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The new tax system is more appealing says FM
Today we will talk about some major factors which will make an impact on multiple aspects after introducing this Budget 2023. What Individuals, Enterprises, MSMEs, Salaried Persons, and others are going to get under the budget are summarised here.
- Our Finance Minister Nirmala Sitharaman has announced various changes in the income tax slabs under the tax reform regime. If we take all rebates, a person is not required to pay tax on incomes upto Rs 7 lakh under the new tax system.
- The Finance Minister, Nirmala Sitharaman has announced an unprecedented increase of capital spending. This year’s Union Budget has hiked the capital expenditure by 33% to 10 crores. This amounts to 3.3 percent of GDP. It is also estimated that the FM is also announcing a huge increase in the PM Awaas Yojana. In her Budget speech, Sithraman announced the continuation of the programme for food security for another year. She also revealed steps to support Agri startups, fisheries, and a new programme for vulnerable, primitive tribal groups.
- FM Sitharaman said that the government will not force anyone to switch towards the current tax system. Individuals who were under the old regime are able to remain in the old regime. But, she added that the new tax system is attractive due to the increase in deductions and rebates.
FM highlights four key areas of the Budget
The four main areas of this budget focus on the empowerment of women, plans for tourism and tourism-related actions, projects to support Vishvakarmas (artisans) as well as green growth.
Atma Nirbhar Clean Plant Programme
The government will announce the Atma Nirbhar Clean Plant Programme with an investment of around Rs 2200 crore to improve the accessibility of quality and disease-free plant material for high-value cultivars in the horticulture sector. In presenting the Union Budget in Parliament, Sitharaman announced that the Agriculture Accelerator Fund will be created to promote agri-startups from young entrepreneurs from rural regions. “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, and increase productivity and profitability,” she stated. Sitharaman further said that “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.”
Investment of Rs 10,000 crore in the GOBARdhan scheme
- Finance Minister Nirmala Sitharaman Wednesday announced 500 new “waste to wealth’ facilities under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme will be created to encourage circular economics. They will comprise 200 compressing biogas (CBG) facilities, comprising those in the urban area as well as 300 cluster or community-based plants with an investment of 10,000 crores. In presenting the Union Budget for 2023-24, she also announced that the government will help one crore farmers to switch to organic agriculture. In addition, the government will set out to establish mangrove plantations along the coast in the new MISHTI program, she said.
Pradhan Mantri Kaushal Vikas Yojana will benefit youth’
“Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched in order to educate thousands of youngsters over three years to contribute to the overall improvement and development of youth across the nation. This National Education Policy will enable young people to be empowered by facilitating job creation on a large scale, thus creating opportunities for business is a significant step toward the direction of success.
Highest tax rate
- “Highest tax rate in the country we live in is 42.74 percent. It is one of the highest anywhere in the world. I would like to lower the surcharge rate which is the highest from 37 percent to 25 percent under the new tax system.
- Additionally, the Prime Minister stressed that digital payments’ success should be replicated in agriculture. Therefore, the government has introduced a digital infrastructure for agriculture.
- Within the Union Budget presented in Parliament by Finance Minister Nirmala Sitharaman, on Wednesday, an amount of 1.62 lakh crore was put aside for capital expenditures, which include the purchase of new aircraft, weapons, warships, as well as other hardware for the military. The budgetary allocation for capital expenditure was 1.52 lakh crore. However, the updated estimate put the amount at 1.50 1 lakh crore. According to the 2023-24 budget documents, an allocation of 2,70,120 crore was allocated for revenue expenses, which include the cost of paying salaries and the maintenance of establishments.
- Finance Minister Nirmala Sitharaman on Wednesday suggested to increase the deposit limit of the Senior Citizen Savings Scheme to Rs 30 lakh and for the Monthly Income Account Scheme to 9 lahks. With the Budget Speech, the minister also announced a tiny savings program for women.
- The luxury vehicles that are imported fully or electric vehicles (EVs) within India will cost more since the government increased customs duties from 60 percent to 70 percent on these items in the Budget 2023.
- The government has proposed to extend tax benefits for income to companies that have been incorporated up to March 2024. Nirmala Sugar cooperatives are able to claim the payments made prior to 2016-17 to sugarcane farmers as expenses according to the minister. New cooperatives that start manufacturing activities until March 2024 could also enjoy a lower tax rate of 15 according to her Budget speech.
- In relation to personal income tax The FM has announced the following “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 percent, for income of above Rs 6 lakh and up to Rs 9 lakh will be taxed at 10 percent and for income above Rs 12 lakh and up to Rs 15 lakh to be taxed at 20 percent and above 15 lahks at Rs 30 percent.”
- Finance minister Nirmala Sitharaman this week announced an increased tax-free income limit from 5 lahks to Rs . 7 lahks. She also said that this new tax system will become the default tax system. Sitharaman also suggested changing the tax structure under this new tax regime by reducing the amount of tax slabs to five and expanding the tax exemption to Rs 3 lakh.
- There will be no taxation for earnings up to the amount of Rs 3 lakh. If income is between 3-6 lakhs Tax of 5% will be charged. The maximum tax rate of 30% on earnings above Rs 15 lakh in the new regime.
- The government has released new Income Tax Return (ITR) forms that make it simpler for filing tax returns.
- The government has made a cash transfer worth the sum of Rs 2.2 lakh crore as part of the PM-KISAN Presenting the final budget during the second term in the BJP-led NDA administration ahead of general elections in 2024 she stated that the goal that the administration has is creating an economy that is driven by knowledge.
By considering all facts some of the policies are seeming very interesting but in some areas, we may see some drawbacks also.
If you are a salaried person and not able to get what is for you in this budget, you can connect to our professionals for making your tax planning for a new tax regime or old tax regime. We will help you in getting maximum benefit on taxes paid by you.