New union budget 2023 insights for every taxpayer
The long-awaited budget is finally out! It is promising in ways anticipated, yet surprising with the shifts in numbers it presented. It brought forth digitalization, inclusivity, universalization, and a holistic sense of empathy as its value systems. At its heart, it promised financial literacy as a countrywide phenomenon and stability in taxation.
The 2023 budget in India, presented by Amrit Kaal, aims to bring a bright future for the economy by formalizing it through increased digital payments.
The following updates got made to personal income tax:
1. There is a rebate for income up to 7 lakhs under section 87A in the new tax regime.
2. The new tax regime has the following tax rates: 0-3 lakhs are nil, 3-6 lakhs are 5%, 6-9 lakhs is 10%, 9-12 lakhs is 15%, 12-15 lakhs is 20%, and above 15 lakhs is 30%.
3. The standard deduction for the new tax regime for individuals earning Rs. 15.5 lakhs or more is Rs. 52.500.
4. The highest surcharge rate has been reduced from 37% to 25% in the new income tax regime.
5. The limit for tax exemption on leave encashment has increased from 3,00,000 to 25,00,000.
6. The new income tax regime is the default regime.
The Indian government has made several changes to its income tax policies. PAN will be used as a universal business identifier for matching IDs held by different government agencies. The investment limit for senior citizens has increased from 8.15 lakh to 30 lahks for small savings. A Mahila Samman Savings certificate, with a deposit limit of up to 22 lakhs at 7.5% interest, has been introduced for 2 years. The e-filing portal processed over 6.5 crore returns and received 72 lakh returns in a day. New cooperative societies will receive a lower tax rate of 15%. The TDS limit for cooperative societies on cash withdrawal has been proposed to be increased to 3 crores. Start-ups established until 31-03-2024 are eligible for tax exemptions under Section 80-IAC. A new common IT form will be launched. MSMEs and professionals can receive presumptive tax limits of up to 23 crores (turnover) and 275 lakhs (income) if cash receipts are no more than 5%. The upper limit for exemptions under sections 54 and 54F has been capped at 210 crores. The section 87A rebate has increased from 85 lakhs to 27 lakhs in the new regime. High-value insurance policies will be taxed, and capital gains from the sale of property over 210 crores will be higher. The number of tax slabs have been revised, with a maximum exemption limit of 23 lakhs. The highest surcharge rate has been reduced from 37% to 25% in the new tax regime.
While we are at it, let me take you through other significant announcements launched in the new budget.
The Finance Minister of India has announced reductions in the basic customs duty rates from 21% to 13%. A concession in duty was also declared for the import of batteries and camera lenses. The budget includes an exemption for the import of capital goods for Lithium-ion cell production in EV batteries.
Customs duty relief for mobile phone parts has been extended for another year and has been reduced for TV panel parts. However, the basic customs duty on electric kitchen chimneys has increased to 15% and decreased on heat coils. To enhance mobile production, customs duty relief has been provided for the import of parts and inputs.
On the other hand, basic customs duty has increased on compounded rubber, while customs duties on kitchen chimneys have been reduced. Additionally, customs duties on gold products have been increased.
An Agriculture Accelerator Fund has been set up to finance agri-startups, and the government is focusing on empowering women through self-help groups. The Indian Institute of Millet Research will also be supported as a center of excellence. According to Nirmala Sitharaman, the Finance Minister of India, the Indian economy is growing and is on track to be among the largest in the world. The 2023 budget is a reflection of this growth and the government's commitment to its future.
The latest budget presented in India has set out plans to improve various aspects of life for its citizens. The Atmanirbhar Clean Plant Program will be introduced with a budget of & 2,200 crores to provide high-quality, disease-free planting material for horticultural crops. To improve healthcare, 157 new nursing colleges will be established in key areas. In addition, the government is taking measures to ensure food security by offering free food grains to certain households for one year. The creation of cooperative societies for farmers and a mission to eliminate sickle cell anemia by 2047 are also part of the budget's plan. A national digital library will be established to give children and teenagers access to quality books, managed by the National Book Trust and Children's Book Trust. The budget's main objective is to enhance the standard of living for the citizens of India.
2023 is an important year for our country, and the nuances of its vision are looking up. I, with TaxBuddy, am grateful to be a part of the vision that aims at setting India self-sufficient, efficient with its taxation, and flourishing financially.