Budget 2023: What did middleclass get in Union Budget 2023-24?

In a massive bonanza for the middle class, Union Finance Minister Nirmala Sitharaman on Wednesday announced that no tax would be levied on annual income of up to Rs 7 lakh under the new tax regime. Earlier the rebate limit was Rs 5 lakh.

She also reduced the number of tax slabs under the new personal income tax regime to five. "I propose to change the tax structure in this regime by reducing the number of slabs to five and increasing the tax exemption limit to Rs 3 lakh," Sitharaman said.

Revised Tax Slabs

"I propose to extend the benefit of the standard deduction to the new tax regime. Each salaried person with an income of Rs 15.5 lakh or more will thus stand to benefit by Rs 52,500," Sitharaman said.

The government announced a reduction of the highest surcharge from 37 per cent to 25 per cent in the new tax regime. This would result in the reduction of the maximum tax rate to 39%.  

The finance minister also stated, "The limit of Rs 3 lakh for tax exemption on leave encashment on government salaried employees. That was set in 2002 when government salaries were lower and are now being raised to Rs 25 lakh."

Revamped credit guarantee scheme for MSMEs

The finance minister announced a revamped credit guarantee scheme for Micro, Small, and Medium Enterprises (MSMEs) with an outlay of Rs 9,000 crore will be launched from April 1.

Providing relief to MSMEs, the government said that in case of failure by MSMEs to complete contracts during the pandemic period, 95 percent of performance security or the forfeited amount relating to the bid, will be reciprocated to them by government and government undertakings.

What becomes cheaper and costlier

During her budget speech, Sitharamn announced a cut in customs duty on the import of certain inputs for mobile phone manufacturing, open cells of TV panels, shrimp feed, seeds used in the manufacture of diamonds, Lithium-ion batteries, and Camera lenses for phones, laptops, and DSLRs.

Articles made of gold, silver, and platinum, compounded rubber, copper scrap, and compounded rubber are set to be costlier.