Union finance minister Nirmala Sitharaman presented the last full-fledged Union Budget of the Modi government before the 2024 Lok Sabha elections. The proposal in the budget was around seven priorities: inclusive development, reaching the last mile, infra and investment, unleashing the potential, green growth, youth power and financial sector. But what are the changes announced in the Budget 2023 that will directly impact the common people? Let’s find out.
1. Changes in tax slab under the new tax regime
There will be no income tax up to ₹3 lakhs under the new tax regime. Below is the new tax slab –
0 to ₹3 lakhs – Nil
₹3 lakhs to ₹6 lakhs – 5%
₹6 lakhs to ₹9 lakhs -10%
₹9 lakhs to ₹12 lakhs – 15%
₹12 lakhs to ₹15 lakhs – 20%
Above ₹15 lakhs – 30%.
An Individual with an annual income of 9 lakhs will be required to pay only ₹45,000.
2. The income tax rebate limit increased
The income tax rebate limit is increased from ₹5 lakhs to ₹7 lakhs under the new tax regime.
3. Reduction in surcharge rate
Surcharge reduced from 37% to 25%. This will bring the maximum tax rate, along with the surcharge, to 39%.
4. The new tax regime will become the default option
But people will have the option to opt for the old-tax regime.
5. Tax exemption on leave encashment increased
The tax exemption of leave encashment on the retirement of non-government salaried employees increased from ₹3 lakhs to ₹25 lakhs.
6. New investment scheme for women announced
The new investment scheme, Mahila Samman Saving Certificate, will be available till 2025. Deposits can be made under the name of a woman or a girl child, with a maximum limit of ₹2 lakhs. The scheme will have a tenure of 2 years and will offer a fixed rate of interest at 7%.
7. Reduction in average ITR processing time
The average processing time for income tax returns was reduced from 93 days to 16 days.
8. Things that will get expensive
Cigarettes, imitation jewellery, silver products, electric kitchen chimney, imported bicycles and toys, and electronic vehicle imports will get expensive
9. Things that will get cheaper
Mobile phone parts, TV panel parts, machinery for lithium-ion batteries and raw materials for the EV industry will become cheaper.
10. Maximum Deposit Limit for Senior Citizen saving scheme increased
The Maximum Deposit Limit for Senior Citizen saving scheme is to be increased from ₹15 to ₹30 lakhs.
11. PM Kaushal Vikas Yojana 4.0 announced
PM Kaushal Vikas Yojana 4.0 will provide skill training to the youth for the next three years.
12. Regional air connectivity to be improved
50 additional airports, helipads, water aero drones, and advanced landing grounds will be revived to improve regional air connectivity.
13. Pradhan Mantri Primitive Vulnerable Tribal Groups Development Mission to be launched
Pradhan Mantri Primitive Vulnerable Tribal Groups Development will also be launched, to improve the conditions of vulnerable tribal groups.
14. New nursing colleges to be established
157 new nursing colleges will be established in co-location with the existing 157 medical colleges established since 2014.
Apart from these, Finance Minister also said that the KYC process will be simplified and PAN will be used as the common identifier for all digital systems of specified government agencies.