Union Budget 2023: The customary ‘Halwa Ceremony’ held at the Ministry of Finance to mark the beginning of the printing of documents relating to the Union Budget 2023-24 in the presence of Union Finance Minister Nirmala Sitharaman, Union Minister of State for Finance Dr. Bhagwat Kishanrao Karad and senior officials of the Ministry Was. A customary pudding ceremony is performed every year before the “lock-in” process of budget preparation begins. Like the last two Union Budgets, the Union Budget 2023-24 will also be presented in a paperless manner. The Union Budget 2023-24 is to be presented on February 1, 2023.
Finance Ministry is considering SOAP to benefit the middle class of the country
The finance ministry is mulling over proposals to benefit the middle class in the Narendra Modi 2.0 government’s last full budget to be presented in the Lok Sabha on February 1. Sources said the finance ministry is looking into the proposals sent by various government departments on specific steps that could be announced in the budget, which would benefit a large section of the middle class.
The government has not raised the income tax exemption limit from Rs 2.5 lakh, which was set by then finance minister Arun Jaitley in his first budget in 2014. Also, from 2019, the standard deduction remains at Rs 50,000. Many experts are of the opinion that there is a need to increase the exemption limit as well as the standard deduction to compensate the salaried middle class for the high level of inflation.
Finance Minister Nirmala Sitharaman’s recent statement that she was aware of the pressures on the middle class has raised hopes that some stimulus may come their way in the upcoming budget. She said earlier this month, “I am also from the middle class, so I can understand the pressures of the middle class. I identify with the middle class, so I know.” In the same breath the minister reminded that the present Modi government has not imposed any new tax on the middle class.
He said that the government has taken several measures like developing metro rail network in 27 cities and making 100 smart cities to promote ease of living. The minister assured that the government can do more for the middle class as its population is increasing and it has become huge now.
“I understand their problems very well. The government has done a lot for them and will continue to do so,” she said.
Apart from tinkering with the exemption limit and standard deduction, the finance ministry is also looking at the possibility of increasing the limit under section 80C, which covers investments in life insurance, FDs, bonds, housing and PPF among others. Sources said payment of medical insurance premium is also being considered, the government may simplify capital gains tax rules to benefit middle class investors who have started investing in the capital market.
Read also: Budget 2023: Will Finance Minister Sitharaman revise the long pending income tax exemption limit?
The insurance industry has been demanding a separate tax deduction provision for life insurance, tax waiver for annuity income and higher deduction for health insurance premium.
If there is an increase in the limit under 80C with special focus on the insurance segment, it will help in pursuing term insurance or other protection plan, which will provide the necessary financial security to the family in the event of untimely death of the earning member. Can do, said Prashant Tripathi, MD & CEO, Max Life Insurance.