Union Budget Highlights 2023
- February 1, 2023
- Posted by: GITPAC
- Categories: GST, INDIA, TAX, Uncategorized, Union Budget
No Comments
Key Budget Highlights 2023
Budget 2023 focused on raising capital expenditure by the government, fiscal consolidation, and attractive incentives and rebates in the new income tax regime. The big announcement was the increase in rebate limit in the new tax regime — now the default — from Rs 5 lakh to 7 lakh. The middle class has been given some relief in terms of tweaks in the new income tax regime clearly pointing out that the government wants a shift towards the new regime from the older one. The FM stuck to the fiscal deficit roadmap in the Budget with a target of 5.9% in FY 24 and adhering to the target for the current
- Income Tax payers:
- No changes in the old tax regime
- New tax regime to become the default tax regime. However, citizens can opt for the old tax regime.
- No tax on income up to Rs 7.5 lakh a year in new tax regime (with inclusion of standard deduction)
- Govt proposes to reduce highest surcharge rate from 37% to 25% in new tax regime
- New Income Tax Slabs Under New Tax Regimes:
| Taxable Income | Income Tax Rate |
| Rs 0 to 3 lakhs | Nil |
| Rs 3 to 6 lakhs | 5% |
| Rs 6 to 9 lakhs | 10% |
| Rs 9 to 12 lakhs | 15% |
| Rs 12 to 15 lakhs | 20% |
| Above 15 lakhs | 30% |
- An individual with annual income of Rs 9 lakh will have to pay only Rs 45,000 in taxes
- Income of Rs 15 lakh will fetch Rs 1.5 lakh tax, down from Rs 1.87 lakh.
- A Rs 50,000 standard deduction to taxpayers has been introduced under the new regime.
- Payment received from Agniveer Corpus Fund by Agniveers to be exempted.
- Tax exemption removed in insurance policies with premium over Rs 5 lakh
- For online games, govt proposes to provide for TDS and taxability on net winnings at the time of withdrawal or at the end of fiscal.
- Tax exemption on leave encashment on retirement of non-government salaried employees hiked to Rs 25 lakh from Rs 3 lakh.
- A higher limit of Rs 3 crore for TDS on cash withdrawal to be provided to co-operative societies.
- Next-generation Common IT Return Form to be rolled out for taxpayer convenience.
- Grievance redressal mechanism to be strengthen.
- TDS rate to be reduced from 30 per cent to 20 per cent on taxable portion of EPF withdrawal in non-PAN cases.
- Indirect Taxes:
- New cooperatives that commence manufacturing till March 2024 to get lower tax rate of 15%
- Basic customs duty on crude, glycerine reduced to 2.5%.
- Import duty on silver bars hiked to align it with gold, platinum.
- Extend customs duty cut on imports of parts of mobile phones by 1 year.
- To promote TV manufacturing, customs duty on open cells of TV panels reduced to 2.5%
- Relief provided on Customs Duty on import of certain parts & inputs like camera lens.
- Concessional duty on lithium-ion cells for batteries extended for another year.
- Number of basic custom duty rates on goods other than textiles and agriculture reduced from 21 to 13. As a result, there are minor changes in taxes on some items toys, bicycles, automobiles.
- 16% tax hike on certain cigarettes
What Budget 2023 says about MSMEs
- The revamp schemes will take effect from 2023 through an infusion of Rs 9,000 crore in the corpus.
- This will enable another collateral-free credit of Rs 2 lakh crore.
- Further the cost of credit will be reduced by around 1%.
What the budget says about the agri sector :
- The Union Government’s focus on reforming the agriculture sector continues, after its legal reforms had to be repealed.
- The Budget envisages an open source digital infrastructure for agriculture and an agriculture accelerator fund focused on youth in rural areas.
- These steps will help the nascent agri-tech industry and could help boost the sector which still employs nearly half of the country’s workforce.