Budget 2023: New income tax slabs, savings scheme for women, hike in capital expenditure
Salaried persons earning up to Rs 7 lakh annually will not have to pay any income tax under the new tax regime.
The limit on income tax rebate will be extended to an annual income of Rs 7 lakh from the current limit of Rs 5 lakh, Finance Minister Nirmala Sitharaman said in her Budget speech on Wednesday. The government also announced new tax slabs:
- Rs 3 lakh - Rs 6 lakh - 5%
- Rs 6 lakh to Rs 9 lakh – 10%
- Rs 9 lakh to Rs 12 lakh – 15%
- Rs 12 lakh to Rs 15 lakh – 20%
- Above Rs 15 lakh – 30%
The government will aim to limit fiscal deficit for the financial year 2023-’24 to 5.9% of the GDP, Sitharaman said in her speech. The target for this year has been retained at 6.4%. The finance minister also said that the government will increase capital expenditure by 33% to Rs 10 lakh crore in the next financial year.
The government has also announced a new small savings scheme for women, under which they can deposit up to Rs 2 lakh for a two-year tenure till March 2025. The scheme will have a fixed interest rate of 7%.
This was the last full Budget of the Modi government before the Lok Sabha elections in 2024.
Here are the top updates of the day:
5.01 pm: The finance minister says that the budget “gives a big leg-up to capital investment, attends to MSMEs as they are the engine of growth, sustains capital investment and also gives a push to the private sector while also giving tax reliefs to individuals and middle class”.
4.55 pm: Sitharaman says the government is looking at a futuristic fintech sector and workers will be trained through Industrial Revolution 4.0. She adds that the government is trying to unleash the digital economy in various walks of life.
4.51 pm: Sitharaman clarifies that the government is not forcing anyone to move to the new tax regime. Those who are in the old regime can continue being so. However, she saysthat the new tax regime is more attractive given the increased rebates and deductions.
She adds that the budget is aimed to rationalise customs duties, to ensure personal income tax benefits for middle class.
More details on the new tax regime.
4.41 pm: During the post-Budget press conference, Finance Minister Nirmala Sitharaman says the four emphasis points of this budget are on empowering women, action plan for tourism, initiatives for Vishvakarmas (artisans) and green growth.
4:40 pm: Union Finance Minister Nirmala Sitharaman conducts post-budget press conference.
4.15 pm: Delhi Chief Minister Arvind Kejriwal says inflation will increase due to the budget. Kejriwal also says there is no plan to tackle unemployment.
“Step-motherly treatment again with the people of Delhi,” he adds. “The people of Delhi paid more than Rs 1.75 lakh crore income tax last year. Out of that only Rs 325 crore was given for the development of Delhi. This is a gross injustice to the people of Delhi.”
4.04 pm: Riding on the budget announcements, Sensex closes on a positive note after tumbling down in the late session. The 30-share index ends at 59,708.08, gaining 158.18 points, or 0.27% after falling to 58,842.08 points around 3 pm.
Nifty 50, meanwhile, closes at 17,616.30, down by 45.85 points, or 0.26%.
3.15 pm: Congress General Secretary KC Venugopal says the budget has not addressed the issues of unemployment and price rise, reports ANI.
“It only had fancy announcements that were made earlier too but what about implementation?” he adds. “Only insurance companies benefited from PM Kisan Yojana not farmers.”
3.11 pm: West Bengal Chief Minister Mamata Banerjee calls the Union Budget anti-people, reports PTI.
“It will benefit only one class of people,” she adds. “This Budget will not help address the country’s unemployment issue. It has been prepared with an eye on the 2024 Lok Sabha elections. The changes in the income tax slabs will not help anyone.”
2.43 pm: Congress General Secretary (communicaitons) criticises this year’s budget.
“Last year’s Budget drew applause for allocation towards agriculture, health, education, MGNREGA and welfare of SCs,” he tweets. “Today the reality is evident. Actual expenditure is substantially lower than budgeted. This is Modi’s OPUD strategy of headline management – Over Promise, Under Deliver.”
2.41 pm: Experts say the budget fell short of a major boost in the health sector.
“This is a disappointing budget,” says Rajiv Nath, a member of the Association of India Medical Device Industry. “The government has not announced any measures to help end the 80-85% import dependence forced upon India and an ever increasing import bill of over Rs 63,200 crore.”
He adds: “The only positive announcement was plans for skilling of manpower for manufacturing of medical technologies.”
2.40 pm: The government is also planning to start a new pharma programme to promote research, development and training programmes to create skilled manpower in R&D sector for the medical device industry.
2.38 pm: The government announces establishing 57 new nursing colleges. Since 2014, the government has the constriction of 157 medical colleges, Nirmala Sitharaman says in her budget speech.
2.36 pm: Nirmala Sitharaman announces that the government is planning to launch a sickle cell anaemia elimination programme aimed at eliminating the disease by 2047. Sickle cell anaemia is a hereditary blood disorder that affects red blood cell production, turning it into sickle shape, and can result in death if not treated.
2.34 pm: The budget for the National Health Mission, an umbrella programme to monitor various initiatives to control diseases and lifestyle problems, has been cut to Rs 36,785 crore this year from Rs 37,165 crore in 2022-’23.
2.33 pm: Budget estimate for health sector has been increased to Rs 88,956 crore from Rs 86,606 crore in 2022-’23. The revised estimates for 2022-’23, however, dips to Rs 77,351 crore.
2.20 pm: Prime Minister Narendra Modi says the budget will fulfil dreams of the aspirational society, including the poor, the middle-class and farmers, reports ANI.
“First budget of Amrit Kaal will build a strong foundation for building a developed India,” he adds.
1.38 pm: BJP MP Tejasvi Surya says Nirmala Sitharaman’s Rs 5,300 crore allocation for the Upper Bhadra Irrigation Project, meant to benefit the drought-prone areas of central Karnataka, “will be a game changer for the state”.
1.30 pm: Congress leader Shashi Tharoor says there was no mention of the Mahatma Gandhi National Rural Employment Guarantee Scheme, or MGNREGA, employment and inflation in Nirmala Sitharaman’s Budget speech. “Some fundamental questions remained to be answered,” he adds.
1.06 pm: New tax slabs announced in Budget 2023-’24:
12.40 pm: Those earning up to Rs 7 lakh will not have to pay any income tax under the revised structure, announces Finance Minister Nirmala Sitharaman.
12.38 pm: Finance Minister Nirmala Sitharaman announces new tax slabs under the new tax regime.
- Rs 3 lakh - Rs 6 lakh - 5%
- Rs 6 lakh - Rs 9 lakh - 10%
- Rs 9 lakh - Rs 12 lakh - 15%
- Rs 12 lakh - Rs 15 lakh - 20%
- Above Rs 15 lakh - 30%
12.22 pm: Rebate limit in personal income tax increased from Rs 5 lakh to Rs 7 lakh, says Finance Minister Nirmala Sitharaman.
12.16 pm: One hundred labs for developing apps using 5G services will be set up in engineering institutions, announces finance minister.
12.12 pm: Finance minister announces a cut in customs duty in imports of mobile phone parts, camera lens and kitchen chimneys.
12.05 pm: Fiscal deficit for the financial year 2023-’24 estimated to be 5.9% of the GDP, says finance minister
12.03 pm: Finance minister announces a new small savings scheme for women called the Mahila Samman Saving Certificate. Under the scheme, women can deposit up to Rs 2 lakh for a two-year tenure till March 2025. The scheme will have a fixed interest rate of 7%.
12.01 pm: Finance minister proposes setting up of a national digital library.
11.59 am: Finance minister lays down seven priority areas for Budget 2023-’24
11.55 am: For enhancing ease of doing business, more than 39,000 compliances have been done away with and over 3,400 legal provisions have been decriminalised, says finance minister.
11.53 am: Over the next 3 years, one crore farmers will get assistance to adopt natural farming, finance minister says in her Budget 2023 speech.
11.49 am: Three centres of Excellence for Artificial Intelligence will be set up in top educational institutions, announces Finance Minister Nirmala Sitharaman.
11.47 am: For business establishments required to have Permanent Account Number, the PAN number will be used as a common identifier for all digital systems of specified government agencies, says finance minister.
11.41 am: The 50-year interest free loans to state governments will be extended for one more year, says Nirmala Sitharaman.
11.39 am: Digital payments of more than Rs 126 lakh crore were done in 2022, says finance minister.
11.36 am: Allocation for the railways will be Rs 2.4 lakh crore for the financial year 2023-’24, says finance minister.
11.34 am: In the next three years, Centre will recruit 38,800 teachers and support staff for 740 Eklavaya Model Residential Schools serving 3.5 lakh tribal students, says finance minister.
11.29 am: Capital expenditure outlay to be increased by 33% to Rs 10 lakh crore, says finance minister. This amount will be 3.3% of the GDP.
11.28 am: Outlay for PM Awas Yojana to be increased by 66% to over Rs 79,000 crore this year, says finance minister.
11.26 am: Assistance will be given to traditional artisans and craftspeople under the PM Vishwa Karma Kaushal Samman, says finance minister.
11.20 am: Agriculture credit target to be increased to Rs 20 lakh crore, says finance minister.
11.16 am: Budget 2023 has seven priorities called ‘Saptarishi’ – inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth and financial sector, says finance minister.
11.15 am: Finance Minister Nirmala Sitharaman says an Agriculture Accelerator Fund will be set up to focus on agriculture-related startups.
11.14 am: Promotion of tourism will be taken up on mission mode, says finance minister in her Budger speech.
11.10 am: Per capita income of Indians has more than doubled to Rs 1.97 lakh since 2014, says finance minister.
11.09 am: “The world has recognised India as a bright star, our growth for current year is estimated at 7%, this is the highest among all major economies,” says Finance Minister Nirmala Sitharaman.
11.07 am: The Indian economy is on the right track, heading to a bright future, says Finance Minister Nirmala Sitharaman as she starts her Budget speech.
11 am: Nirmala Sitharaman starts her Budget speech
10.56 am: Among the key points to watch out for in the Budget would be the allocation for the Union government’s welfare schemes such as the Mahatma Gandhi National Rural Employment Guarantee Scheme and the National Food Security Act.
Last year, the Centre had allocated Rs 73,000 crore for MGNREGA and Rs 2,06,831 crore for food subsidies in total. In December, the government had decided to merge the Pradhan Mantri Garib Kalyan Anna Yojana with the National Food Security Act till December 31, 2023.
10.50 am: Copies of the Budget document have been brought to Parliament ahead of the finance minister’s speech.
10.20 am: Prime Minister Narendra Modi has reached Parliament ahead of the Budget speech. A meeting of the Union Cabinet will be held shortly, ANI reported.
9.30 am: Finance Minister Nirmala Sitharaman meets President Droupadi Murmu at the Rashtrapati Bhavan.
9.17 am: Indian shares edge up ahead of the Budget announcements. The 30-share BSE Sensex was trading 443 points or 0.74% higher at 59,993, while the broader 50-share NSE Nifty was trading at 17,792, up 130 points or 0.73%.
9.05 am: Finance Minister Nirmala Sitharaman is at the Rashtrapati Bhavan ahead of her presentation of the last full Budget before the general elections in 2024.
8.58 am: Activists say the minimum budget allocation for Mahatma Gandhi National Rural Employment Guarantee Act should be at least Rs 2.72 lakh crore for the upcoming financial year 2023-’24.
MGNREGA is a national social security scheme meant to guarantee at least 100 days of unskilled manual work in a year.
8.33 am: The Bharatiya Janata Party has planned to start a 12-day nationwide campaign today to make citizens aware of the “pro-people” measures that are to be announced in the Budget, PTI reports.
8.15 am: Recent findings by non-profit group Oxfam showed that India’s top 1% owned more than 40.5% of its total wealth in 2021, while the bottom 50% of the population only accounted for around 3% of it.
Oxfam had called on Finance Minister Nirmala Sitharaman to levy a wealth tax on the ultra rich to tackle this “obscene” inequality. Read on.
8.05 am: Commenting on the Economic Survey, Congress MP P Chidambaram says that the document appears to have been “authored by someone who is navigating the journey looking only at the rear view mirror”.
He added: “The navigator [Chief Economic Advisor V Anantha Nageswaran] should have looked at the path ahead through the windshield and cautioned the driver [Finance Minister Sitharaman] on the pitfalls and how to negotiate them.”
The survey forecast India’s gross domestic product could grow 6% to 6.8% year-on-year next fiscal year, down from 7% projected for the current year.
8.00 am: Prime Minister Narendra Modi, in his remarks at the beginning of the Budget Session on Tuesday, said that the attention of not just India, but the entire world, will be on today’s Budget. “In an unstable world, India’s Budget will not only attempt to fulfil the aspirations of the common people, but will make the ray of hope for the world brighter,” he said.
7.55 am: Union Finance Minister Nirmala Sitharaman will present the Union Budget 2023-’24 in Parliament on Wednesday at 11 am. This will be the fifth Budget that she will present in the Lok Sabha.