The Union Budget 2023-24 introduced significant changes to the country's tax policies, with one of the most important announcements being the revision of income tax slab rates for Fiscal Year 2023-24. The new income tax slabs have been revised to give taxpayers relief and to simplify the tax process.
The government has announced several new tax policies aimed at easing the burden on the average citizen and encouraging investment in the country. Increase in the tax exemption limit for individual taxpayers, which means that the average person will have more disposable income which is expected to increase consumer spending and domestic demands.
Individuals can choose between the existing tax structure and the new one, which offers a lower tax rate in exchange for giving up exemptions and deductions under the new tax regime. Along with it the implementation of a new tax regime, which will provide a lower tax rate for those willing to forego exemptions and deductions.
This will simplify and make the tax system more accessible to the average person, while also making it easier for the government to enforce tax compliance. To provide relief to the middle-income group, India will lose ₹35,000 crore ($4.2 Bn) in net tax revenue. Approximately ₹37,000 crore ($4.63 Bn) in direct taxes and ₹1,000 crore($0.12Bn) in indirect taxes will be foregone. The revenue of approximately ₹3,000 crore($0.36Bn) will be increased.
Furthermore, Union Budget 2023-24 government has considered measures aimed at encouraging foreign investment in the country. It has proposed, for example, raising the investment limit in various tax-saving instruments such as the Public Provident Fund (PPF) and National Pension Scheme (NPS), making it easier for people to save for the future. Similarly several steps have been taken in this direction in the budget, including providing tax breaks to start-ups and encouraging entrepreneurship, which is expected to drive innovation and create new employments in different sectors.
Finally, The Union Budget 2023-24 places a strong emphasis on taxation and benefits for all. The government has taken several steps to help the common man and to encourage investment in the country. This action is expected to benefit taxpayers and encourage more people to follow tax laws. It is also expected to simplify and make the tax system more accessible to the general public which result into boost consumption, create new job opportunities and economic growth of the country.
