As the Budget 2025 presentation nears, it’s worth revisiting some of the significant personal finance changes introduced by Finance Minister Nirmala Sitharaman in the previous Budget on July 23, 2024.
Typically, the Union Budget is presented annually on February 1. However, due to general elections in 2024, the final Budget was delayed and unveiled after the BJP-led NDA government was re-elected on June 4.
The Budget 2024 was pivotal for taxpayers, especially with the overhauled capital gains tax structure. Major changes included a reduction in the tax rate, revised exemption limits, and an option between indexation benefits and adjusted tax rates. Here’s a breakdown of these key provisions.
Key Personal Finance Changes from Budget 2024
1. Short-Term Capital Gains Tax
- Short-term capital gains on financial assets are now taxed at a flat rate of 20%, replacing the earlier slab-based taxation.
2. Long-Term Capital Gains Tax (LTCG)
- The tax rate for long-term gains on both financial and non-financial assets was reduced from 20% to 12.5%.
3. Increased Exemption for LTCG
- The exemption limit for capital gains on financial assets was raised to ₹1.25 lakh, up from ₹1 lakh.
4. Higher Standard Deduction
- The standard deduction for salaried employees increased from ₹50,000 to ₹75,000.
5. Pension Deductions
- The deduction on family pensions was increased from ₹15,000 to ₹25,000.
6. Relief for Property Buyers (Pre-Budget Assets)
- For assets purchased before July 23, 2024, taxpayers were given a choice:
- 20% tax with indexation benefits, or
- 12.5% tax without indexation.
7. Angel Tax Abolished
- The controversial angel tax was completely abolished for all classes of investors, offering relief to startups and entrepreneurs.
8. Revised New Tax Regime
- A new slab structure was introduced for taxpayers opting for the new tax regime:
- Income up to ₹3 lakh: No tax
- ₹3–7 lakh: 5%
- ₹7–10 lakh: 10%
- ₹10–12 lakh: 15%
- ₹12–15 lakh: 20%
- Above ₹15 lakh: 30%
Looking Ahead: Budget 2025 Expectations
With these critical reforms shaping personal finance in 2024, taxpayers are keenly awaiting what Budget 2025 will bring. As February 1 approaches, there is hope for more measures to enhance savings, investments, and financial security for individuals and families.
