Budget 2023-24

What's new in the new income tax regime

🪙1) Basic exemption limit is hiked from Rs 3 lakh to Rs 2.5 lakh

🪙2) Rebate under section 87A has been hiked from Rs 5 lakh to Rs 7 lakh

🪙3) The income tax slabs under the new income tax regime will be as follows:

Up to Rs 3 lakh - 0% tax

Between Rs 3 and 6 lakh - 5% tax

Between Rs 6 and 9 lakh - 10% tax

Between Rs 9 lakh and Rs 12 lakh - 15% tax

Between Rs 12 lakh and Rs 15 lakh - 20% tax

Above Rs 15 lakh above - 30% tax

🪙4) Individuals with income of Rs 15.5 lakh and above have been made eligible for standard deduction of Rs 52,500 in new tax regime in Budget 2023.

🪙5) Further, the new income tax regime becomes default tax regime. However, the individuals will have an option to continue with the old income tax regime

✍ New slabs under new tax regimes

Rs 0-3 lakh : Nil

Rs 3-6 lakhs: 5%

Rs 6-9 lakhs: 10%

Rs 9-12 lakhs: 15%

Rs 12-15 lakhs: 20%

Rs Over 15 lakhs: 30%

• Govt proposes to cap deductions from capital gains on investments in residential houses to Rs 10 crore

• An individual with annual income of Rs 9 lakh will have to pay only Rs 45,000 in taxes: FM Sitharaman

• An individual with income of Rs 15 lakh will have to pay Rs 1.5 lakh tax, down from Rs 1.87 lakh under new tax structure

• An individual with income of Rs 15 lakh will have to pay Rs 1.5 lakh tax down from Rs 1.87 lakh under new tax structure: FM

• No tax for income up to Rs 3 lakh; 5 pc tax on Rs 3-6 lakh; highest tax rate of 30 pc on income above Rs 15 lakh under new I-T regime: FM

🪴 Indirect Taxes:

• 16% increase in NCCD on certain cigarettes

• 45% of tax refunds were processed within 24 hours. The taxpayer portal received maximum of 72 lakh returns a day: Sitharaman

• New cooperatives that commence manufacturing till March, 2024 to get lower tax rate of 15%

• Basic customs duty on crude, glycerine is proposed to be reduced to 2.5%.

• Propose to increase import duty on silver bars to align it with gold, platinum

• Extend customs duty cut on imports of parts of mobile phones by 1 year

• To promote value addition in the manufacturing of TVs, 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 & continue the concessional duty on lithium-ion cells for batteries for another yea

📌 Fiscal position:

• I reiterate my intention to bring the fiscal deficit below 4.5% of GDP by 2025-26: FM

• FM Sitharaman retains fiscal deficit target of 6.4 pc in the Revised Estimate for FY23; cuts it to 5.9% for FY24

• Gross market borrowing seen at Rs 15.43 lakh cr in FY24

• Net market borrowing in FY24 seen at Rs 11.8 lakh crore

• FY23 net tax receipts revised estimate stands at Rs 20.9 lakh crore

• FY23 total expenditure revised estimate stands at Rs 41.9 lakh crore

• FY23 revised estimate of total receipts other than borrowing at Rs 24.3 lakh crore

• FY24 net tax receipts seen at Rs 23.3 lakh crore

🎁 Saving schemes

• Maximum deposit limit for Senior Citizen Savings Scheme to be enhanced to Rs 30 lakh from Rs 15 lakh

• Monthly Income Scheme limit doubled to Rs 9 lakh and Rs 15 lakh for joint accounts

• One-time new saving scheme Mahila Samman Saving Certificate for women to be made available for 2 years up to 2025.

💌 MSME

• Revamped credit guarantee for MSMEs to take effect from Apr 1, 2023 with infusion of Rs 9,000 crore in corpus

• New credit guarantee scheme for MSMEs to reduce cost of credit by 1 percentage point

🔖 Banking:

• Govt moots amendments to Banking Regulation Act to improve governance in banks

📝 Skill training:

• Government will launch Pradhan Mantri Kaushal Vikas Yojana 4.0

• To skill the youth for international opportunities, 30 Skill India International Centres will be set up across different States.

🪴 Clean Energy:

• Rs 35,000 crores priority capital for the energy transition

• Green credit programme will be notified under the Environment Protection Act

• Battery storage to get viability gap funding.

• Govt to support setting up of battery energy storage of 4,000 MwH

• National Green Hydrogen mission with an outlay of Rs 19,700 crore will facilitate the transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports and make the country assume technology and market leadership

💎 Gems and Jewellery:

• To encourage the indigenous production of lab-grown diamonds, a research and development grant is to be provided to one of the IITs for five years

• Proposal to review customs duty of lab-grown diamonds to be included in Part-B of Budget document

💡Urban Development:

💶 Govt to spend Rs 10,000 crore per year for urban infra development fund

💶 Cities to be incentivised to improve creditworthiness for municipal bonds

💶 Aim for 100% mechanical desludging of septics tanks and sewers in all cities and towns

⚙ Education

🧰 Three centres of excellence for artificial intelligence to be set up in top educational institutions.

🧰 157 new nursing colleges will be established in colocation with the existing 157 medical colleges established since 2014.

🧰 Eklavaya Model Residential Schools to be set up in the next 3 years. The Centre will recruit 38,800 teachers and support staff for 740 schools serving 3.5 lakh tribal students.

🧰 Budget follows seven priorities:

1. Inclusive development

2. Inclusive development

3. Reaching the last mile

4. Infra & investment

5. Unleashing the potential

6. Green growth

7. Youth and financial sector

📌 Aims of Budget 2023 to include:

1. Facilitating ample opportunities for citizens, especially youth

2. Providing strong impetus to growth and job creation

3. Strengthening macro-economic stability

4. To aim for the empowerment of women in Budget 2023

5. To enable women self-help groups to reach next stage of economic empowerment

6. To help self-help groups with raw material supply, branding, marketing of products

🔑 Key number to watch for in

🛠 Fiscal Deficit

🛠 Disinvestment/Privatisation

🛠 Capital Expenditure

🛠 Tax Revenue

🛠 Borrowing

🛠 Nominal GDP: GDP growth in current fiscal is projected at 7 per cent and come down to 6-6.5 per cent in the next

🛠 Spotlight on key schemes, like NREGA, as well as key sectors like health and education