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Important Highlights of Budget 2023

Important Highlights of Budget 2023

Introduction

In the Economic Survey for the Financial Year 2022–23, which Sitharaman presented to the Lok Sabha on Tuesday, it was stated that India's economic recovery from the Coronavirus pandemic is complete and that the country can expect economic growth of between 6% and 6.8% in the ensuing fiscal year 2023–24. The budget for 2023 concentrates on seven pillars that will assist the economy in recovery. Among the seven pillars are:

  • Wellbeing and good health.

  • Infrastructure innovation, research, and development, and inclusive physical and financial capital development

  • Minimum government and Highest levels of governance.

  • Additionally, the budget has proposed some rules for the securities sector which would be suggested as being combined into one single code.

Budget highlights for 2021–23 include economic reforms and programs.

The total capital expenditure for 2021–2022 will be INR 5,54,000 lakh crore. The finance minister has suggested a new centrally sponsored program, including the Pradhan Mantri Atma Nirbhar swatch Bharat yojana comprising the outlay of 64,180 crores over the next six years, in order to strengthen the healthcare sector, which is urgently needed. Additionally, the budget includes funding for health and wellbeing that is expected to total roughly 2,23,846 crores for the fiscal year 2021–2022, an increase of 130% on a year-over-year basis. The additional funding will probably be used to reinforce and extend the current national healthcare institutions' emergency medical services, mobile hospitals, and the national center for disease control.

The increase in the FDI restrictions in the insurance sector, which went from 49% to 74%, was one of the key highlights. 

From Rs 5.5 lakh crore the year before, or Rs 2.5 lakh in Budget 2023 for this financial year 2023 2024, the Finance Minister increased capital investment for the financial year 2022 2023 through Budget 2023 by 35.4% to Rs 7.5 lakh crore.

1.    Direct Tax Proposals 

Additionally, specific direct tax solutions were put forth, somewhat easing the burden on small businesses and individual taxpayers. For 2021 to 2022, both the individual and corporate tax rates remained the same. It is a significant change as the threshold for tax audits under section 44 AB has increased from INR 5,00,00,000 to INR 10,00,00,000 Only 195% of payments are now digital, which is a huge comfort for many corporate entities. 

2.    IT Relaxation for Seniors Over 75

If pension and interest income are the only sources of income for senior folks, it has been suggested that they all be excluded from submitting income tax reports. The newly added Section 194 P requires the bank to deduct some tax from elderly persons who are above 75 and exclusively get pension and interest income from the bank.

3.    Reduced Time for Income Tax Processes

Reduced Time for Income Tax Processes The earlier time frame was six years. create a committee for conflict resolution. Small and medium taxpayers with taxable incomes of more than 50,000 and individuals with only contested incomes of INR 10,00,000 may contact the committee established by Section 245 Ma to resolve the matter at the earliest possible time.

4.    Center for the National Faceless Income Tax Appellate Tribunal

It will contribute to lowering the cost of compliance for the taxpayer and improving transparency in the handling of subsequent appeals. This will assist in distributing the work among the several benches. The fundamental justification is that doing this will ensure effective administration.

5.    Tax Initiatives for New Businesses

The start-up tax holiday will now last until March 31, 2022, an additional year. The tax holiday regime that is available to businesses that have previously been incorporated will also be available to eligible start-ups that incorporate by March 31, 2023.

The 15% concessional tax rate will also be available to manufacturing and production enterprises that incorporate by March 31, 2024.

6.    Relaxations

The difficulty of double taxation is being addressed by a plan to inform all rules and regulations.

7.    The Front Must Be Pre-Filing Of Returns

Pre-filing is permitted for salary TDs, tax payments, etc. Furthermore, all capital gains from listed securities dividend income information would already be filled in. Disallowance of the PF Contribution In the event that the employee's provident fund was withheld but not deposited by the relevant employer, the PF contribution will not be recognized as a deduction for the employer.

8.    Section 43  CA

If any residential unit transfers, which means a transaction involving an independent dwelling unit is made between November 12, 2020, and June 30, 2021, stamp duty would be assessed at a rate of 100% of the consideration. The supplementary directive under Section 80 on affordable housing has been extended to March 31, 2022.

9.    Proposals for indirect taxes

Here are the few things for which the custom duty rates have changed:

  • The copper scrap tariff has decreased from 5% to 2.5%.

  • Petrol and high-speed diesel oil now have lower primary and special extra excise taxes.

  • The duty of the solar inverter increased from 5% to 20%.

  • Solar lanterns now bear a 15% duty instead of the previous 5%.

  • A lower essential customs duty is applied to silver and gold.

  • Instead of other products, the department will rationalize the textile chemicals charge.

  • The updated prices would take effect on February 2, 2021.

  • Alcohol, cotton, silk, and other agricultural products are all subject to higher customs duties.

Conclusion

Nirmala Sitharaman, the finance minister, will deliver her sixth budget speech on February 1, 2023. While balancing growth and the fiscal deficit, she is anticipated to unveil tax relief measures for salaried taxpayers, the middle class, and senior citizens.

Nirmala Sitharaman, the minister of finance, said, "This budget will inspire me a lot. It will move India forward and be comparable to the previous Budget 2023." In addition, numerous institutions have lowered their estimates of India's growth rate for the fiscal year 2022–2023, and the RBI has lowered its forecast for the country's growth rate for the current fiscal year to 6.8%. The market anticipates that the Finance Minister will cut the budget deficit and inflation as part of Budget 2023 India. The speed of progress will continue as long as it is kept in check.

Author:

Archita Sharma
Kanpur
Archita Sharma, IV year BA.LLB (Hons.) student from PSIT College of Law


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