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The Government of India announces the Union Budget in Parliament every year. It is a report on the government’s revenues and expenditure projection for the fiscal year. And as an Indian citizen or a non-resident having Indian businesses or assets, you should know the government’s financial goal. Why? Because they impact your everyday life.
Finance Minister Nirmala Sitharaman presented the Union Budget 2023-24 on Wednesday, 1st February 2023. The minister has outlined many key initiatives and changes. The administration also announced several tax adjustments.
And the good news? Our Finance Minister, Smt Nirmala Sitharaman, has begun the Budget with growth overtones and confidence, declaring that India’s economic outlook is brighter than before the epidemic.
The Budget reflected and emphasized the administration’s continuing focus on expanding capital expenditures in the country. It aims to do so by prioritizing the development of roads, highways and railway lines, airports, helipads, water aero drones, etc. Besides growing infrastructure and industry, they also plan to balance social expenditures to uplift society.
So continue reading to discover more about the Union Budget presentation, so you don’t miss out on essential information.
Let’s begin!
Finance Minister Nirmala Sitharaman led the presentation of the Modi government’s last complete Budget before the forthcoming General Elections in 2024 by declaring, “This is the first Budget of Amrit Kaal.”
She claims India’s economy has been widely recognized as a positive. At 7%, India’s current fiscal growth rate is the greatest of any large economy. Furthermore, in her budget speech, Sitharaman also expressed optimism about India’s economic prospects.
The per capita income has risen to Rs 1.97 lakh. Simultaneously, India’s economy has risen from 10th to 5th biggest in the world in the previous nine years, according to Sitharaman’s Union Budget address.
The presentation of the India Budget 2023 comes as the world’s most developed nations experience slowdowns and maybe even recession. According to the Economic Report, this would result in a rise of between 6% and 6.8% in India’s GDP this year. Thus guaranteeing that India would keep leading the globe in economic growth.
The research also said that India has fully recovered from the shock of the Covid-19 epidemic, which is encouraging for expectations for GDP growth.
In the new tax regime of 2020, income tax rebates are extended up to Rs 7 lakhs. The Finance Minister quoted:
“I created a new personal income tax structure with six income bands beginning at Rs 2.5 lakhs in 2020. I recommend that the tax structure under this regime be changed by decreasing the number of slabs to 5 and raising the tax exemption ceiling to Rs 3 Lakhs.”
The Budget proposes to treat the New tax regime as the default tax regime with effect from FY 2023-24, with the taxpayer having the option to continue enjoying the benefit of the old tax regime. Sitharaman proposed changing the tax structure under the new tax regime by decreasing the number of slabs to five and raising the tax exemption level to Rs 3 lakh. Here’s a quick overview:
| INCOME | TAX RATE |
| Up to 3 Lakh | No or very little |
| Rs 3 lakh and Rs 6 lakh. | 5% |
| Rs 6 lakh and Rs 9 lakh. | 10% |
| Rs 9 lakh and Rs 12 lakh. | 15% |
| Rs 12 lakh and Rs 15 lakh. | 20% |
| Over Rs 15 lakh. | 30% |
The changes to the New tax regime introduced in 2020 will now offer better savings on tax liability for Indians. Also, the highest surcharge under the new regime is reduced to 25% from the extant 37%.
Capital gains exemption for investment in Residential houses has also been proposed to be capped at Rs. 10 Crores under sections 54 and 54F of the Income tax act. Also, the tax exemption from proceeds of insurance policies with very high value is intended to be capped.
Also, Indian Railways has a capital investment of Rs 2.40 lakh crore for the first time. According to Sitharaman, this is the largest capital spent on railroads.
Furthermore, Finance Minister Nirmala Sitharaman announced a significant increase in capital spending. The Union Budget increased capital spending by 33% to Rs 10 lakh crore. It equates to 3.3% of GDP.
The FM also announced a significant increase in the PM Awaas Yojana by Rs. 79,000 Crores. Sithraman underlined the continuance of the food security program for another year in her Budget address, as well as actions for Agri startups, fisheries, and the launch of a program for primitive, vulnerable, tribal populations.
In Budget 2023, the Finance Minister increased capital spending for the fiscal year 2022-2023 by 35.4 percent to Rs 7.5 lakh crore. This is an increase from Rs 5.5 lakh crore the previous year, or Rs. 2.5 lakhs in Budget 2023 for the fiscal year 2023-2024.
The government has raised the maximum permitted investment in the senior citizen savings program, a popular investment among the elderly, in Budget 2023. Furthermore, they have improved the post office’s monthly revenue system.
Finance Minister Nirmala Sitharaman doubled the Senior Citizen Savings Scheme (SCSS) maximum contribution to Rs 30 lakh from Rs 15 lakh. Moreover, it guarantees an annual interest rate of 8% under the plan. Finally, there will be a quarterly interest payment.
There is also a rise in the Post Office Monthly Income Scheme (POMIS) investment cap from Rs. 4.5 lakh to Rs. 9 lakh. Also, there is a rise in previous INR 9 Lakh caps on combined/joint POMIS accounts to Rs. 15 Lakhs. An interest of 7.1% per year is paid monthly under this scheme.
The government plans to form three artificial intelligence excellence centers in prominent educational institutions. Furthermore, 100 labs in engineering colleges will develop applications employing 5G services.
Additionally, they will establish a national digital library for children and adolescents to provide access to excellent books across geographies, languages, and genres. The government will also hire 38,800 teachers and support personnel for 749 Eklavya Model Residential Schools. Thus serving 3.5 lacks children.
The Government plans to introduce Revamp schemes in 2023 with an infusion of Rs. 9,000 Crores in the corpus allotted for MSMEs, enabling yet another collateral-free credit of Rs. 2 Lakh crores. Thus, reducing the cost of credit by 1%.
Green hydrogen, clean energy storage, and transmission shall receive focus and impetus, with the Central government providing necessary financial support for setting up storage systems and putting in place transmission systems. They will also enact a Green credit program for boosting behavioral change through the Environmental Protection Act.
The highest allocation across ministries was to the Defence Ministry at Rs. 5.94 Lakh Crores, though this isn’t significantly higher as compared to the current FY 2022-23 allotment of Rs. 5.25 Lakh Crores. As a part of the Atma Nirbhar Bharat initiative, the government has restricted imports of several items used for defense equipment and weapons, which are now being manufactured in India.
Finance Minister Nirmala Sitharaman delivered her sixth Budget in a row today. It was also the final complete Budget of the Modi 2.0 government before the 2024 legislative elections.
The Budget 2023 plays in the loop yet again the government’s emphasis on building strong infrastructure, boosting tourism, simplifying taxes for the common man by easing the new tax regime and making it default, focusing on making India as self-reliant as possible, and enforcing digitization across the economy including agriculture are all welcomed.
How do you feel about the Budget? Is it a positive step forward for India?
We hope that with this blog, you are now aware of the key points addressed by the Budget 2023-2024. However, if you still have questions, it’s best to get them answered by experts like GJM & Co.
Our experts will walk you through the Budget as well as explain how it may impact your business. Furthermore, we will help you with tax filings for the year to avoid any mishaps.
Should you have any queries or need consultation, Schedule a Call today or write to us at info@gjmco.in.