The Union Budget 2024 25 is a highly anticipated event that sets the tone for the financial landscape of the country. It outlines the government’s plans and policies for the upcoming fiscal year, including tax reforms and changes that can have a significant impact on individuals and businesses alike. In this article, we will delve into the tax reforms and changes introduced in the Union Budget 2024 25, with a specific focus on Equity Linked Savings Schemes (ELSS). ELSS, a popular investment option, offers tax benefits and potential long-term wealth creation through equity investments with a three-year lock-in period.
Knowing about the budget
The Union Budget 2024 25 has introduced several tax reforms that affect ELSS investments. One of the key highlights of the Union Budget 2024 25 is the revision of tax slabs and rates. The budget has introduced new tax slabs and reduced tax rates for individuals, offering them the flexibility to choose between the new and existing tax regimes. This change has a direct impact on ELSS investments, as they fall under the purview of Section 80C of the Income Tax Act, which allows for tax deductions. In addition to the revised tax slabs, the Union Budget 2024 25 has also introduced changes in the tax deduction limits under Section 80C. The budget has increased the limit from the previous Rs 1.5 lakh to Rs 2.5 lakh. This means that individuals can now claim a higher deduction for their ELSS investments, reducing their taxable income and potentially saving more on taxes.
The measures in the budget
The budget has introduced measures to simplify the tax filing process and promote digital transactions. This is particularly beneficial for ELSS investors, as it streamlines the process of claiming tax deductions and increases transparency. The Union Budget 2024 25 aims to make tax compliance easier and more efficient, benefiting individuals investing in ELSS and other tax-saving instruments. Another crucial change introduced in the Union Budget 2024 25 is the shift towards a faceless assessment system. This means that tax assessments will be conducted in a transparent and non-intrusive manner, reducing the scope for corruption and harassment.
What is new?
This change is significant for ELSS investors, as it ensures a fair and efficient assessment process, giving them peace of mind and confidence in their tax-saving investments. Additionally, the budget has introduced measures to promote long-term investments in the capital market, including ELSS. The government has proposed to extend the lock-in period for ELSS investments to five years. While this may limit the liquidity of ELSS funds, it encourages investors to adopt a long-term investment approach, aligning with the government’s objective of promoting long-term wealth creation and stability in the market. Moreover, the Union Budget 2024 25 has introduced reforms to boost the infrastructure sector, which can indirectly benefit ELSS investors.
Conclusion
The budget has allocated significant funds towards infrastructure development, which can lead to increased investment opportunities and potential growth in companies related to infrastructure. This presents an attractive investment avenue for ELSS investors looking to diversify their portfolio and capitalize on the government’s focus on infrastructure development. In conclusion, the Union Budget 2024 25 has introduced several tax reforms and changes that affect individuals and their investments, including ELSS.