Budget 2023 Highlights: PDF Download, Key Takeaways, Important Points

The Finance Minister, Nirmala Sitharaman, unveiled the Union Budget 2023 on 1st February 2023.

Citizens anticipated various populist measures from this Budget and measures that would support India’s $5 trillion economy goal. With enhanced Capex, infrastructure upgrades and incentives for key sectors, it is no longer a lofty goal but an actionable plan ready for deployment.

This budget aims to address the ongoing challenges and fortify the nation for the next few decades. Various measures were included to boost consumption in the economy, ease compliance burden, benefit MSMEs and the middle-class and simplify and streamline the tax system.

The Budget mentioned: Inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power, financial sector as its seven priorities. Let’s decode Budget 2023.

Budget 2023 Highlights: Direct Tax

Changes in New Tax Regime

The new tax regime is now the default tax regime. The government has taken 5 key measures to make the new tax regime more attractive. However, taxpayers have an option to choose the old tax regime.

Change in new tax regime slabs for FY 2023-24 (AY 2024-25):

Income range	Income tax rate
Up to Rs. 3,00,000	Nil
Rs. 300,000 to Rs. 6,00,000	5% on income which exceeds Rs 3,00,000
Rs. 6,00,000 to Rs. 900,000	Rs 15,000 + 10% on income more than Rs 6,00,000
Rs. 9,00,000 to Rs. 12,00,000	Rs 45,000 + 15% on income more than Rs 9,00,000
Rs. 12,00,000 to Rs. 1500,000	Rs 90,000 + 20% on income more than Rs 12,00,000
Above Rs. 15,00,000	Rs 150,000 + 30% on income more than Rs 15,00,000

A tax rebate on income of Rs 7 lakhs has been introduced under the new tax regime. Therefore, you do not have to pay tax if your taxable income is below 7 lakhs under the new tax regime.
The standard deduction of Rs 50,000 has been introduced under the new tax regime as well.
The highest surcharge under the new tax regime has been reduced to 25% from 37% for people earning more than Rs 5 crore. This move brings down their tax rate from 42.74% to 39%.

Presumptive Taxation Limits Revised for FY 2023-24

Category	Previous limits	Revised limits
Sec 44AD: For small businesses	Rs 2 crore	Rs 3 crore*
Sec 44ADA: For professionals like doctors, lawyers, engineers, etc.	Rs 50 lakh	Rs 75 lakh*

*The increase in limits is subject to a condition that the 95% of the receipts must be through online channels.

Start-ups

Start-ups	Previous limiit	Revised limit
Date of incorporation for income tax benefits	31.03.2023	31.03.2024
Time limit for set-off and carry forward of losses	7 years from incorporation	10 years from incorporation

Only condition is that shareholders who hold at least 51% shareholding must continue to hold the shares in the year such loss is to be carried forward and set-off.

Co-operative Societies:

Some of the proposals announced for co-operative Societies are:

New manufacturing initiatives: The government has extended the benefit of concessional tax rate of 15% to new co-operatives that commence manufacturing by 31st March, 2024.
Sugar co-operatives: Any expenditure was disallowed to sugar co-operatives prior to 2016-17, can be claimed now by making an application to the Assessing Officer.
Section 194N: TDS limit on cash withdrawals is increased to Rs. 3 crores for co-operatives societies.
Cash deposit limit: Limit for cash deposits and loans by Primary Agricultural Co-operative Societies (PACS) and Primary Co-operative Agriculture and Rural Development Banks (PCARDBs) is being increased to a maximum of 200,000 per member.

Other Direct Tax Updates

Leave Encashment: The exemption threshold for Leave encashment has been increased to Rs 25 lakh from Rs 3 lakh for non-government employees. Thus, at the time of retirement, leave encashment of up to Rs. 25 lakhs for a maximum period of 10 months is tax-free under Section 10(10AA).
TDS on EPF Withdrawal: TDS rate has been reduced to 20% from 30% on taxable withdrawal of EPF.
Payment Based Deduction: Any payment made to MSME shall be allowed as expenditure only when payment is actually made. This move brings ‘payments to MSME’ under the purview of Section 43B.
No Penalty: Where a loan is accepted or repaid by a primary agricultural credit society or a primary co-operative agricultural and rural development bank to its members or vice versa, no penalty would arise under Section 269SS or 269ST.
Capital Gains Exemption limit: The capital gains tax exemption under Section 54 to 54F is restricted to Rs. 10 crores. Earlier, there was no threshold.

Budget 2023 Highlights: Indirect Tax

Customs Duty Changes

The indirect tax proposals made in Budget 2023 promote exports, encourage domestic manufacturing, enhance domestic value addition, and boost green energy and mobility.

The customs duties were revised on the following list of items-

Items of which customs duty was revised	Impact/Benefit
Imported capital goods for lithium-ion battery manufacturing	For greener mobility
Imported mobile camera lens	Deepening value addition
Denatured ethyl alcohol	Benefits the chemical industry
Primary inputs for making shrimp feed	Increase in marine exports
Seeds for manufacturing lab-grown diamonds	Promotes exports
Extending the concessional Basic Customs Duty (BCD) on copper scrap	Increasing raw material availability for MSMEs
Compounding rubber to bring it at par with natural rubber	To curb duty circumvention

National Calamity Contingent Duty (NCCD) on specified cigarettes was increased.
The customs duty for importing silver dore, bars and articles has been increased to align them with that on gold and platinum. Further, the duty on jewellery made from precious metals including gold, silver and platinum is increased.
Extension is granted to the exemption from BCD on raw materials for manufacturing CRGO Steel, ferrous scrap and nickel cathode.
FM has reduced the basic customs duty on seeds used to manufacture Lab Grown Diamonds (LGDs).
The basic customs duty on the electric kitchen chimneys has been increased.
FM reduced the basic customs duty on parts of open cells of TV panels to encourage domestic manufacturing of television.
The customs duty exemption is being continued for the import of capital goods and machinery that are used for manufacturing lithium-ion cells for batteries in electric vehicles.
Exemption is also granted for excise duty on GST-paid compressed bio-gas used in blended compressed natural gas.
Minor changes are carried out in the basic customs duties, cesses and surcharges on certain consumables imported, such as toys, bicycles, automobiles and naphtha.

GST Changes

Section 10 stands amended such that a taxpayer can opt into the composition scheme even if they are supplying goods through e-commerce operators where TCS is collected under Section 52.
Section 16 is amended for a condition that in cases where a recipient taxpayer fails to pay to their supplier invoice value including the GST within 180 days from the date of issue of invoice, then they must pay with interest computed under Section 50 on it.
Sections 37, 39, 44, and 52 are amended to restrict taxpayers from filing GSTR-1 (return for outward supplies), GSTR-3B (summary returns), GSTR-9 (annual returns), and GSTR-8 (e-commerce operator) for a tax period after the expiry of three years from the due date.
Penalty of Rs.10,000 or an amount equivalent to the amount of tax involved, whichever is higher will be charged for e-commerce operators who-
- Allow an unregistered person to supply goods or services or both through them except where such person is exempted from GST registration.
- Allow any registered person from making inter-state supply of goods/services through them where they are ineligible for it.
- Do not furnish accurate details in the GSTR-8 of any sale of goods made through them by a person exempted from obtaining GST registration.
The following offences have been decriminalised-
- Where a person obstructs or prevents an officer in the discharge of their duties under the CGST Act,
- Where a person tampers with or destroys material evidence or documents,
- Where a person fails to supply information that is required to be supplied under the CGST Act or Rules or supplies false information.
In regard to the compounding of offences, the limits have been changed to 25% of the tax involved up to a maximum amount of 100% of the tax involved.
A new section 158A has been inserted in the CGST Act to allow businesses to now share GST data digitally with consent. It prescribes the manner and conditions for sharing information furnished by a registered person on the GST portal with such other systems as may be notified, as declared in-
- Returns filed under GSTR-1/3B/9, or
- Application of registration, or
- Statement of outward supplies, or
- Generation of an e-invoice or e-way bill, or
- Any other details, as may be prescribed.

Budget 2023 Highlights: Inclusive Development

The government’s policy of “Sabka Saath Sabka Vikas” has benefited various sections of society, including women, SCs, STs, OBCs, and other underprivileged groups. The budget will continue to build on those efforts.

Budget 2023 Highlights: Reaching the last mile

Building on the success of the Aspirational District program, government launched
Proposed an outlay of Rs 15000 crores for the newly launched Pradhan Mantri PVTG (Primitive Vulnerable Tribal Group) over next 3 years to improve socio-economic conditions of the vulnerable tribal groups
Outlay for PM Awaas Yojana was enhanced by 66% to over Rs 79,000 crores.
In the next three years, the center plans to hire 38,800 teachers and support staff for 740 Eklavya Model Residential Schools, which will cater to 3.5 lakh tribal students.

Budget 2023 Highlights: Infrastructure and investment

Proposed capital expenditure is increased by 33% to Rs 10 lakh crore.
50-year interest free loan to state governmemnts will be extended for one more year resulting in an outflow of rs 1.3 lakh crore.
Planned outlay of Rs 2.4 lakh crore towards railways
Fifty airports, heliports, water aerodromes, and advanced landing grounds will be revived to enhance regional air connectivity.
Urban Infrastructure Development Fund (UIDF) will be established with an outlay of Rs 10,000 crore per annum to create urban infrastructure in Tier 2 and Tier 3 cities

Budget 2023 Highlights: Unleashing the potential

Vivad se Vishwas I: During the Covid period, if MSMEs failed to fulfill their contracts, the government and its undertakings will refund 95% of the forfeited amount relating to bid or performance security.
KYC process will be streamlined and PAN card will be adopted as a single identifier.
A National Data Governance Policy will be introduced, providing access to anonymized data for the purpose of research and innovation by startups and academia.
To improve the ease of doing business in India, 39,000 complinaces have been reduced and 3,400 provisions have been decriminalised.
Three centres of excellence for Artificial Intelligence (AI) will be set-up in top educational institutions to achieve the vision of “Make AI in India and Make AI work for India”.
Unified filing process will eliminate the need for filing the same information with different government departments. People will now be allowed to voluntarily share the information with other government agencies over a common portal.

Budget 2023 Highlights: “Green Growth”

The government included “Green Growth” among the seven focus areas of this year’s Budget, with the aim of achieving net zero carbon emissions in India by 2070. To support this following announcements were made:

Green hydrogen: allocated Rs 19,700 crore for the National Green Hydrogen Mission, which will promote a shift to low carbon intensity in the economy, decrease reliance on fossil fuel imports and establish the country as a technology and market leader in this growing industry.
Energy transmission: Proposed construction of a transmission system of 13 GW renewable energy from Ladakh with a total investment of Rs 20,700 crore including central support of Rs 8,300 crore
Green credit programme: Introduced green credit program to encourage environmentally friendly behavior under the Environment Protection Act.
Vehicle replacement: allocated funds for scrapping old vehicles owned by the central government, and will also provide support to states in replacing their old vehicles and state ambulance
Energy transition: allocated Rs 35,000 crores for crucial capital investments towards achieving energy transition, reaching net zero targets, and enhancing energy security.
Battery storage: Viability gap funding introduced for battery energy storage systems with a capacity of 4,000 MWh

Budget 2023 Highlights: Youth power

The PM Kaushal Vikas Yojana 4.0 will be launched to skill lakhs of youth, covering new-age courses.
National Apprenticeship Promotion Scheme to provide stipend to 47 lakh youth over next three years through Direct Benefit Transfer (DBT).

Budget 2023 Highlights: Financial sector

Revamp credit guarantee schemes for MSMEs will be implemented starting 2023, with an infusion of Rs 9,000 crore. This will provide additional collateral-free guaranteed credit of Rs 2 lakh crore. Further, the cost of the credit will be reduced by nearly 1%
To improve business operations in GIFT IFSC, government will Implement a unified IT system for registration and approval from SEZ authorities, IFSCA, GSTN, SEBI,RBI and IRDAI.
Central Processing Center will be established to provide quicker responses to businesses through centralized handling of various forms under the Companies Act.
Integrated IT portal will be established which will help investors to reclaim unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority (IEPFA).
Mahila Sanman Savings Certificate- A one-time deposit scheme for women with a maximum deposit of Rs.2 lakh and a tenure of up to two years has been introduced. This scheme is valid till March 2025 and will fetch a fixed interest rate of 7.5%.
Senior Citizen Savings Scheme (SCSS) – The maximum investment limit has been raised from Rs.15 lakh to Rs.30 lakh, with an interest rate of 8% for the quarter ended 31st March, 2023.
Postal Monthly Income Scheme (POMIS) – Investors under this scheme too saw an increase in deposit limit from Rs.4.5 lakh to Rs.9 lakh for single accounts and Rs.9 to Rs.15 lakh for joint accounts.

Budget 2023 Highlights: What’s Cheaper and What’s Costlier?

What got cheaper	What got costlier
Gold	Travel by flights
Televisions	Imitation jewellery
Smartphones	Cigarettes
Compressed gas for EVs	Silver
Lab-grown diamonds	Bicycles
Lithium-ion batteries for mobile phones	Electric kitchen chimney
Industrial rubber

Budget 2023 Highlights: Key Numbers and Budget Allocation

FY23 GDP growth estimated at 7%. To spend Rs 2,200 crore on high-value horticulture crops as part of the Atmanirbhar Clean Plant Programme to enhance the supply of superior, disease-free planting material.

The agricultural credit target will be increased to Rs 20 lakh crore.

While the current fiscal deficit is 6.4% of GDP. the government aims to bring it down below 4.5% of GDP by 2025-26.
The government has stated that it will offer a 2% interest subsidy to help farmers obtain short-term loans of up to INR 3 lakh at an effective interest rate of 7% per year.
The Reserve Bank of India (RBI) has increased the limit for collateral-free agriculture loans from INR 1 lakh to INR 1.6 lakh.

Budget 2023 PDF Download

Topic	Download
Budget at a Glance (Full)	PDF
Budget Speech	PDF
Deficit Statistics	PDF
Transfer of Resources to States and Union Territories with Legislature	PDF
Budget Profile	PDF
Receipts	PDF
Expenditure	PDF
Outlay on Major Schemes	PDF

Statement I – Consolidated Fund of India	Download
Revenue Account – Receipts	PDF
Revenue Account – Disbursements	PDF
Capital Account – Receipts	PDF
Capital Account – Disbursements	PDF
Statement IA – Disbursements ‘Charged’ on the Consolidated Fund of India	PDF
Statement II – Contingency Fund of India – Net	PDF

Statement III – Public Account of India	Download
Receipts	PDF
Disbursements	PDF
Receipts & Expenditure of Union Territories without Legislature	PDF
Finance Bill	PDF
Budget Highlights (Key Features)	PDF
Memorandum to the Finance Bill 2023	PDF
Expenditure Budget	PDF
Receipt Budget	PDF

Budget 2023 Expectations

According to the income tax department, salaried individuals comprise a large percentage of taxpayers. In 2022, nearly 50% of the ITRs filed were ITR-1 by salaried class individuals. But the salaried individuals had very little to cheer about in the last few budgets except the new tax regime. They have a few expectations they hope will be met. Rightly so, because the last few years have been difficult for them given the harsh impact of layoffs, pay cuts, rising inflation and the fear of global recession.

Potential changes that may be included in the budget for the salaried class are:

Tax Exemption Limit:

The current tax exemption limit of Rs.2.5 lakh has stayed the same since 2014-15. It should be increased to Rs 5 lakh, considering factors such as inflation.

Increased Standard Deduction

The government may raise the standard deduction limit from Rs 50,000 to Rs 1,00,000 in this budget.

Decluttering Section 80C

Section 80C of the Income Tax Act currently offers a wide range of investment options such as the Public Provident Fund, Employee Provident Fund, National Pension System, Fixed Deposits, and home loan repayment. However, the deduction limit is restricted to Rs 1.5 lakh. Since the last review of this section in 2014, incomes have risen significantly, leaving limited scope for tax-saving investments. The government should consider reviewing the investment options or raising the deduction limit from Rs 1.5 lakh.

Deductions for Medical Insurance Premium

The government may consider increasing the deduction limits under Section 80D from Rs.25,000/Rs.50,000 to Rs.50,000/Rs.1 lakh, respectively, due to high medical expenses and hospitalisation costs.

Reduced Surcharge Rate

The surcharge rate of 37% brings the tax to 42.744% for people earning more than Rs.5 crores. It is time for the government to rationalise and revisit the surcharge rates.

Validity of other Deductions

31st March 2023 is the last date to claim deductions like 80EEA (interest on housing loan) and 80EEB (interest on electric vehicle loan). We can expect to see a 2-year extension on these deductions.

Reviewing Children’s Education and Hostel Allowance

How much do you think a child’s education would cost today? The Child Education and Hostel Allowance have remained the same at Rs.100 and Rs.300 per child per month for over 20 years. The government should consider raising the limits to Rs.1,000 and Rs.3,000 per child per month, respectively.

More on Budget 2023 expectations of various industries.

Key Highlights of Budget 2022

The key highlights of Budget 2022 was embracing trust-based governance, it introduced ITR-U in Budget 2022, allowing taxpayers to declare their undeclared income or update their return within two years from the end of the relevant assessment year. The tax rates did not change in the financial year 2022-23, but we saw some aggressive moves that discouraged crypto transactions in India.

A 30% tax was introduced on Virtual Digital Assets (VDA) like cryptocurrency without allowing the losses of one cryptocurrency to be offset against income from other cryptocurrencies. Also, no deductions were allowed besides the acquisition cost. This meant that crypto investors paid taxes on the gains, but in the event of losses, they solely bore the brunt.

Investors and traders also took a 1% cut in the form of TDS on payments exceeding Rs.10,000 per annum on VDAs. The Finance Act 2022 added Section 194S, where 10% TDS was introduced for persons providing benefits or perquisites over Rs.20,000 per annum, particularly impacting doctors, music bands, and influencers.

A host of amendments were made under the GST law. Significant ones include sequential filing of GST returns, restriction to Input Tax Credit (ITC) claims to those that appear only in Form GSTR-2B of the buyer and adding a condition that filing of GSTR-1 is compulsory before filing GSTR-3B of the same period. The annual time limit for amendments to sales invoices/debit-credit notes and ITC claims belonging to a financial year was revised as 30th November of the following year.

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