Key Highlights : Budget 2023

As per our assessment if one has opted for new regime no tax up to 7 lakhs and in old regime no tax upto 3 lakhs and income taxable as per slabs.

Tax slabs remain in position as given. However, for income upto Rs 7 lakh and below, the Govt will waive off the tax index provisions of Section 87.

If taxable income exceeds Rs 7 lakh, then the tax applicable on the Rs 4 lakh income (7-3) will not be waived off. It is the same as the present system where the tax exemption was being given by the Govt, for the income between 2.5 and 5 lakhs.

Currently, those with income up to Rs 5 lakh don't pay any tax in new regimes. The rebate will be increased to Rs 7 lakh in the new tax regime. Individuals opting for new tax regime, which was introduced in Budget 2020, with an income of Rs 7 lakh will not have to pay any tax at all.

Persons in the new tax regime with income upto Rs 0.7mn p.a will not have to pay any tax. Tax exemption limit under new tax regime increased from Rs 0.25mn to Rs 0.3mn and no. of slabs reduced from six to five. As per these slabs the tax liability of an individual with income of Rs 0.9mn pa will go down from Rs 60000 to Rs 45000 and that of an individual with income of Rs 1.5mn pa will go down from Rs 187500 to Rs 150000. 

Benefit of standard deduction of Rs 52500 extended to new tax regime for salaried class and pensioners. Highest surcharge rate reduced from 37% to 25% which reduces highest tax rate from 42.74% to 39%. 

Tax exemption limit on leave encashment on retirement of non-government salaried employees increased from Rs 0.3mn (last set in year 2002) to Rs 2.5mn. New income tax regime will become the default tax regime, however citizens will continue to have the option to avail the benefit of the old tax regime.

Old regime still beneficial till this FY.

Should maybe change from next FY to new tax regime and say good bye to compulsory investments.

Nirmala Sitharaman has outlined 

7 Priorities For first Budget in Amrit Kaal

• Inclusive development

• Reaching the last mile

• Infra & investment

• Unleashing the potential

• Green growth

• Youth power

• Financial sector

📍 India's Economy to grow at 7% in the current year, World recognises India as a bright star, highest among major economies.

📍 Rural Focus - FM announces that the centre will Spend Rs 2 lakh cr on Free Food Grains for all priority households under PM Garib Kalyan Yojana.

📍 Green growth would be one of the priorities of the budget, They will help Reduce carbon intensity and create *Green jobs*

📍 Agri Sector - The Union Government’s focus on reforming the agriculture sector continues, An open-source digital Infrastructure for agriculture & an agriculture accelerator fund focused on youth in rural areas.

📍 Government to Spend Rs 2200 crore for high-value Horticulture, also increased Agri Credit Target to Rs 20 lakh crore.

📍 Health -  Budget 2023 that a mission to *Eliminate sickle cell anaemia by 2047 will be launched by the government.

📍 Educational infra - Eklavya Modern Schools in next three, 157 new nursing colleges will be established, Plan to Spend Rs 15000 cr vulnerable tribal group (PVTG) over 3 years.

📍 Capex Big Jump

• At Rs 10 lakh crore, the Centre’s capex target for 2023-24 is 33% higher than the budget estimate of Rs 7.5 lakh crore for 2022-23

• Plan to increase PM Housing ( PMAY) outlay to Rs 79,000 crore

• Govt proposes Rs 2.40 lakh crore for *Indian Railways* which is 9x over FY14.

📍 Digilocker One stop KYC maintenance system, the legalisation of the permanent account number (PAN) as a single business identification.

📍 50-year Interest Free Loan to State governments extended for 1 more year

📍 MSMEs - The revamp schemes will take effect from 2023 through an infusion of Rs 9,000 crore in the corpus, This will enable another Collateral-free credit of Rs 2 lakh crore,  Further the cost of credit will be *reduced by around 1%

📍 DBT scheme for youths - To provide support to 47 lakh youths in 3 years, a Direct Benefit Transfer under a pan India national apprenticeship scheme will be rolled out.

📍 Borrowings - 

• The Centre will borrow Rs 15.43 lakh crore via bonds in 2023-24 on a gross basis - a new all-time high.

• In net terms, the borrowing programme has been fixed at Rs 11.8 lakh crore

These numbers are broadly in line with market expectations of Rs 15.5 lakh crore and Rs 11.7 lakh crore, respectively.

📍 Custom Duty - 

• Relief in custom duty on Import of certain parts of mobile phones like camera lens and batteries by another year, open cells of TV panels cut to 2.5%, etc

• Taxes on cigarettes Hiked by 16%, compounded rubber increased to 25% from 10% , etc

📍 Personal Income Tax - 

0-3 lakh - NIL

3-6 lakh -5%

6-9 lakh - 10%

9-12 lakh-15%

12-15 lakh -20%

Above 15 lakh - 30%

This will provide major relief to all tax payers in the new regime. An individual with an annual income of Rs 9 lakh will be required to pay on Rs 45,000 in tax- this is only 5% of his or her income. It is a reduction of 25% on what he or she is required to pay now. Similarly, an individual with an income of Rs 15 lakh would be required to pay only Rs 1.5 lakh or 10% of his or her income.

Major relief to all tax payers in the new regime.

New tax regime to become the default tax regime. Desire of the govt is that max people migrate to new tax regime.

📍 Income tax rate -

Currently, the highest rate is 42.74% income tax under the new regime. 

The FM has proposed to reduce the highest surcharge from 37% to 25% in the new tax regime, max rate of 39%

📍 Direct Taxes-

Processed more than 6.54 cr Returns this year on the tax portal.

Make daily profit with Indian-Share-Tips.com bank nifty option tips on a daily basis.

Contribution to SCSS increased to 30 lakh from 15 lakh

Contribution to MIS increased to 9 lakh from 4.5 lakh for single account and 15 lakh for joint account

The Above two will change ur chart on what to do with retirement corpus

Gist: No change announced on 80c

🌺 Major Direct tax proposals (from speech)

👉 1. Rollout of next gen ITR form 

👉 2. New limit for 44AD & ADA : 3 crore & 75 Lacs

👉 3. Expense deduction to MSME to be allowed on payment basis

👉 4. New cooperatives manufacturing tax @ 15% if upto 31.03.24

👉 5. Higher loan limit /cash deposit Rs 2 lacs for PAC society -RDB

👉 6. Startups:

a) Date of incorporation for. startup extended to 31.03.24

b) Extension of CF losses 7 yrs in case of change in shareholders

👉 7. Selective scrutiny + More CIT to dispose off small appeals

👉 8. Extension of tax benefits for IFSC

👉 9. Personal Income tax

a) Tax rebate limit extended to 7 lacs (new regime)

b) change in tax slabs & new tax rates as per old tax regime.

0-3 L : Nil

3-6 L : 5%

6L-9L : 10%

9L-12L: 15%

12-15 L : 20%

15L +: 30%

c) Salaried class & pensioners(incl family pensioners) :

Standard deduction extended

d) Highest surcharge reduced from 37% to 25% 

Now MMTR : 39%

e) Leave encashment exemption (pvt) increased from 3Lacs to 25 Lacs

f) New tax regime is now default tax regime -Old tax regime will continue.

🌺 Major Insurance Tax proposals (from Budget)

 Income from Insurance Policies (Other than ULIP) having aggregate above 5 Lakhs Premium will be *TAXABLE* from 1st Apr 2023 -

1) Tax will be only on Policies Purchased from 1st April 23

2) Aggregate Premium More than 5 Lakh 

3) If 80C Claimed on Premium paid - FULL Maturity Taxed as per Slab

4) If 80C NOT Claimed on Premium paid - Then Maturity Less Premium paid = Profit will be Taxable as per Tax Slab

5) Policies Purchased till 31st March 23 will have Tax Free Maturity (Any Amount)

6) Policies Purchased After 1st April 23 Tax Free Maturity ( Premium Upto 5 Lakh per PAN card)

Above proposal will not affect the tax exemption provided to the amount received on the death of person insured. 

Interest Rates are still high so HURRY UP & TAKE ADVANTAGE OF TAX FREE STATUS AVAILABLE TILL 31st MARCH 2023

Lighter vien

Budget analysis in two lines:

1. Whatever you have already bought has become cheap.

2. Whatever you wanted to buy has become costly

Modi take on Budget

Talking about the benefits included for the middle class and the revised tax regime introduced in the budget, PM Modi said, “Middle class is a big force to fulfil dreams of prosperous, developed India. 

Our government has taken several steps to empower the middle class and ensure ease of living. We have reduced tax rates and have given relief accordingly.”