New Delhi: Fulfilling the much awaited expectations of the salaried middle class, in the final full-fledged Budget of Modi government 2.0, Finance Minister Nirmala Sithraman announced a change in the tax slabs for the income tax payers and extended the income tax rebate up to Rs 7 lakhs in new tax regime.

Making a slew of announcements in the direct tax category, the Finance Minister announced a much-needed relief for the middle class and something that was also being anticipated by financial experts.

Finance Minister in her budget speech said, “In 2020, the new personal income tax regime with 6 income slabs, were introduced starting from Rs 2.5 Lakhs. Now, I propose to change the tax structure in this regime by reducing the number of slabs to 5 and increasing the tax exemption limit to Rs 3 Lakhs.”

The exemption limit in the direct income tax has been raised from Rs 2.5 lakh to Rs 3 lakh while under the new Tax regime, the income tax rebate has been increased from Rs 5 lakh to Rs 7 lakh.

“Income tax- rebate extended on income up to Rs 7 lakhs in new tax regime,” said FM Sitharaman.
Revised tax slab: (under new Tax regime)

Personal Income Tax – New rates are as below
Rs 0 to Rs 3 lakhs – Nil
Rs 3 to 6 lakhs – 5%
Rs 6 to 9 Lakhs – 10%

On the other budget highlights, Finance Minister proposed to raise the capital expenditure by 33 per cent to Rs 10 lakh crore to spur up growth through infrastructure development.

“After the subdued period of pandemic, private investments are growing again. Budget takes the lead again once again to ramp up the virtuous cycle of investment creation . The capital investment outlay is being increased steeply for the third year in a row from 33 per cent to Rs 10 lakh crore, which would be 3.3 per cent of GDP. This will be almost three times the outlay made in 2019-20,” Sitharaman said in her budget speech.

The government has estimated the fiscal deficit for 2023-24 at 5.9 per cent of the GDP, the FM said while presenting Union Budget 2023-24 in Parliament.

The FM added that the government remains committed to bringing the fiscal deficit down to 4.5 per cent of the GDP by 2025-26.

In a boost for states, the FM said that the 50-year interest-free loan to state governments will continue for a year more. The NITI Aayog’s state support mission will be continued for three years, she added.

On the farm sector, Finance Minister Nirmala Sitharaman said: “The Agriculture Credit Target will be increased to Rs 20 lakh crore, with focus on animal husbandry, dairy, and fisheries, the minister said, adding that a new sub-scheme of PM Matsya Sampada Yojana will also be launched with a targeted investment of Rs 6,000 crore.”

The Budget 2023 focuses on seven priorities, which the Finance Minister called the “Saptrishis guiding us through Amrit Kaal”. They are inclusive development, digital infrastructure to aid agriculture growth, financial sector, infrastructure & investment etc.

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