Union Budget 2023

Last updated on February 4th, 2023 at 03:14 pm

Union Budget 2023 holds a lot of importance as this budget is the last full-term budget under the leadership of the Modi Government before the country goes to parliamentary polls in 2024. FM Smt. Nirmala Sitharaman will be presenting her fifth budget on 1st February 2023 in parliament. The budget is likely to focus on the country’s economic development and combating rising inflation.

The first digital budget was presented in FY 22 (Key Highlights of Budget 2022). The Honorable FM mentioned this is the first Amrit Kaal Budget that is being presented in digital format.  All the details of the Indian Budget can be checked on the Indian Budget website and download the Indian Budget Mobile App.

Key takeaways from Union Budget 2023

• World has recognised Indian economy as a bright star. FM mentioned that the Indian Economy is on the right track.
• This budget is based on the foundation laid in the last budgets
• GDP growth rate highest amongst all economies at 7%
• Focus on food supply: PM Garib Kalyan Anna Yojana to provide free foodgrains for the needy effective 1 Jan 23. The objective is to ensure no one sleeps hungry. Centre likely to bear the exp.
•  Govt priorities include
  1. Inclusive Development
  2. Reaching Last Mile
  3. Infrastructure Investment
  4. Unleashing Potential
  5. Green Growth
  6. Youth Power
  7. Financial Sector
• Many policies implemented for Green Growth
• Agricultural Accelerated Fund announced for Agri based startups in Rural areas
• Agri Credit target hiked to Rs 20lakh cr. from 18 lakh cr.
• Rs 6000 cr for Fisheries
• National Digital Library for Children and Adults announced. States to set up a physical library
• 15000 cr will be spent in 3 years for Scheduled Tribe Mission
• PM Aawas Yojana fund increased by 66% to 79000 cr
• Capital Investment outlay increased to Rs 10 lkh crores. This is 3.3% of GDP.
• Effective CAPEX at 4.5% of GDP
• Railway Outlay at Rs 2.4lakh cr. Highest ever outlay. 9 times higher than FY 14.
• Rs 10,000 cr p.a. for infra development
• Ease of doing business – 39 compliances are removed and thousands of legal provisions are decriminalized.
• Make AI in India and Make AI work for India emphasized. 3 centers for Excellence for AI set up. Effective AI ecosystem aimed at.
• Simplified KYC, digilockers etc. A national data governance policy will be brought out this will enable access to anonymize data (digilockers)
• PAN will be used as a common identifier in all digital compliances in government offices.
• 100 labs to set up for developing 5G Apps.
• Lab-grown diamonds (LGD) – grant provided to one of the IITs to improve opportunities in LGD.
• Green Credit Yojana to encourage companies carrying sustainable/green process
• Rs 35ooo cr for Energy Transition Investment
• Rs 27000 cr for renewable energy in Ladakh
• Rs 79000 cr for Affordable Housing
• 3rd Phase of e-courts (Viwad se Vishwas) – Rs 7000 cr
• Rs 9000cr corpus set up for revamping Credit Guarantee scheme (effctive 1 Apr 23)
• Fiscal support for Digital payments continues.  Digital payments increased by 76% and in value terms by 90%.
• Senior Citizen saving scheme deposits limit will be enhanced from 15 lacs to 30 lacs
• Estimated Fiscal Deficit at 5.9% for FY 24

Indirect Taxes

• Customs duty rates reduced for certain items
• Customs duty rates increased on Electric Kitchen Chimney

Direct Taxes

• The presumptive tax turnover limit increased for MSMEs and Professionals to Rs 3 cr and Rs 75 lacs respectively provided cash receipts less than 5%
• Startups – 3rd largest ecosystem in the world. C/f of losses on change in share ownership extended to 10 years from 7 years effective from 31/3/23 to 31/ 3.24
• TDS rate reduced to 20% on EPF, Market linked debentures etc.
• Tax on winnings from online games
• Wrt Sec 54 the value of new residential property is capped at Rs 10cr for computation of capital gain exemption on Residential property

5 major announcements in personal tax

• The rebate limit increased to Rs 7 lacs from Rs 5 lacs in New Tax Regime.

• Standard deduction raised to Rs 52,500 from Rs 50,000

• New Tax Regime tax slab changes:
  • Upto 3 lakh – Nil
  • 3-6 lakh 5%
  • 6-9  lacs 10%
  • 9-12 lacs-15%
  • 12-15 lacs – 20%
  • 15 lakh above 30%

• The highest surcharge rate was reduced from 37% to 25% in the new tax regime.

• The limit on tax exemption for leave encashment is increased from 3,00,000 to 2,50,000.

• New Income Tax regime as default regime. Option of old tax regime available with the taxpayer.

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CA Ankita Khetan

Founder at Financepost.in

Chartered Accountant in practice, DipIFRS (from ACCA, UK), Post Graduate in Commerce, Certified Independent Director (from IICA), and holds a certification in Forex and Treasury Management course (by ICAI).

She can be contacted at info.financepost@gmail.com

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