• Notification Date: 01-02-2023
• Notification No: N/A

Union Budget 2023

 

 

Finance minister Nirmala Sitharaman has announced a number of changes in the Income-tax slabs in the new tax regime. Including all rebates, an individual will have to pay no tax on income up to Rs 7 lakh in the new tax regime. Addressing the post-Budget press conference, Sitharaman has stated that the government has made the new income tax regime more attractive for taxpayers and has thus brought about 'substantial changes' in its structure for the benefit of the middle class. She highlighted that the country has been waiting for a simplified and easier method of compliance in the direct tax regime.   

At present, an individual with annual income of Rs 9 lakh will have to pay only Rs 45,000 as tax in the new regime. This amounts to only 5% of a taxpayer's income in the new regime. A standard deduction of Rs 52,500 has been induced in the new tax regime. The finance minister also added that the new tax regime would be the default regime. It gives greater rebates and is more attractive, the finance minister said in the post-budget interaction with media. 

New Income Tax Slabs 2023-24: 

a) Up to Rs 3 lakh income there is 0% or NIL tax, 

b) From Rs 3 lakh to Rs 6 lakh the tax rate is 5%, 

c) From Rs 6 lakh to Rs 9 lakh the tax rate is 10%, 

d) From Rs 9 lakh to Rs 12 lakh the tax rate is 15%, 

e) From Rs 12 lakh to Rs 15 lakh the tax rate is 20%, and 

f) Above Rs 15 lakh the tax rate is 30% 

"This is the first Budget of Amrit Kaal", with these words finance minister Nirmala Sitharaman started the presentation of the last full Budget of the Modi government. She stated that the world is now recognizing the economy of India as a bright spot. India ranks highest among the major economies world-wide with a growth of 7% in current fiscal. The FM added that it can be anticipated that Indian economy is on right track, and heading towards a bright future. 

  

While delivering the Union Budget Speech, Sitharaman highlighted that the per capita income has increased to Rs 1.97 lakh. At the same time, India's economy has grown from 10th to 5th largest in the world in the last 9 years.  

Union Budget 2023 is being presented at a time when the major advanced economies in the world are crumbling down. The economies across the world are even staring at a possible recession. In this backdrop, the Economic Survey still expects India’s GDP to grow between the 6-6.8% range, maintaining its tag of being the fastest growing economy in the world. The Survey has also said that India’s recovery from the shock of the Covid-19 pandemic is complete, which bodes well for the GDP growth prospects.  

Indian Railways has received a capital outlay of Rs 2.40 lakh crore for the first time ever. This is the highest capital outlay for railways, Sitharaman said. 

While presenting the Budget, Finance Minister Nirmala Sitharaman announced a huge rise in capital expenditure. The Union Budget has hiked the outlay on capital expenditure by 33% which amounts to almost Rs 10 lakh crore. This would be 3.3% of GDP. The FM has also announced a massive raise in PM Awaas Yojana.  

In her Budget speech, Sitharaman highlighted the continuation of the food security programme for another year. She also announced steps for Agri startups, fisheries and started a programme for primitive, vulnerable, tribal groups. Besides executing the crucial task of maintaining the fiscal deficit target of 6.4%, Nirmala Sitharaman has also been providing a credible road map to bring it down further in the upcoming years, closer to the FRBM target. 

Congress leader P Chidambaram has commented that the Budget shows that government is not bothered about the people. "Finance minister didn’t mention the words like unemployment, poverty, or inequality anywhere in her speech. Budget shows that the government is not bothered about the people and their concerns about lives and livelihood and growing inequality between the rich and poor. Who has benefited from this Budget? Certainly, not the poor, not the youth looking desperately for jobs, not those who have been laid off, not the bulk of the taxpayers and not the homemakers," said the former FM. 

 

Key Highlights of Budget 2023: 

 

1. Rs 2.41 Lakh crore allocated for Railways -  

Railways minister Ashwini Vaishnaw stated that - "it is a big change and it will fulfil the aspirations of passengers. Under 'Amrit Bharat Station' scheme, 1,275 stations are being re-developed. Production of Vande Bharat trains will be revamped. Now apart from ICF Chennai, Vande Bharat trains will be manufactured in Haryana's Sonipat and Maharashtra's Latur and it will fulfil PM Modi's dream of connecting every corner with Vande Bharat trains."   

 

2. Union Home Minister says Budget will give impetus to Modi Government’s 'Self-reliant India' vision -   

The target of increasing the capital expenditure by 33% to Rs 10 lakh crore and keeping the Fiscal Deficit at 5.9% is commendable. This shows the foresight of the Modi government to build a new India with strong infrastructure and a strong economy, said the minister. 

  

3. Union Budget 2023 provides an Incentive for Corporate India -   

"This budget provides an incentive for corporate India, including start-ups, MSMEs, and private players to participate in India's growth story. The India growth story is further bolstered by the government's fiscal consolidation roadmap, which aims to reduce the fiscal deficit from 6.4% in FY23 to 5.9% in FY24 and then to 4.5% by FY2025-26. This will be achieved through revenue growth and targeted expenditure measures," Manish Goel, Founder & Director of Research & Ranking said. 

  

4. Union Budget to maintain the Country's Robust Growth Engine with Healthy Growth -   

“The Union Budget 2023 maintains the country's robust growth engine with healthy growth predicted on all key metrics. It’s a positive and favourable budget, with the Government's emphasis on infrastructure, technology, and entrepreneurship boosting economic growth. On the other hand, farmer-centric programs, last-mile connectivity, and digitization will further contribute to the FMCG sector's multiplier effect," said PepsiCo India President Ahmed El Sheikh. 

 

5. Union Budget entails Multiple Welcome Initiatives -   

"Union Budget entails multiple welcome initiatives like the revival of 50 airports, the building of 50 new destinations, and high budgetary outlays on railways, roads, and highways, which will help long-term growth for the domestic travel and tourism industry. However, one budget proposal that will negatively impact the industry is the move to increase the TCS mandate from 5% to 20% on overseas tour packages. This will not only increase the upfront cash outflow for customers but will also give an unfair advantage to foreign-based online travel booking platforms over India-based travel agents and tour operators," Rajesh Magow, Co-Founder and Group CEO of MakeMyTrip. 

  

6. Revenue estimates in Budget 2023 -   

Revenue estimates in Budget 2023 conservatively assume tax buoyancy of only 1, that the commitment to 4.5% fiscal deficit was reiterated in this Budget shows that we believe we have the means and the ability to reach that target by 2025-26: Union Finance Secretary TV Somanathan 

  

7. FM Sitharaman on Inflation -   

You have seen inflation come down, both the CPI and WPI. Action has been taken by the government, we take inflation-related steps when things develop on the ground and in response to it and that has borne results: Union Finance Minister Nirmala Sitharaman 

  

8. Big Leg-up to Capital Investment -   

Budget 2023 gives a big leg-up to capital investment, it also attends to MSMEs as they are the engine of growth, it sustains capital investment and also gives push to private sector while also giving tax reliefs to individuals and middle class: Finance minister 

  

9. Direct Taxation to be Simplified as per Country-wide Demand -   

Addressing the post-Budget press conference, finance minister said that this country has been waiting for direct taxation to be simplified. Therefore, the new taxation regime that we brought in for direct taxation two, three years ago has now got greater incentives & greater attraction so that people can unhesitatingly move from the old to the new. 

  

10. Budget to Rationalise Customs Duties -   

FM Sitharaman said that Budget 2023 has aimed to rationalise customs duties, to ensure personal income tax benefits for middle class. The new taxation regime now has greater attraction so that people can unhesitatingly move from old to new regime, Sitharaman said. 

  

11. Futuristic Fintech Sector -  

In her post-Budget press conference, finance minister Nirmala Sitharaman said that the government is looking at a futuristic fintech sector and people will be trained through Industrial Revolution 4.0. FM said that the Centre is trying to unleash digital economy in various walks of life. 

  

12. Four Emphasis Points of Budget -   

The four emphasis points of this budget are on empowering women, action plan for tourism, initiatives for Vishvakarmas (artisans) and green growth: Finance Minister Nirmala Sitharaman 

  

13. New Tax Regime More Attractive -  

FM Sitharaman said that the government is not forcing anyone to move to the new tax regime. People in the old regime can continue being so. However, she said that the new tax regime is now more attractive given the increased rebates and deductions. 

  

14. Finance Minister addresses Post-Budget Press Conference - 

  

After presenting the Union Budget 2023, finance minister Nirmala Sitharaman is addressing the post-Budget press conference. She speaks about the priorities undertaken by the Budget and said that it will benefit all sectors of the economy. 

  

15. Reality and Future Opportunities Balanced in Budget -   

"The finance minister balances between ground reality and future global scale opportunities extremely well. Safeguarding India's markets, while ascertaining access to international capital and equipment is akin to the crouching of a bengal tiger right before a full stride. Starting and scaling is getting better each day under this Government,"Siddhartha Bagri, CEO, Pravaig Dynamics. 

  

16. Relief to the Middle-class - 

“The government has made a big move by enhancing the tax rebate to upto 7 lakhs. It has given much awaited relief to the middle-class in the form of tax rebate, with no tax upto 7 lakhs and only 5% tax upto 9 lakhs. This will put more cash in the hands of individuals, which will be utilized in investments. The additional liquidity will help improve the economic scenario as well, as it will enhance overall spending," Aatur Thakkar, Co-Founder and Director at Alliance Insurance Brokers said. 

  

17. Atma-nirbhar Clean Plant Programme -   

Government will launch Atma-nirbhar Clean Plant Programme with an outlay of Rs 2,200 crore to boost availability of disease-free and quality planting material for high value horticultural crops. While presenting the Union Budget in Parliament, Sitharaman said that an Agriculture Accelerator Fund will be set-up to encourage agri-startups by young entrepreneurs in rural areas. "The fund will aim at bringing innovative and affordable solutions for challenges faced by farmers, and will also bring in modern technologies to transform agricultural practices, increase productivity and profitability," she said. Sitharaman added: "India is the largest producer and second largest exporter of 'Shree Anna' (millets) in the world, and that several types of millets such as jowar, ragi, bajra, kuttu, ramdana, kangni, kutki, kodo, cheena, and sama are grown in the country." 

  

18. Rs 10,000 Crore of Investment for Gobardhan Scheme -   

Finance Minister Nirmala Sitharaman on Wednesday said 500 new ‘waste to wealth' plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme will be established for promoting circular economy. These will include 200 compressed biogas (CBG) plants, including 75 plants in urban areas, and 300 community or cluster-based plants at total investment of Rs 10,000 crore. Presenting the Union Budget for 2023-24, she also said the government will facilitate 1 crore farmers to adopt natural farming. Besides, the government will take up mangrove plantation along the coastline under the new MISHTI scheme, she added. 

  

19. Pradhan Mantri Kaushal Vikas Yojana to Benefit Youth -  

"Pradhan Mantri Kaushal Vikas Yojana 4.0 which will be launched to skill lakhs of youth within the next three years will significantly benefit in the overall enhancement and development of the youth in the country. The National Education Policy will enable youth empowerment by facilitating job creation at scale thus supporting business opportunities is a step in the right direction. Furthermore, the pan India national apprenticeship that is a direct benefit transfer scheme to provide support to 47 lakh youths in 3 years will also prove highly advantageous and will enable growth and development of young guns in the right direction. The launch of a unified skill India digital platform for enabling demand based formal skilling will help the country successfully progress towards becoming a digital savvy nation. Overall, the budget includes significant measures that will help in advancement of the youth of the country, help them become more competitive and secure positions on the global world map,” Rahul Goyal, managing director (India & South East Asia), ADP India said. 

 

20. Tax Relief for Corporate Sector -  

To promote the cooperative sector, the government on Wednesday announced a slew of measures, including a concessional tax of 15 per cent to promote new societies focusing on manufacturing and a higher limit of Rs 3 crore for TDS on cash withdrawal. For the cooperation ministry, the government made a total budget outlay of Rs 1,150.38 crore for 2023-24, lower than the revised estimate of Rs 1,624.74 crore for 2022-23. 

  

21. Benefits of New Tax Slabs for Taxpayers -   

Taxpayers who have opted for the new tax regime for them the Budget announcements will lead to a saving of Rs 33,800, if earning up to Rs 7 lakh annually. Those with income up to Rs 10 lakh would save Rs 23,400 and Rs 49,400 saving would accrue to those earning up to Rs 15 lakh. 

  

22. Highest Tax Rate -   

"Highest tax rate which in our country has been 42.74 per cent. This is among the highest in the world. I propose to reduce the highest surcharge rate from 37 percent to 25 percent in the new tax regime. This would result in reductionof the maximum tax rate to 39 percent," FM Sitharaman said. 

  

23. Old Tax Regime remains Unaltered -   

The government did not announce any changes for taxpayers who are still following the old tax regime, that provides for tax exemptions and deductions on investments and expenses such as HRA. In what is being seen as push for salaried class taxpayer to switch to new tax regime where no exemptions on investments is provided, the finance minister in her budget for 2023-24 allowed a standard deduction of Rs 50,000 under the new regime. 

  

24. Rebate Limit Hike - 

  

"Currently, those with income up to Rs 5 lakh do not pay any income tax in both old and new tax regimes. I propose to increase the rebate limit to Rs 7 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to Rs 7 lakh will not have to pay any tax," Finance Minister Nirmala Sitharaman said. 

  

25. Foundation for a Developed India - 

Prime Minister Narendra Modi said that this is 'Amrit Kaal's' first budget and it provides foundation to fulfil resolve for a developed India. 

  

26. Digital Payments in Agri Sector -  

The Prime Minister also emphasised that success of digital payments has to be replicated in agriculture sector. Hence, the government has brought a scheme for digital agriculture infrastructure. 

  

27. Several Steps taken for Women in Budget -  

"Govt has taken several steps to make the lives of women, in rural & urban areas, easy. Women's self-help groups will further enhance them. Special savings scheme will be started empowering women in households", states PM Modi. 

  

28. “Budget is for All Sectors”, PM Modi -  

Praising Nirmala Sitharaman for a progressive Union Budget 2023, Prime Minister Narendra Modi said that the Budget caters to all sectors alike. 

 

29. Sports -  

"It was surprising that high performance, grassroots athlete schemes and sports infrastructure didn’t get a mention in the Budget 2023-24. With India considering bidding for the 2036 Olympics, the preparation needs to begin now, both from infrastructure and talent development perspective for India to step up towards achieving its sporting and active lifestyle ambitions," says Aman Dhall, Team Owner, Gurgaon Incredibles at LastManStands. 

  

30. "Budget to Fulfil Dreams of Aspirational Society”, PM Modi - 

  

The Union Budget 2023-24 will fulfil dreams of aspirational society including poor people, middle-class people, farmers, PM Narendra Modi said in his address. 

  

31. “First Budget of 'Amrit Kaal' Period”, PM Modi - 

Prime Minister Narendra Modi said that this first Budget of 'Amrit Kaal' will build a strong foundation for building a developed India. 

  

32. Budget for 'Vishwakarmas', says PM -  

Prime Minister Narendra Modi praised the government for its Budget presentation and said that it is a Budget for 'Vishwakarmas'. 

  

33. PM Modi Congratulates FM Nirmala Sitharaman - 

Prime Minister Narendra Modi addressed the nation after the Budget presentation and congratulated FM Sitharaman for a successful Budget. 

  

34. Allocation to Defence Ministry -  

In the Union Budget presented in Parliament by Finance Minister Nirmala Sitharaman on Wednesday, a total of Rs 1.62 lakh crore has been set aside for capital expenditure that includes purchasing new weapons, aircraft, warships and other military hardware. For 2022-23, the budgetary allocation for capital outlay was Rs 1.52 lakh crore but the revised estimate showed the expenditure at Rs 1.50 lakh crore. According to 2023-24 budget documents, an allocation of Rs 2,70,120 crore has been made for revenue expenditure that includes expenses on payment of salaries and maintenance of establishments. The budgetary allocation of revenue expenditure in 2022-23 was Rs 2,39,000 crore. In the budget for 2023-24, the capital outlay for the Ministry of Defence (Civil) has been pegged at Rs 8,774 crore while an amount of Rs 13,837 crore has been set aside under capital outlay. 

  

35. Deposit Limit for Senior Citizen Savings Scheme Doubled - 

Finance Minister Nirmala Sitharaman on Wednesday proposed to double the deposit limit for Senior Citizen Savings Scheme to Rs 30 lakh and Monthly Income Account Scheme to Rs 9 lakh. In her Budget Speech, the minister also announced a new small savings scheme for women. "The maximum deposit limit for Senior Citizen Savings Scheme will be enhanced from Rs 15 lakh to Rs 30 lakh," the minister said in her 87-minute-long speech. She also proposed that the maximum deposit limit for Monthly Income Account Scheme will be enhanced from Rs 4.5 lakh to Rs 9 lakh for a single account and from Rs 9 lakh to Rs 15 lakh for a joint account. 

  

36. PM Modi to Address Shortly - 

Prime Minister Narendra Modi to address shortly on the announcements made by Nirmala Sitharaman in Union Budget 2023 

  

37. New Income Tax Regime Decoded - 

EY Analysis: While the answer is not straight forward and it has to be seen on a person-by-person level it seems like if a person is claiming a deduction of more than Rs 4,25,000 then the old regime is beneficial unless the individual earns over 5 crores. 

  

38. Default Income Tax Regime - 

It is also proposed that the new tax regime will be the default tax regime and individuals will have an option to opt for the old tax regime. 

  

39. Luxury Cars and EVs to Cost More - 

Fully imported luxury cars and electric vehicles (EVs) in India will now cost more as government raised custom duty from 60% to 70% on these items in Budget 2023. 

  

  

40. Enhanced Limits for MSMEs - 

The limits for micro enterprises and professionals have been enhanced in the Union Budget 2023 to avail benefits of presumptive taxation and 95% of the receipts to be non-cash. 

  

41. Tax Benefits for Startups - 

The government on Wednesday proposed to extend income tax benefits to startups incorporated till March 2024. Nirmala Sitharaman also said that the government proposes to increase the benefit of carrying forward losses for startups to 10 years. "I propose to extend the date of incorporation for income tax benefits to startups from March 31, 2023, to March 31, 2024. I further propose to provide the benefit of carry forward of losses on change of shareholding of startups from seven years of incorporation to ten years," she announced. Sugar cooperatives can claim payments prior to 2016-17 made to sugarcane farmers as expenditure, the minister added. New cooperatives that commence manufacturing activity till March 2024 would also attract a lower tax rate of 15 per cent, she said in the Budget speech. 

  

42. Indirect Tax Simplified - 

Finance minister Nirmala Sitharaman on Wednesday announced a cut in customs duty on the import of certain inputs for mobile phone manufacturing. In her Budget 2023-24 speech, she said India's mobile phone output rose from 5.8 crore units in 2014-15 to 31 crore units last fiscal. Her announcement comes at a time when India has aggressively positioned itself as an electronics powerhouse to the world, as global players look for a China plus 1 strategy. 

  

43. Benefits for Pensioners -  

For pensioners, the finance minister announced extending the benefit of standard deduction to new tax regime. Each salaried person with an income of Rs. 15.5 lakh or more will benefit by Rs. 52,500. Sitharaman, while presenting the Union Budget in Parliament, said, "A person earning Rs 9 lakh a year will now be paying just Rs 45,000 instead of Rs. 60,000 currently. Similarly, a person earning Rs 15 lakh will now pay only 10 per cent of this as tax." 

  

  

44. Personal Income Tax Rates - 

On personal income tax, the FM announced that "tax for income of Rs 0-3 lakh is nil, for income above Rs 3 lakh and up to Rs 5 lakh will be taxed at 5 per cent, for income of above Rs 6 lakh and up to Rs 9 lakh will be taxed at 10 per cent and for income above Rs 12 lakh and up to Rs 15 lakh to be taxed at 20 per cent and above 15 lakhs at Rs 30 per cent." 

  

45. Income Tax Rebate Limit - 

Finance minister Nirmala Sitharaman on Wednesday announced an increase in the income tax rebate limit from Rs 5 lakh to Rs 7 lakh stating that the new tax regime will now be the default tax regime. Sitharaman also proposed to change the tax structure in this regime by reducing the number of tax slabs to 5 and increasing the tax exemption limit to Rs 3 lakh. 

  

46. Leave Encashment Limit Raised - 

Finance minister has proposed to hike tax exemption on leave encashment on retirement of non-government salaried employees to Rs 25 lakh from Rs 3 lakh. "We are also making the new income tax regime the default tax regime however, citizens will continue to have the option to avail the benefits of the old tax regime," FM said. 

  

Modified Tax Rates:  

Nirmala Sitharaman has stated that there will be no tax for income up to Rs 3 lakh. For income Rs 3-6 lakh, 5% tax will be charged; highest tax rate of 30% on income above Rs 15 lakh under new I-T regime. 

Stock Markets cheer Budget 2023 

  

The benchmark BSE Sensex surged over 1,000 points to scale over 60,500-mark as investors cheered announcements by Nirmala Sitharaman. The broader NSE Nifty is up 258 points and trading at 17,920. 

 

Tax on Income over Rs 15 Lakh 

Nirmala Sitharaman announced that people earning over Rs 15 lakh in a year will be subject to 30% tax, as per the new Union Budget 2023.