Nirmala Sitharaman, the Union Finance Minister, is set to unveil the Union Budget 2023 for this year’s financial year on February 1, 2023. This will mark her fifth consecutive budget presentation, during which she will present financial statements and tax proposals.
The Finance Ministry is said to be considering measures to provide relief to the middle class in the last full budget of the Narendra Modi government before the 2024 General Elections. As the 2023 Budget approaches, common taxpayers, including salaried employees and senior citizens, have high hopes for the government’s financial plan. We are expecting the Union Budget 2023 Income Tax Reliefs from the Government in this upcoming fiscal year.
Union Budget 2023 Important Dates:
|Event Name||Union Budget 2023|
|Launched by||Ministry of Finance and Government of India|
|Release by||Smt Nirmala Sitharaman|
|India Budget 2023 Date||1st February 2023|
|India Budget Portal||indiabudget.gov.in|
Budget 2023 Key Expectations:
As the date draws near, anticipation is high among the public. Despite India’s optimistic internal growth forecast, there are still potential threats such as geopolitical risks, inflation and slow global economic growth. As the budget session approaches, various industries including manufacturing, real estate, education technology, agriculture, hospitality, banking, telecommunications, and small and medium-sized enterprises have conveyed their hopes for this year’s budget. The following are among the key expectations for the upcoming Union Budget in India:
➤ It is anticipated that the standard deduction for salaried individuals as outlined in section 16 of the Finance Act will be increased from 50,000 rupees to 75,000 rupees, as it has remained unchanged since 2019 and due to the effects of inflation.
➤ The upcoming Union Budget is expected to place a strong emphasis on job creation initiatives, as many families are struggling financially due to employment losses caused by the pandemic. To create new opportunities for livelihoods, the government is expected to introduce changes to key industries such as manufacturing, technology, and infrastructure.
➤ The government is reportedly considering raising the basic tax exemption limit from 2.5 lakh rupees to 5 lakh rupees. This would mean that individuals earning up to 5 lakh rupees would not be affected by the change and would not be required to submit mandatory tax returns, as they are currently eligible for a rebate under section 87A.
➤ The paradigm of savings and investment may shift by increasing the limit under Section 80C, possibly between 2 lakh rupees and 2.5 lakh rupees. Additionally, the existing limit of 25,000-50,000 rupees under Section 80D, which pertains to medical treatments and insurances, may be reviewed and increased in line with inflationary growth.
➤ The insurance sector is calling for health and life insurance to be exempt from GST in the upcoming Union Budget 2023.
➤ The banking sector is expected to receive a significant increase in capital funding in 2023, as it is expected to play a major role in providing funds for government capital expenditures. However, the sector is more focused on the government’s approach to privatizing Public Sector Banks (PSBs), which is expected to improve operational efficiency and promote greater financial inclusion in the country.
➤ The classification of income from stock market transactions is considered overly complex, with different classifications like speculative business income, non-speculative income, long-term and short-term capital gains. Taxpayers hope for simplification of taxation and alignment of multiple tenures for different asset classes or the implementation of a unified tax rate for both long and short-term assets.
➤ The PHD Chamber of Commerce and Industry is calling for a 30-40% increase in budget allocation for healthcare, given the increasing healthcare needs.
➤ The residential real estate market in India appears to be on the rise after a period of stagnation, but rising interest rates and inflation have had a negative effect on the purchasing power of potential homebuyers. To counteract this, industry experts have suggested raising the tax deduction limit on home loan interest from 2 lakh rupees to 5 lakh rupees and extending the benefit under Section 80 EEA for an additional two years.
Budget 2023 Income Tax Relief (Expected)
- Tax Reliefs On Home Loan Interest
- Increase In The Basic Exemption Limit
- Increase In Limit Under Section 80C
- Increase In Tax Deductions Under 80D
- PM Awas Yojana’s budget can also be increased which will eventually lead to a house for every individual in India.
- The standard Deduction limit can be increased to Rs 75,000
It is expected that FM Sitharaman will attempt to strike a balance by addressing some of the common taxpayer’s demands while also prioritizing important issues such as job creation, GDP growth, fiscal deficit, and increased capital expenditure for sectors such as infrastructure and manufacturing.
Budget 2023 is likely to have significant effects on the nation’s economy and society, and will be closely monitored by various groups such as industry leaders, investors, and the general public. It will also establish the government’s financial priorities and have a major impact on the economy and society as a whole.