The Bharat Government announced new tax policy reforms in the Union Budget of 2024-25. These changes are meant to improve the tax system, ease compliance, and provide more relief to taxpayers. In this blog, we will understand in detail the effect of the new tax policies and what major changes have been made.
New Income Tax Slab 2024-25
The government has clarified the difference between this and the old tax regime. Some changes have been made in the standard deduction and tax slab rates to improve the tax regime.
New Tax Slab 2024-25
| Annual Income | New Tax Rate |
|---|---|
| ₹0 – ₹3,00,000 | 0 |
| ₹3,00,001 – ₹6,00,000 | 5% |
| ₹6,00,001 – ₹9,00,000 | 10% |
| ₹9,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| ₹15,00,000+ | 30% |
Main Changes:
The standard deduction has been reduced from ₹50,000 to ₹75,000. Family pension deduction will now be available up to ₹25,000 instead of ₹15,000—efforts to abolish the old tax regime gradually.
Changes in capital gains tax
Some new reforms have been introduced in Capital Gains Tax which will be important for investors:
Short-Term Capital Gains (STCG): Earlier it was 15%, now it has been increased to 20%.
Long-Term Capital Gains (LTCG): Earlier it was 20% (with indexation), now it has been reduced to 12.5% (without indexation).
Holding Period of Gold, Bonds, and Debentures: Earlier it was 36 months, now it has been reduced to 24 months.
Impact for Investors
✔ Gold and Bonds holders will get LTCG benefits soon.
✔ Increase in the STCG rate will impact short-term traders.
✔ LTCG simplification will make tax compliance easier.
Angel tax removed
Startups have been given a big boost, Angel Tax has now been abolished. This decision will help in the growth of the Indian startup ecosystem and will attract investors.
Angel Tax was earlier applicable on issuing shares of an unlisted company, but now it has been abolished for all types of investors.
Big Change in TDS and TCS
TDS rate reduced
✅ Insurance commission, rent, brokerage, and lottery commission were earlier 5%, now it has been reduced to 2%.
✅ TDS on e-commerce platforms has been reduced from 1% to 0.1%.
✅ 20% TDS on Mutual Fund repurchase has been completely removed.
New rules of TCS
If a minor is earning income, then his TCS can be credited to the account of his parent or guardian.
Now, on TCS delay, interest will be 1.5% instead of 1%.
Digital Economy and Crypto Taxation
📌 30% tax will still be applicable on Cryptocurrency transactions.
📌 TDS on Virtual Digital Assets (VDA) has been kept at 1%.
📌 Compliance has become more strict for digital payments and online businesses.
Changes in Business and Corporate Tax
✅ The tax rate of foreign companies has been reduced from 40% to 35%.
✅ Special relief measures have been introduced for MSMEs so that their compliance load is reduced.
✅ Partner Remuneration Deduction limit has been increased to ₹ 3,00,000.
Changes in Real Estate and Property Tax
🏠 Rental Income will now be kept only in the “Income from House Property” category.
🏠 Capital gains tax will be levied on property and shares received through gift or will if the transfer is from any entity other than an individual or HUF.
NRI Taxation Updates
🌍 New taxation norms for NRIs are:
The disclosure process of unlisted shares or foreign assets has been simplified.
TDS compliance has become more strict now.
You must stay at least 120 days in India; otherwise, your global income will be taxable.
10. Conclusion
The Budget 2024-25 brings significant reforms for both taxpaying individuals and businesses. Measures like the removal of the Angel Tax, LTCG tax reforms, relaxations in TDS, and crypto taxation clarity are what make the budget special.
If you are a salaried employee, investor, startup owner, or NRI, it will be important for you to understand the tax laws and make proper use of them.
How do you like this tax policy? Please share your views in the comment section!