The Union Budget 2023-2024 was recently announced, and it is one of the most important budgets India has seen for some time. With the introduction of this budget, there is a lot of anticipation surrounding the impact it will have on the Indian economy. This blog article looks at the various aspects of the budget and how it will affect citizens, businesses, and the economy as a whole. The Union Budget of India is an annual report issued by the Finance Minister that outlines how the country’s money will be spent and several policy changes.
Importance of Union Budget
1. A Union Budget describes the state of the country’s finances and economy in the future year.
2. The Finance Minister makes key policy changes in addition to declaring the amount of money given to the many dimensions of the country’s growth.
3. The 2023 Budget strongly emphasised the digital revolution in medicine, agriculture, education, and infrastructure.
Introduction to the Budget 2023-2024
The Budget 2023-2024 was presented by the Finance Minister of India, Nirmala Sitharaman, on the 1st of February, 2023. It is a comprehensive budget that addresses various topics, such as taxation, government spending, trade, and infrastructure. The budget is intended to help India’s economy recover from the coronavirus pandemic and address some of the country’s long-term challenges.
This Budget introduced 7 new priorities named Saptarishi.
The budget has been widely praised for its focus on social welfare, job creation, and economic growth. There are also some controversial aspects of the budget, such as the proposed changes to taxation and government spending. FM Nirmala Sitharaman highlighted noteworthy improvements in business, startups, and entrepreneurship this year. This article looks at each of these aspects of the budget in detail to provide a comprehensive overview of the Budget for 2023-2024.
1. Revision of Tax Holiday Dates
In India, newly incorporated businesses benefit from a “tax holiday” for the first three years of incorporation. Until recently, this tax holiday benefit was available to any firm formed before March 31, 2023.
The Budget 2023 extended this timeframe by one year, which means that a startup formed before March 31, 2024, can also benefit from the tax break.
2. Carry Forward & Set Off Losses
Until recently, entrepreneurs were permitted to carry forward and offset losses if they had occurred during the previous seven years of formation. It is now 10 years after incorporation, thanks to the new Budget.
Startups can “carry forward and set off losses,” which permits losses from any source to be adjusted against earnings from other sources and carried over to future fiscal years.
Losses can be eliminated from taxable income, decreasing the total amount of tax owed and giving relief to the corporation.
1. Data Accessibility
The Budget 2023 strongly emphasised the value of data accessibility to encourage innovation in the IT sector at a much faster rate.
I. The National Data Governance Policy included in Budget 2023 would create a sizable repository of Indian datasets.
II. The academic and entrepreneurial ecosystems will have access to this data, which may originate from public or private sources, to stimulate innovation.
III. The National Data Governance Policy emphasises ownership, responsibility, and transparency in accessing non-personal data and datasets.
1. Credit Guarantee Scheme Revamp
The credit guarantee scheme, created to give MSMEs collateral-free loans, is also being updated.
The updated programme would lower the cost of borrowing to roughly 1% and offer collateral-free guaranteed lending of up to Rs 2 lakh crore.
2. COVID-19 Relief
MSMEs would get a 95% refund of the forfeited sum connected to bid or security by the government and government undertakings in Budget 2023 if they could not fulfil contracts under COVID.
Micro, Small, and Medium-Sized Businesses impacted by the epidemic would benefit from this.
The significance of integrating technology into agriculture is indeed a central theme of Budget 2023.
1. New digital public infrastructure will help the agri-tech sector and the businesses surrounding it.
2. Comprehensive, farmer-centric crop planning, finance, insurance, crop estimate, and market information will be available.
3. Agri-startups in rural regions will also have access to an agricultural accelerator fund, which will be established.
For Digital India
1. The Entity Digilocker, previously available solely to retail consumers, was included in the 2018 Budget for MSMEs and large corporations.
2. Continued funding for digital payments and digital public infrastructure was also included in the Budget. It was stated that digital payment transactions increased by 76% in 2022.
Every year, changes to tax policy are the most anticipated component of the Budget, and this year was no exception: the Finance Minister unveiled some exciting revisions.
1. Presumptive Taxation
I. MSMEs with a revenue of up to Rs 3 crore and professionals with a turnover of up to Rs 75 lakh can benefit from “presumptive taxes” under Budget 2023.
II. When a taxpayer is exempt from keeping books of accounts, this is referred to as presumed taxation. This provides help to small taxpayers who find it difficult to keep accurate records.
2. TDS Rate Chart for AY 2023-24
I. Another adjustment was made to TDS: the TDS rate on the taxable portion of EPF withdrawals was reduced from 30% to 20%.
II. The Rs 10,000 minimum TDS barrier has been eliminated.
1. The main announcement in Budget 2023 was a modification in the income tax refund ceiling.
2. People earning less than Rs 5 lakhs were formerly excused from paying taxes. That maximum has now been raised to Rs 7 lakhs.
3. The new tax regime is the default choice when filing tax returns.
Here is the updated tax slab for the fiscal year 2023-24.
The Budget for 2023-2024 is a comprehensive budget that addresses many topics. It is expected to positively impact the economy, increasing government spending, providing tax relief for small businesses, and improving infrastructure. It is also expected to positively impact families and households, education, health, the environment, and national security.
Overall, the Budget 2023-2024 is expected to impact the Indian economy positively. It is a welcome move by the government, and it is expected to provide much-needed relief to the citizens of India.