Mint Primer | Eight points to note from the Union budget

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₹75,000 from the current ₹50,000. Second, income tax rates for those in the new tax regime—used by more than two-thirds of those filing income tax returns—have been revised. This will lead to savings of up to ₹17,500 during the year.

Third, the government has proposed a comprehensive review of the Income Tax Act to make it This was the government’s big move in the budget. So far, long-term capital gains made on selling real estate came with indexation benefits—that is, inflation could be taken into account while calculating capital gains, which led to substantially lower tax outflows. This has ceased to exist, with effect from 23 July.

This is a bold move which should rein in, to some extent, those buying residential real estate only for investment purposes—turning it into a financial asset, keeping homes locked and driving up prices—and make things difficult for those wanting a home to live in. These gains will now be taxed at 12.5%. The number of individuals—particularly the youth—punting on stocks and their derivatives like futures and options, has gone up dramatically in recent years.

In order to disincentivize such behaviour, the government has proposed to increase the securities and transaction tax on futures and options to 0.02% and 0.1%, respectively. Further, the short-term capital gains tax on shares has been increased to 20% from the current 15%. The long-term capital gains tax on gains beyond ₹1.25 lakh has been increased to 12.5% from the current 10%.