The Union Budget is easily one of the most popular events in finance. It outlines the government’s plan for the year — which sectors will get investments and what the possible sources of revenue are. The Union Budget 2023 was no different. Presented by Finance Minister Nirmala Sitharaman on February 1, 2023, this Union Budget was expected to be a generous one.
Keep reading for the key highlights of the Union Budget 2023 and then you can decide for yourself!
Union Budget 2023: Key Highlights
The Indian economy has shown significant growth in the last few years. From the tenth-largest economy in 2014, it has now climbed up to the fifth position. Along with the improved hierarchy, there have also been certain developmental changes in the Indian economy.
- Our current growth rate is projected at 7%.
- Our per capita income has increased to ₹1.97 lakhs. Just for reference, in 2013-14, our per capita income was around ₹89,000.
- Fiscal deficit is expected to be in the range of 5.9%.
These highlights confirmed the fact that India’s growth rate is higher than the global average. We seem to have weathered the COVID storm better than some of our peers, and the statistics simply back that up.
Personal Income Tax
“I propose to increase the rebate limit to INR 7 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to INR 7 lakh will not have to pay any tax.” — Nirmala Sitharaman
Apart from that, the exemption limit has been increased from ₹2.5 lakhs to ₹3 lakhs. The new tax slabs have been summarised in the table below.
|Tax Slabs (₹)||Tax Rate (%)|
|< 3 lakhs||0|
|3 — 6 lakhs||5|
|6 — 9 lakhs||10|
|9 — 12 lakhs||15|
|12 — 15 lakhs||20|
|> 15 lakhs||30|
These new amendments are expected to make it easier for salaried individuals, especially in the lower tax slabs, to file their income tax returns on their own.
The total expenditure in this fiscal year is expected to be around ₹45 lakh crores. This is 7.5% higher than the current target of ₹41 lakh crores. But, if you account for the effects of inflation, this amount is only about 3.5% higher than the current expenditure outlay.
In 2023-24, the capital expenditure is targeted to be around ₹10 lakh crores. This is quite a sharp rise of 33%. This growth pattern has been observed for the past three years now. The expected investment will boost job creation and will attract more private participation.
Apart from that, the government also intends to invest ₹2.7 lakh crores for the development of roads and highways, and ₹5.94 lakh crores for defence purposes.
Tax Benefits for Corporates
“I propose to provide enhanced limits of INR 3 crore and INR 75 lakh respectively, to the taxpayers whose cash receipts are no more than 5%.” — Nirmala Sitharaman
Professionals with an annual turnover of ₹50 lakhs and micro-enterprises with an annual turnover of ₹2 crores can now take advantage of the presumptive taxation benefit. Under this facility, you can essentially pre-declare your taxes. You’ll have to pay a fixed rate, irrespective of what your yearly profit is.
Apart from that, there is also a 15% tax benefit for any new cooperatives in the manufacturing sector till 2024.
The Union Budget 2023 has a “Saptarishi” set of priorities. Green energy is one of the areas on that list.
The Green Hydrogen Mission, which aims to increase the productive capacity to 5 MMT (million metric tonnes) by 2030 is expected to have a cash outlay of ₹19,744 crores.
This is expected to reduce our dependence on fossil fuels and external energy import bills.
Pradhan Mantri PVTG Development Mission
Over the next three years, the government is going to invest ₹15,000 crores for the development and upliftment of the tribal areas.
This money will be used to create some basic infrastructure in these areas, and for educational and vocational training support to the Scheduled Tribes.
What’s the Verdict?
You tell me!
There are certain tax exemptions, but not as many as expected. There are several elements that you can be happy about, for sure. But it’s hard to create a budget that satisfied everybody!