According to Finance Minister Nirmala Sitharaman, under the new tax system, individuals making less than ₹7 lakhs annually are exempt from paying income tax. This limit was previously ₹5 lakhs but has now been raised. She stated in her Budget speech, “This is for our hardworking middle class,” adding that this is the news everyone has been waiting for.
Indian Budget 2023-24: Finance Minister’s speech decoded
In the second statement, she stated that, under the new tax system, she is altering the tax structure, lowering the number of tax slabs, and raising the tax exemption threshold. The government also announced a 33% increase in capital spending, or 3.3% of GDP, to ₹10 lakhs crore in FY24. Additionally, the funding for the PM Awas Yojana was increased by 66% to ₹79,000 crore. The Finance Minister also gave the Schedule Tribe Mission a three-year budget of ₹15,000 crores.
The Finance Minister also allotted ₹35,000 crores for investments in the energy transformation. She said that the fiscal deficit for FY23, at 6.4%, is in line with projections. She set a 5.9% budgetary deficit goal for FY24. The final suggestion is for pensioners, especially family pensioners, and members of the salaried class. She added the standard deduction’s advantages to the new tax system. Thus, each salaried individual making at least ₹15.5 lakhs will stand to gain ₹52,500.
In the new tax system, the Finance Minister cut the highest personal income tax surcharge rate from 37% to 25%. The maximum tax rate would be reduced as a result to 39%. Despite obstacles, India is moving toward a bright future as she presented her fifth budget to the parliament. The non-government salaried employee threshold of 3 lakh rupees for tax exemption on leave encashment upon retirement has been raised to ₹25 lakhs.
She named seven budget priorities: unleashing potential, infrastructure, and investment, bridging the last mile of digital public infra for agriculture, youth power, green growth, and the financial industry. Sitharaman stated that there would be a focus on three things: “ample possibilities for citizens and young to fulfil growth, strong impetus to employment creation and growth, and strengthening macroeconomic stability.” Before India holds a general election the following year, this is the last budget the administration will provide.