Filing for AY 2024-25 is coming soon
Filing for AY 2024-25 is coming soon
Keep calm and sign up for early access to our super filing platform
Index

Union Budget 2023 Expectations Of The Industry And The Common Public

Updated on: Jan 31st, 2023

|

7 min read

The Finance Minister of India, Nirmala Sitharaman, will present the Union Budget 2023 on 1st February 2023, the event starts from 11 AM. This budget is of particular interest to the citizens and industry as it is the last budget before the 2024 general elections. Will the government plan to increase spending on infrastructure, or will it focus on tax relief and other financial aid? It remains to be seen. 

But we have noted a few key Budget 2023 expectations from different sectors:

Budget 2023 Expectations Income Tax slab

The government is reportedly considering increasing the basic tax exemption limit from Rs 2.5 lakhs to Rs 5 lakhs. This change would not affect individuals earning up to Rs 5 lakhs, as they already receive a rebate under section 87A. But it would eliminate the need for them to file mandatory tax returns.

Salaried taxpayers in India are eagerly awaiting the upcoming budget, as they have not seen many positive changes in the last few budgets, except for the optional new tax regime in the Budget 2020, which didn’t find favour. It is expected that the government will make the new regime more appealing by allowing certain deductions and exemptions.

Experts believe that the government may consider increasing the threshold for the highest tax rate from Rs 10 lakh to Rs 20 lakh and reducing the highest tax rate from 30% to 25%.

Budget 2023 Expectations For Banking Sector

In 2023, the banking sector expects a significant increase in capital funding as it will play a major role in providing funds for the government's large CAPEX. However, the sector is more focused on the government's approach to privatizing Public Sector Banks (PSBs). Experts anticipate that privatizing PSBs will lead to improved operational efficiency and promote greater financial inclusion in the country.

In the 2022 Budget, Finance Minister Nirmala Sitaraman announced plans to privatize two public sector banks, but no further action has been taken. The Banking Laws (Amendment) Bill, which is crucial for the process, is yet to be presented in Parliament. According to industry sources, the government may delay the privatization of PSBs in light of upcoming state and general elections in 2024. The NITI Aayog has provided suggestions for which banks to privatize, but the government is yet to make a final decision. While major announcements are unlikely, the Finance Minister may unveil measures to promote financial inclusion and improve the efficiency of PSBs.

Budget 2023 Expectations For Stock Market Investors

The classification of income from stock market transactions is overly complex, with different categorisations like speculative business income, non-speculative income, long-term and short-term capital gains. Various instruments, like stocks, bonds, units of mutual funds etc are classified under these categories based on their period of holding. Taxpayers expect simplification of taxation and alignment of multiple tenures for different asset classes or the introduction of a unified tax rate for both long and short-term assets.

Budget 2023 Expectations For Stock Market

Over the past year, the global equity markets have experienced a lot of volatility. However, India's equity market has been an exception, as it has performed better than other developed and emerging markets. While some experts think that high valuations may limit the market's growth in 2023, they believe that the Indian budget could keep its momentum. This could be achieved by eliminating the Long-Term Capital Gains Tax (LTCG), which currently taxes any gains beyond Rs 1 lakh at 10% if the holding period is over one year. Investors are calling for the removal of this tax, and experts believe it would give a significant boost to the markets and encourage more participation.

Budget 2023 Expectations For Industries

Various Industries have these expectations from Budget 2023:

  • Real-estate: After a period of stagnation, the real estate market in India appears to be on the rise, particularly in the residential sector. However, 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 2 lakh to 5 lakh rupees and extending the benefit under Section 80EEA for two more years. 
  • Health: PHD Chamber of Commerce and Industry proposed that the allocated budget for healthcare should be increased 30-40% given the increasing health care needs.
  • Electric vehicles: The Society of Manufacturers of Electric Vehicles (SMEV) has requested an extension of subsidies for electric vehicles under the FAME-II scheme, and is also calling for the inclusion of light to heavy commercial vehicles in the scheme to promote electric mobility.

FAQs:

What is the Budget 2023 date?  

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

At what time does Budget 2023 begin?

Budget 2023 will begin at 11AM on 1st February 2023.

Who prepares the budget in India?

The Ministry of Finance, in collaboration with Niti Aayog and other ministries, is responsible for drafting the budget. The Budget division of the Department of Economic Affairs (DEA) in the finance ministry is the nodal body responsible for producing the budget.

summary-logo

Quick Summary

Finance Minister Nirmala Sitharaman will present Union Budget 2023 on 1st February 2023 at 11 AM. Expectations include increased basic tax exemption limit, privatization of PSBs, simplification of stock market taxes, removal of LTCG tax, and sector-specific demands. Sectors like banking, stock markets, industries, and healthcare await changes. PSBs privatization might be delayed due to upcoming elections.

Was this summary helpful?
liked-feedbackliked-feedback

Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

Cleartax is a product by Defmacro Software Pvt. Ltd.

Company PolicyTerms of use

ISO

ISO 27001

Data Center

SSL

SSL Certified Site

128-bit encryption