The budget is not to get when it buds,
But, allow to bud and grow, and then getting a share".(A quote from the author's book on Poems from A to Z published)
"Taxing is an art and do it with a heart,
As honey bees drink from flowers benefiting all".
Budget is to
Boost economy in all fronts,
Undertaking constructive activities on all aspects dealt with in the article & more required to
Deliver people at large to
Get the required benefits so as to obviate any big bad impact on GDP, budget deficit due to unpleasant impact lashed out by Covid 19.
The budget in the light of sufferings gone through in the past two years or so because of COVID 19 and the government has no other option but perforce extend captivating doles under the scope of welfare measures to alleviate the miseries of the people at large. Apart from this, the government in the new Budget has rightly tailored to take a precise call to spot on certain issues to correct the pressing and critical demand of time.
The present Budget is on the 75th year our Independence and will herald in 2047 the 100th yearof Independence to be well crowned as Centurion.
Multitude of measures for a number of sectors, aimed at boosting growth amid high & rising inflation and continuing Covid uncertainties.
However, in the Budget, remarkably few changes are noticeable to the personal income tax structure in a year when state elections are on the horizons in big (UP) and various other states when that are demands from various quarters for some sort of relief or another in times of a pandemic. Any other government would have fallen prey to it. But this govt. has approached logical one. But, the govt. has copiously followed the rhythm of taxation in tune with my other couplet as quoted below
"Taxing is an art and do it with a heart,
As honey bees drink from flowers benefiting all".
Economy in nut shell
Capex target pushed by 35.4 percent from RS. 5.54 lakh crore to RS. 7.50 lakh crore. FY23 effective capex seen at RS. 10.7 lakh crore
India's growth highest among all major economies; we are now in a strong position to withstand challenges
The goal is complementing macro-growth with micro-all-inclusive welfare, digital economy and fintech, tech-enabled development, energy transition and climate action
ECLGS cover expanded by RS. 50,000 to RS.5 lakh crore
Top focus of the budget this year are: PM Gati Shakti, Inclusive Development, Productivity Enhancement, Sunrise Opportunities, Energy Transition, Climate Action, Financing of investments
Productivity-linked incentive schemes in 14 sectors have received an excellent response; received investment intentions worth RS. 30 lakh crore
Economic recovery benefitting from public investment and capital spending. This Budget will provide impetus to growth
In 2022-23, states will be allowed fiscal deficit of up to 4 pc of GSDP
- Expenditure and deficit & other key numbers
- Proposed fiscal deficit of 4.5% of GDP by 2025/26
- Projected fiscal deficit of 6.4% of GDP in 2022/23
- Revised fiscal deficit for 2021/22 at 6.9% of GDP.
Infrastructure and Industrials
Real Estate and Building Material Focus on affordable housing (₹480 billion allocations in FY23 vs ₹275 billion last year). While it would result in higher demand for the sector, few projects from listed developers fall under this category Focus on building data centres would benefit developers who are in this space Jal Jeevan outlay of ₹600 billion in FY23 vs ₹500 billion last year; beneficial for plastic pipe players
The budget laid down emphasis on domestic manufacturing of capital goods, renewable energy, domestic defence procurement, water supply, bio-fuels and rail network. However, similar emphasis was not there on road networks and urban infrastructure
Allocation to solar manufacturing PLI increased from ₹45 billion earlier to ₹240 billion (i.e. ₹195 billion of additional allocation)
Railway capex for FY23 at ₹2.46 trillion (incl. IEBR of ₹1.09 trillion) is up 14.3% on FY22 RE. Allocation of National High Speed Rail Corporation at ₹241 billion is up 42% on FY22 RE
Road capex at ₹1.99 trillion increases by just 2% on FY22 RE (up 8.7% on FY22 BE). NHAI's capex at ₹1.34 billion increases by 3% on FY22 RE (up 9.5% on FY22 RE). NHAI's IEBR at near-zero for FY23 vs ₹650 billion in FY22 RE indicates the Government's inclination to stop leveraging NHAI's balance sheet and cede the concerns of increasing debt at NHAI balance sheet
Defence capex allocation increased 9.7% (12.8% on FY22 BE) to ₹1.52 trillion for FY23 vs last 10 year's CAGR of 7.1%. Further, the capex outlay earmarked for domestic Further, the capex outlay earmarked for domestic procurement increased from 58% in FY22 to 68%. Effectively, funds available for domestic procurement increase by 29% (32% on FY22 BE)
Infrastructure Outlay
- Outlay of Rs.1.99 lakh crore for Ministry of Road Transport and Highways.
- PM GatiShakti National Master Plan will encompass the seven engines for economic transformation, seamless multimodal connectivity and logistics efficiency.
- 68% of the defence procurement in FY23 would be earmarked for domestic equipment, which is up 10% from FY22.
- Green Bonds will be issued for mobilizing resources for green infrastructure
Digital Outlay
'One class-one TV channel' programme of PM eVIDYA will be expanded from 12 to 200 TV channels and establishment of Digital University.
Proposed to introduce Digital Currency by RBI using blockchain technology, starting 2022-23.
75 digital banks in 75 districts will be set up by scheduled commercial banks to encourage digital payments.
Tax Proposals
Tax Proposals for individual
No change announced in tax slab rates, standard deduction and deduction for interest on housing loans. 15% cap on surcharge on long term capital gains applicable to all asset classes.
On Digital Income
The government has proposed that transfer of any virtual digital asset will be taxed at 30%. Cost of acquisition allowed as a deduction, however, no other deduction allowed. Loss on transfer of virtual digital asset is not allowed for set off or carry forward purposes. Gifts of virtual digital assets will be a benefit taxable in the hands of the recipient. TDS at 1% introduced for virtual digital assets transactions.
On updated Income
Taxpayers can file an Updated Return on payment of additional tax within 2 years from the end of the relevant assessment year. If updated return filed within 12 months - additional tax payable at the rate of 25% of aggregate of tax and interest payable. If updated return filed in the subsequent 12 months - additional tax at the rate of 50% of aggregate of tax and interest payable.
Reduction in Alternative minimum tax rates and surcharge for Cooperative Societies
AMT x to be reduced to 15% (from 18.5% currently) to ensure parity with the rate paid by companies.Surcharge is reduced to 7% (from 12% presently) for those having total income of between RS. 1 crore and RS. 10 crores.
Extension of the last date for commencement of manufacturing or production
Concessional tax rate of 15% for domestic manufacturing companies commencing manufacturing or production by 31 March 2023 extended to 31 March 2024. Profit-linked tax exemption for eligible start-ups extended by another year - start-ups incorporated up to 31 March 2023 will now be eligible.
Withdrawal of concessional rate of taxation on dividend income received from specified foreign company
Dividend received by an Indian company from a specified foreign company is now taxable at a concessional tax rate of 15%. This tax rate now stands withdrawn.
Stripping of Bonus and dividend to be made applicable to securities and units
Provisions of bonus stripping now also applicable to units of InvITs/ REITs/ AIFs and securities. Provisions of dividend stripping now also applicable to units of InvITs/ REITs/ AIFs.
Reduction in multiplicity of appeals before the High Court and Tribunal
Revenue authorities can now defer filing an appeal before the High Court and Tribunal if an identical question of law is pending before the jurisdictional High Court or the Supreme Court including in case of another taxpayer. Application for deferral to be filed only on receipt of acceptance from the taxpayer
Rationalisation of TDS/ TCS provisions on payments to non-filers of income tax returns
However, under the Budget the 2 year requirement has now been reduced to 1 year, i.e. higher TDS/ TCS rates shall apply only in case of persons who have not filed tax return in the immediately preceding year.
Other multifarious Tax Proposals
- Tax relief to person with disability. Tax deduction increased to 14% on employer's contribution to the NPS account of State Government employees.
- Income of a non-resident from offshore derivative instruments, or
- OTC derivatives issued by an offshore banking unit, income from royalty and interest on account of lease of ship and income received from portfolio management services in IFSC shall be exempt from tax, subject to specified conditions.
- Health and education cess not allowable as business expenditure.
- Any surcharge or cess on income and profits is not allowed as business expenditure.
- No set-off of any loss shall be allowed against undisclosed income detected during search and survey operations.
- The government has restored TDS applicable on commission income of insurance agents to TDS of 5% instead of 3.75%.
Conclusion
Budget is for Building
Units to develop Infrastructures, linking rivers and canals across states, Road buildings, railways development in all fronts, Airways development across the country
To get all-round development in connected industries accelerating demand for cement, iron and steel industries, electricity, agriculture sector and to cap it all generation of employment in all sectors.
"Arise awake and Stop not till our goal is reached".
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