Finance Minister Nirmala Sitharaman unveiled the ‘first budget of Amrit Kaal’ to instil fresh optimism, maintain reforms and ease of doing business, and lay the groundwork for India’s next 25 years of development into an economic superpower.
The budget includes significant capital investments in the agriculture and infrastructure sectors, as well as revised tax slabs that will benefit the taxpayer community.
Impact on your personal finance
Senior Citizen Savings Scheme investment limit increased
Budget 2023 increased the maximum investment amount for the Senior Citizen Savings Scheme (SCSS) from Rs. 15 lakh to Rs. 30 lakh. The government increased the interest rate on the Senior Citizens’ Savings Scheme (SCSS) to 8 percent for the fiscal quarter ending March 31, 2023.
The cap of Rs 15 lakh limit prevented many senior citizens from making use of the scheme, therefore this increase is a positive decision. The scheme is one of the most secure and trustworthy investing options for elderly citizens because it is a government-backed modest savings programme. It offers a high-interest rate and is one of the most advantageous investment options, especially when compared to more conventional ways such as FD (fixed deposits) and savings accounts. Fixed deposit rates are currently being hiked. However, this is a fantastic step for many senior citizens as they will be directly investing with the central government. There is also a tax deduction available up to Rs. 1.5 Lakh under section 80C of the Income Tax Act.
New tax regime
Unless the taxpayer decides to choose the old regime, the new tax regime will be the default.
One must be cautious while picking which regime to follow. And if you do not choose the old regime, you will automatically fall under the new regime. Taxpayers who used to choose the old tax regime because of ongoing investments such as insurance premiums amounts invested in provident funds and public provident funds, and outgoings such as home loan EMIs, and tuition fees for children’s education, will have to choose the old regime. If they don’t, they will lose the benefit of these investments under various sections such as sections 80C, 80D, and so on.
Also Read: The ‘Goldilocks’ budget for growth
Enhancement of rebate under 87A
The new tax regime increased the section 87A rebate from the previous income threshold of Rs. 5 lakh to Rs. 7 lakh. Therefore, individuals with income up to Rs 7 lakh will not pay any tax.
Personal income tax rate
The basic exemption amount is increased under the new income tax regime in Budget 2023 from Rs 2.5 lakh to Rs 3 lakh. Additionally, the new tax …….