Union Finance Minister Nirmala Sitharaman presented the final full-fledged budget of the second term of the Prime Minister Narendra Modi-led government and made several announcements.
While the Finance Minister made announcements on several key sectors but incomes tax, new tax regime and cigarette price hike grabbed major attention. She announced a 16 percent increase in the customs duty on cigarettes.
“Taxes on cigarettes will be hiked by 16 per cent,” said the finance minister.
According to experts, the hike in tax on tobacco products will bring the best out of human capital by ensuring better health of citizens.
The budget announcement impacted the shares of cigarette companies, such as Godfrey Phillips India and ITC Ltd., causing them to plunge more than 5% soon after the announcement.
Meanwhile, FM Sitharaman has proposed to increase the tax rebate from Rs 5 lakh to Rs 7 lakh under the New Tax Regime to provide relief to the taxpayers of the country.
She also proposed to change the tax structure in the new income tax regime by reducing the number of slabs to 5 and increasing the tax exemption limit to Rs 3 lakh.
“Income tax- rebate extended on income up to Rs 7 lakhs in new tax regime,” FM Sitharaman said.
“I introduced in 2020, the new personal income tax regime with 6 income slabs, starting from Rs 2.5 Lakhs. I propose to change the tax structure in this regime by reducing the number of slabs to 5 and increasing the tax exemption limit to Rs 3 Lakhs,” she said.
Yesterday, after the President Draupadi Murmu’s address to the joint-sitting of the Parliament, the Union Finance Minister had tabled the Economic Survey for the Financial Year 2022-23.
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According to the survey, India’s economic recovery from the pandemic is complete and the economy is expected to grow in the range of 6% to 6.8% in the coming financial year 2023-24.