#Budget2023 thread starts here. Follow this and @capitalmin…

Note: https://t.co/XDPaLzv6Ki

Budget day today. Please note: Drink lots of water. Ignore most of the budget until the tax things come. Prepare for extreme disappointment, or extreme boredom, or both. Anything exciting is likely to be out of syllabus. You've been warned.
— Deepak Shenoy (@deepakshenoy) February 1, 2023

Some 1 minute left. Here it goes. Last real budget for this version of the government. Elections next year so only a vote on account in Feb 2024. So, whatever bad has to happen (or good), this is the opportunity.

And it begins. They all clap. First budget in Amritkaal, it seems. (Note to self: what is this?)

Meanwhile, markets are up roughly 0.8%. USDINR flat at 81.87 and the 10y at 7.35%

Heckling in the background as people want the tax things first, but it's not to be, you have to listen to the whole thing first.

Free foodgrain scheme to continue for another year. This is a terrible way to spend 200,000 cr. I already don't like this, but at least I knew this one before.

Per capita income at 197,000 rupees. That's not bad at all, actually.

Ok we did blah, and we did bluh, and all that. This is going to last a while. Every year we build X crore toilets and Y crore LPG and all that, so yeah.

11.4 cr. farmers get money directly in their accounts, not sure if this includes Amitabh Bachchan so don't ask.

Startups growing into unicorns have been mentioned in budget. Whatay.

There is a lot of stuff going on with the word "green". I will omit this part.

Maybe it's an ever-green budget. Sorry.

Priority: Inclusive development. Farmers, women, all the castes, Economically weaker, underprivileged, ladakh, north east, J*K.

Interesting - an agri accelerator fund for agri startups in rural areas. Could be big but don't expect too much input from government on this front.

We are big on millets. She names all sorts of things that are probably very anti-keto, but pro-alternate-other-diets.

India-institute-of-sri-anna is about millets, people. Not about research into Ravi Shankar and Rajnikanth. Just saying.

Fisheries and dairy societies to be promoted. We'll see.. I like this ecosystem for the next decade.

ICMR labs to be made available to both educational and private research initiatives.

National digital library for children and adolescents. Probably will entirely have to be "shorts" cos they have no patience whatsoever.

National book trust etc. will provide regional languages/English books to physical libraries. Question: where are physical libraries?

Financial literacy: age-appropriate fin literacy stuff needed. YEESSSSS. Please do.

Ekalavya model residential schools: Hajaar teachers to be recruited. I'm guessing a "thumbs up" would be inappropriate given the name.

PM Awas yojana: 79,000 cr. (66% up). My goodness. But what's been the earlier spend? We'll see.

Now for infra and investment: Capital outlay is up 33% to 10 lakh crore. Holy moly. This is actually a brilliant way to spend.

Now she also stops for water. See? Get some, peoples.

Govt capex is 13 lakh crore. Railways is 2.4 lakh crore. Nice. Bigger than I thought.

Last mile/first mile to core sectors at 75,000 cr. (60K cr govt, 15K private)

Muni bonds: cities to be encouraged to build proper balance sheets. Yes, I can also dream.

Markets at 0.73% mostly because nothing has happened.

We will get a center of excellence for AI. No decentralized AI, people.

I'm not sure why this shouldn't just be part of a defence budget :) We want to create an AI ecosystem it seems. I'm skeptical

KYC process to be simplified !!!!! (Oh man. Thank you. )

Fully digital, and one stop address updating. This I would be really really thankful for. Please make it happen!

PAN will be used as id for all govt digital systems with a legal mandate. I know this sucks for privacy but we do need an id in finance. So yeah, good.

For arbitration by government which is in court, there's going to be a standard settlement format that says boss lets just agree for a smaller amount (I think) and get rid of this arbitration crap. My words, not hers.

Digilocker = more expansion.
5G = 100 labs in engineering institutes. No, certain sites are still illegal, don't get ideas, people.

We will have net zero carbon emissions by 2070. Meaning, stop eating rajma by then.

Energy transition: 35000 cr. for capex in transitioning out of coal etc. Or so I think. She didn't say transition from what.

20,700 cr. for renewable energy from Ladakh.

Markets are not (yet) complaining. 7.39% on the 10year because bond markets are like paisa humse hi loge

Coastal shipping: we will promote it it seems. Heard this for five years, including "viability gap funding".

Vehicles tobe replaced. The old "political", uh no, "polluting" vehicles must be scrapped.

They're now versioning PM yojanas. Something's at 4.0. Skill building. for Industry 4.0. All VC level buzzwords, including drones and AI and all that.

Tourism development in an app. I don't know what this means but it won't work after 5pm.

Financial sector reforms now. I'm waiting.

Credit guarantee for MSMEs. 9000 cr. more in the corpus. I keep hearing this - collateral free guarnateed credit of 2 lakh cr and cost reduced by 1% for MSMEs. Hope this is useful.

Public consultation for various regulatory thingies. Uhm, okay. Nothing happens when public comments anyhow.

To improve bank governance: some changes in Banking acts. We won't tell you what.

Reclaiming of shares and dividends - will makea better portal. Yes! I hope this happens, currently horrendous.

SCSS is doubled to 30 lakh! Very good. retired people get 60 lakh per couple at the higher FD rates. Excellent!

State fisc deficit at 3.5% and 0.5% of that is purely for discom.

42 lakh crore expense for the government. Fisc deficit 6.4% of GDP. Bleady hell, that's pretty big.

Ok now below 4.5% of GDP by 2025-26
Now, net market borrowings at 11.8 lakh cr. (rest from small savings and other)

This is not very much at all.

NOW IS PART B. Drink more water.

Indirect taxes first. Ominous I say.

Customs duty cut a little. Won't know exactly what till later.

Electronics: we made 275,000 cr. worth mobiles here. So now, cut in customs duty on batteries and camera parts etc.

Denatured Ethyl Alcohol - cut customs duty on it. Not good for the sugar fellows?

inputs for shrimp feed: cut in duty. watch those fellows.

Increase in silver import duty too. Jeez.

Now for direct taxes.

6.5 cr. returns processed this year. average period is 16 days. 45% within 24 hours.

MSMEs upto 3 cr. (up from 2 cr) turnover and individuals upto 50 lakh (same) at presumptive taxation.

7.29% on the 10 year. Bond fellows heave sigh of relief?

Some incentives for cooperative societies - Agri and others.

More selective in scrutiny this year.

Capital gains in houses limited to 10 cr. Insurance also will be cut! Oh, gotta see.

Taxation on income in MLDs coming! Details soon.

Rebate: Income upto 7 lakh with no tax (earlier 5 lakh) in new regime only. (No deductions)

New tax slabs
0-3l: nil
3-6: 5%
6-9: 10%
9-12: 15%
12-15: 20%
More: 30%

Only in the new regime. (I'll have to revise this later on details)

Standard deduction in new tax regime has a change- don't see this yet.

Reducing highest income surcharge from 37% to 25% !!!

Highest tax rate down from 42.74% down to 39% (and all AIFs benefit!)

Leave encashment upto 25 lakh will be exempt (?)

New regime will be default. You can choose old if you like. We will find out details soon.

No capital gains changes!!! (yet)

That's it, folks.

Now, we wait for docs. I'm sure there's more in there.

Nifty up 1.1%. 7.31% on the 10y, Rupee up 10p at 81.78

Pretty good budget. My feeling is the budget docs will spring some surprises.

Where are the budget docs? @FinMinIndia

Apologies, here they are: New tax regime slabs:

These will make sense only if you don't have a large HRA deduction or if you're borderline on the earning. Have to calculate this a little.

New twist: the 37% surcharge (for incomes above Rs. 5 cr.) will still apply if you choose the old regime. it's only if you choose the new regime that the surcharge is restricted to 25%. (Means: must let go some depreciation, housing loan interest and other deductions)

Interesting: "news agencies" were tax exempt (I had no idea). Now they are not:

New twist: REITs and INVITs were paying distributions partly as "redemption of debt" which was not taxable. From next year they will be fully taxable no matter what the heading.

TDS on listed debentures: If you buy bonds on the exchange (or otherwise) there was no TDS. Now there will be, from 1 April 2023: Tax will be deducted at source.

All overseas remittances (including buying of US stocks, and debit card spends like Niyo abroad) will now have 20% TDS without a limit (was 5% above 7 lakh)

This is huge. Means if you buy $1000 worth of stocks or spend $1000 abroad on Niyo, you have to pay 20% of that to the govt extra. (And claim it as tax paid later)

Huge: You can only invest capital gains of upto 10 cr. in a house. More than that, pay tax on the excess. This applies to even startup founders who invest LARGE amounts in houses after exits. And also if you sell houses of >10cr only 10 cr. is allowed to be tax-free reinvested.

MLD industry is now dead. All MLDs are classified as debt and any income (regardless of redemption, maturity or sale) will be short-term gain only i.e. added to income, taxed at marginal rates.

Insurance policies - even non ULIP- where premium is > 5 lakh pa, will see full tax on income above premium paid. Not as cap gain, but as income (marginal rate of tax)

Only if you die, does the money not get taxed. Policies issues after 1 Apr 2023 only.

Another small thing: If you've been claiming interest on housing loan as a deduction every year, and then when selling, you want to include the interest in the cost of acquisition (currently allowed) you can't do both. One or the other.

#Budget2023 thread starts here. Follow this and @capitalmind_in for more. We'll live tweet it, and we'll have some fun!

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