Making sense of this year's tweaks
01-Feb-2023 •Research Desk
India's inaugural Amrit Kaal budget enthused the markets as it added more muscles to the capital expenditure outlay and vowed fiscal consolidation despite multiple headwinds.
The new tax regime, in particular, received special attention in this budget. Today's rejigging softly nudges the middle-class to adopt the new structure. While the new system packs in some benefits for the middle-class, it undermines the importance of purchasing insurance plans and investing in tax-saving options that build wealth in the long run.
That said, this year's budget covered a lot of bases, ranging from insurance to gold to the launch of guaranteed regular income options. Here's a recap of Budget 2023-24:
Rebate limit raised
Reduction in tax slabs
The number of slabs in the new tax structure has reduced from 6 to 5.
Introduction of standard deduction
Benefit of standard deduction (Rs 50,000) to salaried class and pensioners has now been extended to the new tax regime also.
Reduction in surcharge rate
The surcharge rate on income exceeding Rs 5 crore has been reduced from 37 per cent to 25 per cent in the new tax structure. This means the highest surcharge rate now would be 25 per cent on income above Rs 2 crore.
Confused between the old and new tax regime? This tax calculator gives you the answer.
Relief for retiring non-government employees
Tax exemption limit for leave encashment on retirement for non-government employees increased from Rs 3 lakh to Rs 25 lakh.
This should provide for a little more money in their hands for their post-retirement life
Launch of women-only saving scheme
Mahila Samman Savings Certificate, also known as Mahila Samman Bachat Patra.
SCSS limit raised: A welcome move
Post office monthly income ceiling raised
Mum's the word on PMVVY
Body blow for high-valued insurance policies
Other changes at a glance
Budget 2023 & the business
Should you invest in Mahila Samman Savings Certificate?