INDIA

BUDGET
HIGHLIGHTS
2023-24
Index

❑ Key priorities
of India Budget 2023

❑ Key Sectors that

received the boost in the budget

❑ Direct Tax Proposals

❑ Indirect tax Proposals

❑ Transfer Pricing Proposals

India Budget Highlights 2023-24

Key priorities
of India Budget 2023

Inclusive
Developme
nt

Reaching
Green
the Last
growth
mile

Saptarishi - 7
Amrit Kaal
Infrastructur
Youth
e and
Power
Investment

Unleashing Financial
the potential Sector

Honourable Finance Minister of India, Shri Nirmala Sitharaman on 1 st

February 2023 presented before the parliament Indian Union Budget 2023.
Cited as the first budget in ‘Amrit Kaal’ and also being the last full-fledged
Budget before the General Elections next year, this Budget comes with a lot
of expectations for taxpayers' individuals or companies alike.

This Budget hopes to build on the foundation laid in previous Budget and the
blueprint drawn for India@100.

India Budget Highlights 2023-24 3

India continues its
Thriving growth streak

Indian economy increased in size from being 10th largest economy in 2014
1 to being the 5th largest now

Fiscal deficit estimate to be 6.4% of GDP for FY 2022-23 and 5.9% for
2 FY 2023-24

Per-capita income more than doubled to INR 1.97 lakh from the
3 year 2014.

7,400 crore digital payments of INR 126 lakh crore through UPI
4 in 2022. Increase of 76% in transactions and 91 % in value.

Increased outlay of expenditure for infrastructure and

5 investment to INR 10 lakh crore. Total Budget estimate at INR
45.03 lakh Crore ($ 550 bn)

Ease of doing business – more than 39000 compliances reduced and

6 3400 legal provisions decriminalized

Increased thrust continues on Digital, Technology driven and a green

7 economy

India Budget Highlights 2023-24

Key Sectors that
Received the boost in
the Budget
Agriculture and
cooperative sectors
• Making India Global Hub for Millets
• Targeted Funding of INR 20 lakh crore agricultural credit
and setting up of Fund for encouraging start-ups
• Horticultural Clean Plant Program, Digital

Health
• 157 New Nursing colleges to be established
• New Programme to be launched to promote research in
Pharmaceuticals
• Joint Public-Private Research to be encouraged
• Sickle Cell Anaemia elimination Mission to be launched

Education
• Revamping Teachers Training
• National Digital Library to be setup for children and adolescents
• States to be encouraged for setting up physical libraries at
various levels

Infrastructure and
Investment
• Increased capital outlay by 33.4% to INR 10 lakh Crore
(3.3% of GDP)
• Capital outlay for Railway at staggering INR 2.4 lakh
Crore – Highest till date
• 100 Transport Infra Projects identified for end to end
connectivity, 50 additional airports for reginal connectivity

India Budget Highlights 2023-24

Key Sectors that
Received the boost in
the Budget

Technology • Make AI in India – 3 specialized AI centres to be setup in

educational institutes
• Entity Digilocker to be setup for use by business
enterprises and charitable trusts
• 100 labs to be setup for 5G services
• R&D grant for Lab Grown Diamond (LGD) Sector
• E-Courts to be launched – INR 7000 Crs allocated for the
same

Manufacturing and
• Changes made to various custom duties specifically Li-on
other industries battery manufacturing, shrimp feed, LGD, copper scrap etc.
• Enhanced limits for presumptive taxation for MSMEs and
professionals, 15% income tax for co-operative manufacturing,
extension of time limit for incorporation of start-ups.
• 50 destinations to be developed on mission mode for
encouraging tourism growth
• INR 35,000 crs for energy transition and net zero objective

Financial • Setting up of National Financial Information Registry for

efficient lending, inclusion and stability
Sector
• Setting up of a Central Data Processing Centre - For faster
handling of admin work under Companies Act, 2013
• Credit Guarantee scheme for MSMEs
• Mahila Samman Bachat Patra – One time small savings
scheme for 2 year up to March 2025 - INR 2 lakh per woman
• Enhanced maximum deposit limit for senior citizens savings
scheme from INR 15 lakhs to INR 30 lakhs

India Budget Highlights 2023-24

Corporates &
Businesses
Area Proposal/Highlight
Corporates & Any amount paid to MSME would be
Businesses allowed only on payment basis (Section
43B)
Successor entity in amalgamation can
modify the returns filed by the
predecessor entity as may be required
Premium received in excess of
valuation of shares under Rule 11UA to
apply even when received from non-
residents. To be taxed as income from
other sources
94B Limitation relaxed for certain
NBFCs
Amount received in cash or in kind or
partly in cash and partly in kind to be
taxed as business income on par with
194R
Amendment in Section 10AA
- Deduction available only if return filed
within the due date
- Time limit of six months to receive
remittance for export forex from
outside India from end of FY (or
extended timeline by RBI)
Small Turnover limits for presumptive
businesses and taxation increased:
professionals - In the case of businesses, limit
increased from INR 2 crores to INR 3
crores;
- In the case of professionals, limit is
increased from INR 50 lakhs to INR
75 lakhs
India Budget Highlights 2023-24
SBC Comments
This will enhance the
liquidity and also create an
obligation on the taxpayers
to make timely payments to
MSMEs
AO shall pass a modified
order taking into account the
modified return
Previously the section was
applicable only on the
consideration received from
residents
NA
Amendment in view of
negative rulings stating that
only benefit in cash can be
taxed as business income
This is to rationalize the
provisions and to be
consistent with other laws.
The relief is provided only to
the businesses/professionals
having at least 95% receipts
and payments through
electronic means
Litigation
Area Proposal/Highlight
Start ups - Start-ups incorporated up to 31-03-
2024 shall be eligible to claim exemption
u/s 80-IAC (Extended by one year)
- Start-ups can carry forward losses u/s
79 for a period of 10 years (extended
from 7 years)
Litigation Closing Inventory can be revalued by
AOs u/s 142 under assessments
Introduction of authority called Joint
Commissioner (Appeals) on par with
CIT(A) to dispose cases involving
small amount of demand
TP Report to be provided to TPO within
10 days of request during TP
proceedings
Time limit for completion of
assessment for AY 2022-23 increased
from 9 months to 12 months.
Cross objection can now be filed before
ITAT for all type of appeals and cases
TDS deducted in later FYs by deductors
on income offered earlier by deductee
can be claimed by making an application
Relevant valuers/experts to be hired
during the course of search and seizure
by Officers conducting the same
India Budget Highlights 2023-24
SBC Comments
Further boost and time limit
extension provided to start-ups to
encourage innovation and
formation of a start-up ecosystem
Valuation to be made by cost
accountants nominated by tax
office
This would help in reduction of
CIT(A) cases which are huge in
number and pending since long.
The stringent condition is to
ensure that the TP reports are
shared for timely adjudication and
completion of proceedings with
quality issues emanating out of
the TPO proceedings
Updated returns filed may also be
scrutinized within 12 months from
the end of FY in which the same
are filed
Previously same was limited to
appeal filed against CIT(A) order
Application to be made within 2
years from the end of FY in which
tax is deducted.
Includes digital/forensic experts
owing to development of
technology
Trusts & Co-operatives

Area Proposal/Highlight SBC Comments

Charitable Application out of corpus or loans Streamlining provisions

Trusts and or borrowings before 01-04-2021 relating to Charitable Trusts
Organisations not to be allowed as application and Organizations is being
when such amount is deposited taken up consistently to
back or invested into corpus or remove all the inefficiencies
when the loan or borrowing is whereby there is increased
repaid. responsibility and governance
in the operation of such
Multiple layer donation to trust
institutes.
or institution not to be allowed
Ex: Where INR 100 is donated to
another trust only 85% of it to be
allowed as application.
Provisions relating to registration
further rationalized
Co-operatives Threshold limit for co-operatives NA
to withdraw cash without TDS
increased from INR 1 Crore to
INR 3 Crores
Co-operatives setting up The same shall be subject to
manufacturing unit and non-availability of deductions
commencing production between and exemptions as specified
01-04-2023 to 31-03-2024 to be
eligible for concessional tax rate
of 15%
Limit u/s 269SS and 269T NA
increased from INR 20000 to INR
2 lakhs for Primary Agricultural
Credit Societies and Primary Co-
Operative Agricultural and Rural
Development Bank

India Budget Highlights 2023-24

Individuals
Area Proposal/Highlight
Personal/ Revisions for individuals opting NEW
Individual TAX REGIME only (i.e., 115BAC
Taxation without claim of exemptions and
deductions specified therein)
- Tax rebate increased from INR 5
lakh to INR 7 lakhs
- Standard deduction of INR 50,000
- Highest surcharge would be only
25% (as against 37% earlier) for
income above INR 2 Crores
Revision in income-tax slab rates
under new tax regime ONLY
Up to INR 3 lakhs : Nil
INR 3 lakhs – 6 lakhs : 5%
INR 6 lakhs – 9 lakhs : 10%
INR 9 lakhs – 12 lakhs : 15%
INR 12 lakhs – 15 lakhs : 20%
Above INR 15 lakhs : 30%
Conversion of Gold to Electronic
Gold Receipt and vice versa not to be
transfer for capital gains
India Budget Highlights 2023-24
SBC Comments
While not making it
mandatory, the
Government intends
individual tax payers to opt
for ‘New Tax Regime’ and
has taken steps to make it
more attractive by
increasing the tax rebate to
7 lakhs & introducing
standard deduction (which
was available in old
regime).
Further, the tax slab is
restructured under New
Tax Regime to provide for
lesser slabs and reduced
tax rates.
However, no changes have
been made to Old tax
regime.
Hence, it would be highly
pertinent to individual tax
payers to evaluate the tax
liability on their income
under both options before
choosing any regime.
NA
Individuals

Area Proposal/Highlight SBC Comments

Personal/ Agniveers to get deduction and exemption This will provide the
Individual on making contribution and withdrawal of needed relief as per the
Taxation funds from Agniveer Corpus Funds. scheme of the Government

Gifts received in excess of INR 50,000 Similar provision was

from Residents but Not ordinary introduced for non-
resident (RNOR) to be taxed as deemed residents
income

TDS to be made on It was noticed by

- Interest received on listed debentures to department that there is tax
a resident avoidance and leakage
- Net winnings from online games and where intent of the
not on individual winnings provisions was misused
and hence the amendment
Tax to be collected @20% on overseas To increase the tax base
tour packages and other foreign owing to the increase in the
remittances not for education purpose. persons traveling abroad
and making foreign
remittances
Exemption not available for sum Amount in excess of
received from life insurance policies premium paid and not
having premium in excess of INR claimed earlier would be
5,00,000 u/s 10(10D) taxed as Income from other
sources
LTCG exemption on reinvestment in Costly reinvestments in
residential house property u/s 54 and 54F premium properties would
capped at INR 10 Crore be taxed @20%

Interest paid on housing NA

loan/construction/renovation not be
considered as cost of acquisition or
improvement for calculation of capital
gains
Market Lined Debentures to be short term NA
capital asset
India Budget Highlights 2023-24
GST Proposals –
CGST Act, 2017
Area Proposal/Highlight
Composition Section 10 of the act is amended to
levy allow composition dealers to make
supply of goods through an e-
commerce operator.
Input tax Second Proviso to section 16 of the
credit act - Is amended to align the
requirement to pay interest under
section 50 in instances (relating to
payment to suppliers within 180 days)
Section 17(3) of the act - Is amended
to include “Supply of warehoused
goods to any person before clearance
for home consumption” in Para 8(a) of
Schedule III for the purpose of
calculation of exempt turnover
New clause (fa) is inserted under
section 17(5) to disallow the ITC
relating CSR expenditure
Registration Section 23 of the act is retrospectively
amended to provide that sec 23
(Persons not liable for registration)
shall prevail over sec 22 (persons
liable for registration) and sec 24
(Compulsory registration in certain
cases)
Returns Section 37, 39, 44 and 52 of the act
are amended to restrict filing of returns
GSTR 1, GSTR 3B, GSTR 9, GSTR
9C and GSTR 8 for a tax period
beyond 3 years from the relevant due
date
India Budget Highlights 2023-24
SBC Comments
This amendment allows
composition dealers to supply
goods through e-commerce
operators.
NA
Supply of warehoused goods
before clearance for home
consumption is to be additionally
included for calculation of exempt
turnover in relation to reversal of
proportionate ITC for persons
carrying out exempt and taxable
business.
Direct clause is introduced to
block ITC on CSR expenditure of
Companies, earlier there used to
be ambiguity surrounding the
issue
This amendment gives over riding
effect to section 23 on section 24
The issue of wholly exempt
suppliers need not go for
registration only for RCM tax
payments is clarified.
Maximum time limt of 3 years to
file various returns under the act is
being instituted
GST Proposals –
CGST Act, 2017
Area Proposal/Highlight SBC Comments
Refunds Section 54 of the act Is amended As per the amended section,
to align with the amended 90% provisional refund may be
provisions in relation to availment given without reducing the
of ITC on provisional basis amount of ITC provisionally
accepted.
Section 56 of the act is amended
to provide for the manner of
computation of period of delay for
determination of interest on
delayed refunds.
Penalties New subsection 122(1B) is These penal provisions on ECO
inserted to provide for penal are put in place to ensure due
provisions to operators in verification of persons using the
instances where an e-commerce ECO platform
operator:

• Allows supply of goods or

services or both by an
unregistered person
• Allows inter-state supply by a
person not eligible to make
such supplies.
• Fails to furnish correct details in
GSTR 8

Punishments Section 132 is amended bringing With this amendment, certain

in the following changes –
• Decriminalizing certain offences
(obstruction, tampering of
documents, fails to provide
information)
• Increasing the monetary
threshold for initiating
prosecution against all the
offences other than the offence
under section 132(1)(b) [i.e.,
issue any invoice without supply
of goods or services]
India Budget Highlights 2023-24
offences such as tampering of
evidence, obstructing any
officer on duty etc. has been
decriminalized and the
monetary
threshold for prosecution for
cases other than that of
issuance of fake invoices has
been increased to Rs. 2 Cr.
from Rs. 1 Cr threshold.
GST Proposals –
CGST Act, 2017
Area Proposal/Highlight SBC Comments
Compounding • Compounding fee rationalized This move is aimed at wider
of Offences to a min fee of 25% of Tax and coverage of compounding of
a max fee of 100% of Tax various offences
(before the amendment the
compounding fee is at a min
fee of 50% of tax and a max
fee of 150% of tax)

• Provisions of compounding of
offence option will not be
available to the persons
involved in offences relating to
issuance of invoices without
supply of goods or services or
both.

Consent based New section is inserted Going forward a declaration is

sharing of prescribing the manner and
information conditions for sharing of
information (registration, returns,
e-waybill & e-invoices details) with
such other systems as may be
notified.
Negative List • Schedule III of CGST Act, is
of Supplies amended to give retrospective
effect from 01 July 2017 to para
7 (High sea sale) & para 8
(supply of warehoused/ bonded
goods before clearance for
home consumption).
undertaken from taxpayers
before sharing of their data with
other Government institutions as
may be notified
This retrospective amendment is
a welcome move resolving the
dispute of reversal of ITC
pertaining to such supplies
during the period from
01.07.2017 to 01.02.2019

• The aforesaid Paras were

earlier inserted vide CGST
Amendment Act, 2018

India Budget Highlights 2023-24

GST Proposals –
IGST Act, 2017
Area Proposal/Highlight
Definitions Non-Taxable Online recipient is
amended increasing the scope of
definition to cover all unregistered
person receiving OIDAR services
as Non-Taxable Online recipient
Online information and database
access or retrieval services
(OIDAR) definition is amended to
exclude the condition of being
essentially automated and
involving minimal human
intervention thereby expanding the
ambit
Place of Proviso to section 12(8) is omitted
supply whereby under the amended
provisions the POS for
transportation of goods shall be:
• the location of recipient (if
recipient is registered)
• the location at which the goods
are handed over (if recipient is
unregistered)
India Budget Highlights 2023-24
SBC Comments
The condition of receipt of online
information and database access
or retrieval services
(OIDAR) for purposes other than
commerce, industry or any other
business or profession so as to
provide for
taxability of OIDAR service
provided by any person located
in nontaxable territory to an
unregistered person receiving
the said services and located in
the taxable territory.
The effect of this amendment is
to be carefully look at in the days
to come as several advance
rulings has been pronounced on
the OIDAR services and its
classification and the phrase
being deleted now was used in
almost all rulings to interpret the
definition of OIDAR services.
This amendment has omitted the
proviso where the transportation
of goods is to a place outside
India, the place of supply shall be
the place of destination of such
goods resulting in place of supply
to be India irrespective of
destination of goods in case
where the location of supplier of
services and location of recipient
is in India
Customs Proposals –
Customs Act, 1962
Area Proposal/Highlight

Legislative Proviso is inserted in Section 25 of the act to the effect that the
changes validity period of two years shall not apply to exemption notifications
issued in relation

• Multilateral or bilateral trade;

• Agreements; obligations under international agreements, treaties;
• Conventions including with respect to UN agencies, diplomats;
international organizations;
• Privileges of constitutional authorities;
• Schemes under Foreign Trade Policy; Central Government
schemes having a validity of more than two years;
• Re-imports, temporary imports,
• Goods imported as gifts or personal baggage

A new sub section 127(C)(8A) is inserted to specify a time limit of 9

months for disposal of applications filed under settlement
commission

India Budget Highlights 2023-24

Customs Proposals –
Customs Tariff Act, 1975
Area Proposal/Highlight
Changes in BCD Reduction in Basic Customs Duty effective from 02-02-2023 for
rates certain items in the following sectors

• Agricultural Products and By Products

• Minerals
• Naphtha
• Gems and Jewellery Sector
• IT, Electronics - Camera lens and its inputs/parts
• Electronic appliances - Heat Coil for use in the manufacture of
Electric Kitchen Chimneys
Increase in Basic Customs Duty effective from 02-02-2023 for
certain items in the following sectors

• Chemicals
• Rubber - Compounded Rubber
• Gems and Jewellery Sector
• Electric Kitchen Chimney
• Bicycles
• Toys and parts of toys (other than parts of electronic toys)
• Silver
• Automobiles
Change in end date of exemption/ concessional rate upto
31.03.2024 for the following major items –

• Ferrous waste and scrap

• Lithium-ion cell for use in the manufacture of battery or battery
pack of cellular mobile phone, electrically operated vehicle (EVs)
or hybrid motor vehicle
• Lifesaving drugs/ medicines and diagnostic test kits, bulk drugs
used in manufacture of life-saving drugs or medicines and
• Others

India Budget Highlights 2023-24

Customs Proposals –
Customs Tariff Act, 1975

Area Proposal/Highlight
Miscellaneous • Rationalization of BCD rate structure for certain items has
been done in a manner so as to maintain the existing
incidence of duty. These changes need to be read with
appropriate changes in AIDC/SWS rates

• The BCD exemption for the some of the goods prescribed

under notification No.50/2017 – customs dated 30.6.2017
are being extended for a period of one year i.e. upto 31st
March 2024

• The BCD exemption for certain items under notification

No.50/2017 – customs dated 30.6.2017 are being extended
for a period of five years i.e. upto 31st March 2028

India Budget Highlights 2023-24

Transfer Pricing
Sec 92BA – Definition of Specified
Domestic Transaction
• A concessional tax rate of 15% for new
manufacturing co-operative society set up
on or after 01.04.2023 is introduced vide
new Sec 115BAE.
• The ambit of domestic TP has been
extended by inserting the new section in
the definition of SDT u/s 92BA i.e., “(vb)
any business transacted between the
assessee and other person as referred
to in sub-section (4) of section
115BAE”. Amendment will be effective
from 1 April 2024
• Therefore, any transaction between the
assessee claiming concessional tax and
related party will have to be at arm’s
length price as per TP regulations.
India Budget Highlights 2023-24
Reduction in time line for furnishing the
documentation requested by assessing
officer or Commissioner (Appeals)
• As per Section 92D (3) – The Assessing
Officer or the Commissioner (Appeals)
may, in the course of any proceeding
under this Act, require an assessee to
furnish the information under Rule 10D
(TP documentation) to be filed within 30
days of receipt of notice from the tax
authorities.
• The Finance Bill has proposed to reduce
this timeline to 10 days to provide the
authorities sufficient time to examine the
information submitted. Further, the AO or
CIT(A) may, on an application made by
such person, extend the period of 10
days by a further period not exceeding 30
days. This amendment will be effective
from 1 April 2023.
• Given this, the taxpayers have to maintain
contemporaneous TP Documentation and
supporting documentation by 31 October
(while filing Form No. 3CEB itself). This
will enable the taxpayers to file the
documentation within time if sought during
any proceedings in future.
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