It is commendable that the minister of finance remains on the path of fiscal consolidation, seeking an acceptable middle ground that tries its best to serve the interests of various interested parties. The Union Budget 2023-2024 is a forward-looking and well-designed plan that will provide many benefits to the Indian economy, including personal finance.
I am pleased to highlight the many benefits that a budget proposal will bring to the common man. First, increased tax savings will increase private consumption, which is a key driver of economic growth. Second, simplified financial processes will make it easier for individuals to manage their finances, which will encourage saving and investment.
In addition, new savings schemes for women and increased savings limits for senior citizens will increase financial inclusion and give this segment of the population more opportunities to grow their savings and secure their financial future. In addition, reducing the tax burden on high-income individuals will create a more favorable business environment, encourage entrepreneurship and job creation.
An increase in the income tax rebate limit to INR 7 lakh and the lowest exempt limit under the plate to INR 3 lakh will provide a significant boost to taxpayers, especially those at the bottom of the income pyramid. The reduction of TDS from 30% to 20% on EPF withdrawals and the proposal not to treat gold conversion to electronic gold receipts as capital gains would also simplify and improve the financial process for individuals.
The launch of the “Mahila Samman Savings Certificate” for women is another important step to empower them financially, and increasing the savings limits for senior citizens under the Post Office's SCSS and MIS schemes will provide them with a higher rate of return on their savings. Moreover, reducing the surcharge on individuals with income of more than INR 5 crore will lower the effective tax rate and promote economic growth.
The expansion of the tax plate under the new tax regime, the introduction of a new savings scheme for women, and an increase in the savings limit for the elderly are all commendable steps to promote personal consumption and tax savings in the economy.
While the proposal to exclude only policies with an aggregate premium of up to INR 5 lakh may have a temporary impact, it is ultimately a move to ensure that the tax benefits of life insurance policies are better aligned with the goal of providing financial security to individuals. This will lead to a more informed and responsible approach to personal finance, which is essential for long-term stability and economic growth.
What's really attractive about this budget is its predictability and consistency. When government policies are predictable and consistent, it provides stability to the economy and its constituents. The government's economic goals are clearly focused on increasing economic capacity and developing well-functioning markets. The increased allocation for capital investment to around 3% of GDP is a capacity increase and should pave the way for the private sector and provide confidence to make capital investments in industry and infrastructure. It is also a wise choice to keep taxes on capital gains and STT untouched. Keeping taxes and transaction fees low, of course, bodes well for the stock market.
Overall, I believe that the Union Budget 2023-2024 has taken laudable steps to promote personal finance and financial literacy, and I am confident that it will make a significant contribution to the country's sustainable & inclusive development and growth.
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