Budget 2024 clarified the definition of a specified mutual fund. This definition will be applicable from 1st April 2025. What about the change in taxation rules? When do they come into force? According to Finance Bill 2024 (as passed by the Lok Sabha on 7th Aug 2024), “‘(ii) “Specified Mutual Fund” means,–– (a) a Mutual…

Many readers keep asking variants of this question: How should I design my fixed-income portfolio after Budget 2024? The answer is quite simple. Always follow a simple thumb rule: Saving tax is NOT a priority. Diversifying portfolio risk is THE number one priority. This has to be done regardless of tax rules. So we do…

Taxation on Sales of Real Estate Bought Before April 2001 requires more clarity from the government. Update:  Finance Bil 2024 has been amended. Taxpayers can now choose either 12.5% without indexation or 20% with indexation, whichever is lower for LTCG on property. Are indexation benefits available for selling properties purchased before 1st April 2001? Our…

After the fall in gold prices due to the customs duty cut announced in the 2024 budget, sovereign gold bond investors are shocked, and many have written to us to ask if these investments make sense anymore. There is a lot of speculation as to why the customs duty was cut – “this was done…

Investors seem confused about how gold investments will be taxed after Budget 2024. This is natural since there is still some ambiguity about the holding periods of listed assets like gold ETFs and sovereign gold bonds.  Here is a quick summary. Physical Gold: slab rate (<2Y); 12.5% (>2Y) The tax will be at the applicable…

This article discusses how Balanced Advantage Funds and Dynamic Asset Allocation Funds will be taxed after the 2024 Budget. Dynamic Asset Allocation or Balanced Advantage Fund can invest in equity/ debt that is managed (0% to 100% in equity & equity related instruments; and dynamically 0% to 100% in Debt instruments). So they could be…

This article discusses how multi-asset funds will be taxed after the 2024 Budget. A multi-asset fund should invest in at least three asset classes with a minimum allocation of at least 10% in each asset class. So they could be taxed like equity funds, debt funds or other funds depending on whether they hold 65%…

In this article, we address some more questions readers have asked in response to Budget 2024: FAQ on capital gains taxation. Update:  Finance Bil 2024 has been amended. Taxpayers can now choose either 12.5% without indexation or 20% with indexation, whichever is lower for LTCG on property. Q1: “I understand that if I sold an equity…

Over the last few days, many readers have asked us if the ey should change their return expectations due to the change in capital gains tax announced in budget 2024. The most significant negative changes are: The long-term capital gains for equity investments have increased from 10% to 12.5%. The increase in tax-free limit to…

Budget 2024 has done away with indexation from all capital gains taxation. Two places where this will hurt the most are real estate sales and debt fund investments made before 1st April 2023. The older the investment, the more the impact. Update:  Finance Bil 2024 has been amended. Taxpayers can now choose 12.5% without indexation…

Budget 2024 has revised the real estate taxation rule. Long term capital gains tax has been modified from 20% with indexation to 12.5% without indexation for any sale made on or after 23rd July 2024. Update:  Finance Bil 2024 has been amended. Taxpayers can now choose either 12.5% without indexation or 20% with indexation, whichever…

In response to our budget 2024 coverage – Budget 2024 Capital Gains Taxation Guide – several readers have asked us for further clarifications. This is an FAQ on capital gains taxation. Update:  Finance Bil 2024 has been amended. Taxpayers can now choose either 12.5% without indexation or 20% with indexation, whichever is lower for LTCG on…

Share buybacks will be taxed as a dividend with the cost of acquistion set as as capital loss from 1st Oct 2024. Why was this done? The budget memorandum states, “Both dividend as well as buy-back are methods for the company to distribute accumulated reserves and thus ought to be treated similarly.” It further adds,…

Budget 2024 has further reduced the tax burden on those opting for the new tax regime. It has been clear for a couple of years now that the old tax regime is unlikely to get any further concessions. Also see: Budget 2024 modifies NPS deduction 80CCD(2) only for the New Tax Regime! Tax payers can use…

There were three proposals related to the National Pension Scheme in Budget 2024. A discussion. 1. The finance minister said, “The Committee to review the NPS has made considerable progress in its work. I am happy that the Staff Side of the National Council of the Joint Consultative Machinery for Central Government Employees have taken…