Major Changes in India’s Tax System for 2024 Explained Simply!

India’s income tax rules have changed a lot this year, thanks to the Union Budget for 2024-25. Here’s what you need to know about these changes which will affect how much tax you pay when filing your returns in July 2025.

1. New Tax Rates:
The new tax system now has different rates that could save you up to ₹17,500 a year. Here’s how it works:
– If you earn up to ₹3 lakh: You pay no tax!
– Earnings between ₹3 lakh and ₹7 lakh: Pay 5%
– Earnings between ₹7 lakh and ₹10 lakh: Pay 10%
– Earnings between ₹10 lakh and ₹12 lakh: Pay 15%
– Earnings between ₹12 lakh and ₹15 lakh: Pay 20%
– Earnings above ₹15 lakh: Pay 30%

2. Bigger Standard Deduction:
The government raised the standard deduction amount from ₹50,000 to ₹75,000. If you’re a family pensioner, it increased from ₹15,000 to ₹25,000!

3. Old Tax Regime Stays the Same:
If you choose the old tax system, your standard deduction remains the same, and the tax rates are:
– Up to ₹2.5 lakh: No tax
– ₹2.5 lakh to ₹5 lakh: Pay 5%
– ₹5 lakh to ₹10 lakh: Pay 20%
– Over ₹10 lakh: Pay 30%

4. Changes to Capital Gains Tax:
If you sell stocks or mutual funds, short-term capital gains tax goes up from 15% to 20%, and long-term gains tax rises from 10% to 12.5%. Also, the exemption limit for long-term gains is now ₹1,25,000 instead of ₹1 lakh.

5. Higher Securities Transaction Tax (STT):
If you trade stocks, you’ll pay more tax. The tax on options goes from 0.0625% to 0.1% of the premium, and for futures, it increases from 0.0125% to 0.02%.

6. Buyback Tax Changes:
In the past, buyback money wasn’t taxed for shareholders, but now individuals will pay tax based on their income tax slab. This starts on October 1, 2024.

7. No More Indexation Benefits:
Indexation, which helped reduce taxes on long-term gains, is gone. But if you sell land or property, you can choose a tax of 12.5% without indexation or 20% with it.

8. TDS Changes:
The 5% TDS (Tax Deducted at Source) will reduce to 2% for some payments, and the 20% TDS on mutual fund repurchases is eliminated. The TDS for e-commerce operators decreases from 1% to 0.1%. Plus, Late TDS payment issues will not be criminal anymore.

9. New Assessment Reopening Rule:
Tax assessments can be reopened for five years if evaded income exceeds ₹50 lakh.

10. Vivad se Vishwas Scheme:
The finance minister introduced this plan to help clear tax disputes. You can pay a disputed tax amount along with a certain percentage to sort it out without extra penalties.

Stay tuned for more updates on how these changes affect your taxes!

from Business & Economy – TheLLV News – Truth, Trends & Insights https://ift.tt/BaXnTqv
via IFTTT