What The Salaried Class & Industry Can Expect From Union Budget 2023?

As the Indian economy rebounds from the economic impact of the pandemic, it is expected that the government will prioritize job creation and expand the tax base by further simplifying the Goods and Services Tax (GST), and adjusting personal income tax rates to stimulate consumer spending.

Let's have a look at Budget expectations for different sectors and components that shape up our economy.

Salaried class

• There has been no change in the 80C deduction for many years. The present limit of Rs 1.5 lakh was set in Finance Act 2014. Given the inflationary trends, the above limit should be increased to Rs 2.5 lakh.
• Similarly, there is also a need to increase the deduction for Health Insurance under section 80D from Rs 25,000 to Rs 50,000.
• Likewise, the limit for Standard Deduction under section 16 should be increased from Rs 50000 to Rs 75000.

Real estate sector

• The Real estate sector plays a crucial role in driving economic growth. It not only accounts for around 7% of the annual GDP but also provides employment for over 50 million people.
• The definition of affordable housing is currently based on bank loans given to individuals for the construction or purchase of homes. Affordable housing in metro cities is currently capped at Rs 45 lakhs; this limit should move to at least Rs 75 lakhs.

Telecom

Since inclusiveness, in large measure, has indeed been enabled by smartphones, the recent introduction of 5G networks should be accelerated through government incentives eg. 5G towers to be rapidly constructed leveraging solar energy.

Automobile

• The Society of Manufacturers of Electric Vehicles (SMEV) is anticipating an extension of subsidies for electric vehicles under the FAME-II program. Additionally, the group is advocating for the inclusion of commercial vehicles, ranging from light to heavy, in the program to support the growth of electric mobility
• It is expected that the government will develop policies to support sustainable technologies and that the promotion of green vehicle usage will be included in these policies. It is also expected that the government will work to increase the adoption of electric vehicles in India.

MSMEs

• The Budget should include tax incentives for capital or operational expenses incurred while implementing new-generation technologies such as Artificial Intelligence (AI), Internet of Things (IoT), and Machine Learning (ML). Additionally, ASSOCHAM's suggestion of reducing the interest rate for late payment of GST from 18% to 12% is correct.
• Given the prevailing difficulties in supply chain and also in constrained working capital requirements, Micro and Small Enterprises (MSMEs) require an improved access to credit. Accordingly, Budget 2023 should further simplify and liberalize the Credit Guarantee Scheme.
• The Budget should announce a complete integration of e-Shram, Udyam, National Career Service, and ASEEM portals.

(Authored by Raj Khosla Founder and MD - MyMoneyMantra.com. MyMoneyMantra.com is India's largest FinServe Marketplace servicing more than 10 million customers across 200 cities with more than 120+ banking partners and 3000 employees strength.)