PremiumFinance Minister Nirmala Sitharaman presented the Union Budget for 2023 in the Parliament on Wednesday, the last full-year budget before the national elections in 2024 and key state elections later this year. In a relief to taxpayers, the FM proposed to change the tax structure in the new personal income tax regime by reducing the number of slabs to 5 and increasing the tax exemption limit to ₹3 lakh.
"Happy that the Government didn’t give in to the pressure from the middle class. Though there has been a revision in the income tax slabs for the salaried class, the income Tax regime needs a massive change. We need a clear rollout plan toward a simpler, more effective, and inclusive income tax regime," said Anand K Rathi, Co-founder, MIRA Money
The maximum tax rate of personal income tax comes down to 39% which was earlier 42.74%.
"As expected, this year after a long wait, the budget finally focused on the middle-class/ salaried class/ small business category taxpayers of India. The introduction of new slabs with lesser tax rates under the new tax regime as well as the announcement of introducing a single simplified common ITR form in the future, clearly shows the government's objective to simplify the income tax for the common people. For small businesses and professionals also, the threshold limit for presumptive business income has been increased, which will not just reduce the compliance burden for them but ensure more people do the compliance. Further, no tax is levied up to 7 Lakh of income, a big relief for millions of salaried individuals," Abhishek Soni, Co-founder & CEO, of Tax2win said
“Taxpayers who want to avoid the hassles of claiming traditional deductions, who usually do not opt for HRA or claim other reimbursements via an employer or do not want to invest in traditional 80C, may now see the new regime as an option," Archit Gupta, Founder, and CEO, Clear said.
The collection through personal income tax is estimated at ₹8.15 lakh crore for fiscal year 2022-23 and are projected to rise by 10.4% next year and reach ₹9 lakh crore
A taxpayer saves more taxes under the new tax regime. It needs to be noted that this would be without any deductions that are available in old regime. Read More
Union Budget 2023: ‘Agniveers’ that were recruited under the "Agnipath' scheme, has now become eligible for tax relief, according tot he Union Budget presented by Finance Minister Nirmala Sitharaman on Wednesday, 1 February, 2023. Finance Minister Nirmala Sitharaman on Wednesday during her Union Budget speech 2023 said that the payment received by the ‘Agniveers’ from the Agniveer Corpus Fund is proposed to be exempted from taxes. Read here
"We are happy that the Union Budget has reduced the compliance burden by mandating that PAN be a common business identifier. Moves to empower SEBI to develop, regulate and enforce norms for education in the National Institute of securities markets will enhance financial inclusion in the country. The budget paves the way for more ease of doing business and will help drive the entrepreneurial spirit of the country. The Government’s resolve to keep fiscal deficit targets combined with RBI's efforts to bring inflation within tolerable limits will reassure investors and consolidate India’s position as an attractive investment destination. The start-up tax exemption for another year will help the sector grow, especially in a challenging macro climate. Focus on simplified KYC, Digi locker for businesses and National Data Governance Policy will reduce the compliance burden and provide data for research this helping start-ups focus on building great products. The revised tax slabs will result in higher disposable income, helping in better savings and additional spending, a win-win for the economy," said Vikas Jain, CIO and Co-founder, Multip
Finance Minister Nirmala Sitharaman today announced that there would be no capital gain tax levied if physical gold is converted to Electronic Gold Receipt (EGR) or e-gold and vice versa. The finance minister said that the move would promote gold investors to move towards electronic equivalence of gold. The finance minister made the announcement while presenting the Union Budget 2023 on Wednesday while delivering the budget speech in the parliament. Find more here
“Focus on new tax regime – Budget is clearly trying to drive more tax payers to the new tax regime for which additional benefits have been provided. No changes have been proposed for the old tax regime. In fact, the new tax regime is now the default option for tax payers, although they have the choice to opt for the old tax regime. Given the focus on the new tax regime, it seems unlikely that in the near future, any additional benefits / exemptions will be provided to tax payers opting for the old tax regime," said Dhaval Kapadia, Director – Managed Portfolios, Morningstar Investment Adviser India
Proceeds from life insurance premium over the annual premium of ₹5 lakh would be taxable from new financial year i.e. from 1st April 2023. However, the finance minister made it clear that the new income tax rule will keep death benefit on such premium would continue to remain tax exempted. She also announced that the new income tax rule won't be applicable on ULIP (Unit Linked Insurance Plan). Find out here
Making new tax regime default option 'grossly unfair', will rob ordinary taxpayers of meagre social security under old regime: Congress
New income tax slabs have been made as a default tax regime in Budget 2023, though, the old one has not been abolished. Therefore, taxpayers now have two options. But, which one is better? Find out here
Finance Minister Nirmala Sitharaman has brought cheer to the middle class by introducing widespread changes to the income tax structure, by changing the slabs, raising the rebate level and providing incentives to those falling under higher brackets. However, there is a catch! The Budget incentives can only be enjoyed by those who opt for the new tax regime. Mint decodes in this story
“We are not compelling anybody. Those who want to remain in Old can still remain there. But the new one is attractive because it gives a greater rebate. It also provides for simplified & smaller slabs, smaller lower rates of taxation & also slabs which are nicely broken down," said FM in the post-budget press conference
The government on Wednesday said there won't be any capital gain tax if physical gold is converted to an Electronic Gold Receipt (EGR) and vice versa. Announcing this in her Budget speech for the 2023-24 fiscal, finance minister Nirmala Sitharaman said: "The conversion of physical gold to Electronic Gold Receipt (EGR) and vice versa is proposed not to be treated as a transfer and not to attract any capital gains." Read here
Finance Minister Nirmala Sitharaman has proposed to use PAN card as as a common identifier for all digital system at government agencies. The move is expected to simplify KYC process and make it simple for the Income Tax Department and other government agencies to manage documents of the PAN cardholders. Details
"Though the new tax system will be the default, taxpayers could choose the previous one. In the new tax system, the FM has also decreased the number of tax slabs. The government has reduced the surcharge of the highest rate from 37% currently to 25% in new tax regime. A salaried person currently has the choice to choose the old tax system and keep using the standard tax deductions and exemptions. Otherwise, he or she might choose the new, more favourable income tax system, which does not offer any typical tax breaks or exemptions. The person will have to forego 70 tax deductions and exemptions under the new tax law, such as the HRA tax deduction, LTA tax deduction, Section 80C deduction of up to Rs. 1.5 lakh, and so on. For people who were unable to take use of the existing tax deductions and exemptions, a new tax regime was announced. Additionally, it assists in reducing the burden of compliance for salaried taxpayers. The benefit in tax slab may give rise to savings and overall investment in the economy," said Manish Khanna, Co-Founder, of Unlisted Assets
Capex bazooka, tax bonanza and jobs push ahead of 2024 elections - Budget 2023 in 10 points: Read here
The new tax regime has been announced as a default tax regime with a host of benefits. But does that mean the old tax regime has ended? Find out in this story
“Any opportunity that gets created for senior citizens to increase their retirement corpus is a welcome one. The proposal to raise tax exemption on leave encashment on retirement is a positive move in that direction," said Caroline Kulkarni, Head of Human Resources, Sanctum Wealth.
"Considering that the exemption limit was set in 2002 and has not undergone any revision since then, it has now been revised in this Budget, the proposed revision will help the employees in getting more dispensable income in their hand since now upto Rs. 25 lakhs such leave encashment will be non-taxable in their hands," said Saurrav Sood, Practice Leader – International Tax & Transfer Pricing, SW India
The government proposed an extension of the date of incorporation for income tax benefits to start-ups from March 31, 2023, to March 31, 2024. Check here
Finance Minister Nirmala Sitharaman on Wednesday proposed to hike tax exemption on leave encashment on retirement of non-government salaried employees to ₹25 lakh from ₹3 lakh. Read details in this story
“The new tax regime has got a great boost by the Budget announcements made by the FM. Taxpayers at both ends of the spectrum will be encouraged under the new regime, as there will be no liability upto annual income of 7 lacs on 1 hand & surcharge on annual income above 5 crores has been reduced from 37 to 25% at the high income end," said Alok Agrawal, Partner, Deloitte India
"In simple words, the enhancement of this limit to seven lakh rupees means that the person whose income is less than Rs.7 lakhs need not invest anything to claim exemptions and the entire income would be tax-free irrespective of the quantum of investment made by such an individual. This will result in giving more consumption power to the middle-class income group as they could spend the entire amount of income without bothering too much about investment schemes to take the benefit of exemptions" explained Abhishek A Rastogi, Founder of Rastogi Chambers
The income tax changes rolled out to cost the govt revenue of about ₹38,000 crore. As a result of these proposals, revenue of about ₹38,000 crore – ₹37,000 crore in direct taxes and ₹1,000 crore in indirect taxes – will be forgone while revenue of about ₹3,000 crore will be additionally mobilized. Thus, the total revenue forgone is about ₹35,000 crore annually
Income above ₹5 lakh from insurance policies will be taxed
Proposal for the salaried class and the pensioners including family pensioners, for whom proposed to extend the benefit of standard deduction to the new tax regime. Each salaried person with an income of ₹15.5 lakh or more will thus stand to benefit by ₹52,500: FM
The limit of ₹3 lakhs for tax exemption on Leave Encashment limit raised to ₹25 lakhs
“The Current tax rate in country is 42.74%, among the highest in world. Budget 2023 proposes to reduce the highest surcharge rate from 37% to 25% in the new Tax regime This will result in the reduction of the maximum tax rate to 39%."
5 major announcements -
Tax rebate limit raised to ₹7 lakh from ₹5 lakh
New personal tax regime
0 to ₹3 lakh: Nil
3 lakh - 6 lakh: 5%
6 lakh - 9 lakh: 10%
9 lakh - 12 lakh: 15%
12 lakh - 15 lakh: 20%
15 lakh - above: 30%
New Income Tax regime to be default regime, will have option to choose old regime
To reduce the highest surcharge rate from 37% to 25% in the new Tax regime. This will result in the reduction of the maximum tax rate to 39%.
New income tax regime the default tax regime but citizens can continue to opt Maximum marginal rate reduced to 39% with reduction in surcharge
0-3 lakh nil
3-6 lk 5%
6-9 lk 10%
9-12 lk 15%
12-15 lk 20%
above 15 lk - 30%
Propose to increase the rebate to ₹7 lakh from ₹5 lakh: FM
- 16% increase in National Calamity Contingency on certain cigarettes
- Average processing time for income tax returns reduced from 93 days to 16 days
- Startups: Date of incorporation tax benefits extended to 31 March 2024 from 31 March 2023
- Lower tax rate for new cooperatives: Relief of almost ₹10,000 crore for sugar cooperatives
Fiscal deficit for FY23 at 6.4% of GDP
Fiscal deficit target for FY24 at 5.9%
Fiscal deficit glide path for FY26 is 4.5%
"I propose to reduce the number of basic custom duty rates on goods other than textiles and agriculture, from 21% to 13%. As a result, there are minor changes in the basic custom duties, cesses & surcharges on some items including toys, bicycles, automobiles."
Reclaiming shares & dividends from investor protection authority, integrated IT portal to be established: FM
“Permitting acquisition financing by IFSC units of foreign banks. National Financial Information Registry to promote credit, facilitate inclusion. NFIR to be designed in consultation with the Reserve Bank of India (RBI)."
₹19,700 crore allocated to the National Hydrogen Mission, to reach hydrogen production capacity of 5 metric million tonnes by 2030
Over the next 3 years, one crore farmers will get assistance to adopt natural farming. 10,000 bio input resource centres will be set up: FM Nirmala Sitharaman
₹35,000 crores priority capital for the energy transition; Battery storage to get viability gap funding: FM Nirmala Sitharaman
More than 39000 compliances have been reduced and 3400+ legal proceedings have been decriminalised to enhance Ease of Doing Business. Furthermore, PAN card to be used as a common business identifier. KYC process to be simplified, announces FM Sitharaman
PM Awas Yojana fund increased by 66% YoY to ₹79,000 crore for FY24 to boost demand of cables and wires
The Capital Investment Outlay announcement is a positive development for domestic commercial vehicle (CV) space and more so for Medium and Heavy Commercial Vehicle (M&HCV) domain. Positive for Tata Motors and Ashok Leyland: ICICIDirect
Capital expenditure outlay is being increased by 33% to 10 lakh crore — 3.3% of GDP. This will be 3 times the outlay in FY19: FM
Rs15,000 crore over the next three years for a new scheme - Primitive Vulnerable Tribal Group Development Mission. “Will saturate these communities and their habitations with safe housing, clean drinking water and sanitation, road and telecom connectivity and access to education and healthcare institutions. This will be part of a development action plan for scheduled tribe."
The government will launch the Atmanirbhar Clean Plant Programme to improve availability of disease-free quality planting material for high-value horticultural crops at an outlay of ₹2,200 crore
"This is the first Budget of Amrit Kaal," Finance Minister Nirmala Sitharaman said in her opening remarks, referring to the Modi government's "New India" mantra. Read here
Green growth efforts to help reduce carbon intensity; create green job opportunities: FM Sitharaman
Priorities of Budget 2023-24 - inclusive development, reaching the last mile, infra & investment, unleashing the potential, green growth, youth and financial sector: Sitharaman
An agriculture accelerator fund to be set up to support agri-tech startups in rural areas. This is meant to bring modern technologies to Indian farms
"Entire expenditure of about ₹2 lakh crore under PM Garib Kalyan Anna Yojana is being borne by the central government, for supplying free food grains for one year to all Antyodaya and priroity households"
his budget hopes to build on foundations set in previous budgets. Indian economy on the right track, and heading towards a bright future, says Finance Minister Nirmala Sitharaman
Finance Minister Nirmala Sitharaman rises to begin her Budget speech in the Parliament
Ahead of the Budget presentation, Minister of State for Finance Pankaj Chaudhary has said that this budget would match the expectations of the general public and that India's economy is on track. Details here
Simplification in the tax structure such as long-term and short-term capital gains are some of the tax reliefs investors are hoping for in the Budget of 2023. Read here
India follows the progressive tax slab rate system for individual taxpayers, where the tax rate is determined based on varied factors. While some countries follow a flat tax-rate system, most countries such as the USA, Canada, Japan, etc. follow a progressive tax slab rate system. The tax rates are also different based on residency, marital status, source of income, etc. A glimpse of the personal income tax rates around the world here
There have been numerous iterations in the Income Tax (I-T) Act over the years—a result of the ever-changing economic conditions and the policies of different ruling parties. Read about it here
"Budget day today. Please note: Drink lots of water. Ignore most of the budget until the tax things come. Prepare for extreme disappointment, or extreme boredom, or both. Anything exciting is likely to be out of syllabus. You've been warned," tweets Capitalmind's Founder and CEO Deepak Shenoy
Union Finance Minister Nirmala Sitharaman arrives at the Parliament. A Union Cabinet meeting will be held at 10 am following which the Finance Minister will present the Budget2023 at 11 am
Tax collections in 2022-23 are on course to better its own projections, which lends it comfort. Yet, whether this will continue into the next year depends on how consumption keeps growing, across consumer classes. Data suggests that smaller producers and consumers were hit harder than top producers and consumers in the last two years. If top consumers ease up on spending—against the backdrop of rising interest rates and job losses—budget 2023-24 might need to do its bit to ensure the smallest of Indian consumers spend. Read here
As per established tradition, the Finance Minister met the President at the Rashtrapati Bhawan before heading to Parliament to present the Union Budget. This is the fifth budget presentation by Sitharaman
Middle class is expecting a rejig in the income tax exemption limit from ₹2.5 lakh to ₹5 lakh, and in the standard deduction from the current ₹50,000. Increasing Section 80C deduction limit for investments in PPF, tax-saving mutual funds, national savings certificate etc, is also widely anticipated. Read here the 5 key expectations
Sitharaman’s recent comments on knowing the pressures of the middle class have added to speculation she would put some money in the pockets of taxpayers. “Any tinkering with rates at the lower income brackets will be compensated by increasing the cess/surcharge for the upper income brackets," as per Yes Bank economists
Indices open higher ahead of Budget 2023 as Sensex gains over 300 points while Nifty up 100 points. ICICI Bank, Kotak Bank, Power Grid top gainers
India will focus on rebuilding fiscal space lost during the pandemic to counter new risks from a challenging global environment, the finance ministry said in its Economic Survey Tuesday, pegging economic growth of 6.5% next year.
Finance Minister Nirmala Sitharaman may tweak income-tax slabs to provide relief to the nation’s vast middle class and increase spend on the poor through programs such as rural jobs, while ramping up financial incentives for local manufacturing
Finance Minister Nirmala Sitharaman arrives at the Ministry of Finance, ahead of the Budget presentation
The income tax slabs have not been changed since 2014. The basic personal tax exemption limit was last revised in 2014. FM Sitharaman introduced a new income tax regime while presenting the Budget 2020, however, the new tax regime remains optional for taxpayers. Read here
Standard deduction hike, increase in 80C exemption, rejigging tax slab rates are some of the expectations of the salaried class from Finance Minister Nirmala Sitharaman's Union Budget 2023
The expectations are rife that FM Sitharaman may tweak income-tax slabs to provide middle class a much needed relief. Recently, she said she identifies herself as a middle class and understands the pressure faced by the section
The LIVE presentation of Nirmala Sitharaman's Budget for the fiscal year 2023-2024 can be watched on Sansad TV and Doodarshan. The live telecast will also be available on their Youtube channels. Read here
Finance Minister Nirmala Sitharaman will present the Union Budget 2023 on Tuesday, February 1, 2023. This will be the last full Budget before the Lok Sabha Elections in 2024. Catch all the LIVE updates here
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