Budget 2023 LIVE Updates: NIL Tax for Income Up to Rs 7 Lakh Under the New Tax Regime

Budget Expectations 2023 From Industries

1. Stock Market Investors: The categorisation of income from stock market transactions is extremely complicated. The adoption of a single tax rate for both long-term and short-term assets is something that taxpayers expect, and the alignment of numerous tenures for various asset classes.
2. Banking Sector: The banking industry anticipates a big increase in capital funding in 2023. But the industry is more concerned with how the government plans to privatise public sector banks (PSBs). According to experts, privatising PSBs will increase operational effectiveness and encourage greater financial inclusion in the nation.
3. Real Estate: Factors such as increasing interest rates and inflation have negatively impacted the purchasing power of potential homebuyers. To counteract this, industry experts propose increasing the tax deduction limit on home loan interest from Rs 2 lakh to Rs 5 lakh and extending the benefit under Section 80EEA for two more years.
4. Health: PHD Chamber of Commerce and Industry proposed that the allocated Budget for healthcare should be increased by 30-40% given the increasing healthcare needs.
5. Electric Vehicles: The Society of Manufacturers of Electric Vehicles (SMEV) has requested an extension of subsidies for electric vehicles and is also calling for the inclusion of light to heavy commercial vehicles in the scheme to promote electric mobility.

Budget Expectations 2023 for Salaried Individuals

1. Changes in Tax Slabs: The taxpayers are hoping that the current basic exemption limit of Rs.2.5 lakh will be increased to Rs.5 lakh under both tax regimes. The current threshold of Rs.10 lakh for the 30% tax bracket may also be raised to Rs.20 lakh.
2. 80C and 80D Limit Increase: Section 80C is a major deduction claimed by taxpayers. A hike in the current threshold of Rs.1.5 lakh to Rs.2.50 lakh is anticipated, increasing the disposable income in the hands of taxpayers. Section 80D allows an individual to claim a deduction for payment of medical insurance premiums of up to Rs.25,000. In the case of senior citizens, this threshold is Rs.50,000. The government is expected to provide tax relief by revising the erstwhile limit of Rs.25,000/Rs.50,000 to Rs.50,000/Rs 1 lakh, respectively.
3. Standard Deduction: An increase in the standard deduction limit from Rs.50,000 to Rs.1,00,000 may also be seen in both tax regimes. There has been a significant increase in medical expenses and fuel costs since its introduction. Therefore, there is a strong argument for increasing the standard deduction from its current limit of Rs.50,000 to Rs.1 lakh.
4. Home Loan Interest Rates: Currently, taxpayers can claim a deduction for interest paid up to Rs.2 lakh on a home loan. This limit may be revisited because EMIs have skyrocketed in the last several months due to RBI’s changes in the repo rate. 
5. Surcharge Rate: The higher tax brackets of Rs.5 crore are charged an effective tax rate of 42.744%, a significant portion of an individual’s income. This rate needs to be rationalised to ensure that the taxpayer has a higher in-hand salary and no investment outflow from the country. This will cater to the high net worth individuals as well.
6. Enhancement of Other Deductions: An increase in the threshold under Section 80TTA (Deduction on saving bank interest), 80EEA (interest on housing loan) and 80EEB (electric vehicle loan) are also expected. Currently, an individual can claim a deduction of Rs.10,000 on saving bank interest. An extension of the current lock-in on 80EEB by two years may also be made to give a thrust to the electric vehicle sector. 
7. Children’s Education and Hostel Allowance: With the rising cost of education, it is reasonable to raise the limits to Rs.1,000 and Rs.3,000 per child per month (for up to two children), respectively.

Union Budget 2022 Flashback

1. Taxpayers can update past return and include omitted income by additional tax payment within two years from the end of the relevant AY.
2. The government began imposing a 30% tax on the income from and transfer of digital assets such as crypto.
3. Corporate surcharge was reduced from 12% to 7%.
4. RBI introduced the digital rupee using blockchain technology starting 2022-23.
5. Issuance of e-passports with futuristic tech was introduced in 2022-23. 

Related articles on Budget 2023:

• Income Tax Slabs
• Section 80 Deductions
• Capital gains
• Income Tax on House Property
• Inocme Tax on Salaried Individuals
• Adhar Card
• Mutual Funds