Finance Minister Unveils New Tax Regime in Union Budget 2023

Finally, the most awaited moments of the year 2023 have arrived and cleared all the doubts. Union Budget 2023 has been presented by Finance Minister Nirmala Sitaraman with everything added or excluded in the tax to clear your doubts.

1.27 Hours Speech to Present the Union Budget 2023

She delivered one hour and twenty-seven minutes speech – and cleared all the issues related to new tax regime and comparison the old one. The tax is a balanced one developed by keeping in mind the election next year. She had a lot in store for diverse industries and different sectors that include Auto, research environment, agriculture, technology, tribal communities, students, and information technology too. Not to mention her announcement on personal tax – emerged as the star of the speech and of course the most awaited time of the entire budget presented.

What is for Salaried and Pensioners in New Tax Regime

The new tax regime has been making headlines too. According to the new regime, Salaries professionals and pensioners will be free from paying any tax on income up to Rs 7.5 Lakh Annual Income. According to the Finance Minister, the budget 2023 suggests to boost rebate under Section 87A in such a way that taxpayers (Who had to pay zero income earlier on income up to 5 Lakhs) will be allowed to pay zero tax for income up to Rs 7 Lakh.

FM Has Extended the Standard Deduction of Rs 50000

In simple words, the quantum of maximum rebate under 87A rebate has been hiked from Rs 12500 to Rs 25000 under the new tax regime to make tax liability as Nil for the income tax payer with income up to Rs 7 Lakh. In addition to this, Union Budget has also extended standard deduction of Rs 50,000 to the aforementioned category, according to the new tax regime. In the old one, it was available only to salaried and pensioners who were opting for the old tax regime.

Details are here to help you understand the new tax regime for salaries and pensioners

Income from Salary or Pension	₹ 750000
Less Standard Deduction	₹ 50000
Net Taxable Income	₹ 700000
Tax Payable	₹ 25000
Less 87A Rebate	₹ 25000
Final Tax Payable	₹ 00000

Even after the new tax regime, a very few people are opted for this – mainly because salaried people with income up to 7.5 lakhs had to pay zero tax under old regime, in case they were eligible for few popular deductions like Rs 50000 standard deduction, Rs 1.5 Lakhs under Section 80C and Rs 50000 on NPS Under Section 80CCD or Rs 25000 to Rs 1 Lakh under section 80D. According to the new tax regime, they had to pay taxes on income more than 5 Lakhs. The push of extra 2 Lakhs deduction in the new regime will make it attractive for salaried tax payers, if their income is up to 7.5 Lakhs. The non-salaried tax payers income up to 7 Lakhs will result as zero tax to pay.

Union Budget 2023 – What Is for Different Industry Verticals

Apart from the aforementioned tax benefits in the slab, there is also something for all. According to the budget, the Government has increased capital spending 33% to 10 Trillion INR – enabling the nation to expand its network on roads, ports, and airports – making India an attractive place for investment.

What Is For Agriculture Sector

Farm sector has touched new heights of success with expectations for something more. in Simple words, the government has increased the spending that is around 19% of the economy. Budget is set to spend around 22 Billion INR on high value horticulture and set up an agriculture accelerator fund to provide financial support to farm startups.

For Tourism

In the budget, government has decided to choose 50 Destinations to promote domestic tourism. They are ready to develop an app to guide tourists on food streets, security, physical and virtual connectivity to lift their experiences.

What Is For Infrastructure

The Government has decided to build 50 additional airports, heliports and aerodromes. According to the budget, Modi Government has identified 100 new projects.

Metal and Cement Industry

Housing infrastructure will get higher capital expenditures and investments. In addition, railways has announced in the budget to focus on infra that will be a positive sign for steel mills and cement market too.

Electric Vehicles 

Government has decided to reduce the cost of electric vehicles and import duty in batteries that are required for EVs. Government is ready to provide impetus to green mobility by exempting from customs duty on import of capital goods required to manufacturer LI cells for EVs.

Green Energy Industry Will Boost 

Rs 350 Billion Investment in energy transition and carbon neutrality initiative will change the green energy industry. The Government has decided to provide financial support to battery energy storage system with the capacity of 4000 Megawatt per hour.

Who Has Lost the Profit Path

Cigarette market, jewelry industry, oil refineries , Foreign carmakers.