Key Points
- Short-term capital gains tax is now 20% (was 15%).
- Long-term capital gains tax is now 12.5% (was 10%).
- Long-term exemption limit is now Rs 1.25 lakh (was Rs 1 lakh).
- Tax on debt mutual funds depends on your tax slab.
- Different holding periods determine short-term and long-term gains.
Looma News
Hey, fellow investors! If you’re into mutual funds, check out this juicy news from the Union Budget 2024. The government has dropped some new capital gains tax rates, and things are getting a bit spicy.
What’s Changed?
First up, if you’re into short-term investments, your tax rate just went up to 20% from 15%. So if you’re cashing out on a fund you held for less than a year, you’re gonna feel that hit a bit more. And long-term investors, you’re not totally off the hook either, long-term capital gains tax is now 12.5%, up from 10%.
Good News for Long-Term Investors
But here’s some good news: the long-term gains exemption limit got a bump from Rs 1 lakh to Rs 1.25 lakh. So if you’re hanging on to your investments for over a year, you get to keep more of your gains without the tax man taking a slice!
How It Affects Your Earnings
Let’s break it down with a quick example. If you rake in Rs 5 lakh in gains from mutual funds:
- For short-term gains, you’d owe Rs 1,00,000 in tax now (that’s up from Rs 75,000 before the budget)—an increase of Rs 25,000.
- For long-term gains, your tax would be Rs 46,875 after the budget, compared to Rs 40,000—an increase of Rs 6,875.
So, while the tax rates might feel a bit tougher, the increased exemption limit gives long-term investors a breather. Just plan your investments wisely! Happy investing!
