BUDGET

INDEX

 EXECUTIVE SUMMARY

 YEARS IN RETROSPECT

 7 PRIORITIES OF THE BUDGET

 FISCAL MANAGEMENT & ESTIMATES

 DIRECT & INDIRECT TAXES

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Union Budget 2023-24 : Executive Summary
The Union Budget was presented taking note of various macro and global challenges
namely :
1. Rising global inflation and rates, resulting in slower global growth and recession
fears in some continents.
2. Full economic recovery, requiring return to fiscal consolidation and normalizing
monetary policy.
3. Rising geopolitical tensions, leading to supply chain disruption that may lead to
demand - supply mismatch and rising supply led inflation.
4. Last but not the least, the demand for sectoral support in light of slowing global
growth and public expectations on tax benefits.

 Union Budget 2023-24 has done an excellent job of not only managing the
expectations of common people but also has provided enough growth drivers in
terms of higher infra spending and job creation, unleashing the potential of India,
objective of reaching the last mile, inclusive development, supporting youth and
small enterprises, green growth and carrying out further financial sector reforms.
 On the fiscal front, Union Budget has returned to the path of fiscal consolidation by
limiting the deficit to 5.90% and re-iterated their medium term goal of reducing fiscal
deficit gradually by 2025-26. Budget 2023-24 has assumed a GDP growth of 10.50%,
that seems like an achievable target.
 Union Budget has done a remarkable job of maintaining growth momentum by
enhancing the capital expenditure to Rs.10 Lakh crore to boost investments in
infrastructure and productive capacity. The same will go a long way in enhancing the
confidence of the global investors to look at India as oasis of growth in a slowing
global growth environment.
 On the personal Income Tax front, the Budget 2023-24 tried to migrate tax payers to
the ‘new regime’ by giving certain benefits in terms of lowering tax rates and
reducing tax slabs, to raise exemption slabs up to Rs.7 lakhs from existing Rs.5 lakhs.
The Budget also reduced the peak surcharge from 37% to 25% thereby reducing the
peak rates down to 39%.
 To sum-up, Budget 2023-24 has provided strong growth impetus in the form of
capital spending, climate change, upliftment of the weaker section of the society,
women empowerment, focusing on youth, support to MSME, simplification of tax
regime, continuation of financial sector reforms and welcoming digitization.

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YEARS IN RETROSPECT

ACHIEVEMENTS IN THE FY 22-23 :

 Envision fruits of development to reach all regions and citizens especially youth, women, farmers,
OBCs, SC & ST
 Current year’s economic growth is estimated to be at 7%, highest among all the major economies,
inspite of massive slowdown globally caused by Covid & War.
 Reforms & Policies implemented through Sabka Prayas resulted in Jan Bhagidari
 Several Accomplishments: Aadhaar, Co-Win and UPI; Covid vaccination drive, climate related
goals, mission LiFE, and National Hydrogen Mission.
 Supplied free food grains to over 80 crore people for last 28 months, and will be continued for
another 1 year from Jan 2023, under PM Garib Kalyan Anna Yojana (PMGKAY). The entire
expenditure of about Rs.2 lakh crore will be borne by the Central Government.
 G20 Presidency: With the theme of ‘Vasudhaiva Kutumbakam’, steering an ambitious, people-
centric agenda to address global challenges, and to facilitate sustainable economic development.

ACHIEVEMENTS SINCE 2014 :

 Per capita income has more than doubled to Rs.1.97 lakh.

 Indian economy has increased in size from being 10th to 5th largest in the world.
 EPFO membership more than doubling to 27 crore, and 7,400 crore digital payments worth
Rs.126 lakh crore through UPI in 2022.
 11.7 crore household toilets build under Swachh Bharat Mission
 9.6 crore LPG connections under Ujjawala
 220 crore Covid vaccination of 102 crore people
 47.8 crore PM Jan Dhan bank accounts opened
 Insurance cover for 44.6 crore persons under PM Suraksha Bima and PM Jeevan Jyoti Yojana
 Cash transfer of Rs.2.2 lakh crore to over 11.4 crore farmers under PM Kisan Samman Nidhi

VISION FOR AMRIT KAAL :

 Technology-driven and knowledge-based economy with strong public finances, and a robust
financial sector.
 Facilitating ample opportunities for citizens, especially the youth, to fulfil their aspirations
 Providing strong impetus to growth and job creation

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 Strengthening macro-economic stability.
 Economic Empowerment of Women: Deendayal Antyodaya Yojana National Rural Livelihood
Mission has achieved remarkable success by mobilizing rural women into 81 lakh Self Help
Groups.
 PM VIshwakarma Kaushal Samman (PM VIKAS): package of assistance for Vishwakarma - financial
support, advanced skill training, knowledge of modern digital techniques and efficient green
technologies, brand promotion, linkage with local and global markets, digital payments, and
social security.
 Tourism: Promotion of tourism will be taken up on mission mode, with active participation of
states, convergence of government programmes and public-private partnerships.
 Green Growth: Focus on green fuel, green energy, green farming, green mobility, green buildings,
and green equipment, and policies for efficient use of energy across various economic sectors.

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The Government has laid out 7 Priorities of this Budget. This complements each other and act as
“Saptarishi” guiding through the Amrit Kaal.

PRIORITY 1 : INCLUSIVE DEVELOPMENT

Under the Government’s philosophy of ‘Sab ka Sath Sabka Vikas’, this priority covers farmers,
women, youth, OBCs, Scheduled Castes, Scheduled Tribes, Divyangjan and economically weaker
sections, and overall priority for the underprivileged.

1. Agriculture and Cooperation

Digital public infrastructure to be set up to enable inclusive, farmer-centric solutions through
relevant information services for crop planning and health, improved access to farm inputs,
credit, and insurance, help for crop estimation, market intelligence, and support for growth of
agri-tech industry and start-ups.
2. Agriculture Accelerator Fund
An Agriculture Accelerator Fund will be set-up to encourage agri-startups by young entrepreneurs
in rural areas, with an aim of bringing innovation and affordable solutions for challenges faced by
farmers.
3. Enhancing productivity of cotton crop
With the aim of enhancing the productivity of extra-long staple cotton, the Government will
adapt a Public Private Partnerships (PPP) model collaborating farmers, states, and industry. This
is likely to result in supplies, extension services, and market linkages.
4. Atmanirbhar Horticulture Clean Plant Program
With an estimated outlay of Rs.2,200 crore, the program is likely to boost availability of disease
free, quality planting material for high value horticulture crops.
5. Global Hub for Millets: ‘Shree Anna’
Government to set up an Indian Institute of Millet Research at Hyderabad to support the Centre
of Excellence for sharing best practices, research and technologies at the international level.
6. Agriculture Credit
The agriculture credit target will be increased to Rs.20 lakh crore with focus on animal husbandry,
dairy and fisheries.
7. Fisheries
A new sub scheme of PM Matsya Sampada Yojana is launched with a target of investment of
Rs.6,000 crore to enable activities of fishermen, fish vendors, and micro & small enterprises,
improve value chain efficiencies, and expand the market.

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8. Cooperation
A new Ministry of Cooperation was formed with a mandate to realise the vision of ‘Sahakar Se
Samriddhi’. To realise this vision, the government has already initiated computerisation of 63,000
Primary Agricultural Credit Societies (PACS) with an investment of Rs.2,516 crore. The
Government aims to decentralise storage capacity.
9. Health, Education and Skilling
10.The government aims to set up new 150 nursing colleges, A Mission to eliminate Sickle Cell
Anaemia by 2047 will be launched, medical research facilities at select ICMR labs will be made
available for public and private medical college faculties and private sector R&D teams, a new
program to promote research and innovate in pharma industry, dedicated multidisciplinary
courses for medical devices will be supported, The District Institutes of Education and Training
will be developed as vibrant institutes of excellence for the purpose of training teachers, National
Digital Library for children and adolescents to be set-up and to encourage reading by making
regional language and English books available.
11.
PRIORITY 2 : REACHING THE LAST MILE

To sharpen the focus to the objective of ‘reaching last mile’ the government has formed the
ministries of AYUSH, Fisheries, Animal Husbandry and Dairying, Skill Development, Jal Shakti and
Cooperation.
1. Aspirational Districts and Blocks Programme
The Government has recently launched the Aspirational Block Programme covering 500 blocks
for saturation of essential government service across multiple domains such as health, nutrition,
education, agriculture, water resources, financial inclusion, skill development, and basic
infrastructure.
2. Pradhan Mantri PVTG Development Mission
An amount of Rs.15,000 crore will be made available to implement the Mission in the next three
years under the Development Action Plan for the Scheduled Tribes. This includes basic facilities
such as safe housing, clean drinking water and sanitation, improved access to education, health
and nutrition, road and telecom connectivity, and sustainable livelihood opportunities.
3. Eklavya Model Residential Schools
In the next 3 years, centre will recruit 38,800 teachers and support staff for the 740 Eklavya Model
Residential Schools, serving 3.5 lakh tribal students.
4. Water for Drought Prone Region
In the drought prone central region of Karnataka, central assistance of Rs.5,300 crore will be given
to Upper Bhadra Project to provide sustainable micro irrigation and filling up of surface tanks for
drinking water.

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5. PM Awas Yojana
The outlay for PM Awas Yojana is being enhanced by 66% to over Rs.79,000 crore.
6. Support for poor prisoners
Financial support to be provided to the poor prisoners who cannot afford penalty or bail amount.

PRIORITY 3 : INFRASTRUCTURE AND DEVELOPMENT

Post the pandemic, private investments are going up. The Budget takes the lead to ramp up the
cycle of investment and job creation.
1. Capital Investment as driver of growth and jobs:
The Government has planned a Capital Investment outlay of Rs.10 Lakh Crores, (~3.3% of GDP),
an increase of ~3 times the outlay in 2019-2020. This substantial increase is central to the
government’s efforts to enhance growth potential and job creation, private investments and
provide a cushion against global headwinds.
2. Effective Capital Expenditure:
Direct capital investment is complemented through Grants-in-Aid to the States. The effective
Capital Expenditure of the Centre is budgeted at Rs.13.7 lakh crore (~4.5% of GDP).
3. Support to State Governments for Capital Investment:
50 year interest free loan to State Governments to continue for one more year to spur investment
in infrastructure and to incentivize for complimentary policy actions, with an outlay of Rs.1.3 Lakh
crore.
4. Enhanced opportunities for private investment in Infrastructure:
The newly established Infrastructure Finance Secretariat will assist stakeholders for more private
investment in sectors which are predominantly dependent on public resources.
5. Railways:
Capital outlay of Rs.2.40 Lakh Crore. This outlay is about 9 times the outlay made in 2013-14.
6. Logistics:
100 critical transport infrastructure projects, for last and first mile connectivity have been
identified. This will be taken up on priority with investment of Rs.75,000 crore, including
Rs.15,000 crore from private sources.
7. Regional Connectivity:
50 additional airports, helipads, water aerodromes and advance landing grounds will be revived
for improving regional air connectivity.

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8. Sustainable Cities of Tomorrow:
States to be encouraged for efficient use of land resources, adequate resources for urban
infrastructure, transit-oriented development, enhanced availability and affordability of urban
land, and opportunities for all.
9. Urban Infrastructure Development Fund:
Urban Infrastructure Development Fund (UIDF) will be established through use of priority sector
lending shortfall. It will be managed by National Housing Bank to create infrastructure in Tier 2
and Tier 3 cities. Rs.10,000 crore per annum is sanctioned for the same.
10. Urban Sanitization:
All cities and towns will be enabled for 100% mechanical desludging of septic tanks and sewers
to transition from manhole to machine-hole mode. Enhanced focus on dry and waste
management.

PRIORITY 4 : UNLEASHING THE POTENTIAL

“Good Governance is the key to a nation’s progress. Our government is committed to providing a
transparent and accountable administration which works for the betterment and welfare of the
common citizen,” said Hon’ble Prime Minister.
1. Mission Karmayogi:
Centre, States and Union Territories are making and implementing capacity-building plans for civil
servants. The government has also launched an integrated online trading platform, iGOT
Karmayogi to provide continuous learning and training opportunity to government employees.
Furthermore, to enhance ease of doing business, more than 39,000 compliances are reduced and
more than 3,400 legal provisions have been decriminalized. Jan Vishwas Bill is introduced to
amend 42 Central Acts.
2. Centres of Excellence for Artificial Intelligence:
For the vision of “Make AI in India” and “Make AI work for India” three centres of excellence will
be set up in top educational institutions. This will galvanize an effective AI ecosystem and nurture
quality human resources in the field.
3. National Data Governance Policy:
This will enable access to anonymized data.
4. Simplification of Know Your Customer (KYC) Process:
The KYC process will be simplified adopting a ‘risk-based’ instead of ‘one size fits all’ approach.
5. One stop solution for identity and address updating:
A one stop solution for reconciliation and updating of identity and address of individuals
maintained by various government agencies, regulators and regulated entities will be established
using DigiLocker service and Aadhaar as foundational identity.

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6. Common Business Identifier:
Permanent Account Number (PAN) will be used as common identifier for all digital systems of
specified government agencies. This will bring ease of doing business, and it will be facilitated
through a legal mandate.
7. Unified Filing Process:
The system will obviate the need for separate submission of same information to different
government agencies.
8. Vivad se Vishwas I – Relief for MSMEs:
Failure by MSMEs to execute contracts during Covid period, 95% of forfeited amount related to
bid or performance security will be returned to them by government and government
undertakings.
9. Vivad se Vishwas II – Settling Contractual Disputes:
Where arbitral award is under challenge in a court, a voluntary settlement scheme with
standardized terms will be introduced. This will be done by offering graded settlement terms
depending on pendency level of the dispute.
10. State Support Mission:
The mission of NITI Aayog will be continued for three years for collective efforts towards national
priorities.
11. Result Based Financing:
The financing of select schemes will be changed, on a pilot basis, from ‘input-based’ to ‘result-
based’.
12. E-Courts:
For efficient administration, Phase – 3 of the E-Courts project will be launched with an outlay of
Rs.7,000 crores.
13. Fintech Services:
To enable more Fintech innovative services, the scope of documents available in DigiLocker for
individuals will be expanded.
14. Entity DigiLocker:
Will be used by MSMEs, large business and charitable trusts. This will be towards storing and
sharing documents online securely, whenever needed, with various authorities, regulators, banks
and other business entities.
15. 5G Services:
100 labs for developing applications using 5G services will be set up in engineering institutions to
realise a new range of opportunities, business models and employment potential.

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16. Lab Grown Diamonds:
Lab Grown Diamonds (LGD) is a technology-and innovation driven emerging sector with high
employment potential. These environment-friendly diamonds which have optically and
chemically the same properties as natural diamonds. A research and development grant will be
provided to one of the IITs for 5 years.

PRIORITY 5 : GREEN GROWTH

Hon’ble Prime Minister has given a vision for ‘LiFE’ or Lifestyle for Environment, to spur a
movement of environmentally conscious lifestyle. India is moving towards net zero carbon
commission by 2070.
1. Green Hydrogen Mission:
National Green Hydrogen Mission launched with an outlay of Rs.19,700 crores, will facilitate
transition to low carbon intensity, reduce dependence on fossil fuel imports, and make the court
assume technology and market leadership. Target is to reach an annual production of 5 MMT by
2030.
2. Energy Transition:
Budget provide Rs.35,000 crore for priority capital investments towards energy transition and net
zero objectives, and energy security by Ministry of Petroleum and Natural Gas.
3. Energy Storage Projects:
Battery Energy Storage Systems with capacity of 4,000 MWH will be supported with Viability Gap
Funding.
4. Renewable Energy Evacuation:
Inter-State transmission system for evacuation and grid integration of 13GW renewable energy
from Ladakh will be constructed with investment of Rs.20,700 crore including central support of
Rs.8,300 crore.
5. Green Credit Program:
Green Credit Program will incentivize environmentally sustainable and responsive actions by
companies, individuals and local bodies, and help mobilize additional resources for these
activities.
6. PM-PRANAM:
“PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth”
will be launched to promote alternative fertilizers and balanced use of chemical fertilizers.
7. GOBARdhan scheme:
500 new ‘waste to wealth’ plants under Galvanizing Organic Bio-Agro Resources Dhan scheme
will be established for promoting circular economy. These will include 200 compressed biogas
plants and 300 community or cluster-based plants at total investment of Rs.10,000 crore.

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8. Bhartiya Prakritik Kheti Bio-Input Resources Centres:
Facilitate 1 crore farmers to adopt natural farming over the next 3 years.
9. MISHTI:
‘Mangrove Initiative for Shoreline Habitats and Tangible Incomes’, MISHTI, will be taken up for
mangrove plantation along the coastline and on salt pan lands.
10. Amrit Dharohar:
Scheme to encourage optimal use of wetlands, and enhance bio-diversity, carbon stock, eco-
tourism opportunities and income generation for local communities.
11. Coastal Shipping:
Lower cost mode of transport, both for passengers and freight. It will be promoted through PPP
mode with viability gap funding.
12. Vehicle Replacement:
Funds allocated to scrap old vehicles and ambulances of the Central Government. Support to be
extended to States as well.

PRIORITY 6 : YOUTH POWER

To empower the youth help the ‘Amrit Peedhi’ realize their dreams, the government has
formulated the National Education Policy.
1. Pradhan Mantri Kaushal Vikas Yojana 4.0
The scheme will be launched to skill lakhs of youth within the next three years through on-job
training, industry partnership and alignment of courses. The scheme will also cover new age
courses for Industry 4.0 like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft
skills.
2. Skill India Digital Platform
The launch of digital platform for enabling demand-based formal skilling, linking with employers
including MSMEs, and facilitating access to entrepreneurship schemes.
3. Tourism
The government plans to innovate and integrate the tourism industry by adding aspects such as
physical connectivity, virtual connectivity, tourist guides, high standards for food streets and
tourists’ security, all the relevant aspects would be made available on an App to enhance tourist
experience. For integrated development of theme-based tourist circuits, the ‘Swadesh Darshan
Scheme’ was also launched.
4. Unity Mall
Setting up malls at the most prominent tourism place or financial capital of the state and promote
ODOP (One District, One Product), GI Products and other handicraft products.

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PRIORITY 7 : FINANCIAL SECTOR

Through Government’s reforms in the financial sector and innovative use of technology which has
led to financial inclusion, better and faster service delivery, ease of access to credit and participants
in financial markets.
1. Credit Guarantee for MSMEs
The revamped scheme will take into effect from April 01, 2023 through financial inclusion of
Rs.9,000 crore in the corpus, which will enable additional collateral-free guaranteed credit of Rs.2
lac crore. Further, the cost of credit will be reduced by around 1%.
2. National Financial Information Registry
A national financial information registry will be set up to serve as the central repository of
financial and ancillary information. This will facilitate efficient flow of credit, promote financial
inclusion, and foster financial stability.
3. Financial Sector Regulations
To simplify, ease and reduce cost of compliance, financial sector regulators will be requested to
carry out a comprehensive review of existing regulations.
4. GIFT IFSC
Delegating powers under the SEZ Act to IFSCA to avoid dual regulation, setting up a single window
IT system for registration and approval from IFSCA, SEZ authorities, GSTN, RBI, SEBI and IRDAI,
permitting acquisition financing by IFSC Banking Units of foreign banks, establishing a subsidiary
of EXIM Bank for trade re-financing, Recognizing offshore derivative instruments as valid
contracts.
5. Data Embassy
Setting up data embassy in GIFT IFSC for countries who are looking for digital continuity solutions.
6. Capacity Building in Securities Market
SEBI will be empowered to develop, regulate, maintain and enforce norms and standards for
education in the National Institute of Securities Markets and to recognize award of degrees,
diplomas and certificates
7. Central Data Processing Centre
A Central Processing Centre will be setup for faster response to companies through centralized
handling of various forms filed with field offices under the Companies Act.
8. Reclaiming of shares and dividends
An integrated IT portal will be established for investors to reclaim unclaimed shares and unpaid
dividends from the Investor Education and Protection Fund Authority with ease
9. Digital Payments
Fiscal support for digital payments will continue in 2023-24.

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10. Azadi Ka Amrit Mahotsav Mahila Samman Bachat Patra
A one-time new small savings scheme, Mahila Samman Savings Certificate, will be made available
for a two-year period up to March 2025. This will offer deposit facility upto Rs.2 lakh in the name
of women or girls for a tenor of 2 years at fixed interest rate of 7.5% with partial withdrawal
option.
11. Senior Citizens
The maximum deposit limit for Senior Citizen Savings Scheme will be enhanced from Rs.15 lakh
to Rs.30 lakh. The maximum deposit limit for Monthly Income Account Scheme will be enhanced
from Rs.4.5 lakh to Rs.9 lakh for single account and from Rs.9 lakh to Rs.15 lakh for joint account.

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FISCAL MANAGEMENT & ESTIMATES

 Fiscal Management: The total expenditure has been estimated from Rs.41 lakh crore as per
revised Estimates 2022-23 to Rs.45 lakh crore in 2023-24. However total receipts other than
borrowings is expected to increase from Rs.24.3 lakh crore to Rs.27.2 lakh crore in 2023-24. As a
result, the Fiscal Deficit is estimated at 5.9% of GDP for 2023-24, 50 bps lower than 2022-23
revised estimate. FM has reiterated that it intends to bring the fiscal deficit below 4.5% of GDP
by 2025-26.
 Financing of fiscal deficit: Net market borrowings are estimated at Rs.11.8 lakh crore. The balance
financing is expected to come from small savings and other sources
 State fiscal deficit: FM has kept a cap on fiscal deficit on states to be 3.5% of GSDP, of which 0.5%
will be linked to power sector reforms.
 GDP Growth: Nominal GDP for 2023-24 is projected at Rs.301.8 lakh crore, growth of 10.5% over
the estimated Nominal GDP for 2022-23. Nominal GDP growth is estimated at 15% for 2022-23.

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DIRECT TAXES

The Direct Tax proposals seek to maintain tax continuity and stability, to simplify and rationalise
various provisions in order to reduce compliance burdens, to promote entrepreneurial spirit, and
to provide tax relief to citizens.

Better targeting of tax concessions

 To improve and enhance the targeting of tax concessions and exemptions, it is proposed to limit
the deduction from capital gains on residential property investment under sections 54 and 54F
to Rs.10 crores.
Co-operation

 In realizing the prime ministers goal of “Sahkar se Samriddhi”, various proposals for the
cooperative sector have been introduced:
1. New co-operatives that begin manufacturing activities before March 31, 2024, will benefit
from a lower tax rate of 15%.
2. Is it proposed to enable sugar co-operatives to claim payments made to sugarcane farmers
prior to the assessment year 2016-17 as expenditure. This is expected to provide them with
nearly Rs.10,000 crores in relief.
3. It is proposed to increase the cash deposit and loan limits for Primary Agricultural Co-
operative Societies (PACS) and Primary Co-operative Agriculture and Rural Development
Banks to Rs.2 lakhs per member (PCARDBs).
MSMEs and Professionals

 Presumptive taxation is available to micro enterprises with a turnover of up to Rs.2 crores and
professionals with a turnover of up to Rs.50 lakhs.
 It is further proposed to provide enhanced limits of Rs.3 crores and Rs.75 lakhs, respectively, to
taxpayers with cash receipts of no more than 5%.
Rationalisation

 The income of authorities, boards, and commissions established by Union or State statutes for
the purpose of housing, development of cities, towns, and villages, is proposed to be exempt
from income tax.
 Eradicating the minimum TDS threshold of Rs.10,000 and clarifying the taxability of online
gaming.
 TDS on the taxable portion of EPF withdrawals in non-PAN cases will be reduced from 30% to
20%.
Start-Ups

 It is proposed to extend the date of incorporation from March 31, 2023 to March 31, 2024 for the
income tax benefits to start-ups.

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 It is proposed to extend the benefit of carrying forward losses on changes in shareholding of start-
ups from seven to ten years after incorporation.

PERSONAL INCOME TAX

5 major developments regarding Personal Income Tax :

 Rebate – Presently, those earning up to Rs.5 lakhs do not pay income tax under either the old or
new tax regimes. The new rebate limit is increased to Rs.7 lakhs in the new tax regime, therefore,
persons with income up to Rs.7 lakhs will not have to pay tax.
 Middle Class Persons :
Old Tax Regime New Tax Regime (Previous) New Tax Regime (Revised)
Tax Slab Regime Tax Slab Regime Tax Slab Regime
0-2.5 lakhs NIL 0-2.5 lakhs NIL 0-3 lakhs NIL
2.5-5 lakhs 5% 2.5-5 lakhs 5% 3-6 lakhs 5%
5-10 lakhs 20% 5-7.5 lakhs 10% 6-9 lakhs 10%
Above 10 lakhs 30% 7.5-10 lakhs 15% 9-12 lakhs 15%
10-12.5 lakhs 20% 12-15 lakhs 20%
12.5-15 lakhs 25% Above 15 lakhs 30%
Above 15 lakhs 30%

This will provide significant relief to all taxpayers under the new regime. An individual earning Rs.9
lakhs per year will be required to pay only Rs.45,000. This is only 5% of his or her annual income. It is
a 25% reduction from what he or she is required to pay now, i.e. Rs.60,000.

 Salaried Class and Pensioners - It is proposed that the standard deduction benefit be extended to
the new tax regime. Each salaried individual earning Rs.15.5 lakhs or more will thus benefit by
Rs.52,500.
 Highest Tax Rate – Presently the highest tax rate in the country is 42.7%. It is proposed to reduce
the surcharge rate from 37% to 25% in the new tax regime, thereby, resulting in the maximum
tax rate reduced to 39%.
 Non-government salaried employees – It is proposed to increase the tax exemption on leave
encashment for non-government salaried employees from Rs.3 lakhs to Rs.25 lakhs.

The new tax regime will now be considered as the default tax regime.

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INDIRECT TAXES

The indirect tax proposals aim to boost exports, domestic manufacturing, domestic value
addition, mobility, and green energy. The number of basic customs duty rates on goods were
reduced, resulting in changes in duties, cess and surcharges on items like bicycles, automobiles
and toys.

Chemicals

 Basic customs duty is proposed to be exempt on denatured ethyl alcohol.

 Additionally, this will aid in the effort to move to a cleaner energy source and support the Ethanol
Blending Programme.
 To increase the competitiveness of the domestic fluorochemicals industry, the basic customs duty
on acid grade fluorspar is being reduced from 5% to 2.5%. Additionally, it is proposed to reduce
the basic customs duty on crude glycerin used to make epicholorhydrin from 7.5% to 2.5%.
Cigarettes

 16% increase in NCCD (National Calamity Contingent Duty) on certain cigarettes.

Compounded Rubber

 To combat duty evasion, the basic customs duty rate on compounded rubber is being raised from
10% to 25% or USD 30/kg, whichever is lower, in line with the rate on natural rubber other than
latex.
Electrical

 To encourage manufacturing of electric kitchen chimneys, the basic customs duty on electric
kitchen chimneys is being raised from 7.5% to 15%, while the duty on heat coils for these is
proposed to be reduced from 20% to 15%.
Electronics

 It is proposed to reduce customs duties on the import of certain components and inputs, such as
camera lenses, and to extend the concessional duty on lithium-ion cells for batteries for another
year in order to further increase domestic value addition in the production of mobile phones.
 Furthermore, to promote value addition in the manufacturing of televisions, basic custom duty
on parts like open cells of television panels is reduced to 2.5%.
Green Mobility

 In order to avoid cascading effect of taxes on blended compressed natural gas, excise duty is
exempt on GST-paid compressed biogas contained within.
 Customs duty exemption is being extended to imports of capital goods and machinery required
for the manufacture of lithium-ion cells for batteries used in electric vehicles, to further boost
green mobility.

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Lab-grown Artificial Diamonds

 Lab-grown diamonds are environmentally friendly diamonds as compared to natural diamonds.

Lab-created diamonds, unlike mined diamonds, do not pollute the air or water.
 Basic customs duty is proposed to be reduced on seeds used in their manufacture. This will reduce
import dependency and facilitate export promotion.
Marine Products

 Marine products experienced the highest export growth in the previous fiscal year, benefiting
farmers in the country's coastal states.
 To improve the export competitiveness of marine products, particularly shrimps, duties on key
inputs for domestic shrimp feed manufacturing are being reduced.
Metals & Precious Metals

 To ensure that secondary copper producers, who are primarily in the MSME sector, have access
to raw materials, the 2.5% concessional basic customs duty on copper scrap is also being
maintained.
 It is proposed to increase the import duty on silver dore and bars in order to align them with that
on gold and platinum.

February 2023 | 19
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