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Union Budget 2024: What are the most important changes that will now affect your portfolio?

This article analyses the most important changes affecting your portfolio as per the Union Budget 2024.

Union Budget 2024: What are the most important changes that will now affect your portfolio?


Posted on 24 Jul 2024
Author: Sayan Sircar
10 mins read
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This article analyses the most important changes affecting your portfolio as per the Union Budget 2024.

Union Budget 2024: What are the most important changes that will now affect your portfolio?

This article is a part of our detailed article series on Union Budget 2024. Ensure you have read the other parts here:

📚 Topics covered:

What did Union Budget 2024 change that will now affect your portfolio the most?

From the Budget speech presented by the Union Finance Minister Nirmala Sitharaman on 23 Jul 2024, we analyse some key points that have the highest potential for impacting your portfolio:

  • Which tax regime to choose: old or new?
  • What are the changes to capital gains tax for shares and mutual funds?
  • What are the changes to tax deductions related to NPS?
  • How selling real estate will incur more tax and what you should do about it?
  • How to do tax harvesting for your shares and mutual funds?
  • Should you still invest in SGB after Gold import duty cut?

Which tax regime is best after Union Budget 2024?

In the Union Budget 2024 speech, the new tax regime slabs were tweaked to give an additional ₹17,500 tax reduction. Here is a worked-out example for an income of ₹20 lakhs demonstrating the ₹17,500 benefit.

Tax Rate Before Budget 2024 Tax After Budget 2024 Tax Benefit
0% 0-3L 0 0-3L 0 0
5% 3-6L 15,000 3-7L 20,000 -5,000
10% 6-9L 30,000 7-10L 30,000 0
15% 9-12L 45,000 10-12L 30,000 15,000
20% 12-15L 60,000 12-15L 60,000 0
30% Above 15L 1,50,000 Above 15L 1,50,000 0
0% Std. deduction 50k -15,000 Std. deduction 75k -25,000 7,500
Benefit - - - - 17,500

We have updated our new-vs-old tax-regime calculator to adjust for these changes to help you choose the best tax regime for you: Union Budget 2024: which is the best tax regime to choose from 1st April 2024?

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What are the changes to capital gains tax for shares and mutual funds in Union Budget 2024?

There have been two big changes in capital gains for shares and mutual funds:

  • On one hand, equity capital gains rates have now been increased: 12.5% from 10% for LTCG and 20% from 15% for STCG.
  • On the other hand, LTCG for other funds (international, gold, Fund of Funds etc.) is now set to 12.5% if held for 2 years or more.

You can find more details here: Union Budget 2024: What are the changes in capital gains tax for Stocks and Mutual Funds?

How selling real estate will incur more tax due to Union Budget 2024 and what you should do about it?

In a surprise move, Union Budget 2024 changed the capital gains taxation rules for real estate transactions:

  • Removed indexation in the name of “simplification” of capital gains tax calculation.
  • Reduced the tax rate from 20% with indexation to 12.5% without indexation.

Now that the tax calculation rule has changed, we can calculate a minimum price level above which the new 12.5% without-indexation tax is lower.

(click to open in a new tab)
Maximum selling price above which tax is lower in the 12.5% without indexation regime in Union Budget 2024

You can read more on this topic in this dedicated article: Budget 2024: A Surprise in Real Estate Sales due to Indexation Benefit Removal: Is it good or bad?

Also read
Gift tax exemption rules: who can receive gifts from relatives that are tax-free?

Union Budget 2024 added a new incentive for taxpayers to switch to the New Tax Regime by increasing the deduction available under non-government employer contributions to the NPS. It raised the eligibility amount from 10% to 14% of basic pay plus dearness allowance (DA).

We are not convinced that even this change makes NPS a good retirement plan due to the forced annuitisation and lock-in up to age 60 rules. We have argued both for and against the merit of NPS as per these new changes in detail here: Union Budget 2024: Should you invest more in NPS now in the new tax regime?

How to do tax harvesting for your shares and mutual funds after the changes announced by the Union Budget 2024?

We have a worked out example on how tax harvesting changes due to equity taxation change in the Union Budget 2024.

Read more here: Budget 2024: How to do tax harvesting for your shares and mutual funds?

Should you still invest in SGB after Gold import duty cut?

This article discusses the impact on investors’ psyche due to impact on Gold price due to government policy change.

Budget 2024: Should you still invest in SGB after Gold import duty cut?

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This post titled Union Budget 2024: What are the most important changes that will now affect your portfolio? first appeared on 24 Jul 2024 at https://arthgyaan.com


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