Budget 2023 : What has changed for your Personal Finance

You might have been reading a lot about the Budget and what’s there in it for you. While the main buzz is around the “New Tax Slabs” and the whole debate about “New vs Old Tax Regime”, there are more in the budget which will have direct impact on your personal finance and planning.

Hear are some details :

1. New income tax slab and rates :

Increasing the threshold limit from 5 lac to 7 lac, new slabs for new tax regime, extending the Standard Deduction to new tax regime – these are some benefits which will give some extra disposable income in the hands of salaried class. It can result in more savings and better investments.

2. Reduction in Surcharge :

Reduction of the highest surcharge levied on income tax to 25% from 37% under the new tax regime. This will effectively reduce the tax rate on income above Rs 2 crore to 39% from the current 42.7%

3. Mahila Samman Saving Certificate :

A one-time small saving scheme for women. This deposit facility will be available for a 2-year period, up to March 2025, earning a fixed interest rate of 7.5% with a partial withdrawal option. The maximum amount that can be deposited under this is Rs 2 lakh.

4. Higher deposit limit for SCSS :

Enhancing the maximum deposit limit for Senior Citizen Saving Scheme (SCSS) from Rs 15 lakh to Rs 30 lakh. Similarly, the maximum deposit limit for the Monthly Income Plan has been raised from Rs 4.5 lakh to Rs 9 lakh, and from Rs 9 lakh to Rs 15 lakh the in case of a joint account.

5. Tax on High-Value insurance proceeds :

To tax income from insurance policies having premium above Rs 5 lakh in a year. This will be applicable to policies sold after April 01, 2023

6. Other personal finance proposals :

a. TDS rate on the tax portion of EPF withdrawals in non-PAN cases will be reduced from 30% to 20%

b. Increased the limit for exemption on leave encashment on retirement of non-government salaried employees from Rs 3 lakh to 25 lakh

c. Deduction from capital gains on investment in residential house under Section 54 and 54F will be capped at Rs 10 crore

d. Establish an integrated IT portal for investors to reclaim unclaimed shares and dividends from the Investor Education & Protection Fund Authority with ease.

Overall, in terms of personal finance the announcements in the Union Budget 2023-24 brought some tax relief for the common man, especially those looking to opt for the new tax regime.