How Budget 2024 is Impacting NRIs?

Summary

In this informative video, the host discusses the 2024 budget's impact on various investments, including real estate, gold, and equity. Key points include changes in income tax slabs, a reduction in custom duty on gold, rationalization of capital asset holding periods, and adjustments in capital gain tax rates. The video also highlights the abolition of 'Angel Taxation' for startups, encouraging investment in this sector. The host concludes by emphasizing the importance of fiscal prudence and sustainable growth for both the economy and individual investors.

Takeaways

• 🌟 The speaker is a consultant specializing in NRI services and provides weekly explainer videos on various topics related to NRI taxation, FEMA, and investment.
• 📊 The video discusses the impact of the 2024 budget on investment portfolios, focusing on six key areas including income tax slab changes, gold rates, equity investments, and real estate.
• 💼 Income tax slab changes include an increase in the standard deduction for Resident Indians from ₹50,000 to ₹75,000 and a new tax slab starting at ₹3 lakhs, making it more beneficial for NRIs.
• 🏵️ The custom duty on gold has been reduced from 15% to 6%, encouraging domestic production and consumption, and leading to a decrease in gold prices.
• 📈 The holding period for capital assets has been rationalized to 12 months for listed securities and 24 months for unlisted securities and immovable properties, simplifying tax calculations.
• 🏠 The budget has mixed effects on real estate investors. While the capital gain tax has been reduced from 20% to 12.5%, the removal of indexation benefits could lead to higher tax liabilities for long-held properties.
• 📈 The budget is unfavorable for equity investors as short-term capital gains tax has increased from 15% to 20%, and long-term capital gains tax has risen from 10% to 12.5%, potentially discouraging short-term trading.
• 🚀 Startup investors receive a significant boost as the budget abolishes angel taxation, simplifying tax rates and encouraging investment in startups.
• 💡 The speaker emphasizes the importance of understanding the tax implications of different asset classes and suggests consulting with experts for complex tax planning, especially for real estate investments.
• 🌐 The budget is seen as progressive, aiming to prevent asset bubbles and encourage sustainable growth across various sectors, with a focus on capital expenditure and fiscal prudence.
• 📉 Despite the budget's potential negative impacts on certain investments, the speaker believes that the market will adjust and focus on earnings and growth, ultimately benefiting from the fiscal stability and prudent economic management.

Q & A

What is the main focus of the video?

The main focus of the video is to analyze the impact of the 2024 budget on various investment portfolios, including real estate, gold rates, equity investments, and startups.

What are the changes in the income tax slabs for Resident Indians mentioned in the video?

The standard deduction for Resident Indians has increased from 50,000 to 75,000, and the nil tax slab has been raised from 2.5 lakhs to 3 lakhs, meaning individuals will effectively pay zero tax on income up to 3 lakhs rupees.

How has the custom duty on gold been affected by the 2024 budget?

The custom duty on gold has been reduced from 15% to 6%, which is aimed at encouraging domestic production and consumption of gold.

What is the new holding period for different capital assets as per the 2024 budget?

The new holding period has been rationalized to two periods: 12 months for listed securities like mutual fund units, equity shares, and debentures, and 24 months for unlisted securities and immovable properties like land and buildings.

How does the 2024 budget impact real estate investors?

The budget reduces the capital gain tax from 20% to 12.5% for real estate, but it also removes the indexation benefit, which adjusts the purchase price for inflation. This could lead to a higher tax liability for some investors.

What changes are made to the capital gain tax for equity investors in the 2024 budget?

The short-term capital gain tax for equity investors has increased from 15% to 20%, and the long-term capital gain tax has increased from 10% to 12.5%. The tax exemption limit for capital gain from equity has also been raised from 1 lakh to 1.25 lakh.

What is the impact of the 2024 budget on startup investors?

The budget abolishes the Angel Tax, which previously taxed investments above fair market value in startups at 31%. This change is expected to boost the startup ecosystem by removing a major roadblock for investors.

How does the 2024 budget affect the security transaction tax?

The security transaction tax has been increased by 400%, making it 22% overall. This change is likely aimed at discouraging frequent trading and promoting long-term investment.

What is the government's approach to managing the economy as indicated by the 2024 budget?

The government aims to prevent any asset class bubble formation and promote a slow, organic, and sustainable growth rate across asset classes. The budget also shows fiscal prudence with a reduction in fiscal deficit and no change in capital expenditure or government borrowing.

What advice does the speaker give to investors regarding the 2024 budget changes?

The speaker advises investors to focus on long-term investment, pick the right asset class, and plan strategically to optimize taxation at the time of exiting or selling off investments.