The Budget 2023 is set to be tabled in Parliament by Finance Minister Nirmala Sitharaman on February 1. There are some expectations from people across sectors, with individuals also expecting tax relaxations. This is the last full Budget of the current tenure of the government. Here are five major expectations from the Union Budget 2023-24:
Tax Exemption Limit
There is an expectation that the government might give a relief to individual tax payers by raising tax exemption or rebate limit. Salaried employees are one of the major tax contributors in India. Their salary is tax-exempt up to Rs 2.5 lakh a year.
However, their salary is also tax-free if it is below Rs 5 lakh in a year. However, it is a rebate under Section 87A, not an exemption. If the salary goes above Rs 5 lakh in a year, the tax on the whole amount except the exemption limit of Rs 2.5 lakh will be applicable. Now, there are demands for raising the exemption limit to Rs 5 lakh.
Sections 80C and 80D Deduction Limit
Income tax deductions pertain to specific deductions which a taxpayer is eligible for on account of investments made (Section 80C) or sum expended (Section 80D or Section 80E).
There are demands of raising the deductions limit under Section 80C in the Union Budget 2023-23, compared with Rs 1.5 lakh currently. The real estate sector is also urging the government to provide a separate deduction for realty purchases, apart from Section 80C. The current 80C limit was fixed about a decade ago.
Production-Linked Incentive For More Sectors
The government is likely to extend fiscal incentives for the production of toys, bicycles and leather and footwear in the forthcoming budget as it looks to expand production linked incentive (PLI) scheme to cover more high-employment potential sectors, according to PTI report quoting sources.
The government has already rolled out the scheme with an outlay of about Rs 2 lakh crore for as many as 14 sectors, including automobiles and auto components, white goods, pharma, textiles, food products, high-efficiency solar PV modules, advance chemistry cell and speciality steel.
Infrastructure Push
The government is likely to announce a greater allocation this year to address growth challenges in FY24 as infrastructure is a significant engine of growth.
Rural Push
A push to the rural sector is also likely this year. Krishnarao Buddha, senior category head, Parle Products, said, “The Union Budget 2023-24 should foster investments to accelerate and balance economic recovery across markets. Enhanced focus on programmes that aim to increase employment opportunities will give a boost to the rural economy and in turn, increase their purchasing capacity."
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