India's Union Budget Highlights 2023, Change in New Tax Rates, Green Energy Boost, and More

Union Budget 2023 announced by FM Nirmala Sitharaman. New tax regime with lower rates, the highest outlay for Indian Railways after years, and more.

Written by: Arjita Gupta

Edited by: Krutarth Ghosalkar

Last Updated: February 01, 2023

Finance Minister Nirmala Sitharaman presented the Union Budget 2023 following the notion of Amrit Kaal, saying that the economic growth for the current year is estimated at 7%. For FY2024, the fiscal deficit will be at 5.9% from 6.4% in FY2023. The same may come down to 4.5% in 2025-26. New tax regime to become the default tax regime. It entails lower tax rates for Hindu Undivided Families and individuals if they do not avail of the specified deductions and exemptions such as interest on a home loan, house rent allowance, and investments as per Section 80C.

The new tax regime rates are nil for income up to Rs. 3 lakhs. 5%, 10%, 15%, 20%, and 30% is applicable for income bracket for Rs. 3 lakhs to Rs. 6 lakhs, Rs. 6 lakhs to Rs. 9 lakhs, Rs. 9 lakhs to Rs. 12 lakhs, Rs. 12 lakhs to Rs. 15 lakhs, and over Rs. 15 lakhs, respectively.
Individuals with income of Rs 15.5 lakh and beyond can benefit from a standard deduction of Rs 52,500 in the new tax regime.
But you can still choose to be under the old tax regime. The old tax regime will not apply taxes on income up to Rs. 2.5 lakhs. 5%, 15%, 20%, and 30% tax are applicable on the income bracket of Rs. 2.5 to Rs. 5 lakhs, Rs. 5 to Rs. 7.5 lakhs, and over Rs. 10 lakhs, respectively.

Here are further updates announced in the Union Budget this year:

Relief for MSMEs by investing in green energy. An outlay of Rs. 35,000 crores for investment into energy transition.
A new scheme to supply foodgrains was implemented from 1 January 2023 to priority households and all Antaodaya for the next year. An agricultural accelerator fund for entrepreneurs in rural areas launching start-ups to develop innovative and affordable solutions for farmers.
16% hike in customs duty for cigarettes. Plan of 100 labs for 5G solutions for engineering colleges. Data embassies are to be set up in IFSC Gift City for digital continuity solutions. Government to set up a National Financial information repository.
Emergency Credit Line Guarantee Scheme (ECLGS) extended up to March 2023. Expansion in guarantee cover by Rs. 50,000 crores with a total of Rs. 5 lakh crores as cover. This added amount will be exclusively utilized for hospitality and related companies.
50 additional water aerodromes, airports, and landing grounds for regional air connectivity intended to push up the existing UDAAN scheme.
From April 2023, Rs. 9,000 crore corpus for Credit Guarantee for MSME.
Phase 3 of eCourts with an outlay of Rs. 7,000 crores, which will replicate the offline processes but on a digital platform.
To boost the tourism sector, 50 destinations are selected via challenge mode – virtual and physical connectivity, tourism guides, and security available on an application to improve the tourist experience.
Green credit program under the Environment Protection act. Green hydrogen production by 2030 to reach 5 million tonnes. The government will set up a battery storage capacity of 4,000 MWH.
5% compressed biogas mandate to every entity that markets natural gas in the country. It will facilitate the transportation segment with an increase in CBG production.
To access anonymized data, the government will build a national data governance framework.
Rs. 2.40 lakh crore for Indian Railways, a 9 times hike from the outlay stated in 2013-14.
Mission to eradicate sickle cell anemia by the year 2047. It will consist of universal screening of 7 crore people in the age group of 0 to 40 years in tribal areas.
Set up of Urban Infrastructure Development Fund to meet the shortfall in priority sector lending. Rs. 10,00 crores annually allocated. National Housing Bank to manage this fund.
Replacement of vehicles by the central government in order to upscale sales of automobiles and electric vehicles.
PAN or Permanent Account Number will be a single business identifier across digital systems on an integrated system for state and central-level departments.
Preparation of a National Cooperative database for de-centralized storage capacity to facilitate the setting up of dairy cooperative societies, farms, and fisheries for the next 5 years in uncovered villages in order to promote allied agricultural activities.
National mission with Rs. 15,000 crore proposal for vulnerable tribes to help with clean water, health, basic infrastructure, sanitation, and sustainable livelihood opportunities.
National digital library to provide quality books to adolescents and children across the nation to make up for the losses in education because of the pandemic.
Compared to capital expenditure allocation in 2022-23 of Rs. 7.5 lakh crore, for 2023-24, the amount has been increased to Rs. 10 lakh crores to encourage investment activity. Outlay of Rs. 1.3 lakh crore for infrastructure investment by government and continuation of interest-free loans for 50 years to state governments in this respect.