Big announcements: New income tax regime announced in Budget 2023
NEW DELHI : Union Finance Minister Nirmala Sitharaman today presented the last full-fledged Union Budget of the Modi government before the 2024 Lok Sabha elections. Sitharaman announced a big ticket budget ahead of next year’s general elections which included huge capital outlay in infrastructure and agri sectors and reworked tax slabs in a massive relief to the middle class.
The government on Wednesday proposed to simplify the KYC procedure by adopting a ‘risk-based’ rather than the ‘one size fits all’ approach currently in practice.In her Budget speech, Finance Minister Nirmala Sitharaman also proposed to introduce a ‘one stop solution’ for identity and address updating through the DigiLocker service.
Another significant announcement made by the minister relates to use of PAN as common identifier for business establishments for digital systems of government agencies. “The KYC process will be simplified adopting a ‘risk-based’ instead of ‘one size fits all’ approach,” Sitharaman said as she presented the last full budget before the 2024 general elections.The financial sector regulators will also be encouraged to have a KYC (Know Your Customer) system fully amenable to meet the needs of Digital India.
In a big push for income tax relief ahead of an election year, the government has simplified the slabs in the new tax regime. At a post-Budget presser, FM Sitharaman said that Budget 2023-24 gives a big leg-up to capital investment, it also attends to MSMEs as they are the engine of growth, it sustains capital investment and also gives a push to the private sector while also giving tax reliefs to individuals and middle class.
There will be five slabs now instead of six in the new tax regime, which will be the default system. Taxable income of ₹ 0-3 lakh (after all exemptions) will be nil, 5 per cent tax on ₹ 3-6 lakh; 10 per cent on ₹ 6-9 lakh; 15 per cent on 9-12 lakh; 20 per cent on 12-15 lakh and 30 per cent above that. For senior citizens, investment cap for the Monthly Income Scheme and Senior Citizens’ Saving Scheme have been raised.
“Under these circumstances, this budget should have addressed the central issues of increasing people’s purchasing power with job generation and boosting the growth of domestic demand. This budget fails to meet this situation. The Communist Party of India (Marxist) alleged.
It said the budget comes at a time when the Oxfam report has shown that the richest one per cent of the population in India has cornered 40.5 per cent of the wealth generated in the last two years. Thus, it is a contractionary budget that will only aggravate the economic crisis, it claimed.
“Overall, the Modi government has made life difficult for the people. While, “This budget will be called ‘Naam Bade Aur Darshan Chhote Budget’ (big on announcements and short on delivery),” Kharge said after the presentation of the Union Budget. He alleged that the budget has been made with elections and not the country in mind. “No effort has been made in this budget to find a solution to massive unemployment. Inflation is hurting every household and the common man is in trouble. There is nothing in the budget that would reduce prices of items of daily use,” he said. Kharge claimed that there is nothing in this budget for the welfare of Dalits, tribals and backward classes or to protect their rights.
Addressing a post-Budget meet, the finance minister said the new taxation regime has now got greater incentives, and attractions so that people can unhesitatingly move from the old to the new. “We are not compelling anyone. But the new one is now attractive as it gives greater rebates,” she said.The government has outlined seven priority areas in the last complete budget before next year’s general elections. The areas, Ms Sitharaman said, are “inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and financial sector”.
In the next fiscal, capital investment outlay will be raised by 33% to ₹ 10 lakh crore — which would be 3.3 per cent of the GDP in 2023-2024 fiscal, the finance minister said. The agricultural credit target has been increased to ₹ 20 lakh crore and in another populist measure, allocation for PM Awas Yojna increased by 66 per cent to over ₹ 79,000 crore.
For the railways, the minister has announced an outlay of ₹ 2.4 lakh crore — the highest in almost a decade and four times the last year’s budget. “This is about nine times the outlay made in 2013-14,” she said, comparing it with the last year of the Congress-led UPA governance. For ease of business and to settle commercial disputes, the government will bring another dispute resolution scheme under Vivad Se Vishwas-2. There will be a one-stop solution for reconciliation of IDs maintained by various government agencies, the minister said. PAN will be used as common identifier for all digital systems of specified government agencies.
This year’s Budget holds much significance as the country is scheduled to have the next Lok Sabha election in April-May 2024. The budget session of the Parliament began on Tuesday with the President’s address, followed by tabling of the Economic Survey for 2022-23. The formal exercise to prepare the annual Budget for the next financial year (2023-24) commenced on October 10.
The Economic Survey said India’s GDP is expected to grow in the range of 6 to 6.8 per cent in the coming financial year 2023-24. This is in comparison to the estimated 7 per cent this fiscal and 8.7 per cent in 2021-22.The Survey said that India’s economic recovery from the Covid pandemic is complete and the economy is expected to grow in the range of 6 per cent to 6.8 per cent in the coming financial year 2023-24. This is in comparison to 7 per cent this fiscal and 8.7 per cent in 2021-22.
(Bureau Report with Media Inputs).