Key Features of Union budget 2023
The finance minister Nirmala Sitharaman unveiled the Union budget 2023 on 1st February 2023. This is the 5th union budget introduced by the Modi Government 2.0. And it sets the stage for the government’s economic plans for the coming fiscal year. It’s being regarded as the first budget of Amrit Kaal (Golden age). With a focus on providing tax relief to individuals, boosting infrastructure development, and supporting small businesses.
The primary objective of India’s Union budget for 2023, is to rejuvenate the economy and foster growth while preserving financial discipline. The budget outlines seven key initiatives (Saptarishi-7 priorities) that are sure to have a significant impact on the economy.
- Inclusive Development
- Reaching the Last Mile
- Youth Power
- Infrastructure & Investment
- Unleashing the potential
- Green Growth
- Financial Sector
Key-Takeaways of the budget
Income Tax Updates
- Firstly, one of the most notable highlights of the Union budget 2023 is the changes brought in the new income tax regime. The 2023-24 Union Budget has offered substantial tax relief to individuals. The new tax structure comprises revised tax brackets as below:
|Income Slabs||Tax Rates|
|Upto 3 Lakhs||Nil|
|3,00,001 – 6,00,000||5%|
|6,00,001 – 9,00,000||10%|
|9,00,001 – 12,00,000||15%|
|12,00,001 – 15,00,000||20%|
- Furthermore, It also has a tax rebate for taxable income up to INR. 7 lakhs. This means no tax will be payable for income up to 7 lakhs.
- Salaried individuals will benefit from a standard deduction of Rs 50,000 under the new regime.
- No changes are made in the old tax regime of the income tax act, and the new tax regime will be by default considered while filing the ITR of the taxpayer with the Common ITR form to be rolled out soon.
- The highest surcharge under the new tax regime has been reduced to 25% from 37% for people earning more than Rs.5 crore.
- TDS rate reduced to 20% from 30% on taxable withdrawal of EPF.
- Benefits on Carry forward of loss from 7 years to 10 years allowed for startups along with an extension for exemption u/s 80IAC under the startup India scheme.
- Additionally, enhanced limits for Presumptive taxation u/s 44AD (Businesses) from 2 Cr. to 3 Cr and 44ADA (Professionals) from 50 lakhs to 75 lakhs. Which will help individual taxpayers and MSMEs eligible to take benefit of it.
- A higher limit of Rs 3 crore for TDS on cash withdrawal is to be provided to cooperative societies
- Finally. for online games, govt proposes to provide for TDS and taxability on net winnings at the time of withdrawal or at the end of the financial year.
Support to MSMEs
- The 2023 Union budget includes measures to support the MSME sector. Since this sector is a major contributor to the country’s economy, the budget includes new limits for micro-enterprises and professionals. Accordingly, the measures will let them take advantage of presumptive taxation as mentioned above.
- Other benefits include digital payments, social security, and the integration of MSMEs with the MSME value chain. The package will benefit the Scheduled Castes, Scheduled Tribes, OBCs, women, and people from weaker sections. A new digital entity, DigiLocker, will be set up for MSMEs, large businesses, and charitable trusts to store and share documents securely online.
- The finance minister announced that last year’s proposal to revamp the credit guarantee scheme for MSMEs will take effect on April 1, 2023, with an infusion of Rs 9,000 crore in the corpus. This will provide an additional Rs 2 lakh crore in collateral-free guaranteed credit and reduce the cost of credit by about 1%.
Strengthening the digital economy
- Union budget has also outlined plans to further strengthen the digital economy, promoting digital transactions and encouraging the adoption of cashless payments. DigiLocker’s services are being expanded to incorporate the latest advancements in technology.
- The company plans to set up 100 labs for the development of applications that utilize 5G services in engineering institutions. These labs will focus on creating solutions for the following: smart classrooms, precision farming, and healthcare applications.
- Additionally, DigiLocker will launch phase 3 of its E-courts projects with an outlay of Rs 7,000 crore. This initiative will have the support of leading industry players who will collaborate in developing scalable options for sectors such as health, agriculture, etc.
- Additionally, the government has announced plans to invest Rs 10,000 crore each year for the development of urban infrastructure. The government also plans to enable 100% transition of sewers and septic tanks for all cities and towns.
- The outlay for the PM Awaas Yojana has been increased by 66% to over Rs 79,000 crore. Additionally, an outlay of Rs 2.4 lakh crore has been provided for the railways in FY24, making it the highest-ever allocation for the railways, nearly nine times the allocation in FY14. In an effort to promote education, a National Digital Library will be set up specifically for children and adolescents.
Steps for Promoting Education
- In order to promote the advancement of artificial intelligence, the government has decided to establish three centres of excellence in esteemed academic institutions. Furthermore, the government is also providing education to the tribal community and is planning to set up Eklavaya Model Residential Schools in the next three years. The schools will provide education to 3.5 lakh tribal students. Accordingly, to achieve this goal, the centre is going to recruit 38,800 teachers and support staff.
- The National Book Trust and Children’s Book Trust will also replenish non-curricular titles in regional languages and English to be added to the digital libraries. The government will encourage states to set up physical libraries at panchayat and ward levels and provide the necessary infrastructure for accessing the National Digital Library resources.
Improvements to healthcare
- Also, healthcare is another area of emphasis in the 2023 budget, with the government allocating a significant amount of resources towards the creation of new medical colleges, hospitals, and the strengthening of existing healthcare facilities. Accordingly, there is going to be establishment of 157 new nursing colleges. This will be in collaboration with existing medical colleges established in 2014.
- Moreover, the new budget has introduced the formulation of a new pharmaceutical research program to eliminate sickle cell anemia by 2047. It is encouraging the industry to invest in this critical research. This which will play a crucial role in finding a cure for this debilitating disease. The goal is to work together towards a brighter future where individuals suffering from sickle cell anemia can live their lives free from the pain and suffering caused by this condition.
Indirect Tax Updates
- Firstly, basic customs duty on crude, glycerine will be reduced to 2.5%.
- Secondly, import duty on silver bars hiked to align it with gold, and platinum.
- Thirdly, the relief provided on Customs Duty on import of certain parts & inputs like a camera lens.
- A number of basic custom duty rates on goods other than textiles and agriculture will be reduced from 21 to 13. As a result, there are minor changes in taxes on some items toys, bicycles, and automobiles.
Other Important Changes in Union Budget 2023
For Economic Empowerment of Women
Firstly, the government is working towards the economic empowerment of women through the Deendayal Antyodaya Yojana National Rural Livelihood Mission, which has already formed 81 lakh Self Help Groups. The next step will be the formation of large producer enterprises to increase economic stability.
For the progress of traditional artisans and craftspeople
Secondly, the 2023 Union budget has introduced the PM Vishwakarma Kaushal Samman program. This program will recognize the significant contribution of traditional artisans and craftsmen to India’s cultural heritage. For instance, skilled workers who create masterpieces using their hands and tools, have been instrumental in earning India a reputation for excellence in the arts and crafts. The art and craftsmanship they produce embody the essence of self-reliant India.
For Tourism sector
Thirdly, the government has introduced a new scheme, PM VIKAS, to support traditional artisans and craftspeople. This scheme offers various things, such as financial support and access to advanced skill training, brand promotion, and social security to improve the quality, scale, and reach of their products. The government also plans to promote tourism on a mission mode with the active participation of states and public-private partnerships. This will provide job and entrepreneurship opportunities for the youth.
In conclusion, the 2023 budget sets a clear direction for the government’s economic plans for the coming year. With its focus on several important things such as tax relief for individuals, infrastructure development, digital economy, healthcare, and MSMEs, the budget outlines a comprehensive plan for reviving the economy, creating job opportunities, and improving the standard of living for citizens. There is an emphasis on reducing dependency on other countries and imports and increasing self-sufficiency. The success of the budget will depend on the effective implementation of these measures and the government’s ability to execute its plans.
Monjima is a lawyer and a professional content writer at LegalWiz.in. She has a keen interest in Legal technology & Legal design, and believes that content makes the world go round.
Leave A Comment