Union Budget 2023-2024

Union Finance Minister Nirmala Sitharaman is presenting the Union Budget for 2023-24 in the Lok Sabha. Nirmala Sitharaman is presenting the Union Budget for the 5th consecutive time. The Union Budget is an annual financial report presenting estimates of income and expenditure for the coming financial year in order to outline the future policies to be adopted by the government for sustainable growth and development.

The Finance Minister has presented the financial statement and tax proposal for the financial year 2023-24 (April 2023 to March 2024). Like last time, this time also the budget remained paperless and very few copies of the budget were printed. Earlier the Chief Economic Survey of India 2022-23 was released on 31 January 2023 by V Ananth Nageswaran, Chief Economic Advisor of India. The government is expecting the Indian economy to grow at 6.5 per cent in the financial year 2023-24 (FY24).

The main points of the Union Budget 2023-24 are as follows:

  • This first budget of Amrit Kaal will create a strong foundation for realizing the grand dream of a developed India.
  • This budget is going to fulfill the aspirations and dreams of the farmers, the deprived and the poor.
  • Income tax is not payable on income up to 7 lakhs.
  • A person with an annual income of 9 lakhs will have to pay only 45,000
  • On the other hand, 5% tax will be levied on blueprint income up to Rs 3-6 lakh, 10% tax on blueprint income up to Rs 6-9 lakh.
  • Fiscal deficit estimated at 5.9% of GDP for 2023-2024
  • 35 thousand crore rupees will be invested in the field of energy security.
  • Rs 20,700 crore will be invested in the renewable energy sector.
  • PM Pranam Yojana will be started to promote alternative manure. 500 new plants will be set up under the Govardhan Yojana.
  • Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched.
  • 30 Skill India National Sectors will be opened to skill the youth for international opportunities.
  • Agriculture credit target to be increased to Rs 20 lakh crore with focus on animal husbandry, dairy and fisheries.
  • Startups related to agriculture will be given priority. Agriculture Accelerator Fund will be set up to encourage agri-startups by young entrepreneurs.

Direct tax proposals

  • In the new tax regime, it is proposed to reduce the surcharge rate from 37 percent to 25 percent. As a result, the maximum personal income tax rate will be cut by up to 39 percent.
  • Tax exemption limit on leave encashment on retirement of non-government salaried employee increased to 25 lakhs.
  • The new tax regime will be made the default tax regime, although citizens will continue to have the option of availing the benefits of the old tax regime.
  • Enhanced limits have been proposed for micro enterprises and certain professionals to avail the benefits of presumptive taxation.
  • The enhanced limit will be applicable in case of total amount received in cash during the year which does not exceed 5 per cent of the total gross receipts/turnover.
  • Deduction for expenditure on payments made to MSMEs will be allowed only in cases where payments are actually made in order to assist the MSMEs in timely receipt of payments.
  • New co-operative societies that have started manufacturing activities up to 31.3.2024 to avail the benefit of lower tax rate of 15 per cent currently available to new manufacturing companies.
  • Sugar cooperatives have been given an opportunity to claim payments made to sugarcane farmers for the period prior to assessment year 2016-17, as payment. With this, they are expected to get relief of about 10 thousand crore rupees.
  • Proposal for a ceiling of Rs 2 lakh per member for deposits and loans given in cash to Primary Agricultural Cooperative Societies (PACS) and Primary Cooperative
  • Agricultural Rural Development Bank (PCARDB).
  • Proposal to provide a ceiling of Rs 3 crore on cash withdrawal for TDS to co-operative societies.
  • Proposal to extend the date of incorporation from 31.03.23 to 31.03.2024 for availing income tax benefits by start-ups.
  • Proposed to provide benefit of carry forward of losses on change in shareholding of start-ups from seven years to 10 years of incorporation.
  • Proposal to raise the limit of deduction from capital gains on investment in residential house to Rs 10 crore under section 54 and 54H for better targeting of tax concessions and exemptions.
  • For life insurance policies (other than ULIPs) issued on or after April 1, 2023, if the aggregate premium exceeds Rs 5 lakh, then only those policies whose premium is up to Rs 5 lakh will be exempted provision of. This will not affect the tax exemption provided on the amount received on the death of the life assured.
  • Income-tax authorities, boards and commissions established by the Central or State Governments for regulatory and developmental activities or functions for housing, urban development, towns and villages are proposed to be exempted from income-tax.
  • Proposal to remove TDS threshold of Rs 10,000 in online gaming and clarify tax liability relating to online gaming. Proposal for TDS and tax liability at the time of withdrawal of TDS and net winnings or at the end of the financial year.
  • Conversion of gold into electronic gold receipt or electronic gold into gold will not be treated as capital gain.
  • TDS rate on taxable portion of EPF withdrawal in non-PAN cases reduced from 30 per cent to 20 per cent.
  • Income from market linked debentures will be subject to taxation.
  • Proposed to deploy about 100 Joint Commissioners to dispose of minor appeals to reduce the pendency of appeals at Commissionerate level. We will be more selective in selecting the returns already received for scrutiny this year.
  • Proposal to extend the period of tax benefits of funds transferred to IFSC, GIFT City up to 31.03.2025.
  • Decriminalization under section 276A of the Income Tax Act from 1st April, 2023.
  • Proposal for carry forward of losses in case of strategic disinvestment including IDBI Bank.
  • Proposed to accord EEE status to Agniveer Nidhi and exempt from tax the payment made by Agniveer Corpus Fund to Agniveers registered in Agneepath Yojana 2022.
  • Proposal to give reduction in total income of Agniveers to Agniveers, which they have contributed or Central Government has transferred to their account for their service.

Indirect tax proposals

  • The number of basic customs duty rates was reduced from 21 to 13, except on textiles and agriculture.
  • There have been minor changes in basic customs duties, cess and surcharges on certain items which include toys, cycles, automobiles and naphtha.
    Proposal to exempt excise duty on included compressed bio gas on which GST has been paid.
  • Customs duty on machinery/capital goods used in the production of lithium-ion batteries for electric vehicles extended up to 31.03.2024.
  • To give further impetus to green mobility, customs duty is being exempted on import of capital goods and machinery required for manufacturing of lithium ion cells for batteries used in electric vehicles.
  • To further enhance domestic value addition in manufacturing of mobile phones, it is proposed to extend basic customs duty relief on imports of certain inputs such as parts and camera lenses and to continue concessional duty on lithium-ion battery cells for one more year.
  • Proposal to reduce basic customs duty on open cell parts of TV panels to 2.5 per cent.
  • Basic customs duty on electric kitchen chimneys proposed to be increased from 7.5 per cent to 15 per cent.
  • Proposal to reduce import duty on heat coils of electric kitchen chimneys from 20 per cent to 15 per cent.
  • Dinechy ethyl alcohol is used in the chemical industry. Proposed to exempt this basic customs duty.
  • Basic customs duty on acid grade fluorspar is being reduced from 5 per cent to 2.5 per cent to maintain competition in the domestic fluorochemicals industry.
  • Basic customs duty on crude glycerine used in the manufacture of epichlorohydrin proposed to be reduced from 7.5 per cent to 2.5 per cent.
  • Proposal for reduction of duty on key inputs for domestic manufacture of shrimp feed.
  • Proposed to reduce customs duty on seeds used in the manufacture of Laboratory Created Diamonds (LGD).
  • Proposed to increase customs duty on gold bars and bars and platinum.
  • Proposed to increase import duty on silver wire, bars and articles.
  • Basic customs duty exemption on raw material, ferrous scrap and nickel cathode for the manufacture of CRGO steel.
  • Concessional BCD of 2.5 per cent on copper scrap continued.
  • Proposed to increase basic customs duty on compound rubber, at par with natural rubber other than latex, from 10 per cent to 25 per cent or Rs 30 per kg, whichever is less.
  • The National Calamity Contingency Duty (NCCD) on specified cigarettes was revised three years back. It was proposed to increase it by about 16 percent.

Financial inclusion:

  • 1.5 lakh post offices will be brought on 100% core banking system, thereby providing financial inclusion and access to accounts through net banking, mobile banking, ATMs and also online transfer of funds between post office accounts and bank accounts.
  • This will be especially helpful for farmers and senior citizens in rural areas, thereby enabling interoperability and financial inclusion.

Fiscal Deficit target set at 6.4% for FY23:

  • The country's fiscal deficit is estimated to be 5.9 per cent in FY2024.
  • The Finance Minister said that the FY23 fiscal deficit could be 6.4%.

National Telehealth programme:

  • The Aspirational Blocks Program was launched covering 500 blocks to enhance government services in several areas such as health, nutrition, education, agriculture, water resources, financial inclusion, skill development and basic infrastructure.

Education sector:

  • District Institute of Education and Training will be developed as the best institute for the training of teachers.
  • To increase the authority of excellent books in many fields including geography, language, a National Digital Children's and Teen Library will be established.
  • A unified portal will be set up to enable the global education and conservation authority to easily reclaim shares when they become obsolete.

Indian Railways:

  • Provision of capital fund of Rs 2.40 lakh crore for Railways, which is 9 times more than the amount provided in 2013-14 and the highest ever.

India's farmers:

  • The government will encourage and assist one crore farmers to adopt natural farming in the next three years. For this, 10,000 Bio-Input Resource Centers will be set up, creating a nationally distributed micro-fertilizer and pesticide manufacturing network.
  • Krishi Vardhak Nidhi will be set up to enable young entrepreneurs to start agri-startups in rural areas.
  • The target of agricultural credit will be increased to Rs 20 lakh crore keeping in view the animal husbandry, dairy and fisheries industries.
  • Digital public infrastructure for agriculture will be created with an aim to provide necessary support and provide farmer centric solutions to promote agri-tech industry and start-ups.
  • The government has taken up the computerization work of 63,000 Primary
  • Agricultural Credit Societies (PACS) with an investment of Rs 2,516 crore.
  • Provision has been made to add massive decentralized storage capacity, which will help farmers to safely store their produce and sell at the right time to get remunerative prices.

Infrastructure- PM Awas Yojana

  • Outlay for PM Awas Yojana increased by 66 percent to Rs 79,000 crore.
  • A National Financial Information Registry will be established to serve as a central repository of financial-supporting information. This will enable efficient flow of credit, promote financial inclusion and enhance financial stability. A new legislative framework will also regulate this credit public infrastructure and will be designed in consultation with RBI.
  • Financial sector regulators will undertake a comprehensive review of the existing regulations, along with taking suggestions from the public and regulated entities. Timelines for taking decisions on applications under various regulations will also be prescribed.

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  Last update :  Wed 22 Mar 2023
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  Post Category :  Indian Economics