Budget 2024: Top 5 blows that FM Nirmala Sitharaman announced for Indian stock market

Stock market news: Once Finance Minister Nirmala Sitharaman declared tax proposals for the Indian stock market investors in Budget 2024, Dalal Street witnessed strong selling and tanked from its intraday high. According to stock market experts, the FM has announced a doubling of the STT rate on equity and index trades, raised Long Term Capital Gain (LTCG) Tax from 10 percent to 12.50 percent, Short Term Capital Gain (STCG) Tax is also raised from 15 percent to 20 percent.

Here we list out the top 5 blows that Finance Minister Nirmala Sitharaman has announced in Budget 2024:

1] STT rate on derivative trade

In the Budget 2024, Finance Minister Nirmala Sitharaman raised the STT rate for equity and index trade from 0.01 percent to 0.02 percent. She declared, "I have a couple of proposals for deepening the tax base. First, the Security Transactions Tax on futures and options of securities is proposed to be increased to 0.02 percent and 0.1 percent, respectively."

2] Rise in STCG Tax

The Finance Minister has raised the short-term Capital Gain (STCG) Tax from 15 percent to 20 percent, saying, “ Short-term gains on certain financial assets shall henceforth attract a tax rate of 20 per cent, while that on all other financial assets and all non-financial assets shall continue to attract the applicable tax rate.”

3] Change in Long Term Capital Gain (LTCG) Tax

FM Nirmala Sitharaman raised the LTCG Tax from 10 percent to 12.50 percent, saying, " Long-term gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5 percent."

4] Classification of listed non-listed assets

Nirmala Sitharaman raised the time period for classifying non-listed assets from one year to two years, whereas she left listed assets, including equities, out of consideration.

5] Tax rule change on buyback of shares 

"I propose to tax income received on the buyback of shares in the hands of the recipient," Nirmala Sitharaman said in her Budget 2024 speech.

In the current tax regime, shareholders are exempt from any income tax on the income from the buyback of shares.