Image Source : PTI Finance Minister Nirmala Sitharaman will present the Budget on February 1.
Budget 2023: As the Union Budget 2023 would be the last full term budget to be presented before the 2024 Lok Sabha elections, there are high hopes that Finance Minister Nirmala Sitharaman will change the tax rates for Indian taxpayers. In addition, key decisions regarding the long-term capital gains (LTCG) tax on equity investment and measures to increase demand for the housing sector are speculated.
BUDGET 2023: FULL COVERAGE
Will income tax brackets be altered by Finance Minister Nirmala Sitharaman?
Individuals currently do not pay any tax on incomes up to Rs 2.5 lakh and 5% on incomes between Rs 2,50,000 and 5,00,000. 20% tax is paid for income ranging between Rs. 408212.50 and Rs. 816425, and 30% for income over $10,000.
According to experts, Sitharaman may raise the starting limit for people in the 30% tax bracket from Rs 10 lakh to Rs 20 lakh. Under the Concessional Tax Regime (CTR), which was implemented in Budget 2020, it is also possible that the government will modify the slab rates. It is being speculated that the lowest tax rate could be set at 7.5% rather than the current 5%, with income up to Rs 5 lakh exempt from tax.
On LTCG, what will FM Nirmala Sitharaman do?
The long term capital gains (LTCG) tax is likely to be rationalized in 2023-2024, according to experts and analysts. Shares held for more than one year are currently subject to 10% taxation. The LTCG tax was eliminated in 2005, but the BJP government reinstated it in 2018.
The momentum of direct tax growth may be difficult to maintain:
The government may find it difficult to maintain direct tax growth momentum in the upcoming fiscal year. Between April 2022 and January 10, 2023, India’s direct tax collection increased by 19.5% year-over-year to 12.31 trillion rupees (Rs.151.70 billion).
The real estate industry has requested tax and policy easing in the Union Budget 2023–2024 in order to maintain demand in the housing and real estate industries. Real estate industry is hopeful that the government will offer incentives to maintain the housing demand that was severely impacted by COVID-19 in light of rising interest rates.
Insurance companies hope for tax breaks:
Indian insurance companies anticipate more tax breaks for their policyholders. According to reports, insurance company decision-makers want to eliminate or reduce the Goods and Services Tax (GST) on insurance premiums, exempt pension and annuity proceeds from taxation, and establish a separate category for tax deductions for premiums.
FAQs
Q1. What is LTCG?
Long-term capital gains, or LTCG, are returns on investments that last for a longer period of time.
Q2. What happens if LTCG exceeds one lakh?
There will be a 10% tax on any LTCG (on equity) above INR 1 lakh (plus a surcharge and cess)
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