The Finance Minister Nirmala Sitharaman unveiled the Budget for the forthcoming fiscal year on February 1, 2023. The new Budget lays the groundwork for a more inclusive and empowered economy. Green Growth, Youth Power, Financial Sector, Equitable Development, Reaching the Last Mile, Infrastructure and Investment, and Unleashing Potential were the Budget’s top seven goals.

 The Union Budget 2023-24 is based on Amrit Kaal’s vision of a technology-driven, knowledge-based economy with solid public finances and a thriving financial industry. Three focus areas have been identified to achieve this goal: providing adequate possibilities for residents, providing a solid impetus for growth and job creation, and strengthening macroeconomic stability.

 PERSONAL INCOME TAX-

You are exempt from paying income tax if you make less than Rs. 7 lakhs in a year. The catch is that you can only get this exemption if you choose the new tax regime. The new personal tax system has modified the tax structure by decreasing the number of slabs to 5 and boosting the tax exemption ceiling to 3 lakh. Under the new tax regime, the benefit of standard deduction has been extended to the salaried class and retirees, including family pensioners. With the new tax system, the maximum surcharge rate in personal income tax has been decreased from 37% to 25% for people earning more than Rs 2 crore.

 DIRECT TAX-

To better target tax advantages and exemptions, the deduction from capital gains on investment in residential dwellings under sections 54 and 54F would be restricted to 10 crores. There is a proposal to limit the income tax exemption on the revenues of high-value insurance plans. The minimal level of 10,000/- for TDS removal will be defined, as will the taxability of online gambling. The exchange of gold for electronic gold receipts and vice versa will not be considered a capital gain.

PROPOSALS FOR MSMEs-

The new loan guarantee plan for MSMEs would go into effect on April 1, 2023, with a corpus inflow of 9,000 crores. A single-skill India digital portal will enable demand-based formal skilling, connect with employers, including MSMEs, and ease access to entrepreneurship programmes. The Budget recommended raising the thresholds for micro-enterprises and some professions to qualify for presumptive taxes. The ceilings for taxpayers with less than 5% cash revenues have now been raised to 3 crores and 75 lakh, respectively.

FOR STARTUPS-

To assist startups in saving taxes, the incorporation date will be extended from March 31, 2023, to March 31, 2024. The government has suggested extending the advantage of carrying forward losses on changes in ownership of startups from seven to ten years after incorporation.

EASING COMPLIANCES-

The government will eliminate over 39,000 compliances and decriminalise over 3,400 law provisions to improve the ease of doing business. The Finance Minister further stated that the Government had presented the Jan Vishwas Bill to reform 42 Central Acts to strengthen the trust-based government

CO-OPERATIVE SOCIETIES-

New co-operatives that begin manufacturing activities before March 31, 2024, will benefit from a 15% tax rate, which is identical to that given to new manufacturing businesses. Sugar co-operatives could claim payments paid to sugarcane growers as an expense for the time preceding the assessment year 2016-17 (AY 2016-17). This is likely to offer them around 10,000 crores in relief. A greater ceiling of 2 lakh per member for cash deposits to and cash loans from Primary Agricultural Co-operative Societies (PACS) and Primary Co-operative Agriculture and Rural Development Banks (PCARDBs). Co-operative societies would be given a greater TDS ceiling of 3 crores on cash withdrawals.