Union Budget 2023-24 | Everything you need to know about this year's budget

In a boost for taxpayers and the economy, Sitharaman announces major changes to tax panels under a new tax system and a big boost for rail and capital spendin

Union Finance Minister Nirmala Sitharaman on Wednesday unveiled the Union Budget 2023, the fifth Budget of Modi 2.0. In the last full budget before next year's general election, Nirmala Sitharaman said that the Indian economy is on the right track. 

In a boost for taxpayers and the economy, Sitharaman announces major changes to tax panels under a new tax system and a big boost for rail and capital spending.

Union Budget 2023-24

These are the main points of the 2023 budget:

Key announcements for income tax filers:

* There have been no changes to the old tax system

* A new tax system to become the default tax system

* No income tax which amounts to Rs 7.5 lakh per annum under the new tax regime

* The government proposes to cut the maximum surcharge rate from 37 percent to 25 percent in the new tax system

New slabs under new tax regimes

Rs 0-3 lakh: None

3-6 lakhs rupees: 5 percent

6-9 lakhs rupees: 10 percent

9-12 lakhs rupees: 15 percent

12-15 lakhs rupees: 20 percent

Rs more than 15 lakhs: 30 percent

* The government proposes to limit deductions from capital gains on residential housing investments to Rs 10 crore

* A person with an annual income of Rs 9 lakh will have to pay only Rs 45,000 in taxes: FM Sitharaman

* Income of Rs 15 lakh will generate tax of Rs 1.5 lakh, down from Rs 1.87 lakh

* A standard deduction of Rs 50,000 has been introduced for taxpayers under the new system

* Payment received from the Agniveer Corpus Fund is forgiven by Agniveers

* For online gaming, the government proposes to provide TDS and tax net winnings at withdrawal or at the end of the tax year

* Fully imported luxury cars and electric vehicles will cost more as the government raises rates from 60 percent to 70 percent in the budget.

* Tax exemption on holiday pay at retirement for non-government employees with salaries increased to Rs 25,000 from Rs 3,000

What gets cheaper and what's get costlier:
Mobile phones
Lab-grown diamonds
Shrimp feed

Compounded rubber
Articles made from gold bars
Imported kitchen electric chimney
Imported luxury cars and EVs

Indirect taxes:

* 16 percent tax increase on some cigarettes

* New cooperatives that start manufacturing until March 2024 for a 15 percent lower tax rate

* Reduction of basic customs duties on crude oil and glycerin to 2.5 percent.

* Import duties on silver bullion increased to match gold and platinum

* Extension of tariff reduction for imports of mobile phone parts for one year

* To promote the TV industry, the open cell rate for TV panels has been reduced to 2.5 percent

* Exemption from customs duties on the importation of some parts and supplies such as camera lenses

* The preferential charge on lithium-ion battery cells has been extended for another year

* Reduce from 21 to 13 the number of basic tariff rates on goods other than textiles and agriculture. As a result, there are slight changes to the taxes on some toy items, bicycles, and automobiles.

Savings plan announcements:

* The maximum deposit for the Senior Citizen Savings Scheme will be increased to Rs 30 lakh from Rs 15,000

* Monthly income scheme limit doubled to Rs 9,000 and Rs 15,000 for joint accounts

* The new unique Mahila Al Samman savings program is available to women for a period of two years until 2025.

The railway gets a big boost:

* Expenditure of Rs 2.4 crore saved for railways in FY24.
* It is the highest allocation ever made for railroads and is almost nine times the allocation for fiscal year 2014.

Capital expenditures increased 33 percent

* Capital expenditures rose 33 percent to Rs 10,000 crore, representing 3.3 percent of GDP, reports FM

* The actual capex of the center will be Rs 13.7 crore

* Capital investment spending reached 3.3 percent of GDP in FY24

* Effective capex of the center of Rs 13.7 lakh in FY24

Fiscal position:

* The government intends to reduce the fiscal deficit to less than 4.5 percent of GDP by 2025-26

* Fiscal deficit target maintained at 6.4 percent in revised estimate for FY23; reduced to 5.9 percent for fiscal year 24

* Total market loan was Rs 15.43 lakh crore in FY24

* Market net borrowing in FY24 seen at Rs.11.8 crore

* Estimated net tax receipts for FY23 is Rs 20.9 crore

* Revised total expenditure estimate for FY23 is Rs 41.9 crore

* Revised estimate for FY23 of total non-loan receipts at Rs.24.3 crore

* Net tax receipts for FY24 are seen at Rs.23.3 crore

* A renewed credit guarantee for MSMEs comes into effect from 1 April 2023 with an injection of Rs 9,000 crore into the pool.
* A new credit guarantee system for micro, small and medium-sized companies to reduce the cost of credit by one percentage point

Banking services:
The government plans to introduce reforms to the Banking Regulation Law to improve corporate governance in banks

Skill Training:
* Government will launch Pradhan Mantri Kaushal Vikas Yojana 4.0
* For Youth Skills for International Opportunities, 30 India International Skills Centers will be established in different states.

Clean Energy:

* Rs 35 billion priority capital for energy transition

* The Green Credit Program will be notified under the Environmental Protection Law

* Storage batteries to finance the feasibility gap.

* The government will support the preparation of 4000 MWh energy storage batteries

* The national green hydrogen mission at an expenditure of Rs 19.7 billion will ease the economy's transition to low carbon intensity, reduce reliance on fossil fuel imports and make the country a technology and market leader.

Gems and jewels:
* To encourage domestic production of lab-grown diamonds, a research and development grant will be awarded to one of the IITs for a period of five years.
*Proposal to revise customs duties for lab-grown diamonds for inclusion in Part B of the budget document

* Another 50 airports, heliports, aquatic drones and advanced landing zones will be reactivated to improve regional air connectivity.

The ease of doing business:
* Government to bring another dispute resolution scheme Vivad Se Vishwas-2 to settle trade disputes

* PAN as a common identifier for all digital systems of government agencies

* Comprehensive solution to reconcile and update the identity of different agencies to be created with digi locker and Aadhaar as constituent identity

* A central processing center will be established to respond faster to company filing forms under the Companies Act

* For businesses that are required to have a permanent account number, the personal account number will be used as a common identifier for all digital systems of specific government agencies.

* More than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalized to improve the ease of doing business

* Finance Minister announces multiple measures to enhance business activity in GIFT City

Digital services
* Expansion of the range of DigiLocker services
* 100 laboratories for the development of applications for the use of 5G services in engineering institutions
*Labs will cover smart classrooms, precision agriculture, and healthcare applications.
* Phase 3 of the e-Court projects will be launched at an expenditure of Rs 7,000 crore
* Major industry players will participate in development, providing scalable options for healthcare, agriculture and other sectors.
Urban Development:
* The government spends Rs 10,000 crore annually for the Urban Infrastructure Development Fund
* Stimulate cities to improve the solvency of municipal bonds
* The goal of 100 percent mechanical removal of sludge for septic tanks and sewers in all cities and towns
* Prime Minister Awaas Yojana's spending increased by 66 percent to over Rs 79 000 crore
Interest-free loan for states to continue
* The Center will continue with a 50-year interest-free loan to state governments for another year
A digital library for children and adolescents will be created:
A national digital library for children and adolescents will be established
* National Book Trust, Children's Book Trust to replenish extracurricular titles in regional languages and English for digital libraries.
* States should be encouraged to establish physical libraries for them at the panchayat and ward level and provide the infrastructure to access the resources of the National Digital Library
* Establishment of three centers of excellence for artificial intelligence in the best educational institutions.
* 157 new nursing schools will be established jointly with 157 existing medical schools since 2014.
* The Eklavaya Model Residential Schools will be established in the next three years. The center will employ 38,800 teachers and support staff for 740 schools serving 3.5 percent of tribal students.
* The Agriculture Acceleration Fund will be established to encourage the start-up of agricultural enterprises by young entrepreneurs.
* Development of public digital infrastructure for the agricultural sector
* Agricultural credit target will be increased to Rs 20 crore with a focus on animal husbandry, dairy and fishery
* Over the next 3 years, one crore farmer will be helped to adopt natural farming.
* 10,000 critical supplies resource centers will be established

* To launch a sub-scheme under PM Mastya Sampada Yojna at an expense of Rs 6,000 crore to further enable the activities of fishermen
* The Millet Research Institute of India will be supported as a center of excellence
* The computerization of 63,000 primary agricultural credit societies started with an investment of Rs 2,516 crore, reports FM.
* In the drought-prone central regions of Karnataka, a core assistance of Rs 5.3 billion crore will be given to the Badra-ul-Ula project to provide sustainable micro-irrigation.
Tribal Welfare:
* The Pradhan Mantri Primitive Tribal Vulnerable Group (PMPVTGS) mission was launched to improve socio-economic conditions in PMPVTGS.
* To improve the socio-economic condition of tribal groups in particular, the task of developing the PMPBTG will be launched to saturate the PBTG habitats with basic facilities. Rs 15,000 crore will be provided for the implementation of the scheme in the next three years.
* The budget follows seven priorities, 'Saptarishi':
  1. Comprehensive development.
  2. Go to the last mile.
  3. Infrastructure and investment.
  4. Unleash the potential.
  5. Green growth.
  6. The power of youth.
  7. The financial sector.
Goals for the 2023 budget include:
  1. Offer ample opportunities to citizens, especially young people
  2. Give a strong boost to growth and job creation
  3. Promote macroeconomic stability
  4. With the goal of empowering women in the 2023 budget
  5. Enable women's self-help groups to reach the next stage of economic empowerment
  6. To assist self-help groups in sourcing raw materials, brands, and marketing products.

Also Read: Budget 2023: Can India remain a bright spot in global economy?

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