Budget 2024: Capital gains tax changes are in line with investor expectations

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₹125,000 from ₹100,000, effective from 23 July 2024. All transactions from this date will fall under the simplified capital gains regime.

Moreover, the Budget has proposed an increase in the Securities Transaction Tax (STT) for options contracts trading to 0.1% from 0.062% and for futures contracts trading to 0.02% from 0.0125%, effective 1 October 2024. The increased short-term and long-term capital gains rates will impact stock market investors, but the effects on real estate investors are more pronounced.

Property, being an illiquid asset often held for extended periods for personal or business use, previously benefited from indexation to account for inflation. With indexation no longer available, this relief is lost, although the reduced tax rate will partially offset this disadvantage.

Investors in gold, whether physical or digital, will also face similar changes. On the positive side, the new regime is expected to simplify the process of determining tax liability and filing income tax returns.