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Union Budget 2023: Income tax rebate raised to Rs 7 lakh in new tax regime | Highlights

New Delhi: Finance Minister Nirmala Sitharaman's fifth straight budget included several major announcements including a revision of the income tax rebate from Rs 5 lakh to Rs 7 lakh under the new tax regime.

The budget presentation, which commenced at 11 am on Wednesday, was crucial considering it is the last full budget of the Narendra Modi government before the general elections next year.

Some of the key announcements in the budget are listed below:

Income Tax

Besides the revision of the income tax rebate under the new tax regime, new personal income tax slabs have been announced in this year's Budget. In the proposed changes, the income tax rebate has been increased to Rs 3 lakh.

Tax slab under new tax regime

Rs3 to 6 lakh - 5%
Rs6 to 9 lakh - 10%
Rs9 to 12 lakh - 15%
Rs12 to 15 lakh - 20%
Above Rs15 lakh – 30%

Tax slab under old tax regime

Rebate till Rs 2.5 lakh
Rs 2.5 to Rs 5 lakh: 5%
Rs5 to Rs7.5 lakh: 15%
Rs7.5 to Rs10 lakh: 20%
Above Rs10 lakh: 30%

But one needs to opt for the new tax regime to get the benefit of the new tax slabs. At present, you can opt to be taxed via the old scheme or new scheme. If in case an assessor chooses neither scheme, she will be taxed under that new tax regime, as per the budget.

Click here to calculate your tax under the new regime.

Agriculture

The government made a cash transfer of Rs 2.2 lakh crore under the PM-KISAN scheme. Institutional credit in the agriculture sector grew as much as Rs 18.6 lakh crore in FY22 from Rs 15.8 lakh crore in FY21.

Rs 20 lakh crore agricultural credit targeted at animal husbandry, dairy and fisheries was also announced.

The Pradhan Mantri-Promotion of Alternate Nutrients for Agriculture Management Yojana (PM-PRANAM) will be launched to incentivise states to promote alternative fertilisers.

Infrastructure

Infrastructure growth has been offering multiplier effects in the economy, the finance minister said. Under the National Infrastructure Pipeline (NIP), over 89,151 projects worth Rs 141.4 lakh crore are under various stages of implementation.

Finance Minister hiked the capital expenditure by 33 per cent to Rs 10 lakh crore for infrastructure development for 2023-24 and will be at 3.3 per cent of the GDP.

All logistics and connectivity infrastructure projects, entailing an investment of over Rs 500 crore, are routed through the NPG, constituted under the PM Gati Shakti initiative.

Fiscal management

Fiscal deficit would be brought down to below 4.5 per cent by 2025-26. Tax receipts for the next fiscal are budgeted at Rs 23.3 lakh crore and states would be allowed 3.5 per cent of GDP as fiscal deficit.

To finance the fiscal deficit in 2023-24, net market borrowing from dated securities is estimated at Rs 11.8 lakh crore, Sitharaman said while presenting the Union Budget for 2023-24 in the Lok Sabha.

She retained the fiscal deficit target of 6.4 per cent in the revised estimate for FY2022-23 and reduced it to 5.9 per cent for the next fiscal.

Industry

Increase in limit for presumptive taxation for MSMEs and certain professionals to Rs 3 crore and Rs 75 lakh, respectively.

Clean energy

Outlay of Rs 35,000 crore to achieve energy transition and net zero objectives and listed green growth among seven priorities of the government.

Customs duty on import

Cut in customs duty on the import of certain inputs for mobile phone manufacturing was announced.

Government would continue with a concessional basic customs duty of 2.5 per cent on copper scrap.

The finance minister also announced a hike in basic customs duty on articles made from gold bars while increasing the tax on cigarettes by 16 per cent.

The government would also reduce customs duty on shrimp feed to promote exports.

Technology

Three centres of excellence for artificial intelligence in top educational institutions and 100 labs in engineering institutions for developing applications using 5G services will be set up.

Skill development

30 Skill India international centres will be be set up and Pradhan Mantri Kaushal Vikas Yojna 4.0 will also be launched to skill lakhs of youth.

As many as 38,000 teachers and support staff to be recruited in the next three years for 740 Eklavya Model Residential Schools serving 3.5 lakh tribal students

Miscellaneous

Centre would provide Rs 5,300 crore assistance for Upper Bhadra project in poll-bound Karnataka.

Ecourts: The phase three of the eCourts Project with an outlay of Rs 7,000 crore will be launched for efficient administration of justice.

Pharma: New programme to promote research in pharmaceuticals with a view to promoting growth of the sector.

Facilities in select ICMR (Indian Council of Medical Research) labs will be made available for research by public and private medical faculties.

The finance minister said that this budget hopes to build on foundation of previous budget and blue print for India@100. "India's growth at 7% in current fiscal highest among major economies; Indian economy on right track," she added.

As per established tradition, the Finance Minister met the President at the Rashtrapati Bhavan before heading to Parliament on Wednesday. The Cabinet headed by Prime Minister Narendra Modi approved the Budget for the fiscal year 2023-24 (April 2023 to March 2024) following this.

While traditionally, copies of the Budget are brought to the Parliament complex before the Finance Minister arrives, this year no document has been printed following the COVID-19 protocol.

Instead, the Budget copies were disseminated electronically, with documents being uploaded on the government website as well as being made available on a special app developed for the same.

The Union Budget for 2023-24 (April 2023 to March 2024) is the first normal budget after the COVID-19 shock and amid global geopolitical developments.

(With PTI inputs)