The Key Highlights of the Union Budget 2023 

The Union Budget 2023–24, which was unveiled on February 1 by Finance Minister Nirmala Sitharaman, placed more emphasis on the middle class, social sector programs, infrastructure development, and the rural sector.

Union Finance Minister, Nirmala Sitharaman presented the Union Budget 2023 on Wednesday, the fifth budget of Modi 2.0. In the last full-fledged budget before the general elections next year, the Finance Minister, said that the Indian economy is on the right path and heading towards a bright future. In a big boost for taxpayers and the economy, Sitharaman announced major changes in tax slabs under the new tax regime and a big hike in allocation for railways and capital expenditure.

Below is a full reading of the numerous initiatives, India’s Finance Minister, Sitharaman unveiled in the Budget 2023, broken down by sector:

Payers of income taxes

• The previous tax system has not changed.
• The new tax system will take precedence over all others. An old tax system is still an option for citizens, though.
• In the new tax law, there is no tax on income up to Rs 7.5 lakh per year (with the inclusion of standard deduction).
• In the new tax system, the government wants to lower the maximum surcharge rate from 37% to 25%.

New Income Tax Slabs Under New Tax Regimes:

Rs 0-3 lakh: Nil

Rs 3-6 lakhs: 5%

Rs 6-9 lakhs: 10%

Rs 9-12 lakhs: 15%

Rs 12-15 lakhs: 20%

Rs Over 15 lakhs: 30%

Some facts about Budget 2023:

• Taxes for an individual making Rs 9 lakh a year will only be Rs 45,000: Sitharaman, FM.
• Tax on income of Rs 15 lakh is reduced to Rs 1.5 lakh from Rs 1.87 lakh.
• A basic deduction of Rs 50,000 has been made available to taxpayers under the new system.
• Payment from the Agniveer Corpus Fund received by Agniveers will be exempt.
• Insurance policies with premiums over Rs. 5 lakhs are no longer free from taxes.
• The government wants to establish TDS and taxability on net winnings at the time of withdrawal or at the end of the fiscal year for online games.
• Tax-free leave encashment for non-government salaried workers has increased from Rs 3 lakh to Rs 25 lakh.
• The TDS on cash withdrawal would have a greater cap of Rs 3 crore for cooperative organizations.
• A new version of the Common IT Return Form will be released for the benefit of taxpayers.
• Mechanisms for resolving complaints should be strengthened.
• In non-PAN circumstances, the TDS rate on the taxable component of EPF withdrawal would be lowered from 30% to 20%.

What’s costlier, and what’s cheaper?

Overview of the new Tax regime:

Saving schemes announcements:

• The Senior Citizen Savings Scheme's maximum deposit amount would increase from Rs. 15 lakhs to Rs. 30 lakhs.
• To Rs. 9 lakhs and Rs. 15 lakhs for joint accounts, the Monthly Income Scheme cap has risen.
• Mahila Samman Saving Certificate, a one-time new saving program for women, will be made available for 2 years, through March 2025.
• A deposit facility of up to Rs. 2 lakhs would be made available in the names of women or girls for a two-year period at a fixed interest rate of 7.5 percent with the possibility of a partial withdrawal.

• In FY24, a budget of Rs 2.4 lakh crore was allocated for the railroads.
• It is about nine times higher than the allocations for FY14 and is the highest allocation for Railways ever.
• This year, a total of Rs 17,296.84 crore has been allotted for track renewal, up from Rs 15,388.05 crore in RE 2022-23.
• By August 2023, the Railways would probably have introduced 75 Vande Bharat trains.

• The Union Budget 2023 suggests a 20% Tax Collection at Source (TCS) starting on July 1, 2023, for international outward remittances under LRS (other than for education and medical purposes).
• Following the passage of the bill, this will take effect.
• 5% TCS was previously applied to international outgoing transfers over INR 7 lakhs.

• To increase the economic potential and job creation, attract private investment, and act as a buffer against global headwinds, the government has announced a capital investment of Rs 10 lakh crore, a steep increase of 33% for the third year in a row.
• The centre will effectively spend Rs. 13.7 lakh crore on capital projects.
• 3.3% of GDP will be spent on capital expenditures in FY24.
• In FY24, the Center effectively spent Rs. 13.7 lakh on capital projects.
• To increase the chances for private investment in infrastructure, a new Infrastructure Finance Secretariat was established.

• By 2025–2026, the fiscal deficit is expected to be less than 4.5%.
• In the Revised Estimate for FY23, the objective for the fiscal deficit was kept at 6.4%; for FY24, it was cut to 5.9%.
• In FY24, gross market borrowing was estimated at Rs. 15.43 lakh crore.
• The revised estimate for FY23 net tax collections is Rs. 20.9 lakh crore.
• The revised estimate for FY23 total spending is Rs. 41.9 lakh crore.
• Net tax receipts for FY24 were estimated at Rs. 23.3 trillion.

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