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Published: Feb 2, 2023
Updated: Feb 2, 2023

Union Budget 2023-24: Highlights and Key Announcements

The Indian Finance Minister Nirmala Sitharaman presented the Union Budget 2023-24 today, outlining the government's priorities and proposed changes in tax laws. Here are the key highlights from the budget.

1.Fiscal Deficit Target

The government has set the fiscal deficit target for FY-2024 at 5.9% of GDP.

2.Indirect Taxes

• The customs duty on goods such as textiles, toys, and bicycles has been reduced from 21% to 13%.
• To promote green mobility, excise duty on GST-based green compressed biogas has been exempted.
• The customs duty has been reduced for camera lenses and lithium batteries to promote electronics manufacturing.
• The basic customs duty on TV panels has been cut to 2.5%.
• The basic customs duty on electric kitchen chimneys has been increased.
• Customs duty on key inputs has been reduced to support the export of marine products like shrimp feed.
• Customs duty on silver bars has increased, and duty on cigarettes has been hiked by 16%.
• Direct Taxes

A common IT form and a strengthened grievance redressal system are proposed to be rolled out.

• The limits for presumptive taxation have been increased, with a Rs. 3 crore limit for micro businesses under Sec 44AD and Rs. 75 lakhs for certain professionals under Sec 44ADA.
• The tax for manufacturing cooperatives has been fixed at 15%, with a higher limit of Rs. 2 lakh per member for cash deposits in agricultural banks and a higher limit of Rs. 3 crores on TDS for cash withdrawals.
• Income tax benefits for startups have been extended by a year till 2024, and the carry forward of losses has been increased from 7 years to 10 years.
• 100 joint commissioners will be deployed to dispose of small appeals in Income Tax.
• Tax concession has been granted on capital gains from investment in residential houses under Sec 54 and 54F, up to Rs. 10 crores.
• The TDS rate has been reduced to 20% on taxable EPF withdrawals.
• Personal Income Tax.

New tax regime to bring more relief to the middle class people

• The income limit for the Sec 87A rebate has been increased from Rs. 5 lakh to Rs. 7 lakh for those opting for the new regime.
• The 6 income slabs in the new regime have been changed to 5, with basic exemption up to Rs. 3 lakhs and increasing tax rates up to 30% for those earning more than Rs. 15 lakhs.
• The standard deduction in the new regime for salaried and pensioners with over Rs. 15.5 lakhs is Rs. 52,500.
• The highest surcharge has been reduced from 37% to 25% in the new tax regime.
• The limit on tax exemption for leave encashment has been increased from Rs. 3 lakh to Rs. 25 lakh.
• The new IT regime is proposed as the default, with the option for tax assesses to choose the old regime.

Overall, the budget 2023-24 aims to promote inclusive development, reach the last mile, increase investment in infrastructure, unleash the potential of various sectors, promote green growth, empower the youth, and strengthen the financial sector. The changes in tax laws aim to ease compliance and provide tax benefits for businesses, startups, and individuals.