The Union Budget 2024 has introduced major revisions to capital gains tax rates, affecting both short-term and long-term capital gains on mutual funds. Short-term capital gains tax (STCG) applies to investments held for less than one year, while long-term capital gains tax (LTCG) is applicable to investments held for more than a year, according to the news outlet News18, this revision aims to promote a fairer approach to taxation and will influence the returns on mutual fund investments.
Under the new rules, the STCG tax rate has been increased from 15% to 20%, and LTCG has risen from 10% to 12.5%. Despite the higher tax rates, investors holding equity-oriented mutual funds for more than one year will benefit from an increased exemption limit, raised from Rs 1 lakh to Rs 1.25 lakh. These changes are expected to impact both short-term and long-term financial planning, making it important for investors to adjust their strategies accordingly, the news outlet reported.
