HIGHLIGHTS OF THE BUDGET 2023

Introduction on Budget 2023 By Union Finance Minister :

The union Finance Minister Nirmala Sitharamman announced Union Budget 2023 -24 on 1st February 2023. This is the fifth budget of Modi 2.0 and the last budget before the general elections next year. As per the Finance Minister India is making its path towards a positive future. This budget is always special and much-anticipated for big and bold moves. But this year’s budget was not so bold and was no exception as it was just covering up old schemes by putting some new names and add-ons. But Indian salaried tax payers benefited with Budget 2023 under the new tax regime and not many changes for the old tax regime.This slight disadvantage for old tax regime and looks like government wants to stop old tax regime and make every one to move over new tax regime .

The reappearance of the increased duty on cigarettes, which had been absent for three years, was highlighted in the budget. To boost the economy, various initiatives were implemented to increase consumption, reduce the compliance burden, support micro, small, and medium enterprises (MSMEs) and the middle class, and simplify the tax system. The seven priorities outlined in Budget 2023 are inclusive development, connecting with the last mile, investment in infrastructure, unlocking potential, green growth, empowering the youth, and strengthening the financial sector. Let’s delve deeper into the Budget 2023.

Update On Savings Schemes Budget 2023 :

The union Finance Minister Nirmala Sitharamman announced different improvements for savings schemes in Union Budget 2023 -24 and following are list of it

• Senior Citizen Savings Schemes Update 2023- 24 : The deposit limit for the senior citizen saving scheme has recently been increased from 15 lakhs to 30 lakhs. This change is particularly important for individuals who have retired and often receive a significant amount of money. By depositing their funds in the senior citizen saving scheme, they can take advantage of the increased limit and the current interest rate of around 8% This will provide a substantial boost for retired individuals looking to grow their savings. In summary, the answer to whether this change is a significant impetus for retired individuals is undoubtedly yes
• MIS Monthly Income Scheme Update 2023 – 24: Deposit Limits Doubled to Mobilize Small Savings. The MIS Monthly Income Scheme is a popular savings option for those seeking a steady income stream from their investments. The scheme has recently increased its deposit limits, making it an even more attractive option for individuals with small savings. For a single account, the deposit limit has been raised from 4.5 lakhs to 9 lakhs. For joint accounts, the deposit limit has increased from 9 lakhs to 15 lakhs. These changes are aimed at encouraging individuals to mobilize their small savings and invest in this reliable and profitable scheme
• Azadi ka Marit Mahotsav Mahila Samman Bachat Patra : This new small saving scheme is set to be made available to women for a limited period of two years, up to March 2025. The scheme is designed to encourage women to save and invest their money and features an attractive interest rate of 7.5%.In addition to the high-interest rate, the scheme also allows for partial withdrawal, providing flexibility for those who may need access to their funds. The deposit facility of up to two lakh Rupees is also an attractive feature for those looking to maximize their savings and investments. The focus of this new small saving scheme is clear to encourage more savings and investments among women. For more information on this in English Click Here and in Hindi Click Here.

Income tax in budget 2023 – 24:

The union Finance under budget has announced few major updates particularly in terms of income tax exemptions. It’s important to note that these amendments only apply to the new regime, not the old one.One major update is the eligibility rebate increase under Section 87a, from 5 lakhs to 7 lakhs. This change is only applicable under the new regime. Additionally, the basic exemption limit has increased from 2.5 lakhs to 3 lakhs, again only under the new regime. While the revised tax slabs also only apply to the new regime, the increase in basic exemption limit and rebate eligibility is significant for those in the low and middle-income groups. With a reduced tax outflow, disposable income will increase, providing more opportunities for spending and boosting consumption. If you’re looking to benefit from these changes, it’s important to be aware of which tax regime you fall under. With the right knowledge and planning, you can take advantage of the increased income tax exemption limits and ensure your financial well-being. Below is sample table of calculation for new income tax slab 2023

Then they mentioned the highest rate of surcharge which was 37% (For income above 5 cr) has been removed under this new scheme, the highest surcharge is now going to remain at 25%. So again now this will benefit those who are in the highest income group so for them tax will now reduce to 39% from 42.74% for the new regime. One more important point for salaried class people is standard deduction of Rs 50,000 from salary which was earlier not allowed under the new regime has now been allowed for the new regime as well.

Another important point for exemption limit (capping) of leave encashment received at the time of retirement has been increased to 25 lakhs from 3 lakhs for non-government employees, this is mainly important for non-government employees, for government employees anyways whatever leaves and encashment they are getting at the time of retirement that is anyways going to be exempt for them so this is going to be important, especially for those who are into the non-government employment category.

Another important point is to curb the misuse of claiming exemption on insurance policies, the income from insurance having a premium or aggregate of premium above Rs 5,00,000 in a year shall be taxable. The next big relief is that tax on LTCG from Equity shares was not increased. And for old tax regime under 80C you can save upto 46,800 on your tax liabilities every year by purchasing some term plan and for the investment of 1.15 lakhs could save you almost 46,800 (Considering you fall under 30% bracket) The conclusion on the tax part is that the tax benefits are given not only to middle-income earners but also to high-income earners, which can result in increased disposable income in the hands of individuals. This can in turn increase consumption expenditure, leading to an increase in the GDP.

Agriculture in budget 2023 -24 :

The union Finance Minister announced the building of an open-source infrastructure for farmers. This will include framer-centric solutions like information for crop planning, improved access to farm / agri inputs, credit and insurance help for crop estimation, etc, And they are also going to have an agriculture accelerator fund mainly to encourage Innovations and startups in rural areas in the Agri domain. Along with this government of India is trying to make Digitization of credit societies and focus on creating enough co-op societies in uncovered gram panchayats and villages and they are mainly planning to do this making India a Global Hub for millets (Sri Anna), everyone who are on a diet they know about millets, support is to be given to the Indian Institute of Millet research as the Centre of Excellence for R&D in this domain, sharing best practices while growing it. Other focus on the Cotton Cluster-based value chain, Aatmanirbhar clean plan program, and Maysya Yojana. The main point is all about empowering the farmers so this is the key focus on farmers in this budget.

Reaching Last Mile :

This is mainly about the Pradhan Mantri Primitive Vulnerable Tribal Groups is also called as PM PVTG Development mission which is to be launched in budget 2023 -24. The Main focus is on providing basic facilities to tribal groups where the basic facilities like Clean water, Sanitation, Education, Health, Roads, Connectivity and Sustainable livelihood opportunities are needed at an outlay of 15,000 crores over 3 years, Along with that the update on PM Awas Yojana house of everyone the outlay is increased by 66% to 79,000 crores. The main focus of “Reaching Last Mile” is on empowering and enriching at least giving basic qualities, basic lifestyle requirements to the tribals.

Infrastructure and Investment in budget 2023 -24 :

The union Finance Minister has given a wonderful road map for Infrastructure which lead once again to ramp up the virtuous cycle of investment and job creation. Following is the table which explains the road map on Infrastructure and Investment

Unleashing Potential in budget 2023 – 24 :

The union Finance Minister has unleashed the potential mainly to help ease doing business using technology as key. Following is the table which helps to understand the unleashing ways given by FM

Green Growth in budget 2023 -24 :

The union Finance Minister has announced that PM-PRANAM will be launched to incentivize States and Union Territories to promote alternatives fertilizers and balanced use of chemical fertilizers, this is mainly because we have to use more and more of natural fertilizers green fertilizers if they are used that will be more beneficial.

Green Hydrogen Mission: The recently launched National Green Hydrogen Mission, with an outlay of Rs 19,700 crores, 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 in this sunrise sector. Our target is to reach an annual production of 5 Million Metric tonnes(MMT) by 2030.

Assuming we truly go green then number one we will become carbon neutral number two more sustainable future and very important number three which are crude oil imports can reduce and which can definitely improve our physical deficit position.

Youth Power in budget 2023 -24 :

The union Finance Minister has announced that they will be launching PM Kaushal Vikas Yojana 4.0 to skill youths in new-age courses like drones, 3D printing, artificial intelligence, etc.

The Budget also announced a Pan-India National Apprenticeship Promotion Scheme to provide stipend support to 47 Lakhs youth in 3 years

A National Digital library will be set up for children and adolescents in English and Regional Languages.

Eklavaya Model Residential Schools to be set up in the next 3 years which would serve 3.5 lakh tribal students. As India is a very young country the focus should be on upskilling the youth empowering the youth

Financial Sector in budget 2023 -24 :

For the upliftment of the financial sector, The union Finance Minister has taken a few initiatives which are targeted to touch the last person of society.

This is mainly on efficient lending and promoting financial inclusion, implementing a credit guarantee scheme for MSMEs to enable additional collateral-free guaranteed credit of 2 lakh crores, and initiatives to promote business activities in GIFT IFSC

Miscellaneous in budget 2023 -24 :

50 tourist destinations will be selected on challenge mode to develop as a whole package for domestic and international tourism. States will be encouraged to set up a ‘Unity Mall’ in the State capital or the most popular tourist destination in the state for the promotion and sale of ‘One District, One product’ and indigenous handicrafts.

Conclusion of budget 2023 -24 :

Over the budget was normal as no major impact on income taxpayers, mainly focusing on moving everyone towards a new tax regime that will help them to spend more and grow more economy. More focus is on Agriculture and MSME lending schemes and strengthing the infrastructure which is the backbone of the country. The next key focus on updating government employees on the latest technologies and building AI-focused educational centers, enabling Digit locker for all private companies and 5G base application development. The next main focus is on empowering youth with PM Kaushal Vikas Yojana 4.0 to skill youths in new-age courses. On Conclusion this is mainly focusing on Agriculture and Infrastructure development. What you thing could have been missing in this budget.