Highlights of Budget 2023: Check out the new income tax regimes, what’s cheaper and what’s costlier?

The Budget 2023 was presented by the Union Finance Minister of Nirmala Sitharaman on Wednesday, February 1, 2023. This is the first Budget in Amrit Kaal and is the fifth Budget (from 2019) presented by Finance Minister, Nirmala Sitharaman.

The Budget 2023 envisions a prosperous and inclusive India, wherein, the result of the development is expected to reach all regions and citizens, especially the youth, women, farmers, OBCs, Scheduled Castes and Scheduled Tribes.

The FM said the Budget is adopting seven priorities which complement each other and act as the Saptarshi guiding India through the Amrit Kaal. The seven priorities of the Budget are-

Inclusive Development, Reaching the last mile, Infrastructure and Investment, Unleashing the potential, Green Growth, Youth Power and Financial Sector.

Few of the major highlights of the budget are-

One of the first proposals on personal income tax among the five was to increase income tax rebate limit which was earlier Rs 5 lakh to Rs 7 lakh under the new tax regime. Those with income upto Rs 5 lakh do not pay any income tax under both old and new tax regimes. So with the rebate limit increasing to Rs 7 lakh in the new tax regime, those with income up to Rs 7 lakh will not have to pay any tax. And the new tax regime to remain default unless the taxpayer switches to the old regime i.e., the citizens will have the option to avail the benefit of the old tax regime as well.

Secondly, the new income tax slabs under new tax regime which was introduced back in 2020 with six income slabs has been reduced to five and the tax exemption limit has increased to Rs. 3 lakh.

So the new income tax slabs under the new regime are 0 to Rs 3 lakh: NIL, Rs 3 lakh- Rs 6 lakh: 5%, Rs 6 lakh-Rs 9 lakh: 10%, Rs 9 lakh-Rs 12 lakh: 15%, Rs 12 lakh- Rs 15 lakh: 20%, and Over Rs 15 lakh: 30%

Third, FM’s third proposal was for the salaried class and the pensioners including the family pensioners. She proposed to extend the benefit of standard deduction of Rs 50,000 to salaried individual, and deduction from family pension up to Rs. 15,000 in the new tax regime.

The fourth proposal in personal income tax was about the Highest surcharge rate which has been reduced from 37% to 25% in the new tax regime which will further result in reduction of the maximum personal income tax rate to 39%.

The fifth and the last major announcement on personal income tax involve the limit for tax exemption on leave encashment on retirement of non-government salaried employees.

Earlier in 2002, during the Atal Bihari Vajapayee government, the limit was Rs 3 lakh which now has been proposed to increase to Rs. 25 lakh.

The outlay for capital spending increased by 33% to Rs 10 lakh crore in FY24 while the outlay for the PM Awas Yojana will increased by 66 % to Rs 79,000 crore.

Apart from these, the Finance Minister announced other major announcements like -the government will launch the Pradhan Mantri Kaushal Vikas Yojana 4.0, a yojana to skill youths of the nation within the next three years which will cover new age courses for Industry 4.0 like coding, AI, robotics etc. The Direct Benefit Transfer scheme under a pan-India National Apprenticeship Promotion Scheme to be rolled out to provide stipend support to 47 lakh youth in three years. For the benefit of the women and to commemorate Azadi ka Amrit Mahotsav, a one-time new small savings scheme was announced called the Mahila Samman Savings Certificate which will offer deposit facility up to Rs 2 lakh for women and girls for 2 years up to March 2025.

The FM announced several other significant announcements during the Budget 2023 which also includes the price of the items we use in our daily lives.

 So what’s cheaper?

Toys, Bicycles, Mobile phones, LED TV, Camera lenses, Lithium-ion cells for batteries, Lab grown diamonds, Shrimp feed.

What’s costlier?

Imported luxury cars and EVs, Compounded rubber, Cigarettes, Clothes, Gold, Silver, Diamonds, Kitchen Chimney