More on Union Budget 2023-24: The Good, the Bad, and the Ugly

Income Tax

More on Union Budget 2023-24: The Good, the Bad, and the Ugly

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In our earlier blog, we shared some of the essential revisions brought by the Union Budget of 2023-24. The Budget was tabled by the Finance Minister in the Parliament on February 1, 2023. In this blog, we have further elaborated on the adopted Tax Regime for the fiscal year 2023-24, as well as the seven principles shared by Mrs. Sitharaman for inclusive growth in the Nation for the coming year. So let us begin with the new tax regime of 2023. 

All about New Tax Regime: Direct, Indirect & Personal Income

The taxes are collected by the Government from its revenue departments to run its multitude of operations. The Government’s major source of income is taxes. Every year, in the Budget session, the Finance Minister invariably relaxes and tightens its clutches on various tax-generating avenues, such as CGST, SGST, personal taxes, and duties. In this section, we will brief you on the developments in the New Tax Regime of the Union Budget 2023. The three major categories in the Indian Taxation System are:

Let us see each of them one by one in detail.

Indirect Taxes

1. General Amenities

The Union has reduced customs duty on textiles, toys, & bicycles from 21% to 13%.

2. Green Mobility

The Union promotes Green Mobility by exempting excise duty on GST-based and green-compressed biogases.

3. Rebate on Electronics

The Union relieves customs duty on Electronics Manufacture, such as camera lenses and lithium batteries.In addition, the Union cuts the basic customs import duty for TV panels to 2.5% but raises customs duty on imported Electric kitchen Chimnies.

4. Zero Duty on Industrial Solvents

Union has eliminated customs duty for denatured Ethyl Alcohol.

5. Cheaper Marine Exports

Union reduced customs duty on key inputs to enhance Marine productsexports, like shrimp feed.

6. FM went hard on the Allurings

Union raised customs duty on silver bars and gold and platinum jewellery pieces.

 

Direct Taxes

As for the Direct Taxes, the Union will roll out a common IT form as well as Grievance Redressal System to strengthenits disputes resolving capabilities.

1. Presumptive Taxation Limits

The Union revised limits for Presumptive Taxation, such as:

2. For Co-operatives

Union fixes the Co-operatives Tax at 15% for Manufacturing Segment

3. For Startups

The Union extends the Income Tax benefits by a year till 2024 for Startups. In addition, it will carry forward the loss benefit from 7 to 10 years for Startups.

4. Tax Concession

 

Personal Income Tax

1. Sec 87A Rebate

Entities with income less than Rs. 5 Lakh need not pay any income tax. But, the Union proposes to increase the Income Limit to Rs.7 Lakh applicable for those opting under the New Regime.

2. Revised Income Tax Slabs

The Union has reduced the previous Six Income slabs to five in the current regime, defined below:

3. Standard Deduction

The Standard Deduction in the New Regime for salaried employees and pensionersover Rs.15.5 lakhs is Rs.52,500. The Union reduces the highest surcharge from 37% to 25%  in the new IT regime.

4. Raise in LTC Budget

The Union increased the Tax Exemption Limit for LTC is increased from 3 to 25 lakhs rupees

5. Applicability of the Old Tax Regime

The Union implements the New IT regime as its default,but the old regime will be available for tax assessment choices.

 

7 Priorities of the Union Budget 2023-24

What does this Saptrishis mean?

1. Inclusive Development

The Union Government further promulgates its 'Sabka Saath Sabka Vikas' policy. They seek to provide numerous benefits to many unprivileged sections of society, such as women, SCs, STs, and other underprivileged groups.

2. Reaching the Last Mile

After the success of the Aspirational District program in the country, the Union further sealed the required Budget to launchthe Aspirational Blocks program. It will cover500 blocks for government servicessaturation.

3. Infrastructure & Investment

The Union has further increased the CAPEX outlay by 33%. As a result, the capital expenditure for the year 2023 has been raised to Rs 10 lakh crores, which is 3.3% of the projected GDP.

4. Unleashing the Potential

The Union will implement the National Data Governance Policy by enabling access to anonymized data. It is done to unleash innovation and research by startups as well as academia.

5. Financial Sector

The Union has revamped the infusion schemes for the country's MSMEs, which will take effect from April 1, 2023. The infused amount is Rs 9,000 crore for the corpus.

6. Green Growth

The Union has allocated a budget of Rs 35,000 crore as a capital investment towards energy transition. The Ministry of Petroleum and Natural Gas envisions a net zero objective as well as energy security.

7. Youth Power

The Union has reserved a small pie of the Budget for launching the PM Kaushal Vikas Yojana 4.0. This version of the Kaushal Vikas Yojana seeks to further skill lakhs of youth by covering new-age courses.

If you wish to know furthermore about the Union Budget discussions or its analysis, you can refer to our youtube channel or subscribe to our newsletter.

 

 

 

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