2023 Budget : What changes for you?
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2023 Budget: Synopsis
The Union Budget has a dual focus on growth and fiscal consolidation. The fiscal calculation is based on a nominal GDP growth projection of 10.5%, which is credible. At the same time, the fiscal deficit target of 5.9% is largely in line with our estimates, while the borrowing amount is slightly below our expectations.
4 Things Emphasised by Budget 2023:
More empowerment to women
Tourism and training of youth for tourism specific action
PM Vishwakarma programme for artisans
Green growth
We collate the TOP 3 Budget 2023 Stories:
1. Old vs. new tax regimes post-budget 2023: Who should opt for which income tax regime now?
The revised income tax slabs under the new tax regime announced in Budget 2023 have shifted the break-even between the old tax regime and revised new income tax slabs for salaried, senior citizens and super citizens
If the maximum exemptions and deductions claimed by salaried individuals are more than Rs 4.25 lakh for income above Rs 15.5 lakh, then he/she may pay less tax in the old tax regime from April 1, 2023.
The exemptions and deductions include a standard deduction of Rs 50,000, which is automatically available to a salaried individual. He or she does not need to submit any documentation to claim the standard deduction.
Do note that as the salary levels decrease, the maximum deduction and exemption amount will also decrease to arrive at break even.
2. Potential price cuts
Although the recent price hikes for cars don’t seem to have affected demand, there is good news in the revision of customs duty rates on goods other than agriculture and textiles from 21 percent to 13 percent. According to Finance Minister Nirmala Sitharaman, this would mean a reduction in surcharges (among other things), which could result in minor price cuts, which, once again, would be noteworthy only for the budget end of 4-wheelers and the two-wheeler segment, especially since commodity costs have come down in the last few months.
3. Marginal increase in disposable income
With taxable income brackets being revised, individuals who formerly paid tax on annual income above Rs 5 lakh will now be exempt from doing so, as the slab has been revised to Rs 7 lakh. The increase in disposable income will likely give a boost to the ailing entry-car market, which has seen shrinkage in the last year due to rising costs. More than entry-level cars, the move is expected to boost sales of two-wheelers.
This isn’t the case for luxury car buyers, as import duty on luxury cars and luxury EVs will go up from 60 percent to 70 percent, making CBU imports more expensive for cars costing less than $40,000 (INR 32.77 lakh).
At the moment, the Mercedes-Benz EQS and the Volvo XC40 Recharge are the only locally assembled luxury EVs on the market (both sitting on opposing ends of the price spectrum).
For brands like Audi, BMW, Merc, and other players operating in the luxury EV market, importing cars already commands a 100 percent import duty considering the price bracket within which they operate. So it’s safe to assume that those operations continue to remain unaffected.
However, this will deter brands like Tesla and perhaps other international EV startups from testing the waters in India. Tesla, in the past, had asked for duty concessions, having decided to abstain from entering the Indian market, after being denied said concessions.