Union Budget 2023: 5 Expectations From Finance Minister Nirmala Sitharaman

On Jan. 26, India's Finance Minister Nirmala Sitharaman stirred the ‘halwa' pot and served the dessert to her colleagues. The ‘halwa' ceremony is a customary event that flags off the printing of various documents associated with the Union Budget, which will be presented on Feb. 1 this year.

What Happened: Despite the Indian stock market looking a bit nervous ahead of the Union Budget 2023, courtesy the rout in Adani Group's shares, Benzinga India highlights five areas where taxpayers’ expectations are pinned as we inch closer to D-Day.

1) Income Tax Deductions, Slabs

Tax relief is offered by deductions under various sections, with 80C being one of the most common sections where a taxpayer seeks to reduce tax obligation. The maximum deduction allowed under Section 80C is ₹1.5 lakh — a figure that hasn't been revised since 2014.

What Are The Expectations? The government should raise the maximum deduction under 80C, which, in turn, would increase the disposable income in the hands of taxpayers.

Second, the government is expected enhance the current tax slab from ₹2.5 lakh to ₹5 lakh, considering the rising inflation.

Third, the current tax rate for individuals earning over ₹10 lakh annually is 30%. It is expected that the ceiling could be raised to ₹20 lakh.

See Also: Gautam Adani Falls Below Bill Gates, Warren Buffett On World Rich List Amid Stock Market Rout

2) UDAN Scheme

The government launched a regional air-connectivity scheme called ‘Ude Desh ka Aam Nagrik,' or UDAN, on Oct. 21, 2016, to make air travel affordable. Under this, the fare for an hour's flight (covering about 500 km) on a fixed-wing aircraft or for a 30-minute journey on a helicopter was capped at ₹2,500.

As per official figures, about 1.15 crore citizens from tier-2 and tier-3 cities have traveled by flights under the scheme.

Expectations: The government could expand the reach of air transport in India and make more routes operational. Also on the government’s radar could be revival and development of more unserved/ underserved airports.

3) Cryptocurrency

The government announced a few reforms regarding cryptocurrencies in Union Budget 2022, including formally referring to them as "Virtual Digital Assets." One of the announcements included taxing income from the transfer of virtual digital assets at 30% at the end of each financial year.

Besides, investors were to be subjected to 1% tax deduction at source, or TDS, on all sell transactions. Despite these announcements, taxation of cryptocurrencies has remained a grey area. Gaps persist and navigating the complexities of the 30% tax on the gains is a tedious task.

See Also: Top Indian Apps That Give Bitcoin, NFT Rewards

Expectations: Cryptocurrency industry has urged the government to provide a more comprehensive and detailed framework on cryptocurrency taxation. More clarity is needed on the 1% TDS front since the rate is quite high given the volatile nature of cryptocurrencies.

4) Online gaming

Gaming companies deduct tax from winnings of Rs 10,000 or more from online games at the source. The question here is whether a person must pay TDS on the total amount if they win many games and each time their winnings amount to less than Rs 10,000.

In December 2022, the government announced that actionable claims arising from betting and gambling, including online gaming, would attract 28% GST. However, industry leaders say GST at 28% would be detrimental to the rapid growth of online gaming in the country.

Expectations: Clarity is needed from the government on tax issues in the online gaming industry. Apart from that, industry is also hoping for some sops on taxation.

5) Vande Bharat trains

In last year's Union Budget, the government outlined plans to introduce 400 Vande Bharat trains over the course of three years. Vande Bharat trains are new-age chair car train services with world-class features for passenger comfort and faster travel capability. Indian Railways is also aiming at manufacturing sleeper versions of these trains.

Expectations: This number could increase in this year's budget, and the speed on main lines could also be enhanced to beyond 180 km/h.

Read Next: Retail Traders Aged Below 40 Suffer Heavy Losses Trading Futures, Options: SEBI Study