Budget 2024: Indian finance minister weighs in on increased long-term capital gains tax

Indian Finance Minister Nirmala Sitharaman on Tuesday (Jul 23) said that the government wanted to simplify the approach to taxation as she defended a 12.5 per centtax on long-term capital gains.

While presenting the Union Budget, Sitharaman announced that Long Term Capital Gains (LTCG) tax will be increased from 10 per centto 12.5 per cent, meanwhile, Short Term Capital Gains (STCG) tax on some assets will be hiked from 15 per centto 20 per cent.

While speaking during the post-budget press conference, Sitharaman said, "We wanted to simplify the approach to taxation, also for the capital gains. Second, if anything, the average taxation actual has come down."

"When we say it is 12.5% because we have worked out for each of the different classes. But the point is that we have brought it down from below average to 12.5%, which is the lowest if you look at several years, encourages investment in the market," she added.

Highlights of Budget 2024

Sitharaman unveiled the Modi 3.0 government's first budget after the general elections as she announced income tax relief for the middle class. She also said that India will spend $24 billion in the creation of jobs over the next five years.

The government will also focus on boosting rural spending. The Indian finance ministersaid that the government will spend 2.66 trillion rupees ($32 billion) on rural development and unveil new schemes for states led by two key allies - Bihar and Andhra Pradesh.

Sitharaman added that the Modi-led government will roll out incentives for companies, including those in manufacturing, along with a programme to improve skills and provide subsidised loans for higher education in order to spur employment.

(With inputs from agencies)