Union Budget should be start on 1 February 2025. Due to election in last financial year budget was interim budget. This year FY25-26 is union budget means in India, the Union Budget refers to the annual financial statement presented by the Finance Minister, which outlines the government’s planned expenditures, proposed taxes, and other financial policies for the upcoming year.
BJP government wins majority seats in parliament of Lok Sabha elections. Nirmala Sitharaman was the finance minister of India. She is the first woman to hold the post in India. Sitharaman plays a crucial role in managing the country’s economic policies, including presenting the Union Budget, overseeing the taxation system, and steering economic reforms.
Many stock market traders and investors expectations was break by finance minister in last interim budget, because government increases capital gain taxes.
People support BJP party for removing taxe burden from stock market enthusiast but FM increased by 5% or 10% respectively.
Union Budget 2025 On Capital Gains
In last year many taxes where increased and simplify for investors to file income tax return. This budget is full budget and everyone have high expectations from minister of finance.
Capital Gains Tax rates for the Financial Year (FY) 2024-2025 in India. The rates vary depending on whether the gains are long-term or short-term, and also on the asset type (e.g., equity, real estate, etc.).
| Type of Asset | Holding Period | Short-term Capital Gains (STCG) Tax Rate | Long-term Capital Gains (LTCG) Tax Rate |
|---|---|---|---|
| Equity Shares/Equity Mutual Funds | Less than or equal to 1 year | 20% | 12.5% (on gains above ₹1 lakh in a financial year) |
| Debt Mutual Funds | Less than 3 years | 20% with indexation | 10% with indexation |
| Real Estate (Property) | Less than 2 years | 30% | 20% with indexation |
| Other Assets (e.g., Gold, Bonds) | Less than 3 years | 20% with indexation | 20% with indexation |
Key Points:
- STCG Tax: Tax applied on gains from the sale of assets held for a short period (below specified threshold).
- LTCG Tax: Tax applied on gains from the sale of assets held for longer periods (above the specified threshold).
- Indexation: Allows you to adjust the cost of the asset for inflation when calculating capital gains, which reduces the taxable amount for long-term capital gains on certain assets.
This year it should be more simple with classification of different assets into same category. One of the key expectations is removing STT tax and increasing the limit of exemption of LTCG tax limit to 2 Lakhs in one financial year.
Removing Securities Transaction Tax on equities is great move for domestic and foreign institutional investors to invest more capital into market.
Last year STT for futures and options was hiked due to traders loss money into market and take loans for trading. Indexation should be on Real estates investments also remove and many real estates was shocked after this move in this budget many investors demand simplify for indexation benefits.
