Union Budget 2023: 5 Announcements Expected In This Year's Budget

Finance Minister Nirmala Sitharaman is set to present the Union Budget 2023 at Parliament on February 1. Being the last full budget before the country goes into general elections next year, there are high expectations.

While the industry is anticipating key announcements focusing on infrastructure boosts to put the economy on the fast track after a slum in the years of the COVID-19 pandemic, the middle class is eyeing a tax relaxation. 

The last changes under the exemption limits were in FY 2014-15. The Income Tax exemption limit is Rs. 2.5 lakhs per year under both the new and the old income tax regime. 

Here are 5 key announcements expected from the upcoming budget:

Income Tax Exemption

An increased income tax exemption would allow more disposable income facilitating higher spending, and helping the economy recover from the slowness during the COVID-19 pandemic. 

As per the current tax slab, income up to Rs 2.5 lakh is exempted from any tax whereas earning between Rs 2.5 to Rs 5 lakh are liable for a deduction of 5 per cent and so on. 

However, with the increased cost of living and inflation, the exemption seem to be little. One of the major expectations from the budget is increasing the tax exemption slab to up to Rs 5 lakh.

Low-Cost Credit For Small Businesses

The government is expected to announce a low-cost credit scheme for the medium and small businesses. Micro, Small & Medium Enterprises(MSMEs) were among the worst hit during the COVID-19 pandemic. 

With a large portion of the Indian economy relying on the performance of these small and medium-scale businesses, the move could be a game changer for the future of MSMEs in India.

Tax Exemption for Home Loan

Presently, an individual can claim a maximum of Rs 2 lakh exemption per financial year on a home loan for a self-occupied property. 

However, with soaring property prices over the past few years and rising inflation, the government could announce an extension of this limit by up to Rs 1 lakh to give relief to taxpayers. 

The exemption is also likely to boost the real sector's performance.

Focus on Alternative Energy

The world is looking at alternative options for energy. From electric vehicles to solar power plants and much more.

The government could announce tax exemption and other benefits to promote business working in alternate energy options.

Increased Budgetary Allocation For Infrastructural Project

The government is likely to announce an increase in the budget allocation for various infrastructural projects. 

Going by the past trend of government led by Prime Minister Narendra Modi, we could see major announcements on rail and road infrastructure focusing on ensuring better connectivity and in turn boosting businesses.