Budget 2024: What the new proposals mean for your taxes and finances
Budget seems modest by comparison. While the finance minister proposed a slight adjustment in tax slabs and an increase in the standard deduction to ₹75,000—resulting in a reduction of approximately ₹17,500 in tax burden—the changes fall short of the anticipated overhaul.
The deduction for family pensions will also rise from ₹15,000 to ₹25,000, alongside a boost in the pension scheme deduction from 10% to 14% for those in the new tax regime. The anticipated overhaul of the old tax regime, including enhancements to deductions like those under sections 80C and 80D, did not materialize, reinforcing the government’s push for taxpayers to transition to the new regime.
Finance minister Nirmala Sitharaman had highlighted that over two-thirds of individual taxpayers have already opted for this new scheme, and it appears, the government aims to increase this number further. A notable change involves the tax collected at source (TCS) credit for foreign currency payments, which will now be integrated into the TDS (tax deducted at source) credit calculation, offering significant relief to expatriate employees.
On the capital gains front, the Budget introduced a unified tax rate of 12.5% for long-term capital gains across various asset classes, aiming for simplicity and parity between domestic and foreign investors. However, the abolition of indexation benefits for long-term capital assets could have adverse effects, depending on individual circumstances.
The finance minister also unveiled three employment-linked incentive schemes for first-time employees. Scheme A, in particular, offers a direct benefit transfer equivalent to one month's salary, distributed in three instalments of up to ₹15,000, for new hires registered with
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