Comment on the important changes with respect to the Long-Term Capital Gains (LTCG) and Securities Transaction Tax (STT) in the Union Budget 2024-25. Evaluate the impact of such changes on India's savings and investment regime.

The Union budget 2024-25 has introduced several changes in the financial market fiancuations, to improve the tax base. Changes in LTCG and STT: A The budget has increased the long-term capital gains tax to 12.5% from the previous 10% => long-term capital gains tax is paid on the asset returns of more than 1-year maturity => moreover, the indexation benefit i.e. the inflation protection has also been removed. B The securities transaction tax is a kind of direct tax paid during financial transaction in the stock exchange. => the budget has doubled the STT from 0.01% to 0.02% Impact on Savings and Investments: Positives: 1) Deepened the tax base 2) Removing strain on fiscal deficit, by increasing the tax revenue 3) Careful induction as the tax liability is higher 4) Conscious and informed voter base 5) Removal of indexation benefits will improve the bulge of the securities Negatives: 1) Discourage the retail investors in long-term capital assets due to heavy tax liability 2) May reduce investments in equities, and bonds. 3) Household becomes vulnerable to inflation losses 4) May lead to investments in wealth, instead of stocks.