Union Budget 2023 highlights: Income up to Rs 7 lakh is tax-free under new tax regime

Finance Minister Nirmala Sitharaman opened her Union Budget for the fiscal year 2023–24 address by stating that this is the first budget in the Amrit Kaal era. This is the final complete Budget that will be presented before the general election in 2024.

Under the new tax regime proposed by Union Finance Minister Nirmala Sitharaman, the income tax rebate maximum has been increased from 5 lakhs to 7 lakhs. The government has suggested lowering the highest surcharge rate from 37% to 25% under the new tax regime. The government also reduced the number of tax slabs to five.

New tax rates in the new regime:
0 to 3 lakhs: nil
3 to 6 lakhs: 5%
6 to 9 lakhs: 10%
9 to 12 lakhs: 15%
12 to 15 lakhs: 20%
Above 15 lakhs: 30%

The finance minister set the budget deficit target for 2023-24 at 5.9% of GDP, a decrease of 50 basis points from this year’s objective of 6.4%, which Sitharaman stated will be met.

Following the budget presentation, the Sensex rose over 1,000 points and the Nifty rose over 200 points.

Budget 2023 highlights

• The Defence Ministry has been allocated Rs 5.94 lakh crores for the new FY.
• The processing time for income tax returns has been shortened by 16 days, according to the finance minister.
• The government will increase the maximum for cash deposits and loans made by Primary Agricultural Credit Societies to Rs 2 lakh per member.
• In the new tax regime, the government proposes lowering the maximum surcharge rate from 37% to 25%.
• Under the new tax regime, there is no tax on income up to Rs 3 lakh, 5% tax on Rs 3-6 lakh, 10% for Rs 6-9 lakh, and the highest tax rate of 30% on income beyond Rs 15 lakh.
• Taxes on cigarettes increased by 16 percent.
• Set up of 100 labs devoted to the development of apps for use with 5G networks.
• The revamped Credit Guarantee Scheme for Micro, Small, and Medium-Sized Enterprises (MSMEs) will go into action on 1 April 2023, with a corpus inflow of Rs 9,000 crore.
• A capital outlay of ₹2.40 lakh crores has been provided for the Railways. This is the highest ever outlay and about 9 times outlay made in 2013-2014.
• 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.
• Launching with a budget of Rs 15,000 crores, the Pradhan Mantri Primitive Vulnerable Tribal Groups Development Mission aims to provide PVTG families and habitations with secure housing, clean water and sanitation, better access to education, health care, and nutrition, and better road and telecommunications infrastructure.
• National data governance policy announced Aadhar and PAN will serve as the basis for a unified filing system, and KYC data norms would be relaxed.
• Ease of doing business has been enhanced by the reduction of more than 39,000 compliances and the decriminalisation of more than 3,400 law requirements.
• A mission to eliminate Sickle Cell Anaemia by 2047 will be launched.
• The government will hire 38,800 teachers and support staff for 740 Eklavya model schools serving tribal students over the next three years.
• FM on agriculture: So far, the budget address has focused on millets, artisans, agricultural loans, micro enterprises, and small farmers. The agriculture credit target has been increased to Rs 20 lakh crore.
• Focus on rural economy, such as women’s economic empowerment, farmers, and agri-startups, should help increase rural demand for FMCG companies.
• FM recommends increasing capital expenditures by 33 percent to Rs 10 lakh crore, or 3.3 percent of GDP.
• Thanks to the efforts of the National Rural Livelihood Mission, 1 lakh women from rural areas are now active members of self-help groups.
• FM Sitharaman says seven priorities are guiding us through Amrit Kaal
  1. Inclusive development
  2. Youth power
  3. Green growth
  4. Infrastructure and investment
  5. Reaching the last mile
  6. Unleashing the potential
  7. Launching digital platform
• From an economic standpoint, Budget 2023 will prioritise meeting the hopes of young people, creating new jobs from an economics perspective.
• Our vision for the Amrit Kaal includes a technology-driven, knowledge-based economy with stable public finances and a thriving financial sector: FM
• The Indian economy is seen as a bright star by global community. We expect our economy to grow by 7%, which is the most of any major economy: FM
• The FM asserts that the Indian economy is on the right track and headed for a prosperous future
• Nirmala Sitharaman arrives in Parliament, budget to be presented shortly.
• Finance Minister Nirmala Sitharaman will present her fifth Union Budget.
• Sensex surges over 500 points to reach 60,000 in early trading ahead of the budget.