Team AckoSept 25, 2023
In India, people typically anticipate that a Union Budget will focus on tax deductions, increased expenditure on infrastructure and social welfare, measures to manage inflation, more opportunities, and economic growth. People wish for a better tomorrow in a nutshell. This year too, people, especially tax payers are expecting similar changes in the current tax system. Let us elaborate more on those expectations in the following article
The Union Budget of India is the annual financial statement presented by India's Finance Minister. It shows the government's revenue and expenditures for the new financial year. The budget also details the government's economic and financial strategies for the coming year, including taxation, expenditure on infrastructure and social services, and other economic growth-promoting measures. The budget is usually announced in February and is highly reported in the media. It is also a significant predictor of the government's economic policies and priorities for the corresponding fiscal year.
The following table lists a few details of the upcoming Union Budget 2023.
Budget 2023 date
1st February 2023
Budget 2023 presenter
Finance Minister: Nirmala Sitharaman
Union budget 2023-24 expected time
Location of budget 2023 presentation
The Parliament House in New Delhi
The Union Budget 2023-24 is expected to be live streamed through various media channels.
Here is a list of changes expected by taxpayers.
The exemption threshold of Rs 2.5 lakh has not changed since FY 2014-15, so salaried taxpayers expect that under both (old and new) tax regimes, the existing basic exemption threshold of Rs. 2.5 lakhs will rise to Rs. 5 lakhs. This is because of the increase in day-to-day expenses and inflation. Also, the current tax slab for employees earning more than Rs. 10 lakhs per annum is 30%. Employees are expecting a rise of up to Rs. 20 lakhs for this slab. As per the Income Tax department in 2020, 50% of the tax returns filed were by salaried employees.
There may also be a rise in the basic tax deductions cap from Rs. 50,000 to Rs. 1 lakh, enhancing taxpayers' spendable funds. The withdrawal of tax-free medical reimbursements and travel allowance exemptions, was restructured in FY 2018-19 as a result of the implementation of standard deduction. Even while the deduction hasn't changed, the price of fuel and medical expenses have increased. Thus, the basic limit of tax deductions is expected to increase in the Budget 2023-24.
Since many deductions must be waived in order to earn the benefit, the new tax system did not meet with the taxpayer's expectations. Hence, it is expected that a simplified tax structure will be offered that combines both tax regimes with more exemptions and deductions.
Home loan EMI's (Easy Monthly Instalments) have increased in recent months as a result of RBI modifications to the repo rate. However, the tax deduction structure for home loans has remained the same. The current limit of Rs. 2 lakhs is expected to be increased in the Union Budget 2023 to Rs. 3 to 4 lakhs.
Individuals can deduct a significant amount under section 80C of their taxes, which covers a variety of investments like Public Provident Funds, LIC premiums, and National Savings Certificates among others. A rise is expected in the threshold from the existing amount of Rs. 1.5 lakhs to Rs. 2.5 lakhs. This will increase taxpayers' spending power.
The Children Education Allowance has not been revised for more than 4 years. Monthly exemptions for education and hostel costs are currently Rs. 2,250 and Rs. 6,750 per child, respectively for children of government employees. This is expected to increase to Rs. 3,000 and Rs. 7,500 per child monthly.
Section 80D permits an individual to claim a deduction for up to Rs. 50,000 in health insurance premiums. This threshold is Rs. 1 lakh in the case of older citizens. The COVID epidemic has financially impacted consumers because of an unexpected increase in medical bills and insurance premiums. It has resulted in growing medical debt for the country. The Union Budget 2023 is expected to grant tax relief by raising the previous maximum to Rs. 1 lakh to Rs. 1.5 lakhs.
The main components of the Union Budget include the revenue budget, which shows the government's estimated revenues for the upcoming fiscal year, and the capital budget, which shows the government's planned expenditures on capital assets such as infrastructure projects.
The Union Budget focuses on various areas, including agriculture, education, healthcare, infrastructure, defence, and social welfare programs.
The Union Budget can significantly impact the economy, as it outlines the government's plans for revenue and expenditure, which can affect interest rates, inflation, and GDP growth.
The Union Budget can affect common people in several ways, including changes in tax rates, government spending on social welfare programs, and interest rates, which can affect the cost of borrowing and the availability of credit.
The purpose of the Union Budget is to outline the government's financial plans for the upcoming fiscal year and allocate funds for various sectors and schemes.
The Union Budget is the annual financial statement presented by the Government of India outlining the estimated revenues and expenditures for the upcoming fiscal year while the railway budget outlines the estimated revenues and expenditures for Indian Railways for the upcoming fiscal year. The Union Budget and the Railway Budget were combined in 2017 and are presented by the Finance Minister.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet, and is subject to changes.
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