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…

Many readers have asked us how they should modify their investment strategy after 2024. Some of the critical aspects of budget 2024 that will affect no-so-rich investors are: Tax on equity investments has increased from 10% to 12.5%. The increase of the Rs 1 lakh tax-free limit to Rs. 1.25 is largely inconsequential. Share buybacks…

This article explains how capital gains from different investments will be taxed. These are applicable for redemptions made on or after 23rd July 2024. Indexation benefits are history for all asset classes. Update:  Finance Bil 2024 has been amended. Taxpayers can now choose either 12.5% without indexation or 20% with indexation, whichever is lower for…

Budget 2024 has proposed a Big change in mutual fund taxation rules, as explained in our earlier report. This article explains how fund of funds (FoFs) will be taxed from 23rd July 2024. Note: This is based on our understanding of budget documents. Errors, if any, will be updated when they come to our attention….

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…

Budget 2024 has revised the taxation rule governing family pensions. Existing rule:  deduction of Rs 15,000 or 1/3rd of the pension amount, whichever is lower shall be made before computing the income chargeable under the head “Income from other sources”. Revised rule: deduction of Rs 25,000 or 1/3rd of the pension amount, whichever is lower…

Budget 2024 has proposed big changes in mutual fund tax rules. There are now three types of mutual funds: (1) Equity MF (65% or more domestic equity),(2) Debt MF (65% or more bonds). (3) Other MF (neither 65% equity nor 65% bonds) 1 Equity mutual funds (65% or more domestic equity) New rule: long-term capital…