Today on 1st Feb 2023, Indian finance minister Ms. Nirmala Sitharaman has presented Union Budget for FY 2023-24. Generally budget has a lot of information to consume for a common man for understanding what is in it for him/her. So here we have 7 key takeaways in personal finance from budget 2023.
Limit increase in Senior citizen savings scheme
Senior citizen savings scheme, commonly referred as SCSS has a limit of 15 Lakh for senior citizen individuals. It has attracted many retired individuals, in recent time for getting a better quarterly interest benefit, but with a limit of 15 LAKH. Well now FM has increased this limit to 30 LAKH. That’s an added advantage for anyone interested. Although please note that in scheme you do not get the benefit of compounding, it means, you will not get any extra interest on your earned interest, whether you withdraw it or not.
Limit increase in Monthly Interest Scheme
Monthly Interest Schemes (MIS) was earlier having a limit of 4.5 Lakh for individual account holder and 9 Lakh for joint account holders. Now FM has increased this limit to 9 Lakh for individual depositors and 15 Lakh for joint account beneficiaries.
Income tax exemption limit changed
If you are opting for New Tax Regime and you earn less than 7 Lakh, then FM has a good news for you. Basically FM has increased Income tax exemption limit to 7 Lakh for individual tax payers, but for getting this exemption you will have to opt for New Tax Regime. Earlier this limit was only till 5 Lakh. This is an effort for encouraging people to opt for New Tax Regime.
Changes in the Income Tax Slab
FM has made New Tax Regime as default but people can still opt for Old Tax Regime. FM has also changed the income tax slabs in New Tax Regime. Below are different Income Tax Slabs, which will be applicable for FY2023-24, but only if you opt for New Tax Regime.
| Slab | % of Income Tax |
| 0-3 Lakh | Nil |
| 3-6 Lakh | 5% |
| 6-9 Lakh | 10% |
| 9-12 Lakh | 15% |
| 12-15 Lakh | 20% |
| 15 Lakh + | 30% |
Apart from this FM has also reduced surcharge rate substantially. Earlier the surcharge rate was going till 37% ,but now it has been reduced to max 25%. But you will have to opt for New tax regime to claim all these benefits. So overall this is a big push for New Tax Regime.
Increase in Income Tax exemption Limit of Leave Encashment
FM has increased the income tax exemption limit of Leave encashment for Non-government salaried retirees from 3 Lakh to 25 Lakh. So now if a private company employee is retiring and his/her Leave encashment is going till 25 Lakh, then there will be no tax on this amount.
Introduction of a new deposit scheme for Women
To memorize Azadi ka Amrit Mahotsav, FM has introduced a new deposit scheme for women, named as “Mahila Samman Bachat Patra” or “Mahila Samman Savings Certificate”. This certificate can be purchased by any female, till March-2025. Maximum amount allowed is INR 2 Lakh. It will have a fixed interest of 7.5%. Depositors will also be allowed to make partial withdrawals.
Change in taxation of Life Insurance Policies
Any maturity benefits coming out of Life Insurance policy purchased on or after 1-April-2023, having total accumulated premium paid less than 5 Lakh, will be exempted from tax. This will strictly be for Insurance schemes purchased on or after 1-April 2023. Also please note that this will not be applicable for ULIPs (unit linked Insurance Policies.
Conclusion
So, overall there are many take aways from this budget for common man of India. This budget will surely push people to opt for New Tax Regime. Please share this article with your family and friends.
Disclaimer – If you find any discrepancy in the details provided, please feel free to contact us.
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