Union Budget 2023: Centre woos employees with Income Tax concessions

NEW DELHI: With clearly an eye on the general elections in 2024, Union Finance Minister Nirmala Sitharaman on Tuesday presented the Union Budget 2023 and showered the middle-class earner with a slew of sops in the form of Income Tax concessions.

Announcing five-step changes, Nirmala Sitharaman increased the Income Tax rebate from the existing Rs 5 lakh to Rs 7 lakh. Effectively, employees who are earning an annual salary of upto 7 lakhs do not have to pay any income tax, as per the new tax regime. Until now, the tax rebate has been limited to only Rs 5 lakh per annum amid calls for the need for a substantial increase in it.

This is likely to provide a huge benefit to the salaried class and the attempt, coming in what could be the last full-fledged budget of the NDA government’s current term, is clearly being seen to placate the middle class employees after dangling the carrot over the last several years.

The Union Finance Minister also proposed changes in the existing Income Tax slab model. The taxation system for personal income tax has been reduced from the existing six to five slabs. As proposed by Nirmala Sitharaman, the tax exemption ceiling has been enhanced to Rs 3 lakh from the current Rs 2.5 lakhs.

The new Income Tax slab, as announced in the Union Budget 2023, is as follows:

Rs 0 to Rs 3 lakh = nil tax; Rs 3 to Rs 6 lakh = 5 percent; Rs 6 to 9 lakh = 10 percent; Rs 9 lakh to Rs 12 lakh = 15 percent; Rs 12 to Rs 15 lakh = 20 percent and above Rs 15 lakh = 30 percent.

In what would be seen as a major relief for the salaried class, given in the election year, an individual with an annual salary of Rs 9 lakhs will only be required to pay an annual Income Tax of Rs 45,000 as against Rs 60,000 till now.

The Union Finance Minister, while declaring that the new tax slabs were being made the default taxation regime, also clarified that the citizens were free to opt for the old tax regime.

Electric vehicles, mobile phones, TVs to become cheaper; cigarettes, gold, silver, tyres to cost more

As a result of Nirmala Sitharaman’s proposal to effect changes in custom duties and taxes in both direct and indirect taxes, a few gadgets and goods are going to be cheaper while a few others will see an increase in their prices. The biggest benefactor will be for electric vehicles, whose prices are expected to come down considerably due to the reduction of customs duty on the import of lithium batteries.

Similarly, mobile phones and television sets will also see a dip in their prices due to reduction of customs duty on some of their components.

On the other hand, the Union Finance Minister effected a hike in duties in other areas as well because of which the prices of gold, silver, tyres and cigarettes will go up.

With no major thrills and frills and devoid of any significant sops or schemes for the state, the Union Budget 2023 of Nirmala Sitharaman seemed to have focused heavily on keeping the middle and salaried class happy.

In one of the significant announcements, the Union Finance Minister increased the capital outlay for the Railways to Rs 2.4 lakh crores, which will only be next to India’s defence budget in terms of the quantum.

Nirmala almost calls old polluting vehicles as ‘old political vehicles’

A minor slip of the tongue by the Minister while referring to the phasing out of old polluting government vehicles left the House in peels of laughter. She uttered ‘old political..’ before quickly correcting herself amid hearty laughter of the Members.