Union Budget is Annual Financial Statement of India. The Government presents it in first day of February. The budget is prepared by budget division of department of economic affairs. It is presented as Finance Bill and comes into effect on 1st April after passing of Appropriation Bill by Lok Sabha.
Appropriation Bill allows Government to withdraw funds from Consolidated Fund of India. Budget is prepared keeping in view economic reforms and other financial factors.
10 POINTS YOU SHOULD KNOW
1. The taxpayer is required to pay tax if his income does not exceeds Rs.500000/- in both old and new regime. This limits of 500000/- has been increased to 700000/- to the taxpayers who opt new tax regime.
2. Standard deduction of Rs.50000/- and deduction from family pension of Rs.15000/- is extended to new tax regime. Earlier the deductions were applicable if taxpayers opts old regime. New tax regime is now by default tax regime and if tax payer wants he can opt old regime. The rates and slab of new tax regime is changed which will benefit tax payers. The individual with annual income of Rs.9lakhs will be required to pay Rs.45000 which is only 5% of his income.
New regime Tax Slab and rates has been changed as-
| As per Budget 2023
FOR F.Y.2023-24 |
As per Budget 2022 FOR F.Y.2022-23 |
||
| Total Income (`) | Rate (per cent) | Total Income (`) | Rate (per cent) |
| Upto 3,00,000 | Nil | Upto 2,50,000 | Nil |
| From 3,00,001 to 6,00,000 | 5 | From 2,50,001 to 5,00,000 | 5 |
| From 6,00,001 to 9,00,000 | 10 | From 5,00,001 to 7,50,000 | 10 |
| From 9,00,001 to 12,00,000 | 15 | From 7,50,001 to 10,00,000 | 15 |
| From 12,00,001 to 15,00,000 | 20 | From 10,00,001 to 12,50,000 | 20 |
| Above 15,00,000 | 30 | From 12,50,001 to 15,00,000 | 25 |
| Above 15lakhs | 30 | ||
3. In India personal income tax is highest in the world @42.74% including surcharge of 37%. The surcharge has been reduced to 25% and therefore highest rate of tax is now 39% if taxpayers opts new regime.
4. Exemption of Capital gain on sale of residential house has been capped at Rs.10Crores.
5. TDS is required to be deducted @30% if winnings from online gaming exceeds Rs.10000/-. Now there is no such threshold limit to deduct TDS on winnings from online gaming. Therefore companies organising games have to deduct TDS at winnings of Re.1/- also.
6. The conversion of physical gold into electronic gold receipt and vice versa will not be treated as transfer and capital gains will not be attracted.
7. 100 joint commissioners will be deployed to dispose small appeals at commissioner level and department shall be selective in taking up of new cases for scrutiny. New ITR Forms with ease of filing will be introduced and Taxpayer Grievance Redressal mechanism will be strengthened.
8. The businesses purchasing goods or taking services from MSME will be allowed to book expenses when payment is actually made to MSME. This step is taken to support MSME in timely receipts of payments.
9. Small businesses have an option to opt presumptive taxation scheme in which they can presume profit percentage as 8% of turnover or 6% of turnover if 95% of its receipts are received through banking channel. In case of profession 50% is deemed as profit. This limit is increased to 3Crores in case of business and 75 Lakhs in case of profession if 95% of its receipts/turnover is received through banking channel. Therefore, the benefit of increased limit is NOT for businesses and professionals who do not receive 95% of its turnover/receipts through banking channel.
10. TCS on Foreign remittance under LRS for purchase overseas tour program package has been increased to 20% from 5%.
OUR COMMENTS
Budget has contributed positively to vision of Government for “Amrit Kaal- Roadmap of next 25 years of India”. It supports education sector with establishment of 157 new nursing colleges, new manufacturing Co-operative Societies with reduction in tax rates to 15%, increasing deposit limit in Senior Citizen Saving Scheme from Rs.15Lakhs to Rs.30Lakhs,introducing Mahila Samman Bachat Patra for two-year period upto March 25 to deposit Rs.2Lakhs in name of women with interest rate of 7.5% and many more. It is no stop journey for India and markets have also reacted positively to the Budget. All in one it is no harm budget with reduction in personal tax but tax compliance is mandatory for all of us. Financial Tree Company helps in making such compliance.
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The above comments do not constitute professional advice. The Author can be reached at contact@financialtreecompany.com or visit our website www.financialtreecompany.com. My name is CA Divya Agrawal and I am Practising Chartered Accountant, CEO and Founder of FINANCIAL TREE COMPANY (An online return filing and Tax Consultancy Company). We also upload educational videos in You tube and name of our channel is FINANCIAL TREE COMPANY. Our aim is to help people in improving their financial health by spreading knowledge and love. Stay Financially Fit and Healthy.
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