Indian Budget 2024 Highlights: Key Updates and Tax Changes

The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, introduces a range of significant changes aimed at simplifying the tax regime and fostering economic growth. From revised income tax slabs and updated rules for property income to the abolishment of the angel tax and increased exemptions on capital gains, these updates are set to impact taxpayers and investors alike. Here’s a concise overview of the most important announcements and their implications.

Simplified income tax regime with new slabs:

- ?0- ?3 lakh - Nil

- ?3-7 lakh - 5%

- ?7-10 lakh - 10%

- ?10-12 lakh - 15%

- ?12-15 lakh - 20%

- Above ?15 lakh - 30%

This restructuring aims to ease the tax burden for middle-income groups while maintaining progressive taxation.

Income from House Property

A significant shift was announced regarding the taxation of income from house property. Income from letting out a house or part of it by the owner will now be chargeable under the head 'income from house property' instead of 'profits and gains of business or profession'. This change is expected to streamline tax computations for property owners and clarify the nature of such income.

TDS on Property Sales

To address ambiguities in tax rules, the Budget introduced a 1% Tax Deducted at Source (TDS) on the sale of immovable property valued at ?50 lakh or more. This TDS rule applies even when multiple sellers and buyers are involved in the transaction. This measure ensures clarity and compliance in high-value property transactions.

No Tax Relief Under Old Regime

Taxpayers filing returns under the old regime will not receive any relief. While the new regime saw changes, including an increase in the standard deduction, the old regime remains unchanged.

Increase in Standard Deduction

The standard deduction under the new tax regime has been increased by ?25,000, bringing it up to ?75,000. This increase aims to provide additional relief to salaried taxpayers, reducing their taxable income and overall tax liability.

Abolishment of Angel Tax

In a move to foster the startup ecosystem, the government proposed the abolition of the 'angel tax' for all classes of investors. The angel tax was levied on the investment received by startups from angel investors, often seen as a deterrent to startup funding. This abolishment is expected to boost investments and growth in the startup sector.

Increased Exemption on Capital Gains Tax

The exemption limit for capital gains tax on certain assets has been increased to ?1.5 lakh. This proposal aims to encourage investment in specified assets by providing greater tax relief on capital gains.

The Union Budget 2024 introduces several key changes aimed at simplifying the tax structure, encouraging investment, and providing relief to taxpayers. From the introduction of a streamlined income tax regime to the abolishment of the angel tax and increased exemptions on capital gains, these measures reflect the government's commitment to fostering economic growth and stability.

Stay informed and make sure to consult with a tax professional to understand how these changes may affect your financial planning and obligations.