Wednesday was the seventh Budget Address delivered in Parliament by Finance Minister Nirmala Sitharaman. The Budget’s highlights, main ideas, and major takeaways are listed here.
Before the 2024 Lok Sabha elections, Union Finance Minister Nirmala Sitharaman delivered her final comprehensive budget to Parliament on Wednesday. The government’s increased capital spending in Budget 2023 was emphasized, along with fiscal reform and enticing tax breaks and incentives.
On February 1, 2023, Union Finance Minister Nirmala Sitharaman will announce the general budget for the next fiscal year. This would be the Finance Minister’s fifth straight budget presentation. The Indian economy is now recuperating from the Covid-19 epidemic. The Finance Minister unveiled an extensive public expenditure plan for the Indian economy.
From Rs 5.5 lakh crore the year before, or Rs 2.5 lakh in Budget 2023 for this financial year 2023 2024, the Finance Minister increased capital investment for the financial year 2022 2023 through Budget 2023 by 35.4% to Rs 7.5 lakh crore.
Union Budget 2023: Some Key Points
- Amrit Kaal’s vision for an inclusive and empowered economy is presented in the union budget for 2023–24.
- The foundation of Amrit kaal is a three-pronged focus driven by four transformative opportunities.
- The amount invested in the capital increased by 33% to rs. 10 lakh crore.
- Actual capital spending at 4.5 % of GDP.
- The estimated fiscal deficit for 2023–24 is 5.9% of GDP.
- 7% real GDP growth in fy2022-23.
- Exports will rise at a 12.5% cagr in fy 2023.
- To increase the availability of high-quality planting materials for highly valuable horticultural crops, the atmanirbhar clean plant program with an outlay of 2200 crore will be launched.
- To be established: 157 new nursing colleges.
- Expenditure for pm awas yojana increased by 66% to over rs. 79,000 crore
- The highest capital outlay for railroads ever, at rs. 2.40 lakh crore
- The establishment of the urban infrastructure development fund (uidf) will utilize a shortfall in lending for priority sectors.
- A total investment of rs. 10,000 crore would be made to establish 500 new “waste to wealth” plants under the gobardhan scheme.
- 10,000 bio-input resource centers will be built, forming a nationally distributed micro-fertilizer and pesticide manufacturing network.
- To be launched is mantri kaushal vikas yojana 4.0
- Personal income tax is significantly relieved in the union budget 2023–24.
- A new tax regime’s announced slabs.
- The new law does not require residents to pay income tax on total income up to 7 lacks.
- Under the new tax regime, residents with a total income of up to 7 lacks will not be subject to income tax.
- Under the new tax regime, salaried individuals will also be eligible for a standard deduction of 50,000.
- The default tax system for individuals and HUF will be the new tax system.
- Limit for tax exemption on leave encashment on the retirement of non-govt salaried employees raised to 25 lacks.
- An announcement of a ton of proposals for the cooperative sector.
- Proposals for an indirect tax are meant to promote exports, improve domestic value addition, and encourage green energy and mobility.
- Reduction of the number of basic customs duty rates on goods, excluding textiles and agriculture, from 21 to 13.
Nirmala Sitharaman, the minister of finance, stated, “This budget will inspire me a lot. It will move India ahead and be comparable to the previous Budget 2023.” The RBI also revised its expectation for the country’s growth rate for the current fiscal year to 6.8%, along with multiple other organizations.
The steps to raise the economy’s growth rate over 8% will thus require a lot of focus under Budget 2023 in order to maintain positive inflation and employment growth in the budget for the upcoming fiscal year.
What Are The New Income Tax Slabs In The Union Budget 2023?
In significant for the middle class, during the presentation of her budget, Finance Minister Nirmala Sitharaman changed the income tax bands. According to her, persons who earn Rs. 5 lacks or less annually are exempt from paying income tax; this threshold has since been raised to Rs. 7 lacks.
Individuals with income up to Rs 5 lakh now pay no income tax, either under the old tax system or the new tax system. I suggest raising the refund cap under the new tax system to Rs 7 lakh. People under the new tax system will not be required to pay any tax on income up to Rs 7 lakh, the speaker added.
The tax exemption threshold has been raised to Rs 3 lakh, and FM Sitharaman also stated that the number of slabs has decreased from six established in 2020 to five.
These are the new income tax rates:
- Rs 0–3 lakh–Zero
- 3 to 6 lakh + 5%
- 10% – 6-9 lakh rupees
- 15% – 9-12 lakh rupees
- 20% – 12-15 lakh rupees
- More than Rs 15 lakh – 30%
The new tax system is the default system, according to Finance Minister Sitharaman. Additionally, she said that the government will take additional actions to improve the appeal of the voluntary tax system.
According to the minister, the new personal income tax laws “mainly favor our hard-working middle class.” She said that a person making Rs. 9 lacs per year would have to pay Rs. 45,000, or about 5% of her income.
For the salaried class and retirees, the minister also suggested extending the advantage of the standard deduction of 34. Thus, any salaried individual earning Rs 15.5 lakh or more will stand to gain Rs 52,500, she noted.
The highest surcharge rate has been lowered from 37% to 25% for the maximum tax rate of 42.74 percent. As a result, the maximum tax rate would be lowered to 39%.
Last but not least, the Rs. 3 lakh threshold for tax exemption on leave encashment upon the retirement of non-government paid personnel was last set in 2002, when the maximum basic salary in the government was Rs. 30,000/- pm. I propose raising this cap to Rs. 25 lacs in order to keep up with increases in government salary, she said.
A total of Rs 37,000–38,000 crore in direct taxes, Rs 1,000 crore in indirect taxes, and an extra Rs 3,000 crore in income will be lost as a result of these changes. According to FM Sitharaman, the total income lost will be close to Rs 35,000 crore each year.
Conclusion:
The final comprehensive budget of Prime Minister Narendra Modi’s second term was delivered by Union Finance Minister Nirmala Sitharaman on Wednesday. According to the finance minister, the budget’s proposals revolved around seven priorities: achieving last-mile development, infrastructure and investment, unleashing potential, green growth, young power, and the financial industry. The five significant personal income tax announcements in the budget, including the adjustment in tax slab under the new tax system, were its main draw.
