Fiscal Recalibration: Union Budget 2024-25 Delivers Targeted Direct Tax Modifications with Mixed Market Implications

The Union Budget 2024-25 has introduced a nuanced recalibration of India's direct tax framework, balancing taxpayer facilitation with revenue enhancement measures. Key provisions include the implementation of a streamlined income tax act designed to simplify compliance for individual taxpayers and small businesses, alongside adjustments to Tax Deducted at Source (TDS) protocols aimed at reducing administrative burdens. However, the budget also incorporates a Securities Transaction Tax (STT) increase, a move analysts project will compress net profitability for high-frequency and active equity market participants. This selective approach indicates a strategic fiscal policy prioritizing broad-based taxpayer relief while targeting specific financial market segments for augmented revenue capture. The modifications reflect continued emphasis on formalization and digital compliance within the tax ecosystem, though the STT adjustment may prompt portfolio reallocation among institutional and retail traders. Overall, the budget maintains structural continuity in direct taxation while deploying tactical instruments to modulate economic behavior and fiscal inflows.