Budget 2023: A Vision for New India

Budget 2023: A Vision for New India
Smt. Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs presented the Union Budget 2023–24 before the Parliament. She said, “In the 75th year of India’s Independence, the Indian economy is acclaimed as a “bright light” as the growth is estimated at 7%, the most among the major economies, despite COVID-19 and the Russia-Ukraine War”. An estimate of income and spending for a future period is referred to as a budget. Budgets are referred to as “Annual Financial Statements” under the Indian Constitution (Article 112). Some key highlights of the budget under the new tax regime are discussed below:

Personal Income Tax

• Individuals in the new tax system would not be required to pay any tax on income up to Rs 7 lakh since the refund ceiling has been raised to Rs 7 lakh under the new tax system.
• The tax structure under the new personal tax system has been altered by decreasing the number of tax slabs to five and raising the maximum tax-free income to Rs 3 lakh.
• Under this new tax regime, the standard deduction is now available to retirees, including family pensioners and members of the salaried class.
• The maximum personal income tax surcharge rate has been decreased from 37% to 25% under the new tax system for income beyond Rs 2 crore.
• Although the new income tax system has been established as the default tax system, residents will still be able to use the previous tax system’s advantages.

Table 1: New Tax Regime (Revised)

Indirect Tax

• There are now just 13 basic customs duty rates available for commodities other than agricultural and textile products, down from 21 previously.
• The import of capital goods and equipment necessary for producing lithium-ion batteries, denatured ethyl alcohol, etc., are now exempt from customs duties.
• The budget decreased the basic customs duty on seeds used to produce laboratory-grown diamonds from 5% to 0%. (LGDs).

Others

• A new generation of the single IT return form is being proposed for implementation by the Union Budget to benefit taxpayers.
• Disposition of appeals: About 100 Joint Commissioners will be used for the modest direct tax appeals that need to be decided.
• Cooperation: New cooperatives will benefit from a 15% tax rate reduction if their manufacturing operations begin by the end of March of the following year.
• Start-ups: The Budget suggests delaying the incorporation deadline for start-ups to get income tax incentives until March 2024.
• MSMEs-related proposals: The budget suggests raising the thresholds at which micro businesses and specific specialists can benefit from presumptive taxes.
• Amendments to the CGST Act: The Budget proposes amending the CGST Act to increase the minimum tax amount required to start a prosecution under the GST from Rs. 1 crore to Rs. 2 crore, with a few exceptions.
• It will decriminalize some provisions, including obstructing or impeding any officer from performing his responsibilities, purposefully tampering with evidence, or failing to provide the information.

The government’s emphasis on infrastructure development, healthcare, education, and rural emancipation has been highlighted in the most recent Union Budget of India for 2023. A focus on digital transformation and job creation is part of the budget’s effort to encourage independent and inclusive growth. Although different stakeholders have had conflicting views on it, the execution of the budget will decide if it influences the Indian economy and the commoner.