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Key Takeaways of Union Budget 2023: The Annual Financial Statement or the Union Budget of 2023 was presented on 1st February 2023. It is nothing but the receipt and expenses of the government in a financial year.
The new financial year of India begins on the 1st of April of the current year and ends on the 31st of March of the next year. The budget contains revenue and capital receipts.
The main theme of the Union Budget of 2023 – 2024 is focused on the development of Sabka Sath and Sabka Vikas. The theme covers farmers, women, scheduled caste, youth, other backward classes, youth, scheduled tribes, economically weaker sections and divyangjan.
The overall priority of the underprivileged shall be taken care of. The focus is also on UTs such as J&K Ladakh and Northeast Frontier.
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Key Takeaways of Union Budget 2023
1] The income tax regime has been updated
2] A 33% increase in capital investment outlay has been proposed, raising it to Rs 10 lakh crore (the biggest in the past decade).
3] Changes in customs duty; reduced import of certain inputs for mobile phone manufacturing, shrimp feed etc. and increased on cigarettes, gold articles, compounded rubber etc.
4] Capital outlay for the railways increased to the highest ever – Rs 2.40 lakh crore
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Amrit Kaal From Union Budget 2023
The Finance Minister announced that this is the first budget of Amrit Kaal. The focus of Amrit Kaal is an inclusive and empowered economy. The economy shall be knowledge–based and technology–driven with the robust financial sector.
The four main transformation opportunities to be leveraged are green growth, PM Vishwakarma Kaushal Samman, Economic Empowerment of Women through SHGs and Tourism Promotion in Mission Mode.
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Saptarshi or 7 Priorities from Union Budget 2023
The Saptarshi or 7 Priorities shall include inclusive development, youth power, Green Growth, Financial sector, Infrastructure, and Investment, Unleashing the Potential and reaching the last mile.
Inclusive development includes health, agriculture, education, and skilling. Reaching the last mile is about a new aspirational block programme, Water for drought-prone regions, PM PVTG development mission and another initiative.
Infrastructure and investment include support to the state government for Cap – investment, increase in Capex for Infra along with railways and aviation with other transportation projects.
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Unleashing the potential for reduced compliance and Jan Vishwas bill, National data governance policy, Digi locker for data sharing, centres for excellence for AI, resolving disputes and 5G technology.
Green Growth includes the Gobardhan scheme, the National Green Hydrogen Mission, Bhartiya prakriti kheti bio input resource centres and other investments in green energy.
Youth Power will focus on Pradhan Mantri Kaushal Yojana, a skill digital platform, empowering Amrit peedhi, boosting tourism, and others. The Financial Sector includes a financial information registry, credit guarantee for MSMEs and small savings schemes.
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Status Of Fiscal Management
The utilisation of funds for capital expenditure stated that states should use a fifty-year loan for capital expenses by the end of 2023 – 24. Most of this will be at the discretion of states.
The part will be conditional on state designated for specific purposes such as Replacing outdated government vehicles, improving urban planning, making urban local bodies eligible for obtaining municipal bonds, building housing for police officers, Constructing Unity Malls, Creating libraries and digital infrastructure for children and adolescents, Contributing to the capital expenses of central schemes.
The fiscal deficits allowed to states are allowed to have a deficit of 3.5% of their gross state domestic product.
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Reforms Proposed in Direct Taxation
As per the new tax regime, the rebate limit has been increased to 7 lakhs. As per the tax structure, the personal tax regime has been changed. The number of slabs has been reduced to five and the tax exemption limit is increased to ₹ 3 lakh.
The new tax regime has proposed to increase the standard deduction for salaried individuals to 50,000 rupees and the deduction for family pensions up to 15,000 rupees.
For micro practises and certain professionals, the limits for presumptive taxation have been increased. The amount received in cash does not exceed 5% of the total gross receipts/turnover.
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The deduction for payments made to MSMEs. When the payment is done to support their timely receipt of payments, it will be allowed. A lower tax rate of 15% shall be levied for the new manufacturing co-operatives.
Primary Agricultural Co-operative Societies and Primary Co-operative Agriculture and Rural Development Banks have increased cash deposits and loans to 2 lakh rupees per member.
The co-operative societies shall be levied Tax Deduction at Source for cash withdrawals has been increased to 3 crore rupees. For the start–ups, the losses can be carried forward from 7 years to 10 years of incorporation.
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The taxability of online gaming shall be clarified with TDS. The taxability on net winnings shall be clarified at the time of withdrawal or the end of the financial year. The conversion of electronic gold receipts into gold and vice versa will not be treated as capital gains.
Union or State laws for housing, town and village development and regulation provided set will be exempt from income tax for income of authorities, boards and commissions.
Exempt-Exempt-Exempt (EEE) status has been given to the Agniveer Fund. In the Agneepath scheme, the payments received by Agniveer shall be tax exempted. The government has rolled out next-generation common IT Return Form for taxpayer convenience. It has also laid plans to strengthen the grievance redressal mechanism.
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Reforms Proposed in Indirect Taxation
For goods other than textile and agriculture, the basic customs duty rate has been reduced to 13% from 21%. On specific cigarettes, the National Calamity Contingent Duty has been further increased to 16%.
For specified machinery for lithium–ion cell manufacturing EV batteries, the deadline for customs duty has been extended to 31.03.2024.
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After an application has been filed, the Customs Act of 1962 shall be revised to set a monthly deadline for the Settlement Commission. The purpose and scope shall be made clearer for Anti-Dumping Duty (ADD), Countervailing Duty (CVD) and Safeguard as set by Customs Tariff Act.
The minimum amount of tax for prosecution under GST has been raised from 1 cr to 2 cr are the proposed changes to be made to the Central Goods and Service Tax Act.
The compounding amount for tax will be reduced to 25-100% from 50-150% of the tax amount and certain offences will be decriminalised. The maximum limit of three years from the due date shall be provided for the filing of returns or statements.
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