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Dated: 01.02.23

Major Highlights-Budget 2023-24

Key points

1. FY-2024 fiscal deficit target at 5.9% of GDP
2. Outlay for capital spending increased 33% to 10 trillion rupees in 2023/24
3. Cigarettes to get costlier as Budget proposes 16% hike in duty
4. To set up agriculture accelerator fund
5. Increases budget allocations to 790 bln rupees for affordable housing in 2023/24
6. Finance Minister says increase in public capex key to crowding in private investments
7. Indian economy has become the fifth-largest economy in the world in last nine years
8. Budget adopts seven priorities including inclusive, green growth
9. Agricultural credit target raised to 20 trillion rupees ($244.42 billion) for 2023/24
10. Sitharaman says the economy is growing the fastest among major economies

FM Nirmala Sitharaman also outlined seven priorities for the ‘first Budget in Amrit Kaal’

1. Inclusive development
2. Reaching the last mile
3. Infra & investment
4. Unleashing the potential
5. Green growth
6. Youth power
7. Financial sector

Part B of Honorable Finance Minister speech in Budget 2023

Indirect Taxes

1. Customs duty on goods of textiles, toys, bicycle reduced from 21 to 13%
2. To promote Green Mobility – basic customs duty concession for lithium ion battery
3. To promote Electronics manufacture- relief on customs duty for camera lens and lithium battery
4. Television – TV panels customs duty reduced
5. Electric kitchen chimney to reduce inverted duty structure from 7.5 to 15 percent
6. Benefit for ethanol blending program and acid program and epichlorohydrine

7  Marine Products- to promote exports – shrimps, etc. Duty on shrimp feed reduced

8. Basic Customs duty reduced for seeds in manufacture for diamonds
9. Customs duty to increase in silver bars
10. Steel – concessional customs duty on steel and ferrous products
11. Copper – concessional customs duty on copper
12. Rubber – concessional customs duty on rubber
13. Cigarettes – increased tax

The goods exempted are: 

1. Denatured ethyl alcohol or use in manufacture of industrial chemicals
2. Seeds for use in manufacturing of rough lab-grown diamonds
3. Specified capital goods/machinery for manufacture of lithium-ion cell for use in battery of electrically operated vehicle (EVs) (up to 31.03.2024)
4. Specified chemicals/items for manufacture of Pre-calcined Ferrite Powder (up to 31.03.2024)
5. Palladium Tetra Amine Sulphate for manufacture of parts of connectors (up to 31.03.2024)
6. Camera lens and its inputs/parts for use in manufacture of camera module of cellular mobile phone
7. Warm blood horse imported by sports person of outstanding eminence for training purpose
8. Vehicles, specified automobile parts/components, sub-systems and tyres when imported by notified testing agencies, for the purpose of testing and/ or certification, subject to conditions. 
9. Apart from the exemptions, the government proposed to reduce the rate of the Basic Customs Duty on different goods. The aim of the proposals are to increase exports, focus more on domestic manufacturing, add more value addition to the economy and also improve green energy mobility.

   

Direct Taxes

1. Common IT form and grievance redressal system
2. MSME – avail benefit of presumptive taxation increased to 44AD to 3 crores

a. Professionals u/s 44ADA – 75 lakhs

b. Provided receipt in cash doesn’t exceed 5%

3. TDS only on payment for deduction
4. Co-operatives tax -15%

a. Higher limit of 2 lakh per member for cash deposit in agricultural banks

b. Higher limit of Rs. 3 crores on TDS for cooperative societies

5. Startups to avail startup benefits from 31-03-2023 to 31-03-2024

6. 100 new joint commissioners for appeal
7. S.54 to S.54F capped at 10 crores
8. TDS on Online gaming –
9. TDS 30% to 20% on taxable portion of EPF
10. Extending funds for GIFT and IFSC

Personal Income Tax

1. Rebate for income up to 7 lakhs u/s 87A in the new tax regime
2. New tax regime from
3. 0-3 lakhs nil
4. 3-6 lakhs- 5%
5. 6-9 lakhs 10%
6. 9-12 lakhs 15%
7. 12-15 lakhs 20%
8. Above 15 lakhs- 30 %
9. Standard deduction for new tax regime for Rs. 15.5 lakhs or more -INR 52,500
10. Reduction of highest surcharge from 37% to 25% on new income tax regime
11. Limit on tax exemption for leave encashment is increased from INR 3,00,000 to INR 25,00,000
12. New income tax regime default regime

Source: India Budget (Union Budget 2023-2024), Govt of India

Download Below:

1. FINAL FINANCE BILL-2023
2. BUDGET HIGHLIGHTS – 2023-24
3. 2023 -2024 UNION BUDGET

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“Indirect Tax & Litigations Advisory”

Disclaimer:

The views expressed in the update are strictly personal, based on our understanding of the underlying law. We are not responsible for any injury, loss or cost arising to any person who refers this update and acts or refrains from any act accordingly. We would suggest that a detailed legal advice must be sought before relying on this update.

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