Highlights of the Budget 2023-24

Income Tax
1

Budget 2023-24 was a much-anticipated event by the citizens of India, as it was the last full-fledged budget by the current government before the 2024 general elections.

FM Nirmala Sitharaman presented the first budget of the “Amrit Kaal” stating 7 priorities (Saptarishi) as the economic turning point for India.

Income Tax Updates

  1. New tax Regime:

The New Tax Regime shall be set as the default regime. However, taxpayers can still opt for the old tax regime. There has been no change in the old tax regime.

There is no tax payable for income up to ₹7 lakhs as the rebate u/s 87A has been increased to ₹25,000 under the new tax regime.

  1. Revised slab rates for New Tax regime:

The income slabs under the new personal tax regime have been reduced from six to five as shown below. Also, the basic exemption limit has been increased from ₹2.5 lakhs to ₹3 lakhs.

Income Tax Rate
Upto 3 Lakhs Nil
<3 Lakhs - >6 Lakhs 5%
<6 Lakhs - >9 Lakhs 10%
<9 Lakhs - >12 Lakhs 15%
<12 Lakhs - >15 Lakhs 20%
Above 15 Lakhs 30%
  1. Standard Deduction

Introduction of standard deduction of ₹50,000 for Salaried individuals/ pensioners/ family pensioners under the new tax regime.

  1. Reduced surcharge rate

The highest surcharge rate has been reduced from 37% to 25% under the new tax regime.

  1. Increased limit for leave encashment

Leave encashment limit increased from ₹3 lakhs to 25 lakhs u/s 10(10AA) for non-government employees.

  1. Revision of turnover limit under the Presumptive Taxation Scheme
  • For businesses → Turnover limit increased to ₹3 cr from ₹2 cr
  • For professionals → Turnover limit increased to ₹75 lakhs from ₹50 lakhs
    (Note: If total cash receipts/payments are not more than 5% of receipts)
  1. Capital Gains
    • No capital gains will be attracted on the conversion of electronic gold to physical gold or vice versa
    • Exemption under section 54 and 54F (Investment in Residential House) capped to ₹10 Cr
  2. TDS updates
    • On winning from online games, the TDS threshold of ₹10,000 has been abolished. This means that a TDS of 30% u/s 194BA will be deducted from any payment from winning in online games.
    • TDS on withdrawal of EPF: Reduced to 20% from 30% for non-PAN holders.

Other Updates

  1. Introduction of a one-time small saving scheme “Mahila Samman Savings Certificate” for women till March 2025.
    • Deposits of up to ₹2 lakhs can be made for a period of 2 years with a fixed interest rate of 7.5%, along with the option of partial withdrawal.
  2. The limit for investment in Senior Citizen Savings Scheme is increased from ₹15 lakhs to ₹30 lakhs
  3. The limit for investment in Monthly Income Account Scheme (MIS) is increased from ₹4.5 lakhs to ₹9 lakhs for a single account and from ₹9 lakhs to ₹15 lakhs for a joint account.
  4. DigilLocker will become a one-stop solution for reconciliation and updating of identity & address across documents.
  5. In FY 2022, digital payment transactions rose to 76% and about 91% in value. Hence to be given a boost.
  6. Reduce the compliance burden: Processing time has been reduced from 93 days to 16 days, strengthening of the grievance redressal system & common ITR forms to be rolled out soon.

What’s the highlight of Budget 2023-24 for you?

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