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Interim Highlights of the Union Budget 2023-2024

Highlights of the Union Budget 2023-2024

Interim Highlights of the Union Budget 2023-2024

Finance Minister Ms.Nirmala Sitharaman presented the Interim Union Budget 2023-24 on February 01, emphasizing the rural sector, social sector schemes, infrastructure creation, and the middle class. In this article, we will look at the highlights of the Union Budget 2023-2024.

Amendments Proposed under Direct Tax

The Amendments Proposed under the Union Budget 2023-2024 related to Incometax are as follows:

New income tax Rate

  • The basic exemption limit under the new tax regime has been increased to Rs.3 lakh.
  • In the new income tax regime, the tax rebate limit for salaried and individual taxpayers has been raised to Rs.3 lakh.
  • The tax rebate limit available for individual and salaried taxpayers under the new income tax regime has been hiked to Rs.7lakh from the present Rs.5 lakh. Refer to the following table for the income tax slabs for the new income tax regime.

Total Income (Rs)

Rate (percent)

Up to 3,00,000 Nil
From 3,00,001 to 6,00,000 5
From 6,00,001 to 9,00,000 10
From 9,00,001 to 12,00,000 15
From 12,00,001 to 15,00,000 20
Above 15,00,000 30

The new tax regime will be made the default tax regime. However, the taxpayer will continue to have the option to avail the benefit of the old tax regime.

Common IT Return Form

The next generation Common IT Return Form will be introduced for taxpayer convenience, along with plans to strengthen grievance redress mechanisms.

Rebate limit of Personal Income Tax

The new tax regime’s rebate limit for Personal Income Tax will be increased to Rs. 7 lacks from Rs. 5 lacks. In the new tax regime, persons with income up to Rs. 7 lack will not have to pay any tax.

Other Highlights on Income tax

In the new tax regime, salaried individuals will be eligible for a standard deduction of Rs. 50,000 and deductions from family pensions of Rs. 15,000.

Under the new tax regime, the highest surcharge rate will be reduced from 37 percent to 25 percent. This further reduces the maximum personal income tax rate to 39%.

The TDS rate will be reduced from 30% to 20% on the taxable portion of EPF withdrawal in non-PAN cases.

Amendments proposed under the GST laws

The Finance Bill has proposed the amendment in respect of the below-mentioned scenarios for extending the time limit up to November 30 following the end of the relevant financial year or date of furnishing the relevant annual return, whichever is earlier:

  • The time limit for availing of the Input Tax Credit
  • The time limit for reporting Credit Note transactions in Form GSTR 3B
  • Rectification of errors or omission or reporting of incorrect particulars in Form GSTR 1, Form GSTR 3B, and Form GSTR 8
  • A retrospective amendment (from July 01, 2017) has been proposed under Union Budget 2023-2024 for levying interest on Input Tax Credit (‘ITC’) wrongly availed and utilized. The interest on such ITC would be 18% p.a. (instead of 24% p.a.).

A new condition is proposed to provide that the registered person would not be allowed to file Form GSTR 1 unless he files Form GSTR-1 for any previous tax periods. Further, Form GSTR-3B would not be allowed to be filed unless the Form GSTR-1 for the current tax period is not furnished.

Amendments in provisions relating to GST returns

 The Finance Bill has amended the following provisions relating to returns:

  • Section 37 and Section 38 under GST has been amended to do away with the two-way communication process in return filing
  • The concept of matching returns would be no more as Section 42, Section 43, and Section 43A have been proposed to be omitted.

Amendments related to ITC

The Finance Bill 2022 has substituted Section 38. Regarding the proposed amendment, Form GSTR-2B will provide the details of supplies where ITC will be available and where ITC cannot be availed.

The proposed new provision has provided various scenarios where ITC can be restricted. 

Transfer of cash balance of CGST and IGST

GST Act to be amended to allow cash balance transfer of IGST and CGST available in electronic cash ledger between distinct persons with the same PAN. According to the 45th GST Council decision, an amendment has been carried out to inform that no such transfer will be permitted where there is an unpaid liability in the electronic liability ledger of the transferor.

Amendments Related to GST Refund

Currently, the GST law enables the Proper officer to withhold or deduct the GST refund amount relating to unutilized ITC-specified cases. A new amendment has been proposed to extend such power regarding all GST refunds.

A new clause is to be inserted in the definition of the relevant date for GST refund filing relating to supplies made to SEZ Unit. It has been informed that the relevant date relating to supplies made to SEZ unit will be computed from the due date of Form GSTR 3B.

Amendment in Due date of filing From GSTR-5

The due date of filing From GSTR5 by Non-Resident Taxable Person has been proposed to be changed from the 20th to the 13th of the subsequent month.

Cancelation of the Registration of composite taxpayers

Amendment has been proposed for enabling the concerned officer to cancel the Registration of composite taxpayer if Form GSTR 4 is not filed beyond three months from its due date

Services by way of the grant of an alcoholic liquor license by the State Government are currently not treated under the GST. An amendment has been introduced to provide the same classification.

Other Amendments

An amendment has been proposed to provide legislative power to prescribe the extent to which a registered person can use the credit from the electronic credit ledger to pay the tax. This proposed amendment seems to have provided a statutory backup to Rule 86B of the CGST Rules.

A retrospective amendment has been introduced to provide the GST exemption on unexpected waste generated during the production of fish meals.

Amendments proposed under the Customs Laws

The following amendments have been proposed via Union Budget 2023-2024:

  • A retrospective amendment and a validation clause are proposed concerning the appointment and functions of Proper Officer under the Customs Laws
  • A new process will be introduced under the Customs law to reassess goods imported into India.
  • Concerning the specified imported goods (whose value is not being declared correctly), the CBIC may adopt Rules specifying additional obligations of importers, including criteria for selecting goods, various checks, etc.
  • The applicant can withdraw the Advance Ruling application under Customs at any time before the announcement of the  Advance Ruling Authority.
  • The validity of the Advance ruling under Customs is proposed to be limited up to three years except where there is a change in the law or facts.