INDIA. Mumbai: Union Finance Minister Nirmala Sitharaman presented the Union Budget for 2023-2024 estimates with a mega push for capital spending on infrastructure and simultaneously relief to taxpayers. Finance Minister unveiled the budget in Lok Sabha on Wednesday (February 1, 2023).
Budget 2023-2024
The budget provided a mixed bag of relief with a reduction in income tax and customs duty on certain goods.
What will become cheaper: Domestically manufactured TV sets since the customs duty on parts of open cells of TV panels has been cut to 2.5%.
Besides the customs duty on the import of certain inputs for use in the manufacture of the camera module of cellular mobile phones will be reduced, basic customs duty on seeds used in the manufacturing of lab-grown diamonds and customs duty on shrimp feed will be reduced. Also, the basic customs duty on goods other than textiles and agriculture has been reduced from 21 to 13.
The budget introduced that the duty on fish lipid oil used in manufacturing aquatic feed has been reduced. The import of capital goods and machinery essential for the fabrication of lithium-ion cells for batteries used in electric vehicles has been extended by the Centre until March 31, 2024, lowering the cost of electric vehicles and lithium ion-cell batteries.
The budget also suggested capping capital gains deductions on residential property investments at Rs 10 crore.
What will be costlier: In the announced budget, the tax on cigarettes was raised by 16% (nearly three years later), the basic import duty on compounded rubber was raised from 10% to 25%, the basic customs duty on articles made from gold bars was raised from 10% to 25%, and the customs duty on kitchen electric chimneys was doubled to 15% (previously 7.5%).
The fully imported luxury cars and electric vehicles will now cost more since the custom duty has been raised from 60% to 70%. The budget reveals that the imported bicycles and toys, imitation jewellery, silver dore and naphtha will also be costlier.
Income Tax
Income Tax exemption has been raised up to Rs 7 lakh/year under the new tax regime. The minimum threshold limit of Rs 10,000 on TDS has been removed.
The income tax on boards for housing and other activities has been exempted. The highest Income Tax surcharge has been reduced to 25% from 37% in the new tax regime.
The tax slabs for the new tax regime: 0-Rs. 3 lakh — nil, Rs. 3-6 lakh — 5%; Rs. 6-9 lakh — 10%, Rs. 9-12 lakh — 15%, Rs. 12-15 lakh — 20%, Rs. 15 lakh and above — 30%.
For people with incomes up to Rs 15 lakh, the standard deduction under the new tax system will be Rs 52,400. Taxes for individuals making Rs 9 lakh or less per year will only total Rs 45,000. That amounts to 5% of their income or a 25% decrease from the Rs 60,000 they were previously paying. The taxpayers will have the option to choose the old regime.
Relief to middle class
Mahila Samman Saving Certificate (MSSC) for a 2-year period has been announced by Finance Minister Sitharaman. It will provide women with a deposit facility of Rs 2 lakh at 7.5% interest for two years with the option of partial withdrawal.
Senior Citizens’ Savings Scheme (SCSS), the highest deposit amount has been raised to Rs 30 lakh. For a single account and joint accounts, the Post Office Monthly Income Scheme has been extended to Rs 9 lakh and Rs 15 lakh, respectively.
Saptrishi
The Government has also come out with a special package, “Saptrishi”, under which there will be an Aspirational Blocks program covering 500 blocks for saturation of government services. The Capital Expenditure outlay is being increased by 33% to Rs 10 lakh crore, which would be 3.3% of the GDP.
There will be a revamped scheme through an infusion of Rs 9,000 crore in the corpus. The budget provides for Rs 35,000 crore capital investment towards energy transition and net zero objective and energy security by the Union Ministry of petroleum and natural gas. The PM Kaushal Vikas Yojana 4.0, comprising new age courses, will be introduced to skill lakhs of youth.
Allocation
The massive allocation of funds includes:
- A national mission for vulnerable tribes-Rs 15,000 crore
- Railways-capital outlay of Rs 2.4 lakh crore
- The PM Awaas Yojana-Rs 79,000 crore
- Poll-bound Karnataka-Rs.5,300 crore to deal with drought
- Aatmanirbhar clean plan programme-Rs 2,200 crore
- PM Matsya Sampada Yojana (Pisciculture)-Rs 6,000 crore
- Gowardhan Scheme-Rs 10,000 crore
- Energy security/ energy transition-Rs 35,000 crore
- Road Transport and highways-Rs 2.7 lakh crore
- Food subsidy-Rs 1.97 lakh crore
- Fertilizer subsidy-Rs 1.75 lakh crore
- High value horticulture-Rs 2200 crore
- Sugar cooperatives-Rs 10,000 crore
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