30 Aug What India Budget 2024 has in store for NRIs
The much anticipated event of the year – announcement of the Union Budget 2024 has come through. How does the new budget impact NRIs? What is the new regime that everyone is talking about? What are the investment opportunities that NRIs must consider in this year. We at NRImantra have compiled everything about Budget 2024 that will impact your financial decisions as an NRI this year.
Tax Implications for NRI in Budget 2024
1. Tax rate on Capital Gains sees an increase
The big thing that you will hear in the NRI community with regards to budget 2024, is the significant increase in Tax on capital gains from assets such as listed equities and equity oriented mutual funds. What this means for NRIs like you is a direct increase in your tax liabilities arising on your taxable income.
Here is a detailed breakdown of the tax revisions:
● Long Term Capital Gains (LTCG) Tax: Tax rates have been moderately increased from 10% to 12.5% on LTCG from listed equities and equity oriented mutual funds, which are held for more than one year. LTCG exemption amount has been increased from 1 lac to 1.25 lacs for listed equities and equity mutual funds.
● Short Term Capital Gains (STCG) Tax: Tax rates have been raised from 15% to 20% on STCG from listed equities and equity mutual funds and held for less than a year.
2. Tax rate on Capital Gains sees a decrease
In an attempt to standardise tax rates, a significant change has been made in Long Term Capital Gains (LTCG) tax on assets other than equities and mutual funds. The earlier tax rate applicable on this class of assets was 20%, which has now been revised to 12.5%. The indexation benefit which allows for the adjustment of the purchase cost based on inflation has been removed for NRIs.
Note: Unlisted bonds and debentures would continue to be taxed at the tax slab rates applicable to the taxpayer, regardless of the duration of the investment.
3. Tax Rates: Old vs. New
The new budget has created some stir with the old regime and the new regime for taxation. But which of these is better for the NRIs? While the old regime definitely helped one get more options for tax saving avenues, the new regime offers simplicity, uniformity and lower tax rates. Which regime should you opt for as a NRI? Opting for a specific tax regime is likely to have an impact on your investment options and as a NRI financial advisor, our experts at NRImantra recommend a thorough evaluation of your financial circumstances as well as your long term goals before opting for a specific regime.
Old and New tax regime for FY 2024-25
4. Property Tax revised
The budget has altered provisions with respect to Tax Deducted at Source (TDS) linked with sale of property. Earlier a split of sale value of residential properties could help individuals avoid TDS of 1%. However, the new rule states that any property sale value which is above INR 50 lakh will invite TDS 0f 1%, regardless of the sale value being split amongst different individuals. Hence, if you are planning to sell any residential property, account for the TDS when planning your tax liability.
While tax implications are big, there are also distinct investment opportunities that are available for NRIs to help diversify their risks. While real estate is definitely a good bet for NRIs from an investment point of view, there are other investment opportunities also that will help you maximise your returns and minimise your tax liabilities.
If you would like to know more about your tax liabilities or plan your finances, leave us a Hi here and our experts will help you understand Budget 2024 in depth and help plan your finances like a pro.
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