Budget 2024: Key Takeaways for Women

On 23rd July 2024, the Finance Minister presented the Union Budget 2024, where a few major changes have been made, which you as a women investor should know. In this blog, we’ll go through key budget 2024 highlights.

Let’s first understand what is the Union budget,

What is the Union Budget?

The Union Budget is an annual financial statement that details its receipts and expenditures for the financial year. Just as you create a personal budget to manage your income and expenses, the Union Budget is a comprehensive budget plan for the entire country. It outlines tax reforms, financial initiatives, growth plans, and expenditure on social welfare.

Focus & Theme of Union Budget 2024:

The focus of Budget 2024:

– Garib (Poor)

– Mahilayen (Women)

– Yuva (Youth)

– Annadata (Farmers)

The theme of Union Budget 2024:

– Employment

– Skilling

– MSMEs (Ministry of Micro, Small and Medium Enterprises)

– Middle Class

Now, let’s look at key budget 2024 highlights for taxpayers

Budget 2024 key points for taxpayers:

There are certain changes done which would affect tax payers let’s first look at positives and negatives from budget 2024,

Positives:

1. Under New Tax Regime, standard deduction for salaried employees is increased from  ₹50,000 to  ₹75,000. Note: This is not applicable for the Old Tax Regime.

2. Long Term Capital Gains Tax exemption limit for equity & equity-related instruments increased from ₹1 Lakh to ₹1.25 Lakh for a financial year.

3. Deduction on family pension for pensioners increased from ₹15,000 to ₹25,000

4. Employer contribution limits hiked from 10% to 14% of the employee’s basic salary under the new tax regime.

5. To enhance domestic value addition in gold and precious metal jewellery in the country, FM has proposed to reduce customs duties on gold to 6% from 15%.

6. New Tax Regime slab rates changed which can help taxpayers to save up to ₹17,500. Following is the table depicts the slab rates before and after Budget 2024

Note: There are no changes in slab rates of old tax regime.

Negatives:

1. Long Term Capital Gains Tax (LTCG) for equity & equity related instruments hiked from 10% to 12.5%

2. Short Term Capital Gains Tax (STCG) for few financial assets like equity & equity related instruments increased from 15% to 20%

For example: The equity and equity related investment instrument sold before  12-months will attract tax of 20% (STCG) and if sold after 12 months then it will attract 12.5% (LTCG) on gains exceeding 1.25 lakh.

3. Long Term Capital Gains tax on the sale of property is reduced from 20% to 12.5% and the indexation benefit is removed, if the property is sold after 23rd July 2024. However, if the property is bought before July 23, 2024, you have the option to choose your long-term capital gains tax: either 20% with Indexation or 12.5% without Indexation, choose whichever saves tax.

Let’s understand what is indexation:

Indexation benefit is a tax advantage that helps you save money on your investments by adjusting for inflation. For example, if you bought an asset for ₹1,00,000 a few years ago and sold it for ₹2,00,000 today, your profit is ₹1,00,000. But with indexation, the purchase price might be adjusted to with inflation and it comes out to be ₹1,50,000. This means now your taxable capital gains would be 2,00,000 – 1,50,000 = 50,000.

Tax Rate Applicable on Investments Before & After Budget 2024 Update:

Investment Options	STCG Before	STCG After	LTCG Before	LTCG After	Holding Period
Equity Mutual Funds	15%	20%	10% if capital gains exceed Rs.1 lakh	12.5% if capital gains exceed Rs.1.25  lakh	Held for less than 12 months – STCG Held for more than 12 months – LTCG
Debt Mutual Funds	Slab Rate	Slab Rate	Slab Rate	Slab Rate	N/A
Gold Mutual Fund	Slab Rate	Slab Rate	Slab Rate	12.5%	Held for less than 12 months – STCG Held for more than 12 months – LTCG
Real Estate (Physical)	Slab Rate	Slab Rate	20% with Indexation Benefit	12.5% without indexation benefit	Held for less than 24 months – STCG Held for more than 24 months – LTCG
Physical Gold	Slab Rate	Slab Rate	20% with Indexation Benefit	12.5% without indexation benefit	24 months – STCG Held for more than 24 months – LTCG

Now, as we have talked about key budget highlights on income tax lets move towards general budget key points

General Budget 2024 highlights

1. Now minors can invest in Nation Pension Scheme (NPS) where parents can contribute to their children’s future retirement. The NPS Vatsalya allows contributions by parents or guardians and will be converted to regular NPS once the child turns 18.

2. Priorities for Viksit Bharat: One-month wage to new entrants in all formal sectors in 3 instalments up to ₹15,000; Expected to benefit 210 lakh youth.

3. PM Awas Yojna Urban 2.0: The needs of 1 crore urban poor and middle-class families will be addressed with an investment of ₹10 lakh crore.

4. Financial support for loans up to ₹10 lakh for higher education in domestic institutions.

5. In line with the announcement in the interim budget, PM Surya Ghar Muft Bijli Yojana has been launched to install rooftop solar plants to enable 1 crore households to obtain free electricity up to 300 units every month.

6. Scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years. Allowance of ₹5,000 per month.

Women-centric highlights from Budget 2024

1. Encouraging states to lower stamp duties for properties purchased by women.

2. ₹3 lakh crore allocated for schemes benefiting women & promoting women-led development.

3. Boosting women’s workforce participation by setting up working women hostels with industry collaboration.

This is the union budget summary which you as women taxpayer and investor should know as it will impact you while paying taxes. It’s essential to understand how these updates can influence your financial planning. The government’s substantial allocations for women-led development highlight the importance placed on empowering women economically. As women investors, staying informed about these changes allows you to make better financial decisions, whether it’s optimizing your tax liabilities or planning your investments.

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