Budget Highlights 2023
The highlights from the Union budget 2023 and effective changes of income tax slabs are detailed here.
Highlights: Income taxpayers
According to the new budget highlights of 2023, the previous tax system has not changed. Though the new tax system will take precedence over all others, the old tax system is still an option for citizens. There is no tax on income up to Rs 7.5 lakh per year (standard deduction is taken into account). Also, the government wants to lower the maximum surcharge rate from 37% to 25%.
New Income Tax Slabs and New Tax Systems:
Income tax slabs
Income Tax rates
Rs 0-3 lakh
Rs 3-6 lakhs
Rs 6-9 lakhs
Rs 9-12 lakhs
Rs 12-15 lakhs
Rs Over 15 lakhs
- A person earns Rs 9 lakh per year will only pay Rs 45,000 in taxes.
- Tax is decreased from Rs 1.87 lakh to Rs 1.5 lakh on the income of Rs 15 lakh.
- Tax exemption on insurance policies is no longer available for premiums beyond Rs. 5 lakh.
- For salaried non-government personnel, the amount of tax-free leave that may be redeemed has increased from Rs. 3 lakh to Rs. 25 lakh.
- For cooperative organizations, the TDS on cash withdrawals would have a higher ceiling of Rs 3 crore.
- For the benefit of taxpayers, a revised version of the Common IT Return Form will be made available.
- Under the new scheme, taxpayers are eligible for a base deduction of Rs 50,000.
- Agniveers will not be required to pay from the Agniveer Corpus Fund.
- By implementing TDS, the government hopes to ensure that net winnings from online games are taxed either at the time of withdrawal or at the conclusion of the fiscal year.
- It is necessary to improve the complaint resolution process.
- In non-PAN cases, the TDS rate on the taxable part of EPF withdrawal would be decreased from 30% to 20%.
Items that are cheaper and costlier
Lab grown diamonds
Raw materials for EV industry
Denatured Ethyl Alcohol
Machinery for making Lithium ion cells.
Travel by flights
Articles made from gold
Eelectric kitchen chimney
Imported vehicles and electric vehicles
- A 16% tax rise on some cigarettes.
- New cooperatives that begin manufacturing will pay 15% less in taxes up to March 2024.
- The overall customs duty for glycerin and crude oil has been reduced to 2.5 percent.
- Import duties on silver bars were raised to match those on gold and platinum.
- Imports of mobile phone components should be subject to a one-year extension of the reduced customs taxes.
- In order to promote TV production, the customs duty on open TV panel cells has been reduced to 2.5%.
- Providing relief for customs Import taxes on certain components and inputs, such as camera lenses
- Extension of the year-long concessional duty on lithium-ion batteries
- Reduced from 21 to 13 the number of basic custom duty rates on goods other than textiles and agricultural products. As a result, there are minimal tax modifications for several goods, including toys, bicycles, and cars.
A significant boost for the railways
In FY24, a budget of Rs 2.4 lakh crore was allocated for the railroads. It is about nine times higher than the allocations for FY14 and is the highest allocation for Railways ever. This year, a total of Rs 17,296.84 crore has been allotted for track renewal, up from Rs 15,388.05 crore in RE 2022-23. By August 2023, the Railways would probably have introduced 75 Vande Bharat trains.
Announcements about savings plans
The Senior Citizen Savings Scheme's maximum deposit amount would increase from Rs. 15 lakh to Rs. 30 lakh. For joint accounts, the Monthly Income Scheme limit increased to Rs. 9 lakh and Rs.15 lakh.
Mahila Samman Saving Certificate, a one-time new saving programme for women, will be made available for 2 years, through March 2025. It will provide a deposit facility of up to Rs 2 lakh for a 2-year term at a set interest rate in the name of women or girls.
Capex increased 33%.
To increase the economic potential and job creation, attract private investment, and act as a buffer against global headwinds, the government has announced a capital investment of Rs 10 lakh crore, a steep increase of 33% for the third year in a row. An amount of Rs 13.7 lakh crore will be the center's actual capital expenditures. 3.3% of GDP is projected for capital expenditure in FY24. In FY24, the Center's actual capital expenditures were Rs 13.7 lakh. In order to increase options for private investment in infrastructure, a new Infrastructure Finance Secretariat has been established.
Increase in Defense Budget of 13%
- From Rs. 5.25 lakh crore last year, the defense budget jumped to Rs. 5.94 lakh crore this year.
- The budgetary allotment for capital outlay for 2022–2023 was Rs. 1.52 lakh crore.
- The Border Roads Organization's capital budget increased to Rs 5,000 crore. The Indian Air Force's capital expenditure was the largest, coming in at Rs 57,137.09 crore.
- For capital expenses, including the procurement of new weapons, aircraft, warships, and other military equipment, Rs 1.62 lakh crore has been set aside.
- The Indian Navy received a capital outlay budget of Rs 52,804 crore.
- The Army's capital expenditure is estimated to reach Rs 37,241 crore.
- Allocation to Defence Research Development Organisation (DRDO) has been put at Rs 23,264 crore.
- By 2025–2026, the fiscal deficit is expected to be less than 4.5%. The revised estimate for FY23 maintains the fiscal deficit objective of 6.4%. For FY24, it is cut to 5.9%.
- In FY24, gross market borrowing was estimated at Rs 15.43 trillion.
- Net market borrowing was $11.8 trillion in fiscal year 24.
- The revised estimate for FY23 net tax collections is Rs 20.9 lakh crore.
- The updated estimate for FY23 total spending is Rs. 41.9 lakh crore.
- Total receipts other than borrowing are estimated at Rs 24.3 lakh crore for FY23
- Net tax collections for FY24 were $23.3 billion.
A revised loan guarantee for MSMEs will go into effect on April 1, 2023, and a corpus of Rs 9,000 crore will be added. The programme would permit an additional Rs 2 lakh crore of collateral-free guaranteed lending while also lowering the cost of the credit by roughly 1%.
To improve bank governance, the government has proposed changes to the Banking Regulation Act.
- The government will start Mantri Kaushal Vikas Yojana 4.0
- 30 Skill India International Centers will be built throughout various States to prepare young people for opportunities abroad.
- Under a pan-Indian programme, direct benefit transfers A national apprenticeship promotion programme would be implemented to offer stipend support to 47 lakh young people over the course of three years.
Priority funding for the energy transition of Rs 35,000 crores. The Environment Protection Act will provide notification of the green credit programme. Funding to close the viability gap for battery storage. Government to finance the installation of 4,000 MwH of battery energy storage. With a budget of Rs 19,700 crore, the National Green Hydrogen Mission will aid in the transition to a low-carbon economy, reduce reliance on fossil fuel imports, and position the nation to take the lead in both technology and the market.
Jewelry and gemstones
- An IIT will get five-year research and development funding in order to promote domestic manufacturing of lab-grown diamonds.
- In Part B of the budget paper, a proposal to evaluate the customs duty on lab-grown diamonds is to be included.
Automobiles & Aviation:
- To increase regional air connection, 50 more airports, helipods, water aero drones, and sophisticated landing grounds will be revived. The roads sector will have an increased outlay of Rs 2.70 lakh crore under the Union Budget 2023–24.
- For 2023–2024, the amount allotted to NHAI increased by 13.90% to Rs 1.62 lakh crore.
Doing business is simple:
- The government will introduce a new dispute resolution plan. To resolve business disagreements, use Vivad Se Vishwas 2.
- Using digi locker and Aadhaar as the foundational identity, a one-stop solution for reconciling and updating identity stored by many authorities would be built.
- For a quicker response when businesses submit forms under the Companies Act, a central processing centre will be established.
- PAN is considered as the universal identification for all government entities' digital systems.
- To make doing business easier, approximately 3,400 law provisions have been decriminalized and over 39,000 compliances have been lowered.
- Vishwas Jan In order to further trust-based government, a bill to change 42 Central Acts has been proposed.
- For commercial establishments required to have a PAN, the PAN will serve as a standard identifier for all digital systems of certain government entities.
- The Finance Minister has announced a number of initiatives to boost commercial activity in GIFT City.
- Expanding the scope of services offered by DigiLocker.
- Engineering colleges will establish up 100 labs for researching 5G applications.
- Leading business actors will collaborate to create scalable solutions for the health, agricultural, and other sectors.
- Precision farming, smart classrooms, and healthcare applications will all be covered in labs.
- Projects to launch Phase 3 of E-courts with an investment of Rs 7,000 crore.
Developing Urban Areas
The government would spend Rs 10,000 crore annually on an urban infrastructure development fund. Cities will be encouraged to increase their ability to repay municipal bonds. Also, sewers and septic tanks will be completely transitioned in all cities and municipalities.
- The Union Budget includes Rs 89,155 crore for the health sector.
- This includes the goal of eradicating sickle cell disease by 2047.
- The industry will be encouraged to make research investments as a result of the formulation of a new pharmaceutical research programme.
- The Department of Health and Family Welfare will receive 86,175 crores of the total budget of Rs. 89,155 crores, while the Department of Health Research will receive 2,980 crores.
- The Pradhan Mantri Swasthya Suraksha Yojana will have a budget of Rs 3,365 crore year 2023–2024.
- The National Health Mission's budget allocation has grown from Rs 28,974.29 crore, one of these central sector initiatives.
- The AYUSH ministry's budget allotment has increased from Rs 2,845.75 crore.
- The National Digital Health Mission's budget has gone from Rs 140 crore to Rs 341.02 crore.
- Budgetary support for the National Tele Mental Health Programme has increased from Rs 121 crore to Rs 133.73 crore.
- Budgetary support for autonomous entities increases from Rs. 10,348.17 billion in 2022–23 to Rs. 17,322.55 billion in 2023–24.
- Increased from Rs 2,116.73 crore to Rs 2,359.58 crore, the ICMR's budget.
Spending on the PM Awaas Yojana increased by 66% to more than Rs 79,000 crore.
Continue interest-free lending to states:
The Center will give state governments a 50-year, interest-free loan for another year.
Setup of a Children's and Teens' Digital Library:
- A national digital library will be established for kids and teenagers.
- Digital libraries will get new non-curricular titles in regional languages and English from the National Book Trust and Children's Book Trust.
- At the panchayat and ward levels, states are urged to establish physical libraries for them and to provide the necessary infrastructure for them to access the National Digital Library's resources.
- There will be three centres of excellence for artificial intelligence established in prestigious universities.
- Alongside the 157 medical colleges that have already been operating since 2014, 157 new nursing colleges will also be founded.
- In the upcoming three years, Eklavaya Model Residential Schools will be established. 38,800 teachers and support staff will be hired by the Center to work in 740 schools that will serve 3.5 lakh tribal students.
- A national data governance policy will be released to encourage scholarly and entrepreneurial research and innovation.
- A grant increase of Rs 459 crores has been made to the University Grants Commission (UGC) (9.37 pc).
- In comparison to BE 2022–23, support for Central Universities has increased by 17.66%, for Deemed Universities by 27%, IITs by 14%, and NITs by 10.5%.
- Agri-startups by young entrepreneurs will be supported by an Agriculture Accelerator Fund, which will be established.
- The development of digital public infrastructure for the agricultural industry
- Agriculture credit worth 20 lakh crore would be used for dairy, fishery, and animal husbandry.
- One crore farmers would receive aid to switch to natural farming during the next three years.
- There will be 10,000 bio-input resource centres created.
- To develop a sub-scheme under the PM Mastya Sampada Yojna with an investment of Rs 6,000 crore in order to further facilitate fishermen's activities.
- The Indian Institute of Millet Research, Hyderabad, would be promoted as the Center of Excellence for Sharing Best Practices, Research, and Technologies at the International Level in order to make India a global hub for "Shree Anna"
- The computerization of 63,000 credit organizations will cost Rs. 2,516 billion.
- The upper Badra project would receive national funding of Rs. 5,300 crore to offer sustainable micro-irrigation in Karnataka's central, drought-prone districts.
- Under the GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) project, 500 new "waste to wealth" plants would be built with a total investment of Rs 10,000 crore.
- All businesses that market natural and biogas will be required to use 5% compressed biogas.
In order to ameliorate the socioeconomic situation of PMPVTGS Tribes, the Pradhan Mantri Primitive Vulnerable Tribal Group (PMPVTGS) programme has been formed. Over the next three years, this mission will get Rs 15,000 crore for safe housing, sanitation, drinking water, and power.
- The amount allotted to the Department of Space is Rs. 12,544 crore.
- In contrast to the revised estimate's Rs 21 crore, IN-Space is allocated Rs 95 crore. 53 crore rupees from the budget have been set aside for INSPACe's capital expenses.
- An allocation of Rs 408.69 crore has been given to the Physical Research Laboratory.
- A budget of Rs 3,397.32 crore, an increase of Rs 723.97 crore, is given to sports.
- The country's highest-ever sports budget allocation is Rs 3,397.32 crore.
- Rs 1,045 crore has been allocated for "Khelo India."
- For 2023–2024, Sports Authority of India would receive Rs. 785,52 crore.
- The National Sports Federations get a 325 crore rupee raise.
Seven budgetary priorities, or "Saptarishi":
- Integrated development
- Completing the final mile.
- Investment and infrastructure.
- Opening up the potential.
- Green expansion.
- Youth force
- Financial industry.
Goals of the Budget for 2023 will be:
- Providing residents with numerous chances, especially young people.
- To include a goal for women's emancipation in Budget 2023.
- To assist self-help groups with product branding, marketing, and raw material supply.
- Giving a powerful boost to GDP and employment creation.
- Enhancing macroeconomic stability.
- To help women's self-help organizations advance to the next level of economic empowerment.
- Tourism promotion will be carried out in mission mode with the active involvement of the states, the fusion of governmental programmes, and public-private partnerships.
- States will be urged to establish a "Unity Mall" in their state capital or at their busiest tourist attraction for the promotion and retail selling of "One District, One Product," GI goods, and other handicrafts.
- The nation has a lot to offer both domestic and international tourists. The tourism industry has a lot of untapped potentials. For young people in particular, the sector offers tremendous job and entrepreneurial opportunities.
- 50 vacation spots will be chosen through the challenge mode and built as a complete package for both domestic and foreign visitors.
- The Vibrant Settlements Program would facilitate tourism infrastructure and facilities in border villages.
PM Vishwa Karma Kaushal Samman:
Traditional craftsmen and crafters will be able to increase the quality, scale, and reach of their products by integrating into the MSME value chain thanks to the PM Vishwa Karma Kaushal Samman package of help that has been created.
Free food program will run through 2024:
- We're developing a program to provide free food grain to all Antyodaya and priority households for one year under PM Garib Kalyan Yojana Ann starting on January 1, 2023, as part of our ongoing commitment to food security.
- We implemented a programme to provide free foodgrains to more than 80 crore people for 28 months during the COVID pandemic to ensure that nobody goes to bed hungry.
- A technology-driven, knowledge-based economy with sound public finances and a thriving financial sector is part of our vision for the Amrit Kaal.
- Aadhaar, Cowin, and UPI have all helped to raise India's profile internationally, which has led to its rise in stature.
- Since 2014, the government has worked to ensure that all residents live better, more dignified lives. To Rs 1.97 lakh, the per capita income has more than doubled.
- The fact that the membership of EPFO has doubled indicates that the economy has grown much more formalized.
- The Indian economy is on the right road and has a promising future. In the past nine years, India's economy has grown from the 10th to the 5th largest.
- In spite of the significant worldwide slowdown brought on by the pandemic and the war, the world has acknowledged India as a shining star. Our growth for the current year is anticipated at 7%, making it the greatest among the major economies.
- India's G20 presidency presents us with a special chance to enhance India's position in the global economic order at this time of great global challenges.
With significant decisions and changes, the above-mentioned are the budget highlights of 2023.