New Tax Changes, Mutual Funds And Equity Shares

(MENAFN- Kashmir Observer)

By Irshad Mushtaq

The new tax changes in the India Budget 2024-25 have impacted mutual funds and equity shares. The long-term capital gains tax rate has increased to 12.5%, while the short-term capital gains tax is now at 20%.

In the union budget 2024-25, capital gains and STCG tax changes were announced. In the previous structure, the long-term capital gain tax rate was 10%, with a one lakh rupee profit exemption. Now, the profit exemption has increased to 1.25 lakhs.

Additionally, the tax rate has been raised to 12.5% from the previous 10%. (Long-term refers to selling equity shares and mutual funds after 1 year). The short-term capital gain tax on equity was previously 15% if shares were sold before 1 year of purchase, now it is 20%. For example, if shares were bought at 10 lakhs and sold after 1 year for 12 lakhs, the profit would be 2 lakhs. Previously, the tax on a 2 lakh profit at 10% would be around 10,000 rupees, after deduction of 1 lav profit exemption.

Now, at the new rate of 12.5%, after deducting the 1.25 lakh profit exemption, 2 lac -1.25 lav the tax on the remaining 75,000 profit would be calculated at 12.5%. This is due to the updated exemption limit of 1.25 lakh from the previous 1 lakh.

Read Also Financial Fix: Creating a Second Source of Income Financial Fix | Why Do People Have A Negative Perception Of Stock Market Investments?

In the case of short-term capital gains, with a buying value of 10,00,000 and a selling value of 12 lakhs, the profit would be 2 lakhs, attracting a tax rate of 20% instead of the previous 15%, resulting in a 40k tax charge. The long-term capital gains tax is now at 12.50%, and the short-term capital gains tax is now at 20%.

Securities Transaction Tax (STT) on Futures and Options (F&O) has also been increased, from 0.0625% to 0.10% on options trading and from 0.0125% to 0.02% on futures trading. In addition, the Standard deduction was proposed to be increased to Rs 75,000 from Rs 50,000. The normal tax slab structure has been revised under the new Tax Regime as follows: Rs 0-3 Lakh: Nil, Rs 3-7 Lakh: 5%, Rs 7-10 Lakh: 10%, Rs 10-12 Lakh: 15%, Rs 12-15 Lakh: 20%, Above 15 Lakh: 30%.

Learn from the insights of writer, investor, entrepreneur, founder of MI Securities and Business Partner at Sharekhan Srinagar J&K . Reach out at [email protected] for valuable financial advice

MENAFN24072024000215011059ID1108480038

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.