The new tax regime became the default tax regime from FY 2023-24 (Representational)
The Union Budget for FY 2023-24 had something to offer to every sector as the Prime Minister Narendra Modi-led government left no stone unturned in its ambition to make India the world's third-largest economy by 2030. Last year's Budget had a slew of measures ranging from a big push to infrastructure spending to the relief to MSMEs and a boost for startups.
This has generated a significant interest for the upcoming Interim Budget, which will be presented by Finance Minister Nirmala Sitharaman on February 1.
If you are keenly awaiting Budget 2024, it will help in a comparative analysis to have a recap of what Nirmala Sitharaman had announced in the last Budget.
Here are five big announcements made in Budget 2023-24:
1. Income Tax
Even though in last year's Budget the Finance Minister did not announce any changes in the old tax regime, the government revised the tax slabs under the new tax regime. The basic exemption limit was hiked to Rs 3 lakh from Rs 2.5 lakh under the new tax regime, while the tax rebate under Section 87A of the Income Tax Act, 1961, was increased to Rs 7 lakh from Rs 5 lakh. In the Budget, the standard deduction of Rs 50,000, which was earlier available under the old regime, was extended to the new tax regime as well.
The new tax regime became the default tax regime from FY 2023-24.
Tax Slab
Income Tax Rates
Up to 3,00,000
Nil
From 3,00,001 to 6,00,000
5%
From 6,00,001 to 9,00,000
10%
From 9,00,001 to 12,00,000
15%
From 12,00,001 to 15,00,000
20%
From 15,00,001 and above
30%
2. Capex hiked by 33%
The Budget 2023-24 gave a major push to the capital investment outlay for the third year in a row. The total outlay was increased by 33% to Rs 10 lakh crore compared to Rs 7.5 lakh crore for FY 2022-23. The total capital investment outlay was around 3.3% of the GDP. The Finance Minister said that investments in infrastructure and productive capacity would have a large multiplier impact on growth and employment. The 'Effective Capital Expenditure' was budgeted at Rs 13.7 lakh crore, which was 4.5% of GDP.
3. Health and Education
The Union Budget last year allocated Rs 89,155 crore to the health sector. The Finance Minister also announced a Mission to eliminate Sickle Cell Anaemia by 2047. She stated that 157 new nursing colleges will be established in collaboration with the existing 157 medical colleges established since 2014.
The Budget allocation for several central sector schemes was increased. These included the Pradhan Mantri Swasthya Suraksha Yojana and National Health Mission, among others.
4. PM Awas Yojana
In a major push to the housing sector, the outlay for the Pradhan Mantri Awas Yojana was enhanced by 66% to over Rs 79,000 crore. The Finance Minister announced that the central government will continue the 50-year interest-free loan to state governments for one more year to spur investment in infrastructure and to incentivise them for complementary policy actions, with a significantly enhanced outlay of Rs 1.3 lakh crore.
5. Agriculture
Nirmala Sitharaman stated that an Agriculture Accelerator Fund will be set up to encourage startups by young entrepreneurs in rural areas. Through this, the government aimed to bring innovative and affordable solutions for challenges faced by farmers. Also, she announced that the agriculture credit target will be increased to Rs 20 lakh crore with a focus on animal husbandry, dairy and fisheries.
Moreover, a new sub-scheme of PM Matsya Sampada Yojana was announced with a targeted investment of Rs 6,000 crore to further enable activities of fishermen, fish vendors and MSMEs.