The vision for Amrit Kaal includes opportunities for citizens with a focus on youth, growth and job creation and a strong, stable, macro-environment, FM Sitharaman said.
How it affects you
Taxpayers who aim to opt for the newer tax regime, will now likely pay lower taxes, depending on their income. There will be no tax charged for salaries up to 7.5 lakh under the new tax regime.
A standard deduction of 50,000 is now available and the rebate limit has been increased to Rs 7 lakh from 5 lakh.
The maximum rate of surcharge under NTR has been cut to 25% from 37% while the highest effective tax rate is now 39%, down from 42.7%.
The tax exemption limit for leave encashment on retirement for non-govt salaried individuals increased to Rs 25 lakh from Rs 3 lakh.
With hikes in customs duty on certain components and commodities, the Central government has continued its ‘Make in India’ focus aimed at boosting domestic manufacturing. Although, the revision in duties now means that high-end luxury automobiles will cost more, cigarettes too.
How it affects India Inc
The tax holiday of 100% of profits (for a block of 3 years in the first 10 years of incorporation) is extended by one more year. Startups incorporated till March 31, 2024 will enjoy this tax holiday. Carry forward of business loss of startups is extended to 10 years (from earlier 7 years) provided all the shareholders in the year of loss continue to remain invested even in the year of setoff
India Inc (except startups) will suffer tax on premiums received in excess of ‘fair market value’ even from non-resident investors. This was previously taxable only if it was received from resident subscribers
Intangible assets to have zero value for tax purposes. Deeming fiction proposed b e inserted to prescribe the cost of acquisition of intangible assets acquired on or after April 1, 2023 to be ‘Nil’. As a result, there will b e a higher component of taxable capital gain on the transfer.
How it affects India’s infrastructure
The FM has budgeted for a hefty 33% spike in capital expenditure (capex) at Rs 10 lakh crore. The government’s continued emphasis on ramping up capex spending should provide a fillip to both near- and medium-term growth.
The Centre’s bigger push for capex without fiscal profligacy will aid growth and strengthen investment recovery.
How it affects the markets & investors
As for the investors, stable government borrowings despite high capex are likely to keep interest rates calm, and support markets.
However, market-linked debentures will now attract higher taxes, thereby denting this popular investment option.
MSMEs got a support package in the Budget as the revamped credit guarantee scheme will take effect from April 1, 2023 through an infusion of Rs 9,000 crore in the corpus.
How it affects India’s agriculture
The agriculture credit target will be increased to Rs 20 lakh crore with focus on animal husbandry, dairy and fisheries.
A digital public infrastructure for agriculture will be built as an open source, open standard and inter operable public good.
An Agriculture Accelerator Fund will be set-up to encourage agristartups by young entrepreneurs in rural areas which will aim at bringing innovative and affordable solutions for challenges faced by farmers.
It will also bring in modern technologies to transform agricultural practices, increase productivity and profitability.
To enhance the productivity of extra-long staple cotton, will adopt a cluster-based and value chain approach through Public Private Partnerships (PPP).