New Delhi: The Union Budget 2024-25, presented by the Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman focused significantly on the simplification and rationalization of Capital Gains Tax.

Smt. Sitharaman proposed that short-term gains on certain financial assets will now be taxed at 20 per cent, while other financial and non-financial assets will remain subject to their respective tax rates.

Long-term gains on both financial and non-financial assets are proposed to be taxed at 12.5 per cent. To aid lower and middle-income groups, the exemption limit on capital gains for specific financial assets is proposed to increase from ₹1 lakh to ₹1.25 lakh annually.

Listed financial assets held for over a year are to be considered long-term, whereas unlisted financial assets and all non-financial assets must be held for a minimum of two years to qualify as long-term.

Furthermore, the Finance Minister announced that unlisted bonds, debentures, debt mutual funds, and market-linked debentures will be taxed on capital gains at the prevailing rates, regardless of the holding period.