However, let’s take a look at what Finance Minister Sitharaman offered to the middle class in the last full Budget of the previous government, which was announced in February 2023.
In the Union Budget 2023, the last full Budget before the 2024 general elections, Sitharaman announced a number of significant steps in the domain of personal tax, giving Indian taxpayers a veritable boost. The said steps basically comprised some substantial changes in tax slabs.
In the budget, the government proposed to make the new tax regime the default tax option. In another major measure, income tax rebate was extended on income up to Rs 7 lakhs in the new tax regime.
Budget 2023 also proposed to reduce the highest surcharge rate to 25% from the existing rate of 37.5% under the new income tax regime.Subsequently, the new tax rate structure became as follows: a) 0 to Rs 3 lakhs – nil, b) Rs 3 to 6 lakhs – 5%, c) Rs 6 to 9 Lakhs – 10%, d) Rs 9 to 12 Lakhs – 15%, e) Rs 12 to 15 Lakhs – 20% and f) above 15 Lakhs – 30%.
Tax-related announcements
Presenting the 2023 Budget, FM Sitharaman announced that an individual earning Rs 9 lakh annually would have to pay only Rs 45,000 in taxes in the next financial year.
Some of the FM’s other key budget announcements that concerned common taxpayers were:
- Income of Rs 15 lakh will fetch Rs 1.5 lakh tax, down from Rs 1.87 lakh
- A Rs 50,000 standard deduction to taxpayers has been introduced under the new regime
- Payment received from Agniveer Corpus Fund by Agniveers will be exempted
- Tax exemption removed in insurance policies with premium over Rs 5 lakh
- For online games, govt proposed to provide for TDS and taxability on net winnings at the time of withdrawal or at the end of fiscal
- Tax exemption on leave encashment on retirement of non-government salaried employees hiked to Rs 25 lakh from Rs 3 lakh.
- A higher limit of Rs 3 crore for TDS on cash withdrawal will be provided to co-operative societies.
- Next-generation Common IT Return Form will be rolled out for tax payer convenience
- Grievance redressal mechanism will be made stronger.
- TDS rate will be reduced from 30 per cent to 20 per cent on the taxable portion of EPF withdrawal in non-PAN cases.
Personal finance
In her Budget 2023 speech, Nirmala Sitharaman also made a number of important announcements regarding personal finance, specifically saving schemes. Key among those measures were: a) the maximum deposit limit for Senior Citizen Savings Scheme was proposed to be enhanced to Rs 30 lakh from the earlier limit of Rs 15 lakh; and b) the Monthly Income Scheme limit was proposed to be doubled to Rs 9 lakh and Rs 15 lakh for joint accounts.
Some of the other measures in this area included:
- One-time new saving scheme Mahila Samman Saving Certificate for women to be made available for 2 years up to March 2025.
- It will offer a deposit facility of up to Rs 2 lakh in the name of women or girls for tenure of 2 years at fixed interest rate of 7.5 per cent with partial withdrawal option.
Jobs & skilling
There were some important moves made in the domain of jobs and employment as well. The FM announced that the govt will launch the Pradhan Mantri Kaushal Vikas Yojana 4.0. Besides, with a view to skilling India’s youth for global opportunities, 30 Skill India International Centres were proposed to be set up across a number of states.
Besides, Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme was proposed to be rolled out with the aim of giving stipend support to 47 lakh youth over a three-year period.
What got cheaper & what got costlier for consumers
As a result of 2023 Budget announcements, items that became cheaper for the common consumer included mobile phones, TV, lab-grown diamonds, shrimp feed, etc.
Some of the items that turned costlier were: cigarettes, silver, compounded rubber, imitation jewellery, articles made from gold bars, imported bicycles and toys, imported kitchen electric chimney, imported luxury cars and EVs, etc.