Union Budget 2023
The Highlights of Major
Announcements of the Budget.
The Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman
presented the Union Budget 2023-24 in Parliament on 1st February 2023. The
highlights of the Budget are as follows:
PART A OF UNION BUDGET
- Per capita income has more than doubled to Rs. 1.97 lakh in around nine years.
- Indian economy has increased in size from being 10th to 5th largest in the world
in the past nine years.
- EPFO membership has more than doubled to 27 crore. 7,400 crore digital
payments of ₹126 lakh crore has taken place through UPI in 2022.
- 11.7 crore household toilets constructed under Swachh Bharat Mission.
- 9.6 crore LPG connections provided under Ujjwala.
- 220 crore covid vaccination of 102 crore persons.
- 47.8 crore PM Jan Dhan bank accounts.
- Insurance cover for 44.6 crore persons under PM Suraksha Bima and PM
Jeevan Jyoti Yojana.
- Cash transfer of ₹2.2 lakh crore to over 11.4 crore farmers under PM Kisan
- Seven priorities of the budget ‘Saptarishi’ are inclusive development, reaching
the last mile, infrastructure and investment, unleashing the potential, green
growth, youth power and financial sector.
- Atmanirbhar Clean Plant Program with an outlay of ₹2200 crore to be launched
to boost availability of disease-free, quality planting material for high value
- 157 new nursing colleges to be established in co-location with the existing 157
medical colleges established since 2014.
- Centre to recruit 38,800 teachers and support staff for the 740 Eklavya Model
Residential Schools, serving 3.5 lakh tribal students over the next three years.
- Outlay for PM Awas Yojana is being enhanced by 66% to over Rs. 79,000 crore.
- Capital outlay of Rs. 2.40 lakh crore has been provided for the Railways, which is
the highest ever outlay and about nine times the outlay made in 2013-14.
- Urban Infrastructure Development Fund (UIDF) will be established through
use of priority Sector Lending shortfall, which will be managed by the national
Housing Bank, and will be used by public agencies to create urban infrastructure
in Tier 2 and Tier 3 cities.
- Entity DigiLocker to be setup for use by MSMEs, large business and charitable
trusts to store and share documents online securely.
- 100 labs to be setup for 5G services based application development to realize a
new range of opportunities, business models, and employment potential.
- 500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic
Bio-Agro Resources Dhan) scheme to be established for promoting circular
economy at total investment of Rs 10,000 crore.
- 5 per cent compressed biogas mandate to be introduced for all organizations
marketing natural and bio gas. Centre to facilitate one crore farmers to adopt
natural farming over the next three years.
- For this, 10,000 Bio-Input Resource Centres to be set-up, creating a nationallevel distributed micro-fertilizer and pesticide manufacturing network.
- Pradhan Mantri Kaushal Vikas Yojana 4.0, to be launched to skill lakhs of
youth within the next three years covering new age courses for Industry 4.0 like
coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills.
- 30 Skill India International Centres to be set up across different States to skill
youth for international opportunities.
- Revamped credit guarantee scheme for MSMEs to take effect from 1st April 2023
through infusion of Rs 9,000 crore in the corpus. This scheme would enable
additional collateral-free guaranteed credit of Rs 2 lakh crore and also reduce the
cost of the credit by about 1 per cent.
- Central Processing Centre to be setup for faster response to companies through
centralized handling of various forms filed with field offices under the Companies
- The maximum deposit limit for Senior Citizen Savings Scheme to be enhanced
from Rs 15 lakh to Rs 30 lakh.
- Targeted Fiscal Deficit to be below 4.5% by 2025-26.
- Agriculture Accelerator Fund to be set-up to encourage agri-startups by young
entrepreneurs in rural areas.
- To make India a global hub for ‘Shree Anna’, the Indian Institute of Millet
Research, Hyderabad will be supported as the Centre of Excellence for sharing
best practices, research and technologies at the international level.
- Rs. 20 lakh crore agricultural credit targeted at animal husbandry, dairy and
fisheries A new sub-scheme of PM Matsya Sampada Yojana with targeted
investment of Rs. 6,000 crore to be launched to further enable activities of
fishermen, fish vendors, and micro & small enterprises, improve value chain
efficiencies, and expand the market.
- Digital public infrastructure for agriculture to be built as an open source, open
standard and inter operable public good to enable inclusive farmer centric
solutions and support for growth of agri-tech industry and start-ups.
- Computerisation of 63,000 Primary Agricultural Credit Societies (PACS) with
an investment of ₹2,516 crore initiated. Massive decentralised storage capacity
to be set up to help farmers store their produce and realize remunerative prices
through sale at appropriate times. Sickle Cell Anaemia elimination mission to be
- Joint public and Private Medical research to be encouraged via select ICMR labs
for encouraging collaborative research and innovation.
- New Programme to promote research in Pharmaceuticals to be launched.
- Rs. 10 lakh crore capital investment, a steep increase of 33% for third year in a
row, to enhance growth potential and job creation, crowd-in private investments,
and provide a cushion against global headwinds.
- Aspirational Blocks Programme covering 500 blocks launched for saturation of
essential government services across multiple domains such as health, nutrition,
education, agriculture, water resources, financial inclusion, skill development,
and basic infrastructure.
- Rs. 15,000 crore for implementation of Pradhan Mantri PVTG Development
Mission over the next three years under the Development Action Plan for the
- Investment of Rs. 75,000 crore, including Rs. 15,000 crore from private sources,
for one hundred critical transport infrastructure projects, for last and first mile
connectivity for ports, coal, steel, fertilizer, and food grains sectors.
- New Infrastructure Finance Secretariat established to enhance opportunities for
private investment in infrastructure.
- District Institutes of Education and Training to be developed as vibrant institutes
of excellence for Teachers’ Training.
- A National Digital Library for Children and Adolescents to be set-up for
facilitating availability of quality books across geographies, languages, genres and
levels, and device agnostic accessibility.
- Rs. 5,300 crore to be given as central assistance to Upper Bhadra Project to
provide sustainable micro irrigation and filling up of surface tanks for drinking
- ‘Bharat Shared Repository of Inscriptions’ to be set up in a digital epigraphy
museum, with digitization of one lakh ancient inscriptions in the first stage.
- ‘Effective Capital Expenditure’ of Centre to be Rs. 13.7 lakh crore. Continuation of
50-year interest free loan to state governments for one more year to spur
investment in infrastructure and to incentivize them for complementary policy
- Encouragement to states and cities to undertake urban planning reforms and
actions to transform our cities into ‘sustainable cities of tomorrow’.
- Transition from manhole to machine-hole mode by enabling all cities and towns to
undertake 100 percent mechanical desludging of septic tanks and sewers.
- iGOT Karmayogi, an integrated online training platform, launched to provide
continuous learning opportunities for lakhs of government employees to upgrade
their skills and facilitate people-centric approach.
- More than 39,000 compliances reduced and more than 3,400 legal provisions
decriminalized to enhance Ease Of Doing Business.
- Jan Vishwas Bill to amend 42 Central Acts have been introduced to further trustbased governance.
- Three centres of excellence for Artificial Intelligence to be set-up in top
educational institutions to realise the vision of “Make AI in India and Make AI
work for India”.
- National Data Governance Policy to be brought out to unleash innovation and
research by start-ups and academia.
- One stop solution for reconciliation and updation of identity and address of
individuals to be established using DigiLocker service and Aadhaar as
- PAN will be used as the common identifier for all digital systems of specified
government agencies to bring in Ease of Doing Business.
- 95 per cent of the forfeited amount relating to bid or performance security, will be
returned to MSME’s by government and government undertakings in cases the
MSME’s failed to execute contracts during Covid period. Result Based Financing
to better allocate scarce resources for competing development needs.
- Phase-3 of the E-Courts project to be launched with an outlay of Rs. 7,000 crore
for efficient administration of justice.
- R & D grant for Lab Grown Diamonds (LGD) sector to encourage
indigenous production of LGD seeds and machines and to reduce import
- Annual production of 5 MMT under Green Hydrogen Mission to be
targeted by 2030 to facilitate transition of the economy to low carbon
intensity and to reduce dependence on fossil fuel imports.
- Rs. 35000 crore outlay for energy security, energy transition and net
- Battery energy storage systems to be promoted to steer the economy on
the sustainable development path.
- Rs. 20,700 crore outlay provided for renewable energy grid integration
and evacuation from Ladakh.
- “PM Programme for Restoration, Awareness, Nourishment and Amelioration
of Mother Earth” (PM-PRANAM) to be launched to incentivize States and
Union Territories to promote alternative fertilizers and balanced use of chemical
- ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes’, MISHTI, to
be taken up for mangrove plantation along the coastline and on salt pan lands,
through convergence between MGNREGS, CAMPA Fund and other sources.
- Green Credit Programme to be notified under the Environment (Protection) Act
to incentivize and mobilize additional resources for environmentally sustainable
and responsive actions.
- Amrit Dharohar scheme to be implemented over the next three years to
encourage optimal use of wetlands, enhance bio-diversity, carbon stock, ecotourism opportunities and income generation for local communities.
- A unified Skill India Digital platform to be launched for enabling demand-based
formal skilling, linking with employers including MSMEs, and facilitating access
to entrepreneurship schemes.
- Direct Benefit Transfer under a pan-India National Apprenticeship Promotion
Scheme to be rolled out to provide stipend support to 47 lakh youth in three
- At least 50 tourist destinations to be selected through challenge mode; to be
developed as a complete package for domestic and foreign tourists. Sector specific
skilling and entrepreneurship development to be dovetailed to achieve the
objectives of the ‘Dekho Apna Desh’ initiative.
- Tourism infrastructure and amenities to be facilitated in border villages through
the Vibrant Villages Programme.
- States to be encouraged to set up a Unity Mall for promotion and sale of their
own and also all others states’ ODOPs (One District, One Product), GI products
- National Financial Information Registry to be set up to serve as the central
repository of financial and ancillary information for facilitating efficient flow of
credit, promoting financial inclusion, and fostering financial stability.
- A new legislative framework to be designed in consultation with RBI to govern
this credit public infrastructure.
- Financial sector regulators to carry out a comprehensive review of existing
regulations in consultation with public and regulated entities.
- Time limits to decide the applications under various regulations would also be
- To enhance business activities in GIFT IFSC, the following measures to be taken.
- Delegating powers under the SEZ Act to IFSCA to avoid dual regulation. Setting
up a single window IT system for registration and approval from IFSCA, SEZ
authorities, GSTN, RBI, SEBI and IRDAI.
- Permitting acquisition financing by IFSC Banking Units of foreign bank.
- Establishing a subsidiary of EXIM Bank for trade re-financing.
- Amending IFSCA Act for statutory provisions for arbitration, ancillary services,
and avoiding dual regulation under SEZ Act Recognizing offshore derivative
instruments as valid contracts.
- Amendments proposed to the Banking Regulation Act, the Banking Companies
Act and the Reserve of India Act to improve bank governance and enhance
- Countries looking for digital continuity solutions would be facilitated for setting
up of their Data Embassies in GIFT IFSC.
- SEBI to be empowered to develop, regulate, maintain and enforce norms and
standards for education in the National Institute of Securities Markets and to
recognize award of degrees, diplomas and certificates.
- Integrated IT portal to be established to enable investors to easily reclaim the
unclaimed shares and unpaid dividends from the Investor Education and
Protection Fund Authority.
- To commemorate Azadi Ka Amrit Mahotsav, a one-time new small savings
scheme, Mahila Samman Savings Certificate to be launched.
- It will offer deposit facility upto Rs 2 lakh in the name of women or girls for
tenure of 2 years (up to March 2025) at fixed interest rate of 7.5 per cent with
partial withdrawal option.
- The maximum deposit limit for Monthly Income Account Scheme to be enhanced
from Rs 4.5 lakh to Rs 9 lakh for single account and from Rs 9 lakh to Rs 15 lakh
for joint account.
- The entire fifty-year interest free loan to states to be spent on capital expenditure
- Part of the loan is conditional on States increasing actual Capital expenditure and
parts of outlay will be linked to States undertaking specific loans.
- Fiscal Deficit of 3.5% of GSDP allowed for States of which 0.5% is tied to Power
REVISED ESTIMATES 2022-23
- The total receipts other than borrowings is Rs 24.3 lakh crore, of which the net
tax receipts are Rs 20.9 lakh crore. The total expenditure is Rs 41.9 lakh crore, of
which the capital expenditure is about Rs 7.3 lakh crore. The fiscal deficit is 6.4
per cent of GDP, adhering to the Budget Estimate.
BUDGET ESTIMATES 2023-24
- The total receipts other than borrowings is estimated at Rs 27.2 lakh crore and
the total expenditure is estimated at Rs 45 lakh crore.
- The net tax receipts are estimated at Rs 23.3 lakh crore.
- The fiscal deficit is estimated to be 5.9 per cent of GDP.
- To finance the fiscal deficit in 2023-24, the net market borrowings from dated
securities are estimated at Rs 11.8 lakh crore.
- The gross market borrowings are estimated at Rs 15.4 lakh crore.
PART – B
- Direct Tax proposals aim to maintain continuity and stability of taxation, further
simplify and rationalise various provisions to reduce the compliance burden,
promote the entrepreneurial spirit and provide tax relief to citizens.
- Constant endeavour of the Income Tax Department to improve Tax Payers
Services by making compliance easy and smooth.
- To further improve tax payer services, proposal to roll out a next-generation
Common IT Return Form for tax payer convenience, along with plans to
strengthen the grievance redressal mechanism.
- Rebate limit of Personal Income Tax to be increased to Rs. 7 lakh from the
current Rs. 5 lakh in the new tax regime.
- Thus, persons in the new tax regime, with income up to Rs. 7 lakh to not pay any
- Tax structure in new personal income tax regime, introduced in 2020 with six
income slabs, to change by reducing the number of slabs to five and increasing the
tax exemption limit to Rs. 3 lakh.
- Change to provide major relief to all tax payers in the new regime. New tax rates
Total Income (Rs) Rate (per cent) 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% and Above 15,00,000 – 30%.
- Proposal to extend the benefit of standard deduction of Rs. 50,000 to salaried
individual, and deduction from family pension up to Rs. 15,000, in the new tax
- Highest surcharge rate to reduce from 37 per cent to 25 per cent in the new tax
regime. This to further result in reduction of the maximum personal income tax
rate to 39 per cent.
- The limit for tax exemption on leave encashment on retirement of nongovernment salaried employees to increase to Rs. 25 lakh.
- The new income tax regime to be made the default tax regime. However, citizens
will continue to have the option to avail the benefit of the old tax regime.
- Enhanced limits for micro enterprises and certain professionals for availing the
benefit of presumptive taxation proposed. Increased limit to apply only in case
the amount or aggregate of the amounts received during the year, in cash, does
not exceed five per cent of the total gross receipts/turnover.
- Deduction for expenditure incurred on payments made to MSMEs to be allowed
only when payment is actually made in order to support MSMEs in timely receipt
- New co-operatives that commence manufacturing activities till 31.3.2024 to get
the benefit of a lower tax rate of 15 per cent, as presently available to new
- Opportunity provided to sugar co-operatives to claim payments made to
sugarcane farmers for the period prior to assessment year 2016-17 as
- This expected to provide them a relief of almost Rs. 10,000 crore.
- Provision of a higher limit of Rs. 2 lakh per member for cash deposits to and loans
in cash by Primary Agricultural Co-operative Societies (PACS) and Primary Cooperative Agriculture and Rural Development Banks (PCARDBs).
- A higher limit of Rs. 3 crore for TDS on cash withdrawal to be provided to cooperative societies. Date of incorporation for income tax benefits to start-ups to
be extended from 31.03.23 to 31.3.24.
- Proposal to provide the benefit of carry forward of losses on change of
shareholding of start-ups from seven years of incorporation to ten years.
Deduction from capital gains on investment in residential house under sections
54 and 54F to be capped at Rs. 10 crore for better targeting of tax concessions
- Proposal to limit income tax exemption from proceeds of insurance policies with
very high value. Where aggregate of premium for life insurance policies (other
than ULIP) issued on or after 1st April, 2023 is above Rs. 5 lakh, income from
only those policies with aggregate premium up to Rs. 5 lakh shall be exempt.
- Income of authorities, boards and commissions set up by statutes of the Union or
State for the purpose of housing, development of cities, towns and villages, and
regulating, or regulating and developing an activity or matter, proposed to be
exempted from income tax. Minimum threshold of Rs. 10,000/- for TDS to be
removed and taxability relating to online gaming to be clarified.
- Proposal to provide for TDS and taxability on net winnings at the time of
withdrawal or at the end of the financial year.
- Conversion of gold into electronic gold receipt and vice versa not to be treated as
- TDS rate to be reduced from 30 per cent to 20 per cent on taxable portion of EPF
withdrawal in non-PAN cases.
- Income from Market Linked Debentures to be taxed.
- Deployment of about 100 Joint Commissioners for disposal of small appeals in
order to reduce the pendency of appeals at Commissioner level. Increased
selectivity in taking up appeal cases for scrutiny of returns already received this
- Period of tax benefits to funds relocating to IFSC, GIFT City extended till
- Certain acts of omission of liquidators under section 276A of the Income Tax Act
to be decriminalized with effect from 1st April, 2023.
- Carry forward of losses on strategic disinvestment including that of IDBI Bank to
- Agniveer Fund to be provided EEE status.
- The payment received from the Agniveer Corpus Fund by the Agniveers enrolled
in Agnipath Scheme, 2022 proposed to be exempt from taxes.
- Deduction in the computation of total income is proposed to be allowed to the
Agniveer on the contribution made by him or the Central Government to his Seva
- Number of basic customs duty rates on goods, other than textiles and agriculture,
reduced to 13 from 21.
- Minor changes in the basic custom duties, cesses and surcharges on some items
including toys, bicycles, automobiles and naphtha.
- Excise duty exempted on GST-paid compressed bio gas contained in blended
compressed natural gas.
- Customs Duty on specified capital goods/machinery for manufacture of lithiumion cell for use in battery of electrically operated vehicle (EVs) extended to
31.03.2024 Customs duty exempted on vehicles, specified automobile parts/
components, sub-systems and tyres when imported by notified testing agencies,
for the purpose of testing and/ or certification, subject to conditions.
- Customs duty on camera lens and its inputs/parts for use in manufacture of
camera module of cellular mobile phone reduced to zero and concessional duty on
lithium-ion cells for batteries extended for another year.
- Basic customs duty reduced on parts of open cells of TV panels to 2.5 per cent.
- Basic customs duty on electric kitchen chimney increased to 15 per cent from 7.5
- Basic customs duty on heat coil for manufacture of electric kitchen chimneys
reduced to 15 per cent from 20 per cent.
- Denatured ethyl alcohol used in chemical industry exempted from basic customs
- Basic customs duty reduced on acid grade fluorspar (containing by weight more
than 97 per cent of calcium fluoride) to 2.5 per cent from 5 per cent.
- Basic customs duty on crude glycerin for use in manufacture of epicholorhydrin
reduced to 2.5 per cent from 7.5 per cent.
- Duty reduced on key inputs for domestic manufacture of shrimp feed.
- Basic customs duty reduced on seeds used in the manufacture of lab grown
- Duties on articles made from dore and bars of gold and platinum increased.
- Import duty on silver dore, bars and articles increased.
- Basic Customs Duty exemption on raw materials for manufacture of CRGO Steel,
ferrous scrap and nickel cathode continued.
- Concessional BCD of 2.5 per cent on copper scrap is continued.
- Basic customs duty rate on compounded rubber increased to 25 per cent from 10
per cent or 30 per kg whichever is lower.
- National Calamity Contingent Duty (NCCD) on specified cigarettes revised
upwards by about 16 per cent.
LEGISLATIVE CHANGES IN CUSTOMS LAWS
- Customs Act, 1962 to be amended to specify a time limit of nine months from date
of filing application for passing final order by Settlement Commission. Customs
Tariff Act to be amended to clarify the intent and scope of provisions relating to
Anti-Dumping Duty (ADD), Countervailing Duty (CVD), and Safeguard Measures.
- CGST Act to be amended
- To raise the minimum threshold of tax amount for launching
prosecution under GST from one crore to two crore;
- To reduce the compounding amount from the present range of 50 to
150 per cent of tax amount to the range of 25 to 100 per cent;
- Decriminalise certain offences; to restrict filing of returns/statements
to a maximum period of three years from the due date of filing of the
relevant return/statement; and
- To enable unregistered suppliers and composition taxpayers to make
intra-state supply of goods through E-Commerce Operators (ECOs).