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Key Highlights of Union Budget 2023 -24

The Union Budget 2023-24 was presented by the Minister of Finance and Corporate Affairs, Nirmala Sitharaman, in Parliament. The Budget highlights include:

  •    DIRECT TAXES
  • The Direct Tax proposals aim to maintain stability, simplify provisions, reduce compliance burden, and provide tax relief to citizens. The Income Tax Department is working to improve taxpayer services by introducing a new Common IT Return Form and improving the grievance mechanism.
  • The Personal Income Tax rebate limit will be increased to Rs. 7 lakh, with five tax slabs and an exemption limit of Rs. 3 lakh.
  • The standard deduction for salaried individuals and deductions for family pensions will be extended.
  • The highest surcharge rate will be reduced to 25%, reducing the maximum personal income tax rate to 39%.
  • The limit for tax exemption on leave encashment for non-government salaried employees will increase to Rs. 25 lakh.
  • The new tax regime will be the default, but citizens can still opt for the old regime.
  • The benefit of presumptive taxation will be extended to micro-enterprises and certain professionals.
  • The limit for TDS on cash withdrawals by co-operative societies will be increased to Rs. 3 crore.
  • The start-up incorporation date for tax benefits will be extended to 31.03.24.
  • The carry forward of losses for start-ups will be increased from 7 to 10 years.
  • The capital gains deduction for investment in residential houses will be capped at Rs. 10 crore.
  • The income tax exemption from high-value insurance policies will be limited. Authorities, boards and commissions will be exempt from income tax.
  • The TDS threshold will be removed, and TDS on online gaming winnings will be clarified. The EPF withdrawal TDS rate will be reduced to 20%. The deployment of Joint Commissioners will reduce the pendency of appeals.
  • The tax benefits for funds relocating to IFSC, GIFT City will be extended till 31.03.2025. Certain actions by liquidators will be decriminalized.
  • The carry forward of losses on strategic disinvestment will be allowed.
  • The Agniveer Fund will be exempt from taxes, and deductions will be allowed for contributions made to the Seva Nidhi account.

 

  • INDIRECT TAX
  • The number of basic customs duty rates on goods, excluding textiles and agriculture, has been reduced from 21 to 13. Minor adjustments have been made to the customs duties, cesses, and surcharges on items such as toys, bikes, automobiles, and naphtha.
  • Excise duty has been exempt on compressed bio gas contained in blended compressed natural gas that has already been paid for under the GST. Customs duty on machinery for the manufacture of lithium-ion cells for electric vehicle batteries has been extended until 31.03.2024.
  • Customs duty has been waived on vehicles, automobile parts, sub-systems, and tires imported by approved testing agencies for testing and certification purposes.
  • The customs duty on camera lenses and its inputs for use in the production of cell phone camera modules has been reduced to zero, and the concession on lithium-ion cells for batteries has been extended for another year.
  • The basic customs duty on parts of open-cell TV panels has been reduced to 2.5%.
  • The basic customs duty on electric kitchen chimneys has increased to 15% from 7.5%, while the duty on heat coils for electric kitchen chimneys has been reduced to 15% from 20%.
  • Denatured ethyl alcohol used in the chemical industry is exempt from basic customs duty.
  • The basic customs duty on acid grade fluorspar has been reduced to 2.5% from 5%, and the duty on crude glycerin for the production of epichlorhydrin has been reduced to 2.5% from 7.5%.
  • The duty on key inputs for domestic shrimp feed production has been reduced.
  • The basic customs duty on seeds used in lab-grown diamond production has been reduced. Duties on gold and platinum products have increased, and the import duty on silver products has also increased. Exemptions on raw materials for the production of CRGO steel, ferrous scrap, and nickel cathodes continue, while the concessional BCD of 2.5% on copper scrap is also maintained.
  • The basic customs duty rate on compounded rubber has increased to 25% from the previous 10% or 30 per kg.
  • The National Calamity Contingent Duty on certain cigarettes has been revised upward by about 16%

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