Union Budget 2024: You pay these taxes to the government. Which tax rates will go up today?

Union Budget 2024: Taxes are compulsory payments imposed on individuals by the state and central government to generate revenue. They serve as a vital source of income for the government, enabling them to strengthen the country's economy and infrastructure. In India, the tax system is divided into three tiers: local municipal bodies, state, and central government. Taxation in India is broadly categorised into direct and indirect taxes. Direct taxes are imposed directly on individuals or entities, while indirect taxes are levied on products and services, ultimately passed on to consumers.

Recently, the Income Tax (I-T) department released the data of net direct tax collection for FY 2024-25. It mentioned that the collection rose to Rs 5.74 lakh crore till July 11, 2024, which is a jump of 19.54% over the last fiscal. The gross collection of direct tax rose to Rs 6.45 lakh crore, which is about a jump of 23.24%.

During the specified period of FY25, direct tax categories including corporate tax, income tax, and securities tax exhibited commendable growth rates as well.

Indirect tax is a type of tax that is paid by an individual to the government through an intermediary. The intermediary then transfers the tax payment to the government. In India, the Central Board of Indirect Taxes and Customs (CBIC) is the governing body responsible for overseeing indirect taxes. Similar to the Central Board of Direct Taxes (CBDT), the CBIC functions under the jurisdiction of the Department of Revenue.

From now on, the Finance Ministry has discontinued releasing detailed GST collection data on day 1 of every month. But Finance ministry sources said in June, Gross Goods and Services Tax (GST) collections rose 7.7 per cent year-on-year to Rs 1.74 lakh crore. This is the slowest rate of growth in GST collections in three years, with the previous slower pace of growth recorded in June 2021. 

Sources said the gross GST collection stood at Rs 5.57 lakh crore so far in this financial year (April-June). The government had collected Rs 1.73 lakh crore as gross GST in May 2024 and Rs 1.61 lakh crore in June 2023. The Integrated GST (IGST) worth Rs 39,586 crore was settled towards CGST and Rs 33,548 crore towards SGST, sources said.

Different taxes we pay:

1. Income Tax: Income tax is a crucial type of tax levied on the profits and income obtained within a financial year. Specifically, it is a prime example of a direct tax imposed by the Central government on individuals and businesses based on their generated income. The total income tax owed is determined by the amount earned across various categories. Notably, income tax is applicable to individuals and businesses surpassing the specified basic exemption limit for a specific financial year.
Currently, there are two income tax regimes. There two different set of tax slabs for the regimes. The new tax regime was made the default regime in Union Budget 2023.

2. Securities Transaction Tax (STT) is a type of tax imposed on transactions carried out on stock exchanges. The prescribed rates for STT are as outlined below:

Equity delivery: 0.1% tax is applicable on both buy and sell transactions.
Equity intraday: STT of 0.025% is levied on the sell side of the transaction.
Equity futures: A tax rate of 0.01% is applied on the sell side of the trade.
Equity options: STT is charged at 0.017% on the sell side of the premium.
Mutual fund units (equity-oriented): A tax rate of 0.001% is imposed on the sell side of the transaction.

It is important for investors to be aware of these STT rates as they have implications on their trading activities and overall investment strategies.

3. Capital Gains Tax is a form of tax imposed on the profit gained from selling assets, which are categorized as short-term or long-term based on the duration of ownership. In India, short-term capital gains, applicable to equities held for less than a year, are subject to a tax rate of 15%. Conversely, long-term capital gains, relating to equities held for over a year and surpassing Rs 1 lakh, are taxed at a rate of 10%.