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Budget 2024: FM Hikes Long Term Capital Gains Rate To 12.5%
Inc42
ยท
1y ago
Medial
In the Budget speech, the FM announced that the exemption limit for capital gains will be set at INR 1.25 lakh per year. Additionally, short-term gains on certain financial assets will now be taxed at a rate of 20% instead of 15%. This update is expected to affect startups, as stock options are considered part of employees' salaries and are subject to taxation under the Income Tax Act of 1961.
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Budget 2024: Sensex, Nifty fall as govt raises tax on capital gains, derivatives trading
VCCircle
ยท
1y ago
Medial
Indian shares fell as the government proposed higher taxes on capital gains and derivatives trading in the Budget 2024 announcement. The Nifty 50 and Sensex both dropped around 1.6% following the news. The tax on equity investments held for less than a year was raised to 20%, while shares held for more than 12 months will be taxed at 12.5%. The securities transaction tax on derivatives was also increased. Market analysts were not expecting these tax hikes and anticipate short-term market impact.
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A Guide To Tax Laws For Angel Investors, Startup Founders And VCs
Inc42
ยท
10m ago
Medial
SUMMARY The Budget 2024 has made changes to the tax rates on long-term capital gains, reducing it to 12.5% from 20%, making slump sale transactions more attractive for companies. In a positive move for startups, the angel tax has been abolished in the latest budget. Additionally, the tax burden for buyback transactions has shifted from companies to investors, effective from October 1. These changes aim to support the startup ecosystem and simplify tax processes for businesses.
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Budget 2024: Traders Reel Under Capital Gains Tax Shock; Will Zerodha, Groww Take A Hit?
Inc42
ยท
1y ago
Medial
The recent announcement of increased short-term and long-term capital gains tax in the Union Budget 2024 has raised concerns among short-term traders and may slow down retail trading activity in India. Investors who engage in derivatives trading, like future and options trading, are particularly affected by these changes. The heightened taxes on various assets could impact the trading volumes on stock exchanges and the user base of discount brokerages. Finance minister Nirmala Sitharaman announced these tax hikes earlier today.
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Changes in capital gains tax to promote ease of compliance: I-T dept
YourStory
ยท
1y ago
Medial
The income tax department has released FAQs regarding recent changes in the capital gains tax, with the aim of simplifying the tax structure and promoting ease of compliance. The holding periods for various assets have been rationalised, with a reduction from 36 months to 12 months for listed units of business trusts. The holding period for gold and unlisted securities (excluding unlisted shares) is reduced to 24 months for long-term capital gains tax. Short-term capital gains tax rates for listed equity, equity-oriented mutual funds, and business trust units have increased to 20%, while long-term capital gains tax rates have increased to 12.5%.
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LTCG tax parity may bring more family offices to the startupland
Economic Times
ยท
1y ago
Medial
Family offices of millionaires in India are expected to increase their investments in startups following budget proposals that aim to bring parity to long-term capital gains (LTCG) tax and abolish the angel tax. There are currently around 300 family offices, up from 45 in 2018, according to a PwC report. The removal of angel tax and the uniform 12.5% LTCG tax on all financial assets are seen as significant attractions for investment in private companies. This change may incentivize exits by early-stage investors and encourage more domestic capital into the startup ecosystem.
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'Remove LTCG tax, India will gain in the long run': CIO to FM Sitharaman
Business Today
ยท
5m ago
Medial
Investing expert Chadha proposed removing the long-term capital gains (LTCG) tax, suggesting it will benefit India by attracting foreign direct investment and risk capital, leading to job creation. To offset short-term revenue losses, he recommended increasing the Securities Transaction Tax (STT). The proposal aims to support infrastructure and public sector enterprises, ultimately strengthening the economy in the long run.
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Key highlights of the Union Budget impacting the new-age economy
Entrackr
ยท
1y ago
Medial
Finance Minister Nirmala Sitharaman on Tuesday tabled the Union Budget 2024-25, which includes provisions for MSMEs, startups, ease of doing business, FDI, and long/short-term gains, among other areas. Here are the key highlights from the budget that will have a significant impact on Indian startups, founders, employees, and MSMEs. โค To boost the Indian startup ecosystem and entrepreneurial spirit, the government has abolished the angel tax for all classes of investors with the effect from April 1, 2024. โค To facilitate employment, skilling, and other opportunities-focused on MSMEs, the government passed a central outlay of Rs 2 lakh crore. โค To enhance the ease of doing business, the government plans to simplify the rules and regulations for FDI and overseas investments. Additionally, the establishment of the IBC has been a great success that led to the resolution of over 1,000 companies, resulting in a direct recovery of more than Rs 3.3 lakh crore. Moreover, The Centre for Processing Accelerated Corporate Exit (C-PACE) will extend its services to facilitate the voluntary closure of LLPs, reducing the closure time. โค For the development of the space economy, the government has plans to expand it 5-fold in the next 10 years and set up a Rs 1,000 crore venture capital for the same. โค The budget includes the development of climate finance for enhancing the availability of capital for climate adoption and mitigation which will support the achievement of the countryโs climate commitments and green transition. โค The 2025 budget has raised the long-term capital gains tax (LTCG) on both financial and non-financial assets to 12.5%, up from the current rate of 10%. Additionally, the short-term capital gains tax (STCG) on certain assets has been increased to 20%. โค To attract foreign capital for development needs, the corporate tax on foreign companies has been reduced to 35% from 40% in the budget 2024. โค As per the existing provision, Indian professionals working in multinational companies often receive ESOPs and invest in foreign assets, and non-reporting these small foreign assets can lead to penalties under the Black Money Act. The new budget suggests that non-reporting of movable assets up to Rs 20 lakh will no longer be penalized. โค The new budget introduces significant changes to the buyback process. It proposes that income from share buybacks by companies be taxed as dividends for the recipient investor, instead of the current regime where the company pays additional income tax. The new provision will be applicable from 01st October 2024.
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How AMFI suggestions for Union Budget can help mutual fund investors
Money Control
ยท
1y ago
Medial
Finance Minister Nirmala Sitharaman is set to announce the budget on July 23, 2024. The Association of Mutual Funds of India (AMFI) has recommended several key suggestions for the upcoming budget, including raising the Long Term Capital Gains (LTCG) threshold on listed shares and equity mutual funds to Rs 2 lakh, providing uniform tax treatment for pension-oriented mutual fund schemes, and offering taxation relief to fund of funds, gold funds, and overseas funds. AMFI has submitted a total of 13 proposals to the government regarding direct tax measures.
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How the budget has made gold investment attractive
Money Control
ยท
1y ago
Medial
In the budget, the Indian government reduced the import duty on physical gold, aiming to decrease gold smuggling. They also reduced long-term capital gains on gold funds and gold ETFs, making digital gold a more attractive investment option. These measures have been praised by gold enthusiasts, who consider it a favorable move for both physical gold stakeholders and those involved with digital gold.
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Foreign investors injected Rs 30,772 crore into Indian equities this month
YourStory
ยท
1y ago
Medial
Foreign investors have injected INR 30,772 crore ($4.1 billion) into Indian equities this month, driven by optimism surrounding policy reforms, sustained economic growth, and a strong earnings season. The anticipation of a reform-oriented budget has also boosted investor sentiment. Experts suggest that if the weakening of the US dollar and bond yields continues, foreign portfolio investors are likely to continue to buy in the Indian market. Both domestic and foreign investors are also watching for possible changes in the long-term capital gains tax in the upcoming budget.
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