Key Highlights from Union Budget 2023-24 Part-B
26-08-2023
11:49 AM
1 min read
What’s in today’s article?
- Why in News?
- Key Highlights of Union Budget 2023-24
Why in News?
- Union Finance Minister Nirmala Sitharaman presented the Union Budget 2023-24 in Parliament.
- She emphasized that Indian economy is on the right track, and despite a time of challenges, heading towards a bright future.
- In this article, announcements related to Taxation are covered in detail.
Key Highlights of Union Budget 2023-24
- Personal Income Tax –
Image Caption: Income Tax Relief
- People with income of up to Rs 7 lakh per annum will not have to pay any tax, under the new tax regime.
- The tax structure in the new personal tax regime has been changed by reducing number of slabs to five and increasing the tax exemption limit to Rs 3 lakh.
- The highest surcharge rate in personal income tax has been reduced from 37% to 25% in the new tax regime for income above Rs 2 crore.
- This would result in maximum tax rate of personal income tax come down to 39% which was earlier 42.74%.
- Indirect Tax Proposals –
Image Caption: Indirect Tax Proposals
Image Caption: Indirect Tax Proposals
- The indirect tax proposals announced in the budget emphasized on simplification of tax structure with fewer tax rates so as to help in reducing compliance burden and improving tax administration.
- The number of basic customs duty rates on goods, other than textiles and agriculture, has been reduced from 21 to 13.
- Common IT Return Form –
- The Union Budget also proposes to roll out a next-generation common IT return form for tax payer convenience.
- It also stipulates a plan to strengthen the grievance redressal mechanism for direct taxes.
- Better Targeting of Tax Concessions –
- For better targeting of tax concessions and exemptions, deduction from capital gains on investment in residential house has been capped at Rs 10 crore.
- Income tax exemption from proceeds of insurance policies with very high value will also have limit.
- There are a number of proposals relating to rationalization and simplification of direct taxes in the Union Budget.
- Proposals relating to MSMEs –
- Describing Micro, Small and Medium Enterprises (MSMEs) as growth engines of our economy, the Budget proposes enhanced limits for micro enterprises and certain professionals for availing the benefit of presumptive taxation.
- To support MSMEs in timely receipt of payments, the Budget allows deduction for expenditure incurred on payments made to them only when payment is actually made.
- Cooperation –
- The Budget has a slew of proposals for the cooperative sector.
- New cooperatives that commence manufacturing activities till 31st March next year shall get the benefit of a lower tax rate of 15%.
- Startups –
- The Budget proposes to extend the date of incorporation for income tax benefits to start-ups from 31.03.2023 to 31.03.2024.
- It also provides the benefit of carry forward of losses on change of shareholding of start-ups from 7 years of incorporation to 10 years.
- Amendments in CGST Act –
- The Budget provides for amending the Central Goods and Services Tax (CGST) Act so as to raise the minimum threshold of tax amount for launching prosecution under GST from Rs 1 crore to Rs 2 crore.
- It will also decriminalize certain clauses of the Act like obstruction and preventing of any officer from discharge of his duties, deliberate tempering of evidence or failure to supply the information.
- Implications of Tax Changes –
- Announcing the changes in the direct and indirect taxes, the finance minister said that revenue of about Rs 38,000 crore will be foregone as a result of these proposals, while revenue of about Rs 3,000 crore will be additionally mobilized.
- She said thus the total revenue foregone is about Rs 35,000 crore annually on account of these proposals.
Q1) What is an Annual Financial Statement?
Article 112 of the Constitution requires the government to present to Parliament a statement of estimated receipts and expenditure in respect of every financial year, from April 1 to March 31. This statement is called the annual financial statement.
Q2) When was the first Union Budget presented in India?
The first Union Budget of India post-Independence was presented on November 26, 1947, just three months after India got independence from the British Empire. The nation's first Union Budget was delivered by RK Shanmukham Chetty, the then finance minister.