Memorandum Explaining the Provisions in the Finance Bill 2023

Budget 2023

Key Points

  • FY-2024 fiscal deficit target at 5.9% of GDP
  • Outlay for capital spending increased 33% to 10 trillion rupees in 2023/24
  • Cigarettes to get costlier as Budget proposes 16% hike in duty
  • To set up agriculture accelerator fund
  • Increases budget allocations to 790 billion rupees for affordable housing in 2023/24
  • Finance Minister says increase in public capex key to crowding in private investments
  • Indian economy has become the fifth-largest economy in the world in last nine years
  • Budget adopts seven priorities including inclusive, green growth
  • Agricultural credit target raised to 20 trillion rupees ($244.42 billion) for 2023/24
  • Sitharaman says the economy is growing the fastest among major economies

FM Nirmala Sitharaman also outlined seven priorities for the 'First Budget in Amrit Kaal'

  • Inclusive development
  • Reaching the last mile
  • Infra & investment
  • Unleashing the potential
  • Green growth
  • Youth power
  • Financial sector

Part B of Honourable Finance Minister speech in Budget 2023

Indirect Taxes

  1. Customs duty on goods of textiles, toys, bicycle reduced from 21 to 13%
  2. To promote Green Mobility – basic customs duty concession for lithium ion battery
  3. To promote Electronics manufacture- relief on customs duty for camera lens and lithium battery
  4. Television – TV panels customs duty reduced
  5. Electric kitchen chimney to reduce inverted duty structure from 7.5 to 15 percent
  6. Benefit for ethanol blending program and acid program and epichlorohydrine
  7. Marine Products- to promote exports – shrimps, etc. Duty on shrimpfeed reduced
  8. Basic Customs duty reduced for seeds in manufacture for diamonds
  9. Customs duty to increase in silver bars
  10. Steel – concessional customs duty on steel and ferrous products
  11. Copper – concessional customs duty on copper
  12. Rubber – concessional customs duty on rubber
  13. Cigarettes – increased tax

Direct Taxes

  1. Common IT form and grievance redressal system
  2. MSME – avail benefit of presumptive taxation increased to 44AD to 3 crores, Professionals u/s 44ADA – 75 lakhs – Provided receipt in cash doesn’t exceed 5%
  3. TDS only on payment for deduction
  4. TDS only on payment for deduction
  • Higher limit of 2 lakh per member for cash deposit in agricultural banks
  • Higher limit of Rs. 3 crores on TDS for cooperative societies.
  1. Startups
  • To avail startup benefits from 31-03-2023 to 31-03-2024
  1. 100 new joint commissioners for appeal
  2. S.54 to S.54F capped at 10 crores
  3. TDS on Online gaming –
  4. TDS 30% to 20% on taxable portion of EPF
  5. Extending funds for GIFT and IFSC

Personal Income Tax

  1. Rebate for income upto 7 lakhs u/s 87A in the new tax regime
  2. New tax regime tax rates from
  • 0-3 lakhs nil
  • 3-6 lakhs- 5%
  • 6-9 lakhs 10%
  • 9-12 lakhs 15%
  • 12-15 lakhs  20%
  • Above 15 lakhs- 30 %
  1. Standard deduction to new tax regime for salaried class and pensioners.
  2. Reduction of highest surcharge from 37% to 25% on new income tax regime.
  3. Limit on tax exemption for leave encashment is increased from 3,00,000 to 25,00,000.

  4. New income tax regime default regime.

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