The budget document summarizes the major changes in the Indian budget for 2023. Key highlights include increasing the income tax rebate limit to Rs. 7 lakhs, lowering the tax rate for new manufacturing cooperatives, and changing the income tax slab rates under the new tax regime. Other changes involve increasing thresholds for presumptive taxation schemes, lowering the highest surcharge rate, and increasing exemptions for leave encashment and standard tax deductions.

1. MAJOR CHANGES IN
BUDGET 2023
Presented by: Avi Giroti

2. What is a Budget?
The budget is a financial plan for a specified period say ‘a
Year’ in general. The Government of India i.e., the
Ministry of Finance after consultation with all the other
ministries prepares the annual budget. The budget will
be generally presented by the Finance Minister on the
first day of February in Parliament. This budget is
applicable for the upcoming FY. Example: The budget
presented on 01st Feb 2023 is applicable from 01/04/2023
i.e., for AY 2024-25.

3. Budget 2023 Highlights
 The Rebate Limit ofPersonalIncomeTaxincreasedtoRs.7
Lakhs(includingthelimitofdeductionu/s87A)fromthecurrent
Rs. 5 Lakhs in the new tax regime. Thus, persons in the new
tax regime with a total Income of up to Rs. 7 lakhs are not
required to pay any taxes. Applicable from A.Y 2024-25. This
is notapplicable to theOld tax regime.
 New Co-operatives which will commence manufacturing
activities by 31/03/2024 will get a lower tax benefit of 15%
 After the amendment in Budget 2023, consideration
received from non-residents on account of the issue of
shares, where the amount exceeds the face value of shares,
shall be taxable under Income from Other Sources.
Applicable from A.Y 2024-25

4.  Threshold Limit under Presumptive Schemes: - A relief for MSMEs and
professionals is provided underthepresumptive taxation scheme:
• The threshold under 44AD has increased to Rs 3 crore from Rs 2 crore where
cash receipts during the previous year do not exceed 5% of the total receipts.
• The point under 44ADA is raised to Rs 75 lakhs from Rs 50 lakhs where cash
receipts during the previous year do not exceed 5% of the total receipts.
Applicable from A.Y 2024-25
 The highest surcharge rateof 37% is decreased to 25% under New Tax
Regime. Taxpayers with taxable incomeof above Rs 5 crores are required topay
only a 25% surcharge instead of 37%. Applicable from A.Y 2024-25
 IncomeTax slab rates under theNew Tax regime have been changed which is
as follows. Applicable from A.Y 2024-25.
• Rs 0-3 lakhs - 0%
• Rs 3-6 lakhs - 5%
• Rs 6-9 lakhs - 10%
• Rs 9-12 lakhs - 15%
• Rs 12-15 lakhs - 20%
• Above Rs 15 Lakhs – 30%

5.  Leave Encashment exemption on theretirementof
non-governmentsalaried employees is increased to Rs
25 lakhs from Rs 3 lakhs Applicable from A.Y 2024-25.
 Standard Deduction of Rs. 50,000 provided to salaried
employees will also apply to taxpayers opting for the
new regime. Applicable from A.Y 2024-25.
 Thededuction from Capital Gains on investment in
residential houses u/s 54 and 54F is capped at Rs 10 Crore.
Applicable from A.Y 2024-25.

6.  Cost of Acquisition or Improvement is Nil for certain
assets like Intangible Assets or any sort of right for which
no consideration has been paid. Applicable from A.Y
2024-25.
 Insurance Policies If the aggregate premium for life
insurance policies issued on or after 01/04/2023 is above Rs
5 lakhs in a year, income from only those policies with
aggregate premiums up to Rs 5 lakhs shall be exempt.
Applicable from A.Y 2024-25.
 Exemptions to Agni veers - For all the persons enrolled
under the Agni path Scheme for Armed Forces, an amount
as specified will be deducted from the salary for
contribution to the Agni veer Corpus Fund. Therefore, a
matching contribution will be made by the Government to
the fund. Applicable from AY 2023-24

7.  TDS Rate on EPF withdrawal in Non-PAN cases is reduced
to 20% from 30%. Applicable from A.Y 2024-25.
 The threshold for TDS on Cash withdrawal by co-
operative society is increased to Rs 3 crores from Rs 1 Crore
from 01st April 2023.
 The TDS On Horse Racing and Online Games shall be
deducted if the amount from such winnings exceeds Rs. 10,000
in aggregate during the financial year. Applicable from 01st July
2023.
 Increased rate of TCS of certain Overseas remittances
under the LRS Scheme: TCS collected by Financial
Institutions on overseas tour packages has been increased
from 5% to 20% without any threshold limit. Applicable from
01st July 2023.

8. Charitable & Religious Trusts
 Application of Funds by a charitable or religious trust
before 01/04/2021 out of corpus, loans, or borrowings shall not
be allowed when such amount is deposited back or invested
in the corpus, or the loan or borrowing is repaid. Repayment
of loan or investment /depositing back into corpus shall be
considered an application for charitable or religious purposes
only within 5 years of application from the corpus or loan.
 The Donation by Trust/ Institution to another Trust/
Institution shall be treated as the application of up to 85%.
 The trusts and Institutions that commenced the activities
shall make the application directly for Regular Registration
instead of provisional registration.

9. FAQ’S
 What is the TDS Rate of EPF Withdrawal on Non-PAN
Cases?
 - 20%
 What is the TDS Threshold limit for Online Gaming?
 - 10,000
 What is the Highest Surcharge Rate for New Tax Regime and
its Applicability?
 - 25% from A.Y 2024-25.
 How much is the capped limit for deduction under Capital
Gains and its Applicability?
 - 10 Crore from A.Y 2024-25.

10.  How much is the leave Encashment Exemption given to
non-government salaried employees?
 - 25 Lakhs.
 What is the Increased rate of TCS of certain Overseas
remittances under the LRS Scheme?
 - 20 %.