General Budget 2023: Income Tax Exemption Limit Increased from Rs 5 lakh to Rs 7 lakh, Finance Minister gave Statement

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General Budget 2023
India’s Finance Minister Nirmala Sitharaman (3R) looks on as she leaves the Finance Ministry for the Parliament to announce the 2020-21 union budget, in New Delhi on February 1, 2020. (Photo by Prakash SINGH / AFP)
  1. General Budget 2023: Now under the new tax regime, no tax till annual income up to Rs 7 lakh – FM Sitharaman

Finance Minister Nirmala Sitharaman has made a big announcement regarding tax slabs. Now under the new tax system, no tax will have to be paid till the annual income of up to Rs 7 lakh. Till now this limit was 5 lakh rupees.

FM Sitharaman proposes to increase income tax rebate limit from Rs 5 lakh to Rs 7 lakh in new tax regime

Govt to enhance grievance redressal mechanism for direct tax payers

google.com, pub-7431197127296523, DIRECT, f08c47fec0942fa0

An individual with annual income of Rs 9 lakh will have to pay only Rs 45,000

No tax for income up to Rs 3 lakh; 5 percent tax on Rs 3-6 lakh; highest tax rate of 30 percent on income above Rs 15 lakh under new tax regime.

An individual with income of Rs 15 lakh will have to pay Rs 1.5 lakh tax, down from Rs 1.87 lakh under new tax structure

Govt to provide higher limit of Rs 2 lakh per member for cash deposit and loans by Primary Agricultural Credit Societies

Govt proposes to reduce highest surcharge rate from 37 percent to 25 percent in new tax regime.

Finance Minister Nirmala Sitharaman has made a big announcement regarding tax slabs. Now under the new tax system, no tax will have to be paid till the annual income of up to Rs 7 lakh. Till now this limit was 5 lakh rupees.

2. PM Awas Yojana:

Big announcement in the budget on PM Awas Yojana, Finance Minister made this announcement

3. Farm sector receives major boost as FM renews thrust on rural India

Finance Minister Nirmala Sitharaman proposed increase in the agriculture credit target in the Budget 2023 to Rs 20 lakh crore, with an emphasis on industries such as animal husbandry, dairy and fishery. She also proposed a sub-scheme of PM Matsya Sampada Yojana with a targeted investment of Rs 6,000 crore. 

4. No News on Bank Privatisation 

More than an hour into the Budget 2023 speech, FM Nirmala Sitharaman has not touched up on any key banking sector reforms including the long held promise of privatization of public sector banks. To be sure, this is no surprise. Ahead of the 2024 general elections and considering the politically sensitive nature of the move, the Government was expected to keep mum on the bank privatization issue. However, one must remember that privatization of at least two PSBs was a key announcement in Sitharaman’s last budget. A year later, this is nowhere discussed. Is bank privatization totally off the agenda or is the FM keeping the big announcement to the last?

5. Boost for Infrastructure

FM Sitharaman has proposed to hike the capital expenditure by 33 percent to Rs 10 lakh crore for infrastructure development for 2023-24 and will be at 33 percent of the GDP.100 critical transport infrastructure projects, for the last and first-mile connectivity for ports, coal, steel, fertilizer and food grains sectors have been taken up on priority with an investment of Rs 75,000 crore, including Rs 15,000 crore from private sources.

6. Calamity Cess on Cigarettes 

Cigarettes get hit by a steep 16 percent increase in the calamity cess imposed on them. This will lead to an increase in cigarette prices and could hurt volume growth in the near term. ITC will get affected but so will other tobacco stocks

7. DigiLocker Expansion for fintech Companies

Finance Minister Nirmala Sitharaman has announced the expansion of the Government digital certificate depository Digilocker services for the fintech sector. This is a boost for fintech startups as so far the DPI only allows individuals to store and share their certificates, such as academic records, driving licence, PAN cards. Documentation availability will be the focus for the DigitLocker expansion for the fintech sector, The fintech sector has been facilitated by digital services, PM Jan Dhan Yojana, Indian Stack and UPI,” Sitharaman said

8. Fintech Sector update

Digital payments rose 76% in transaction and 91% in value terms in 2022

Rs 7,400 crore digital payments of Rs 126 lakh crore through UPI in 2022.

Fiscal support for digital public infrastructure (DPI) will continue in 2023-2024

The scope of documents available in DigiLocker for individuals will be expanded

An entity DigiLocker will be set up for use by MSMEs and large businesses

PM VIKAS scheme will now include access to digital payments and social security

Subsidy for UPI expected to jump two-folds to Rs 2,137 crore in FY23 over previous fiscal

Allocation for digital payments promotion remains stagnant at Rs 1500 crore for last three years

9. Cost of Products

Which imports are now cheaper: Aero planes and other aircrafts; Gold (including gold plated with platinum) unwrought or in semimanufactured forms, or in powder form; Base metals or silver, clad with gold, not further worked than semimanufactured; New or retreaded pneumatic tyres, of rubber, of a kind used on aircraft of heading; Platinum, unwrought or in semimanufactured form, or in powder form; Waste and scrap of precious metal or of metal clad with precious metal; several aquaculture inputs; Some TV, camera parts 

Which imports are more costly: Vehicle (including electric vehicles); Silver Dore; Naphtha; styrene, Vinyl Chloride Monomer, Compounded Rubber, Articles of precious metals, Imitation Jewellery, Electric Kitchen Chimney, Bicycles, Toys and parts of toys (other than parts of electronic toys)

10. Proposals for energy sector

FM Sitharaman has proposed an outlay of Rs 35,000 crore to achieve energy transition and net zero objectives and listed green growth among seven priorities of the government.

With an outlay of Rs 19,700 crore, National Green Hydrogen Mission will facilitate transition of economy to low carbon intensity, reduce dependence on fossil fuel imports and make the country adopt technology and market leadership in this sector.

Government will provide viability gap funding for 4,000 MWh battery energy storage systems.

Detailed framework for pumped storage projects will be formulated.

Inter state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh will be constructed with an investment of Rs 20,700 crore, including the central government support of Rs 8,300 crore.

A green credit programme will be notified under the Environmental Protection Act.

Is the Rs 7-lakh tax-free income limit only for the new tax regime?

Finance minister has proposed that individuals with an income of up to Rs 7 lakh will not have to pay any tax under the new tax regime. They will be eligible for a rebate under section 87A that is currently available to individuals with income of up to Rs 5 lakh, she said during her Budget 2023 speech.

Finance Minister Nirmala Sitharaman on February 1 announced that individuals with an income of up to Rs 7 lakh will not have to pay any tax under the new tax regime.

They will be eligible for a rebate under section 87A that is currently available to individuals with income of up to Rs 5 lakh, she said during her Budget 2023 speech.

No rebate for taxpayers opting for the older tax regime

If you, like most other tax-payers, have been opting for the older, with-exemptions tax regime that offers tax breaks under section 80C among other things, you will not be eligible for this rebate on the enhanced income limit. You will get a rebate under the old regime only if your income is less than Rs  5 lakh.

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