The government is not planning to make any significant changes to the capital gains tax structure in the upcoming Budget 2025, according to tax experts.¹ This means that the current tax rates and holding periods for long-term and short-term capital gains will likely remain unchanged.
However, there are expectations that the government may rationalize the capital gains tax framework to streamline the tax rates and periods of holding across various asset classes. Some experts suggest that the government should abolish the Securities Transaction Tax (STT) since the long-term capital gains tax on securities is now on par with other assets.
Here are some key expectations from the Budget 2025:
- No changes to capital gains tax rates: The government is not expected to make any significant changes to the capital gains tax rates.
- Rationalization of capital gains tax framework: The government may streamline the tax rates and periods of holding across various asset classes.
- Abolition of Securities Transaction Tax (STT): Some experts suggest that the government should abolish the STT since the long-term capital gains tax on securities is now on par with other assets.
- Increase in basic exemption limit: The basic exemption limit under the new tax regime is expected to increase from Rs. 3 lakhs to Rs. 5 lakhs.
- Increase in 80C deduction limit: The limit under Section 80C is expected to increase from Rs. 1.5 lakhs to Rs. 2 lakhs.
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