HIGHLIGHTS OF BUDGET 2023

Union Finance Minister Nirmala Sitharaman on Wednesday presented the Union Budget 2023, the fifth budget of Modi 2.0. In the last full-fledged Budget before the general elections next year, Nirmala Sitharaman said that the Indian economy is on the right path and heading towards a bright future.

In a big boost for taxpayers and the economy, Sitharaman announced major changes in tax slabs under the new tax regime and a big hike in allocation for railways and capital expenditure.

Here follows a sector-wise detailed reading of the various measures Finance Minister Sitharaman announced in Budget 2023:
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 the new tax regime (with the inclusion of standard deduction)
• Govt proposes to reduce the highest surcharge rate from 37%.

New Income Tax Slabs Under New Tax Regimes:
1. Rs 0-3 lakh: Nil
2. Rs 3-6 lakhs: 5%
3. Rs 6-9 lakhs: 10%
4. Rs 9-12 lakhs: 15%
5. Rs 12-15 lakhs: 20%
6. Rs Over 15 lakhs: 30%

• An individual with an annual income of Rs 9 lakh will have to pay only Rs 45,000 in taxes: FM Sitharaman
• 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 premiums 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 the 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 is to be provided to cooperative societies.
• Next-generation Common IT Return Form to be rolled out for taxpayer convenience
• Grievance redressal mechanism to be strengthened.
• TDS rate to be reduced from 30 percent to 20 percent on the taxable portion of EPF withdrawal in non-PAN cases.

Here is the list of things that will get costlier and Cheaper

Cheaper:

• Mobile phones
• TV
• Lab-grown diamonds
• Shrimp feed
• Machinery for lithium-ion batteries
• Raw materials for the EV industry

Costlier:

• Cigarettes
• Silver
• Compounded rubber
• Imitation Jewellery
• Articles made from gold bars
• Imported bicycles and toys
• Imported kitchen electric chimney
• Imported luxury cars and EVs

Indirect Taxes:

• 16% tax hike on certain cigarettes
• 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 was 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
• A 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, and automobiles.

Saving schemes announcements

• Maximum deposit limit for Senior Citizen Savings Scheme to be enhanced to Rs 30 lakh from Rs 15 lakh
• The 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 March 2025.
• It will offer a deposit facility of up to Rs 2 lakh in the name of women or girls for the tenure of 2 years at fixed interest rate of 7.5 per cent with partial withdrawal option.

Railways gets a massive boost:

• An outlay of Rs 2.4 lakh crore provided for railways in FY24.
• It’s the highest ever highest ever allocation for Railways and is nearly nine times over FY14 allocations.
• The allocation for track renewal has been increased from Rs 15,388.05 crore in RE 2022-23 to Rs 17,296.84 crore this year.
• The Railways is likely to roll out 75 Vande Bharat trains by August 2023.

Capex hiked 33%

• Rs 10 lakh crore capital investment, a steep hike of 33 per cent for third year in a row, to enhance growth potential and job creation, crowd-in private investments, and provide a cushion against global headwinds.
• Effective capital expenditure of centre to be – Rs 13.7 lakh crore
• Capital investment outlay to be 3.3% of GDP in FY24
• Effective capital expenditure of Centre at Rs 13.7 lakh in FY24
• New Infrastructure Finance Secretariat was established to enhance opportunities for private investment in infrastructure.

• Defence Budget hiked by 13%:
  • Defence budget increased to Rs 5.94 lakh crore from last year’s Rs 5.25 lakh crore.
  • Rs 1.62 lakh crore set aside for capital expenditure including purchases of new weapons, aircraft, warships and other military hardware.
  • For 2022-23, the budgetary allocation for capital outlay was Rs 1.52 lakh crore.
  • Capital budget of the Border Roads Organisation increased to Rs 5,000 crore.Capital outlay for the Indian Air Force

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

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

Aviation & Highways:

• • 50 additional airports, helipods, water aero drones, advanced landing grounds will be revived to improve regional air connectivity.

Ease of Doing Business:

• Govt to bring another dispute resolution scheme Vivad Se Vishwas-2 to settle commercial disputes
• PAN as common identifier for all digital systems of govt agencies
• One-stop solution for reconciliation and updating identity maintained by various agencies to be established using digi locker and Aadhaar as foundational identity
• Central Processing Centre to be set up for faster response to companies filing forms under the Companies Act.
• For business establishments required to have Permanent Account Number, the PAN will be used as a common identifier for all Digital Systems of specified government agencies.
• More than 39,000 compliances have been reduced and over 3,400 legal provisions decriminalised to enhancing ease of doing business
• Jan Vishwas Bill to amend 42 Central Acts have been introduced to further trust-based governance.
• Finance Minister announces multiple measures to enhance business activity.

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’s self-help groups to reach next stage of economic empowerment
6. To help self-help groups with raw material supply, branding, marketing of products