Budget 2023: At last, the middle class has been heard

The amendment to section 87A to exempt a person earning not more than Rs 7 lakh from income tax is a welcome relief as it is bound to free most of the salaried class and the senior citizens from income tax liability. For others, the increase in the tax-free threshold to Rs 3 lakhs and the tweaking of the tax slab that had remained dormant for years should be a welcome relief because they are not merely cosmetic but substantial. On the next Rs 3 lakh only 5 per cent is payable and on the next Rs 3 lakh the rate is 10 per cent and on the next Rs 3 lakh 15 per cent and the income between Rs 12 lakh and Rs 15 lakh attracts 20 per cent. In other words, the maximum marginal rate of 30 per cent kicks in only on the income in excess of Rs 15 lakh. Hitherto, one had to shell out 30 per cent on any income in excess of Rs 10 lakh. Senior citizens blessed Senior citizens would send their blessings skyward. Not only will they also stand to benefit from the lower slab rates but can also hope to earn substantially higher interest from their pet schemes – Senior citizens Savings Scheme (SCSS) and post office monthly income scheme (MIS). The niggardly cap of Rs 15 lakh fixed aeons ago has been substantially hiked to Rs 30 lakh.  Likewise, caps MIS too has been liberalised — Rs 4.5 lakh per person hiked to Rs 9 lakh, and in the case of joint MIS accounts the cap of Rs 9 lakh has been increased to Rs 15 lakh. Now in the autumn of their lives, they don’t have to look for risky schemes. One wishes the duration of the SCSS scheme too had been liberalized. It is five years plus a three-year extension. One wonders why they cannot remain with the scheme lifelong once they attain the hallowed status of a senior citizen. Dampener on Make in India efforts As was expected, the last date for setting up for a company to qualify for the soft tax of 15 per cent has been extended by one more year i.e., March 2024. This speaks poorly of the government’s Make in India efforts. In the previous Budget too, the last date was extended to 31 March 2023. Both Indian industrialists and foreign enterprises are obviously adopting a wait-and-watch policy not unduly enamoured of the low rate. A bold effort to cap twin exemptions Section 54 and section 54F give exemption from long-term capital gains in case they are rolled over into investment in a residential property. While section 54 deals with gains from a residential house being rolled over into another residential house, section 54F deals with gains from an asset other than a residential house into a residential house. Budget 2023 makes bold to cap these twin exemptions at Rs 10 crore. This is as it should be because otherwise, one could have walked away with a limitless exemption. It would have been better had it been also stipulated that no person can claim the twin exemptions more than once. As it is, one can claim these exemptions in more than one assessment year. Relief for small traders The presumptive tax schemes’ caps too have been liberalized. For traders, as it is, the cap on turnover is Rs 2 crore but budget 2023 has liberalized it to Rs 3 crore. By availing of this scheme, a small trader gets to pay tax on just 8 per cent of his turnover no matter what his actual profits from the business are. But the Budget has added a rider – not more than 5 per cent of the turnover should be in cash. Likewise, some specified professional incomes are deemed to be just 50 per cent of the gross receipts subject to the condition that the annual turnover of such professionals is not more than Rs 50 lakh. Budget 2023 hikes it to Rs 75 lakh. The writer is a senior columnist. He tweets @smurlidharan Views expressed are personal. Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.