On 1 February 2023, Finance Minister Nirmala Sitharaman took to the Parliament floor to announce the Union Budget 2023-24. This year’s budget has caused quite a stir because of various measures announced benefitting the middle income families. Continue reading to find out what’s there in the Union Budget 2023 for middle-class Indians.
Highlights of the Union Budget 2023-24
Here are some of the highlights of the 2023-24 Union Budget that can benefit middle-class Indians:
Revised Income Tax Slabs Under the New Regime
For taxpayers who follow the new regime, there has been a revamp in the existing tax brackets and available rebates. The government did this to increase the disposable income in the hands of the middle-class and give them room for additional growth.
As per the new updates, for individuals having an annual income of up to ₹3 lakhs, there will be no tax implications. The updated tax brackets of the new tax regime are as follows:
|Income Brackets||Tax Percentage|
|₹0 to 3 lakhs||Nil|
|₹3 to 6 lakhs||5%|
|₹6 to 9 lakhs||10%|
|₹9 to 12 lakhs||15%|
|₹12 to 15 lakhs||20%|
|More than ₹15 lakhs||30%|
Additionally, salaried individuals with a maximum annual income of ₹15.5 lakh can avail a maximum tax benefit of ₹52,000.
Earlier, there was a surcharge of 37% for people with yearly earnings greater than ₹5 crore. In this year’s Budget, it has come down to 25%. In addition, the tax exemption limit for leave encashment on retirement of non-government salaried employees, which was earlier set at ₹3 lakh, has also been increased to ₹25 lakh in line with increase in salaries over the years.
Increased Deposit Limit for Senior Citizens
Senior citizens will significantly benefit from the 2023 Budget due to certain updates. As per the Finance Minister, there has been an increase in the maximum deposit limit from ₹15 lakh to ₹30 lakh in the Senior Citizen Savings Scheme (SCSS).
There has been an update for the maximum deposit limits in the Post Office Monthly Income Scheme (MIS). For single accounts, this limit has been raised to ₹9 lakh from ₹4.5 lakh and ₹9 lakh to ₹15 lakh in the case of joint accounts.
Setting New Milestones in the Health and Medical Research
The Indian Government plans to build an additional 157 new nursing colleges to co-locate with the current 157 medical colleges. It has also started a mission to eradicate Sickle Cell Anaemia by 2047. The authorities plan to screen 7 crore people aged between 0 to 40 years, in specific tribal areas.
Furthermore, there will be facilities in certain ICMR labs to encourage collaborative research and innovation. It will be available to the public and private medical college faculties and members of private sector R&D teams.
Developments in the Field of Teaching
Within the next 3 years, the Central Government plans on recruiting 38,800 teachers as well as supporting staff. They will get appointments in 740 Eklavya Model Residential Schools, serving approximately 3.5 lakh tribal students.
In addition, the government has planned to restructure the Teacher’s Training Program. They plan to do this via Information and Communication Technology (ICT) implementation, dipstick surveys, curriculum transactions, innovative pedagogy and ongoing professional development. They plan to develop District Institutes of Education and Training to implement these measures.
What’s Getting Cheaper and Becoming Expensive After the 2023 Union Budget?
Like every year’s Budget, some items will become cheaper while others will be a little expensive. First, let’s take a look at the items that are going to be cheaper:
- To promote exports, the Indian Government has reduced customs duty on shrimp feed.
- Television sets will now cost less due to a 2.5% cut in the open cells of TV panels.
- Mobile phone prices will also go down due to a reduction in customs duty on certain inputs like camera lenses.
- As a result of the government’s proposal to lower the basic customs rates, bicycle prices are expected to decrease.
- Toys would be cheaper, boosting an already thriving industry in which made-in-India toys are eclipsing global giants.
- Lab-grown diamonds will also cost less due to a reduced customs duty on the seeds used in their manufacturing.
- Basic custom duties on goods have been reduced from 21% to 13%
- Certain electronic parts like heat coils for manufacturing kitchen chimneys and camera lenses are to get cheaper due to a reduction in import customs duty.
Now that you know what’s getting cheaper, let’s take a look at the items that will become more expensive:
- Tobacco-based products, like cigarettes, are going to cost more due to a 16% hike in taxes.
- Due to the government increasing the custom duty from 60-70% in the Union Budget 2023, fully imported luxury and electric vehicles will now cost more.
- Items made from gold, silver and diamonds will also get expensive due to an increase in basic customs duty.
- The price of electric kitchen chimneys will appreciate as it raised their customs duty from 7.5% to 15%
- Articles made from compounded rubber shall become expensive as it raised the basic import duty from 10% to 25%
By observing all the changes brought about by the Union Budget 2023-24, one can say the Budget attempts at increasing the consumption expenditure by increasing the in hand income with the middle class. In the backdrop of growth dampened by the pandemic, thi policy is expected to help build a stronger economy catapulted by private consumption.
Frequently Asked Questions (FAQs)
Q1. When is the Union 2023-24 Budget going to come into force?
Ans. The Union Budget 2023-24 will come into effect from April 1, 2023.
Q2. How much capital allocation has the Railways sector got in the 2023 Budget?
Ans. In this year’s budget, the Railways sector has got a fund allocation of ₹2.4 lakh crore. This outlay is 9 times more than what was done in the financial year 2013-14.
Q3. How are State Governments going to benefit from the Union 2023 Budget?
Ans. According to the 2023 Budget, the Centre will continue to provide State Governments with a 50-year interest-free loan. This policy is available for one more year to increase investments in infrastructure and incentivise complementary policy actions. For this purpose, the authorities have planned a ₹1.3 lakh crore outlay.
Q4. What did the Union 2023 Budget introduce for improving nationwide connectivity?
Ans. To enhance nationwide connectivity, the Union 2023 Budget has proposed to improve regional air connectivity. The authorities plan to construct 50 new airports, water aerodromes and advanced landing stations.
Ramya is a qualified lawyer with experience in both public policy and finance. She completed her B.A.LL.B (Hons.) from NALSAR University of Law, Hyderabad and is a registered advocate with the Bar Council of India. She is currently working in the Legal and Compliance department of Wint Wealth, and has previously worked closely with the Department of Economic Affairs, Ministry of Finance and ICICI Bank Ltd, Mumbai.