Budget 2023: New tax regime to be the default, old one to continue too, says Finance Minister

Budget 2023: Finance Minister Nirmala Sitharaman reduced the number of tax slabs in the new tax regime while presenting the Union Budget 2023-24 in Parliament on Wednesday.

Finance Minister Nirmala Sitharaman announced an increase in the income tax rebate limit from Rs 5 lakh to Rs 7 lakh under the new tax regime. She added that the new tax regime will now be the default tax regime.

Changes in Income Tax slabs

0-3 lakh – nil

3-6 lakh – 5%

6-9 lakh – 10%
9-12 lakh – 15%

12-15 lakh – 20%

above 15 lakh – 30%

An Individual with an annual income of 9 lakhs will be required to pay only 45,000.

The government estimated the fiscal deficit for 2023-24 at 5.9 percent of the GDP, Finance Minister Nirmala Sitharaman said.

Announcing the “highest-ever outlay, nine times the outlay made in 2013-14”, the finance minister said that Rs. 2.40 lakh has been allocated for Indian Railways. She said this was the “highest-ever outlay”, nine times the outlay made in 2013-14.

The capital investment outlay has been increased by 33 percent to Rs. 10 lakh crore, which will account for 3.3 percent of the GDP. In a boost for states, Sitharaman said that the 50-year interest-free loan to state governments will continue for a year more. The NITI Aayog’s state support mission will be continued for three years, she added.

The Union Budget 2023 focused on seven priorities, which the Finance Minister called the “Saptrishis guiding us through Amrit Kaal”. These are inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power, and financial sector”.

Finance Minister also announced that the average processing time for income tax returns was reduced from 93 days to 16 days.

The income tax slabs were not changed since 2014. The basic personal tax exemption limit was last revised in 2014.

Also read: Union Budget 2023-24 Live: FM Nirmala Sitharaman Presents Paperless Budget, Begins..