Budget 2024: FM Sitharaman Simplifies Capital Gains Taxation

In presenting the Modi government's first Budget 3.0, Finance Minister Nirmala Sitharaman announced significant changes to capital gains taxation. She proposed a simplified tax structure where short-term gains on certain financial assets will now be taxed at 20%, while gains on all other assets will remain at the current rates. To benefit the lower and middle-income classes, the exemption limit on some financial instruments for capital gains will be increased to ₹1.25 lakh per year. Additionally, unlisted bonds and debentures, debt mutual funds, and market-linked debentures will attract capital gains tax regardless of the holding period. These measures aim to streamline the tax system and provide relief to taxpayers.