Union Budget 2023: Income tax Slabs rationalised in new income tax regime

03 Feb 2023|

1 min read |

by ICICI Securities Team

Higher disposable income, auto sector, consumer durables space to benefit

The Union Budget has allowed standard deduction of Rs 50,000 under the new personal income tax regime
Basic exemption limit has been raised to Rs 3 lakh from Rs 2.5 lakh earlier while slabs have been reduced from six to five with those earning up to Rs 7 lakh annually exempted from income tax in the new tax regime
Individual salaried tax payer to save Rs 52,500 at an income of Rs 15.5 lakh
Capital gain in excess of INR 10 crore on sale of house property cannot be used to avail exemption via property purchase u/s 54 and 54F. Impact on high ticket investors
Tax collected at source ( on Liberalised remittance scheme ( applicable at 5% without limit is changed to 20). Similarly, for overseas tours also, TCS raised from 5% to 20% .For education and medical exp there is no change.
Conversion of gold into electronic gold receipt and vice versa will not be considered as capital gain.
Reduced the TDS rate to 20% from 30% on taxable portion of EPF withdrawal in non-PAN cases.
Highest surcharge rate on income above 5 Cr to be reduced from 37% to 25% under new regime
Tax exemption limit raised to Rs 25 lakhs on leave encashment on retirement for Non-government salaried employees

Tax savings in revised new income tax regime with new slabs is Rs 52,500 for income of Rs 15,50,000

Tax liability in old regime without benefits is Rs 2,88,600, higher by Rs 1,32,600 vs. latest new tax regime, without any benefits

For 30% tax bracket assesses, if the total amount of deductions (Chapter VI-A + Housing Loan Interest+ HRA + LTA + Self NPS + Mediclaim + Standard Deduction) exceeds Rs 4,42,000 (its 30% is Rs 1,32,600), it is better to continue in the current tax regime

Key beneficiaries of rationalisation of tax slabs in new tax regime:

Automobile Sector: Rationalisation of personal income tax slabs with higher disposable is positive for the passenger vehicle industry as well as premium 2-W space. Consequently, PV and premium 2-W space is seen growing in healthy double digits with key beneficiaries being Maruti, Tata Motors and Eicher Motors. Also, positive in the Budget was the capex push with robust allocation at Rs 10 lakh crore, which will further aid cyclical upswing in commercial vehicle space.
Consumer durables space: The change in personal income tax slabs coupled with higher rebates under the new tax regime is likely to increase the consumers' discretionary spend towards home appliances. We believe Havells and Bajaj Electricals are the major companies will likely benefit as demand for both small as well as large home appliances would increase on account of higher disposable income.

Source: Budget documents, ICICI Direct Research

Disclaimer

ICICI Securities Limited has its registered office at ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. The non-broking products / services like iLearn and Financial Learning are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism. iLearn is not an exchange traded product/service of ICICI Securities Ltd. All disputes with respect to the activity on the platform would not have access to Exchange investor redressal or Arbitration mechanism.

ICICI Securities Ltd. is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. ICICI Securities Ltd. is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. Name of the Compliance officer (broking): Mr. Atul Agrawal, Contact number: 022-69997051, E-mail address: complianceofficer@icicisecurities.com Investments in securities markets are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. ICICI Securities Ltd. and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Such representations are not indicative of future results. The securities quoted are exemplary and are not recommendatory. AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. ICICI Securities Ltd. acts as a Composite Corporate agent having registration number -CA0113. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund, Corporate Fixed Deposits, Bonds, Alternate investment funds, Tax planning, Succession planning, NPS, IPO, Investment Advisory and Loans related services are not Exchange traded products and ICICI Securities Ltd. is acting as a distributor to solicit these products. Please note, Insurance related services are not Exchange traded products and ICICI Securities Ltd. is acting as a corporate agent to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The non-broking products / services like Research, etc. are not exchange traded products / services and all disputes with respect to such activities would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

Did you enjoy this article?

52 people liked this article. Share Feedback

Recent Articles

View all

Understanding Contango in Commodity Markets

Understand contango in commodity trading, how futures prices differ from spot prices, and how financing, storage and insurance costs influence commodity pricing.

213 views

1 minutes

19 Oct 2026

Know Your Commodity Before You Trade: Copper

Copper is a widely used base metal known for its electrical and thermal conductivity, strength, ductility and corrosion resistance. It is used across electrical wiring, construction, machinery, power infrastructure and several industrial applications.

425 views

2 minutes

09 Oct 2026

Know your commodity before you trade - Natural Gas

Natural Gas is a widely traded energy commodity used for electricity generation, industrial activity, heating and other applications. Its prices can react sharply to weather, supply and demand, inventories, global energy markets and geopolitical developments.

703 views

1 minutes

30 Sep 2026