Budget 2024 Highlights: Tax Rates, Duty Cuts, and More

Union Budget Minister Niramala Sitharaman presented the Union Budget 2024 in Parliament on Tuesday, July 23, introducing a slew of changes. There have been no changes in the old tax regime, but the new tax regime has seen significant changes, including a hike in the standard deduction amount. The Finance Minister also claimed to simplify and rationalise capital gains taxation over the coming few months. Significant alterations were also made to customs duties, lowering the tax levied on some products and increasing the tax on others. A detailed breakdown of the changes is given below:

The standard deduction for salaried employees will be hiked to ₹75,000 from ₹50,000 under the new income tax regime.

The tax rate structure is revised, and the six new slabs under the budget are:

There will be duty cuts on several products, including mobile phones and gold and platinum. Notable duty cuts are:

• Duty cuts on mobiles, chargers, and accessories reduced to 15%.

Customs duty on gold and silver is reduced to 6% and platinum to 6.4%.

• Three cancer treatment medicines are exempted from basic customs duty.

• Customs duty is reduced on leather goods.

• Customs on X-ray machines for medical, surgical, dental, or veterinary use are reduced

• Capital gains exemption limit is hiked to Rs 1.25 lakh per year from Rs 1 lakh currently. Long-term capital gains tax rate on all financial and non-financial assets will rise from 10% to 12.5%. Short-term gains from financial assets will result in a tax increase from 15% to 20%.

• The Securities Transaction Tax (STT) rate has changed, doubling from 0.01% to 0.02%, significantly impacting equity and index traders involved in Futures and Options (F&O) transactions.

• The TDS rate for e-commerce operators will be reduced from 1% to 0.1%.

Moreover, a comprehensive review of the Income Tax Act was proposed to further simplify it. The Finance Minister also said that the government will introduce an SoP (standard operating procedure) for TDS defaults to simplify and rationalise the compounding of such offences.

As in the previous year, the new tax regime is still the default regime for computing tax. By further adjusting the tax slabs and raising the standard deduction amount, the new tax regime is likely to become more attractive to taxpayers.