India's Finance Act 2024 has brought significant changes to the capital gains tax regime, impacting investment strategies and tax planning.
The tax rate for short-term capital gains on listed equity shares, previously at 15%, has increased to 20%. Similarly, the rate for long-term capital gains, formerly at 10%, has risen to 12.5%. These changes are applicable from 23 July 2024 onwards.
In a move to provide some relief, the exemption limit for long-term capital gains has been raised from INR 100,000 to INR 125,000.
It is also worth noting that there will be a change in the time limit for reassessment proceedings as of 1 September 2024:
- In standard cases an increase to 3 years and 3 months from the end of relevant assessment year;
- In specific cases (where the income chargeable to tax which has escaped assessment exceeds INR 5 million) an increase beyond a period of 3 years but cannot exceed 5 years and 3 months from the end of the relevant assessment year.
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