Budget 2023 Highlights: Income Tax Slab Change And Other Key Takeaways

Finance Minister Nirmala Sitharaman offered tax relief under the new regime and increased capex spending to boost consumption and growth. Yet, she stuck to the fiscal consolidation path in Budget 2023.

The budget for FY24 will focus on seven priorities of inclusive development, reaching the last mile, agriculture and investment, unleashing potential, green growth, youth power and financial sector, Sitharaman said in her speech.

She, however, cut welfare spending and lowered subsidies.

Here are the key takeaways from the budget for 2023-24:

The finance minister provided the much-awaited relief to taxpayers by raising slabs. If you opt for the new tax regime, income of:

• Rs 0-3 lakh will attract nil tax.

• Above Rs 3 lakh and up to Rs 6 lakh to be taxed at 5%.

• Above Rs 6 lakh and up to Rs 9 lakh to be taxed at 10%.

• Above Rs 9 lakh and up to Rs 12 lakh to be taxed at 15%.

• Above Rs 12 lakh and up to Rs 15 lakh to be taxed at 20%.

• Above Rs 15 lakh to be taxed at Rs 30%.

The surcharge on those earning between Rs 50 lakh and Rs 1 crore from 37% to 25%.

The new tax regime will be the default choice, but citizens can still opt for the old tax regime.

The finance minister raised capital investment outlay by 33% to Rs 10 lakh crore in FY24, representing 3.3% of the GDP.

• The effective capital expenditure of the central government has been pegged at Rs 13.7 lakh crore.

• Capital outlay for the railways stands at Rs 2.40 lakh .

• The government will continue 50-year interest-free loans to states for one more year.

Sitharaman stayed on the fiscal consolidation consolidation path, pegging the FY24 figure at 5.9% of the GDP. And the government is likely to meet the budget estimate of 6.4% in FY23, she said.

• The government will adhere to the fiscal deficit glide to below 4.5% by 2025-26.

• The government is estimated to borrow Rs 15.45 lakh crore via bonds in FY24, with net borrowings at Rs 11.8 lakh crore.

Agriculture credit target for FY24 has been set at Rs 20 lakh crore, up from Rs 18.5 lakh crore budget estimate for FY23.

Other measures for the sector are:

• Atmanirbhar clean plant programme to improve availability of disease-free quality planting material for high-value horticultural crops at an outlay of Rs 2,200 crore.

• Indian Institute of Millet Research to be supported as a centre of excellence to boost cultivation.

• A sub scheme under PM Matsya Sampada Yojna with an outlay of Rs 6,000 crore will be launched to further enable activities of fishermen.

Budget 2023 provides Rs 35,000 crore for priority capital investment towards energy transition and net zero objectives and energy security.

Interstate transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh to be constructed with an outlay of Rs 20,700 crore including central support of Rs 8,300 crore.

• The credit guarantee scheme for MSMEs has been revamped with infusion of Rs 9,000 crore.

• The revamped structure will take effect from April 1.

PM Awas Yojana outlay has been increased by 66% to Rs 79,000 crore in the next fiscal.

The overall expenditure outlay for the Pradhan Mantri Awas Yojana or the mission for 'housing for all' has been increased by 66% for the fiscal 2024 to Rs 79,000 crore.

The government targets to reduce welfare spends under subsidies and the rural jobs guarantee scheme in FY24.

• Food subsidies have been budgeted at Rs 1.97 lakh crore, a decline of 31% from the revised estimate for FY23.

• Fertiliser subsidy has been pegged at Rs 1.75 lakh crore, a drop of 22% from the revised estimate for FY23.

• Fuel subsidies have been budgeted at Rs 2,257 crore, a fall of 75% from the revised estimate for FY23.

Sitharaman lowered allocation to the Mahatma Gandhi National Rural Employment Guarantee Act to Rs 60,000 crore. The estimate for the rural employment guarantee scheme for FY23 has been revised to Rs 89,400 crore, according to budget documents.

• Finance minister Nirmala Sitharaman proposed to set up an Urban Infra Development Fund with an outlay of Rs 10,000 crore.

• The fund will be established to mitigate priority sector lending shortfall to the housing sector.