Highlights of the Union Budget 2023-2024

Union Budget 2023-2024 maintained its focus on seven key areas, Saptarishi as said by Finance Minister Nirmala Sitaraman. The middle class has also received some respite in the form of adjustments to the new income tax scheme. The Finance Minister also adhered to the fiscal deficit path in the Budget, with a goal of 5.9 percent in FY 24 and a goal for the current fiscal year.

Highlights of the Union Budget 2023-2024: Key Highlights

The highly anticipated Union Budget 2023 has arrived, bringing good news for taxpayers with new income tax slabs, an infra boost, a focus on youth development, and a push for green energy. Assetmonk breaks down the key takeaways for you.

Highlights of the Union Budget 2023-2024: Key Numbers

Here are the key numbers that highlight the targets of the 2023 budget.

Highlights of the Union Budget 2023-2024: 7 Priorities

• Inclusive development: STs, SCs, OBCs, Women, and other underprivileged groups have benefited from the government’s Sabka Saath Sabka Vikas strategy.

• Reaching the last mile: The government launched the Aspirational Blocks project. The Aspirational Blocks Program covers 500 blocks. It aims to increase the availability of critical government services in areas like health, nutrition, education, agriculture, water resources, financial inclusion, skill development, and basic infrastructure. 

• Infrastructure and investment: The capital expenditure is being boosted by 33 percent to Rs 10 lakh crore, or 3.3 percent of GDP.

• Unleashing the potential: A National Data Governance Policy will be developed, allowing startups and academics access to anonymized data in order to spur innovation and research.

• Green growth: The Ministry of Petroleum and Natural Gas proposes a capital investment of Rs 35,000 crore in energy transition, net zero, and energy security.

• Youth power: The PM Kaushal Vikas Yojana 4.0 will be launched to train lakhs of youth. The program will include new-age classes.

• Financial sector: The overhaul initiatives would go into effect in 2023, thanks to an investment of Rs 9,000 crore into the corpus.

Highlights of the Union Budget 2023-2024: What got cheaper and what got expensive?

What got cheaper?

• Customs tax on components of open cells in TV panels has been reduced to 2.5 percent.

• The government intends to lower customs duties on some inputs for mobile phone production.

• The government plans to lower the base tariff on seeds utilized in the manufacturing of diamonds grown in the lab.

• It will also reduce customs taxes on shrimp feeding to stimulate exports.

What got expensive?

• Cigarette taxes have been raised by 16 percent.

• The basic import tariff on compounded rubber was raised from 10 percent to 25 percent.

• The basic customs tax on products created from gold bars has gotten raised.

• The customs tax on kitchen electric chimneys has gotten raised from 7.5 percent to 15 percent.

Highlights of the Union Budget 2023-2024: Tax

The New Personal Income Tax Regime was implemented in 2020, with six income slabs beginning at Rs. 2.5 lacs. So there were 6 income levels beginning at 2.5 lacs. However, the tax slabs have been decreased and the ceiling has been lifted to 3 lacs. In several of these categories, the government has also enhanced the tax exemption limitations. 

So, an individual with an annual salary of Rs. 9 lacs will have to pay only Rs. 45,000 in taxes. So, it is 5 percent of his income or a 25 percent drop from the Rs 60,000 he was previously paying.

Highlights of the Union Budget 2023-2024: Direct Taxes

• The government proposes capping capital gains deductions on residential property investments at Rs 10 crore.

• A person earning Rs 9 lakh will pay just Rs 45,000 in taxes.

• A person earning Rs. 15 lacs will have to pay Rs 1.5 lakh in tax, down from Rs 1.87 lacs per the new tax system.

• Zero tax on income up till Rs. 3 lacs; 5 percent tax on income between Rs 3 lakh and Rs 6 lakh; 30 percent tax on income over Rs. 15 lacs under the new I-T regime.

• Under the new regime, taxpayers can claim a standard deduction of Rs. 50,000/-. But they are not eligible for exemptions or deductions on their assets.

• Agniveers planned to be tax-free for payments received from the Agniveer Corpus Fund.

• For online gaming, the government plans to impose TDS and taxation on net wins at the moment of withdrawal or at the end of the fiscal year.

Highlights of the Union Budget 2023-2024: Indirect Taxes

• NCCD on select cigarettes increased by 16 percent

• 45 percent of tax refunds were completed within 24 hours. A maximum of 72 lakh returns were received every day by the taxpayer portal.

• New cooperatives that begin production before March 20, 2024, will pay a 15 percent tax rate.

• A 2.5 percent reduction in the basic customs tariff on crude glycerine is recommended.

• Propose increasing import charge on silver bars to match gold and platinum 

• Extend customs duty decrease on imports of parts of mobile phone by one year.

• To encourage value addition in TV production, the customs tax on the open cell of a TV panel has been cut to 2.5 percent.

• Customs duty relief was provided on the import of specific inputs and parts like lenses of cameras.

• The custom tariff exemption on lithium-ion cells for batteries has been extended an additional year.

• Reduced the number of basic custom duty rates on goods other than textiles and agriculture from 21 percent to 13 percent. As a result, various fundamental custom taxes, surcharges, and cesses such as toys, bicycles, and vehicles, have undergone modest adjustments.

Highlights of the Union Budget 2023-2024: Ministry of Health and Family Welfare

• The Union health and family welfare ministry has been given Rs 89,155 crore in the Union budget FY24, a 12 percent increase above the revised budget predicted for FY 23.

• The department of health and family welfare has been granted Rs 86,175 crore for the 2019 fiscal year, while the department of health research has been allocated Rs 2,980 crore.

• The department of health and family welfare has a budget of Rs 76,370 crore for the current fiscal year. The department of health research has a budget of Rs 2,775 crore.

Highlights of the Union Budget 2023-2024: Crucial Figures

• Food subsidies are expected to be 1.97 lakh crore in FY24.

• Fertilizer subsidies are expected to be 1.75 lakh crore in FY24.

• The aim for FY24 divestiture is Rs 51000 crore.

• Growth in FY23 is expected to be 7 percent.

• The FY23 disposal objective has been reduced to Rs 50,000 crore.

• FY24 capital spending is projected at Rs 10 lakh crore, a 33 percent increase from last year.

• The agricultural credit goal has gotten raised to Rs 20 lakh crore.

• FM increases PM Awas Yojana spending by 66 percent to Rs 79,000 crore. It is to spend Rs 2200 crore on high-value horticulture.

• Over the next three years, it is planned to invest Rs 15000 crore in vulnerable tribal groups (PVTG).

• The third phase of e-courts will cost Rs 7000 crore.

• An investment of Rs 35000 crore is proposed for energy security and energy transition.

• Green Hydrogen Mission targets a 5MMT production by 2030.

• Sugar cooperatives would profit from a sum of Rs 10,000 crore.

• The import tariff on compounded rubber has gotten raised from 10 percent to 25 percent.

• Cigarette taxes have been hiked by 16 percent due to the disaster.

Highlights of the Union Budget 2023-2024: Main tax regime takeaways

The new tax regime has taken effect as the default tax regime. The administration has tried a series of steps to make the voluntary tax scheme more appealing while foregoing income.

• New tax regime will be the default regime; will have the option to pick the old regime

• Zero tax on income up till Rs. 3 lacs per year 

• Personal income tax slabs would be reduced from 6 to 5

• Tax exemption up till Rs. 7 lacs per year under fresh tax regime 

• Remove the Rs 10,000 minimum threshold for TDS

• Exempt tax on revenue of boards for housing and other operations

• Reduce the maximum surcharge rate to 25 percent from 37 percent per the newly introduced tax system

Highlights of the Union Budget 2023-2024: Green Growth

• The major drivers of the government’s “Green Growth” priority sector are green hydrogen, clean energy storage, and transmission.

• Viability gap financing will be provided for battery energy storage systems with a capacity of 4,000 MWh.

• A complete architecture for pumped storage will be developed as well.

• An inter-state transmission line for the evacuation and grid integration of 13 GW of renewable energy from Ladakh would be built at a cost of Rs 20,700 crore, with a central contribution of Rs 8,300 crore.

• Under the Environment Protection Act, a green credit program to encourage behavioral change will be announced.

Highlights of the Union Budget 2023-2024: Saving Schemes

• The highest deposit limit for SCSS or  Senior Citizen Savings Scheme will get increased to Rs. 30 lacs from Rs.15 lacs.

• The post office monthly income scheme limit will get doubled to Rs. 9 lacs and Rs. 15 lacs for joint accounts.

• The Mahila Samman Saving Certificate, a one-time unique saving plan for women, will be accessible for 2 years until 2025.

Highlights of the Union Budget 2023-2024: Variable Announcements

• In the past fiscal year, India’s mobile phone production surged from 5.8 cr. units and get valued at around Rs 18,900 crore from 2014 to 2015 to 31 cr. units and get valued Rs. 2,75,000 crore.

• Custom duty on certain mobile phone parts, such as camera lenses and batteries, will be waived for another year.

• The Finance Minister has highlighted the extension of the Government’s Digilocker services for the fintech sector.

• Government will borrow Rs 15.43 lakh crore in bonds in 2023-24, a new all-time record. The borrowing program has been set at Rs 11.8 lakh crore in net terms. These figures are roughly in line with market predictions of Rs 15.5 lakh crore and Rs 11.7 lakh crore.

• A Direct Benefit Transfer under a pan-India national apprenticeship plan would be implemented to help 47 lakh youths in three years.

• From unification malls to roads and highways to affordable housing, the budget relies on domestic demand and public investments to drive development as the globe prepares for a recession.

• The MSMEs revamp schemes will go into effect in 2023, thanks to an infusion of Rs 9,000 crore into the corpus. This will allow for an additional Rs 2 lakh crore in collateral-free lending. Credit costs will also be cut by about 1 percent.

• The legalization of the permanent account number (PAN) as a single corporate identifier has been announced in the Union Budget 2023-24. The change will allow enterprises to access the national single-window system using PAN rather than other data as a unique identity.

• The Pradhan Mantri Awas Yojana (PMAY) was granted Rs 79,000 crore in the Budget 2023-24, providing a significant boost to the government’s effort to provide homes to the urban poor. The PMAY budget has been increased by 66 percent to about Rs 79,000 crore.

• Railways were allocated Rs 2.4 lakh crore in FY24. It is the greatest-ever allocation for Railways and is roughly nine times greater than FY14 funding.

• Capital Expenditure or Capex grew by 33 percent to Rs 10 lakh crore or 3.3 percent of the country’s GDP.

• Three artificial intelligence excellence centers will be built in prestigious educational institutions.

• While the Ministry of Defence has received the biggest budget of any ministry, at Rs 5.94 lakh crore, it is a little increase from Rs 5.25 lakh crore for the current fiscal year.

• The Ministry of Electronics and Information Technology’s budget estimate has been raised to Rs 16, 549.04 crores from Rs 11,719.95 crore.

• The budget for the road transport and highways ministry (MoRTH) in the Budget has been increased by 36% to roughly Rs 2.7 lakh crore for 2023-24.