The stock market reacted negatively to the Union Budget 2024-25, as Finance Minister Nirmala Sitharaman introduced hikes in both short-term and long-term capital gains taxes, and increased the securities transaction tax on futures and options (F&O).
Today, the Sensex initially opened higher but began to fall as the budget speech approached, ultimately dropping nearly 850 points during the address. By 1:26 pm, the Sensex had declined by 654.79 points to 79,847.29.
In her budget speech, Sitharaman raised the securities transaction tax on futures and options by 0.02% and 0.1%, respectively. Additionally, long-term capital gains tax was increased from 10% to 12.5%, and short-term capital gains tax on certain assets was set at 20%.
Regarding stock disposals, equity shares and equity-oriented mutual funds with over 65% equity exposure sold before one year will now incur a 15% short-term capital gains tax. Additionally, income from share buybacks will be taxed in the hands of recipients.
To combat tax litigation, the finance minister announced the Vivad Se Vishwas Scheme 2024. Furthermore, a significant allocation of Rs 10 lakh crore for PM Awas Yojana – Urban 2.0 aims to meet the housing needs of 1 crore urban poor and middle-class individuals.
