BUDGET 2023

RESEARCHED BY:
Anshika Singh| Ayushi Sharma
Dhruv Vora | Rutveek Shah | Shreya Mathur
 Introduction
The honorable prime minister Nirmala Sitharaman presented Budget 2023
on February 1, with a special focus on seven priorities "Saptrishi" i.e.,
Inclusive Development: Sabka Sath Sabka Vikas, Reaching Last Mile,
Infrastructure & Investment, Unleashing the Potential, Green Growth, Youth
Power, and the most important of all Financial Sector.

Key Highlights

The creation of digital public infrastructure for farmers.

Launch of ANB Horticulture Clean Plant program.
Vision to make India a global hub for millets, ‘Sree Anna’.
Formation of a wide network of storage spaces for farmers.
Launch of ‘Sickle Cell Anaemia elimination Mission’.
 Vision for Amrit Kaal
The budget reflects the mission envisioned by Prime Minister
Narendra Modi for India, which is entering the "Amrit Kaal" to
become a developed nation in the next 25 years.

Key focus areas

Opportunities for
Citizens with focus on the Youth

Growth and Job Creation

Strong and Stable

Macro-Economic Environment
 Allocations fo

Rupee Comes from Rupee Goes To

Allocations for Specific Ministries

Defence 5.95
Railways 2.41

Road Transport 2.70

Home Affairs 1.96
Rural Development 1.60
in Rs Lakh Crore
 Agriculture
Investments and financial support:
Agricultural credit target to be increased to INR20 lakh crore
Assistance of INR5,300 crore to be given to the Upper Bhadra Project to
provide sustainable micro irrigation and filling up of surface tanks for
drinking water
Agriculture Accelerator Fund to be set up to encourage agri-start ups

Infrastructure:
Decentralised storage capacity to be set up to enable farmers to realize
sales in a timely manner
Multipurpose cooperative societies, primary fishery societies and dairy
cooperative societies to be set up in the next five years
Digital public infrastructure for agriculture to be built to enable farmer
centric solutions for support and growth of agri-tech industry and start-
ups
Green growth:
PM- PRANAM – Incentives to states to promote the use of alternative
fertilisers
500 new ‘waste to wealth’ plants to be established under the GOBARdhan
scheme to promote a circular economy

Skill and Research and Development:

Support to be given to IIMR for promoting research for making India a
global hub for millet
Centers of Excellence to be set up for developing AI-based solutions in
agriculture
Labs using 5G services to be set up in engineering institutions for
precision farming
 Infrastructure
The Budget provides INR10 lakh crore allocation for the development of the
infrastructure sector and eventually the creation of more jobs.
50 additional airports, heliports, water aerodromes and advanced landing
grounds to be revived for improving regional air connectivity.
Green Credit Programme to be notified under the Environment (Protection)
Act to incentivize environmentally sustainable and responsive actions.
Customs duty exemption restricted up to 31 March 2025 on import of
dredgers and raw materials/ parts used in manufacture of vessels/ ships.
Solar power plant & projects excluded from Customs Project Imports
Scheme.
 IT Sector
Centre of Excellence for Artificial Intelligence; leading players to
partner in R&D cutting-edge applications and scalable problems
Skill India digital platform to enable demand-based formal skilling
and facilitate access to entrepreneurship schemes
Entity Digi Locker to facilitate secure online storing and sharing of
documents

The unified filing process for simplified

form filling and sharing with other
agencies
National Financial Information Registry to
enable efficient lending, promote
financial inclusion, and enhance financial
stability
Central Data Processing Centre for handling data administrative
work under Companies Act, 2013
Input tax credit restricted for CSR activities
E-Commerce operators would be subject to penal provisions in case
of contravention of GST provisions by unregistered persons or
composition taxpayers for supplies made through them
The scope of online information and database access retrieval
services expanded to cover supplies with or without human
intervention, whose delivery is mediated by IT over the internet or
an electronic network, and the nature of supply is impossible in the
absence of IT sector.
 Defence Sector
Defense budget allocation of INR 1,62,600 crores for capital outlay
and INR 2,70,120 crores for revenue expenditure
6.7% and 15.9% increase in INR terms in budget allocation for
capital outlay and revenue expenditure, respectively, over FY 22 - 23
(BE)

Agniveer Corpus fund will be created to incentivize Agniveers under the

Agnipath Scheme, 2022
Each Agniveer will contribute 30% of the monthly package to this
fund.
Consolidate amount called Seva Nidhi in the account will be paid to
Agniveer on completion of four years of service
These contributions shall be under the E-E-E scheme, i.e., both
contributions will be tax-free at the time of grant, annual accretion
through interest as well as at the time of withdrawal.
In 2021, aircraft and engine leasing
activities were permitted in GIFT IFSC.
Various measures have been proposed to
simplify the IFSC regulatory framework -
Powers under the SEZ Act to be delegated
to the IFSC Authority to avoid dual
regulations
A single window IT System shall be set up
for registrations and approvals under
various regulation
Acquisition financing by IFSC banking
units of foreign banks permitted
 Healthcare
Budget allocation to health sector increased to 2.1% of GDP (against
revised estimate of INR77,351 crores to INR 88,956 crores budgeted
estimates).
Facilities being made available in select ICMR labs for research by
medical college faculty and private sector – to promote collaborative
R&D.
Mission to eliminate Sickle Cell Anaemia by 2047.

Current customs exemption for specified products extended:

1. Current customs exemption for lifesaving drugs and specified drugs,

medicines, and diagnostic kits extended by two years up to 31 March
2025.
2. Specified drugs and medicines supplied free of cost to patients under
Patient Assistance Program, specified medical and surgical instruments,
hospital equipment extended by one year up to 31 March 2024.
 Financial Services
Policy proposals

By adding INR 9,000 crores to the corpus and updating the credit
guarantee programme for MSMEs, an extra INR 2 lakh crore in collateral-
free guaranteed credit has been made possible.
Proposed to set up a national financial information registry to serve as
the central repository of financial and ancillary information.
Public input will be included in the creation of regulations and the
issuance of subsidiary directives.
To make compliance easier and less expensive, financial sector
regulators must conduct a thorough assessment of current laws.
The Banking Regulation Act, the Banking Companies Act, and the RBI Act
have all been amended in order to improve bank governance and
increase investor protection.
The following incentive is proposed to further encourage operations from the
International Financial Services Centre (IFSC):
1) Permitting acquisition financing by IFSC banking units of foreign banks.
2) Recognizing offshore derivative instruments as valid contracts in IFSC.
3) Delegating powers under the SEZ Act to IFSCA and adopting a single
window approach for registration and approvals from IFSCA

Benefits for Senior Citizens

Enhanced maximum deposit limit for senior citizens savings scheme from
Rs 15 lakhs to Rs 30 lakhs.
Mahila Samman Bachat Patra
One-time new small savings scheme for a 2-year period with a deposit facility of
upto Rs 2 lakh for women.

Fiscal Management

Budget Estimates 22-23 Revised Estimates Budget Estimates 23-24

Total expenditure 39.44 lakh crore 41.87 lakh crore 45.03 lakh crore

Fiscal deficit 16.61 lakh crore 17.55 lakh crore 17.86 lakh crore

Overall, the Union Budget 2023 seeks to maintain a balance between fiscal
discipline and growth-oriented spending, while ensuring that the government's
finances remain on a sustainable path. The government's commitment to
reducing the fiscal deficit, increasing tax revenues, and prioritizing capital
expenditure are some of the key measures that reflect its focus on prudent
fiscal management.
 Income Tax Changes
New v/s Old tax slabs

Income Income
Income Slab Tax Income Slab Tax
Rate Rate

Upto 3,00,000 Nil Upto 2,50,000 Nil

3,00,001 to 6,00,000 5% 2,50,001 to 5,00,000 5%

6,00,001 to 9,00,000 10% 5,00,001 to 10,00,000 20%

9,00,001 to 12,00,000 15% More than 10,00,000 30%

12,00,001 to 15,00,000 20%

More than 15,00,000 30%

New v/s Old tax deductions

Particulars Old Tax Regime New Tax Regime

Lower slab rates of taxes

Rebate u/s 87A

HRA & LTA exemptions u/s 10

Standard Deduction 50,000

Housing loan- deduction towards interest &

principal payments

Section 80C Deductions (LIC, PPF, EPF etc)

Section 80D deductions (Mediclaim)

Section 80TTA Deductions (Savings bank

interest)
New v/s Old tax interpretations
1. Nothing has changed for those declaring an income up to
Rs 2.5 lakh, as their tax liability continues to be zero.
2. Those who earn between Rs 2.5 lakh and Rs 10 lakh and
do not have any active tax-saving investments, or do not
pay for health insurance, or do not have home loan
obligations, can switch over to the new tax structure.
3. In this case, their entire income in excess of Rs 2.5 lakh
will be taxable as per the slabs mentioned above.

1. However, it would be prudent to take advantage of the various

deductions and exemptions available. One can avail of
deductions up to Rs 1.5 lakh for investments under Section
80C – tax-saving deposits, ELSS schemes, life insurance, etc.
2. Additionally, another Rs 55,000 by way of health insurance
coverage for self, spouse, and dependent parents, up to Rs 2
lakh as interest on home loan.
3. Rs 50,000 as standard deduction if employed in the formal
sector can be availed. There are many other deductions too,
under various heads
 Impact of Budget
On Salaried Individuals
Positives:

Introduction of standard deduction of `50,000 under new tax regime

Increase in the basic exemption limit and revised tax slabs under the new
tax regime
Maximum deposit limit for monthly income account scheme to be enhanced
from `4.5 lakh to 9 lakh for single accounts and from Rs 9 lakh to `15 lakh for
joint accounts
Increase in tax exemption limit to `25 lakh from `3 lakh on leave encashment
will benefit non-government salaried employees nearing retirement
Continuation of concessional duty on lithium-ion cells for batteries for
another year
Negatives:

Income tax exemption in case of maturity proceeds of insurance policies with

an aggregate premium of more than `5 lakh issued on or after April 1, 2023 has

been removed

TDS exemption from interest payments by listed debentures withdrawn

Basic custom duty on imitation jewelry raised from 20% or `400 per kg to 25%

or `600 per kg, whichever is higher

Custom duty on precious metals such as platinum and silver raised from 20%

to 25%

Basic custom duty on electric kitchen chimney raised from 7.5% to 15%
 Impact of Budget
On SME Owners
Positives:
Infusion of `9,000 crores in the corpus of the Credit Guarantee Scheme for
MSMEs enable additional collateral free guaranteed credit of 2 lakh crore.
Deduction for expenditure incurred on payments to MSMEs to be allowed on
an actual payment basis easing cash flows for MSMEs .

Increase in the threshold for MSMEs to avail of the benefit of presumptive

taxation from `2 crores to `3 crores if cash receipts are not more than 5%.
The government will launch a new sub scheme called PM Matsya Sampada Yojana
with targeted investments of `6,000 crore to further enable activities of fishermen,
fish vendors and MSMEs
Concessional basic customs duty of 2.5% on copper scrap.
 Impact of Budget
On Home Makers
Positives:
Mahila Samman Bachat Patra: One-time new small savings
scheme for a 2-year period with a deposit facility of up to `2
lakh for women/girls at a fixed rate of
7.5% with a partial withdrawal option.
Reduction in basic customs duty on camera lens and its
inputs/parts for use
In manufacture of camera modules of mobile phones and
continuation of concessional duty on lithium-ion cells for
batteries for another year

Negatives:

Increase in basic custom duty of electric

kitchen chimney from 7.5% to 15%
Rise in custom duty on imitation jewelry from
20% or `400 per kg to 25% or `600 per kg,
whichever is higher
Increase in basic custom duty of toys,
bicycles, automobiles and naphtha
Financial Highlights
Financial Highlights
Financial Highlights