Highlights of Union Budget 2023-2024

Individuals tax slabs:

Before listing out the new slabs, the minister announced that the Old Tax Regime will only be available on request now, and what was known as the New Tax Regime so far will thus be considered the default regime. No changes have been made to the old tax regime.

The Union Finance Minister Nirmala Sitharaman has proposed a new tax regime, under which the income tax rebate limit has been increased from ₹5 lakhs to ₹7 lakhs. Rebate under section 87A has been hiked from ₹ 5 lakhs to ₹ 7 lakhs under the new tax regime.

 (The rebate under Section 87A was first proposed in the year 2013 and has been in effect for several years, with it being updated as recently as 2019. Under the existing provisions of Section 87A, any individual with an annual taxable income of up to ₹5 lakhs is eligible for an income tax rebate of ₹12,500).

The new regime of personal income tax with 6 income slabs, is reduced to five slabs, and increasing the tax exemption limit to ₹3 Lakhs from the earlier ₹2.5 lakhs.

The new tax rates are:

0 to ₹3 lakhs – nil;

₹3 to 6 lakhs – 5%;

₹6 to 9 Lakhs – 10%;

₹9 to 12 Lakhs – 15%;

₹12 to 15 Lakhs – 20%; and

Above 15 Lakhs – 30%

* Maximum Deposit Limit for Senior Citizen saving scheme to be increased from 15 to 30 lakhs

* Mahila Samaan Saving Certificate” for Women and Girls Offered for 2 Years with a 7.5% Interest Rate.

*   Allocation for the PM Awas Yojana Fund increased 66 per cent to a record ₹ 79,000 crores. The capital investment outlay jumped 33 per cent to ₹ 10 lakh crore.

* FM caps the upper limit for exemption under Sections 54 and 54F at Rs. 10 crores

* The benefit of a lower tax rate of 15% to new cooperative societies is proposed

* Start-ups incorporated upto 31-03-2024 shall be eligible to claim tax exemptions under Section 80-IAC

* A higher limit of ₹ 3 crores on TDS on cash withdrawal is proposed for co-op. society.

* FM proposes amendments to the Banking Regulation Act, Companies Act, and RBI Act to improve governance and enhance investor protection

* Custom duty:

* There are minor changes in the basic customs duties, cesses & surcharges on some items including toys, bicycles, and automobiles. The government will provide relief in customs duty on the import of certain parts like camera lenses and concession on the import of lithium-ion batteries to further promote mobile phone production in India, said FM. Centre has proposed to increase the basic customs duty on kitchen chimneys from 7.5% to 15% and that on heat coils reduced from 20% to 15%. It has also proposed to reduce basic customs duty on parts, and TV panels to 2.5% in a bid to promote value addition on the manufacture of TVs. Custom duty exemption on import of capital goods for the production of Lithium-ion cells used in batteries of EV.

* The outlay for PM Awas Yojana has been hiked by 66 per cent to ₹79,000 cr for FY 2023-24, announced Sitharaman.

*  Agriculture Credit Target to be increased to ₹20 lakh crores, with a focus on animal husbandry, dairy, and fisheries, the minister said, adding that a new sub-scheme of PM Matsya Sampada Yojana will also be launched with a targeted investment of ₹ 6000 crores.

*  50 additional airports, helipads, water aero drones, and advanced landing grounds will be revived to improve regional air connectivity.

*  Capital outlay of ₹2.4 lakh crore has been provided for Railways, the highest-ever allocation since 2013-14, the finance minister said.

*  All cities and towns will be enabled for 100% mechanical de-sludging of septics tanks and sewers to transition from manhole to machine hole mode,” Sitharaman said.

*  As part of its second priority ‘reaching the last mile’, the Centre will provide ₹5,300 cr assistance to the drought-prone central region of Karnataka, announced Sitharaman.

*  In the next 3 years the Centre will recruit 38,800 teachers and support staff for 740 Eklavaya Model Residential Schools serving 3.5 lakh tribal students, according to Nirmala Sitharaman.

*. The finance minister announced the establishment of 157 new nursing colleges in co-location with the existing 157 medical colleges established since 2014. She also assured that sickle cell anemia to be eliminated by 2047.

* “Promotion of tourism will be taken up in mission mode, with the active participation of states and PPPs,” Sitharaman said while presenting the Union budget 2023-24.

* FM spoke about the mandatory scrapping of government vehicles to support replacement demand in the auto sector. The focus is also on tourism development which may boost air travel.

* MSME assistance to continue. Government infuses Rs 9000 cr into the corpus, reducing the cost of credit. The credit guarantee scheme had a choppy start but over the last two years banks have been brought on board to lend, the scheme has helped in alleviating stress in the sector

* The government plans to introduce a 5 per cent compressed biogas mandate for all entities marketing natural gas in India. This may mean that companies marketing natural gas in India will have to market compressed biogas, or CBG, to the extent of 5 per cent of their volumes.

* SEBI will be empowered to develop, regulate, maintain, and impose norms and standards for education in the National Institute of Securities Market and to recognise the award of Degrees, Diplomas, and Certificate

* Single window registration and approval System for IFSCA, SEZ authorities, IRDAI, GSTN, RBI, and SEBI to permit acquisition financing by IFSC banking units for foreign banks

* Central processing center will be set up for faster response to companies under the Companies Act, 2013

* PAN card to serve as a Common Identifier for all digital systems of Government agencies

* 95% of the forfeited amount related to the bid or performance guarantee will be returned in case MSMEs fail to execute contracts

* DigiLocker facility will be available to SMEs, large businesses, and charitable trusts to securely store and share documents online.

* 30 ‘Skill India Centres’ will be established

* Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to upskill lakhs of youth within the next 3 years

*  A new program to promote research & innovation in the pharma sector will be launched

* Capital Investment outlay is being increased straight for the third year in a row by 3.3% of GDP to 10 lakh crores

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