Direct tax budget 2023

Spotlight PA is an independent, nonpartisan newsroom powered by The Philadelphia Inquirer in partnership with PennLive/The Patriot-News, TribLIVE/Pittsburgh Tribune-Review and WITF Public Media. Sign up for our free newsletters . HARRISBURG — June is budget negotiation month in Pennsylvania, when state lawmakers decide how to direct billions of tax dollars and make big policy choices on everything from energy to education to health care. The average Pennsylvanian likely doesn’t have time to prowl the halls of the Capitol in Harrisburg to keep up with the latest developments, which is why Spotlight PA has compiled this guide. Below, you’ll learn what Democratic Gov. Josh Shapiro has proposed, what comes next in the process and how to follow along. What’s on the table? In his March budget address, Shapiro It calls for $1 billion in new education spending (including state funding directly to school districts as well as money for building repairs and mental health services), Legislators in both major parties have greeted it with cautious optimism as a fine starting point, even if their priorities are in opposite directions. Democrats have said they want to spend more on education and use more of the state’s multibillion-dollar surplus on new government programs, from Republicans meanwhile have said Shapiro’s plan spends too much of the state’s cash reserves and have quibbled with some of his proposed programs, such as What comes next? The governor’s budget address kicked off t...

The Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman announced several Direct Tax proposals with an aim to maintain continuity and stability of taxation, further simplify and rationalize various provisions to reduce the compliance burden, promote the entrepreneurial spirit, and provide tax relief to citizens. She said that the constant endeavor of the Income Tax Department is to make tax compliance easy and smooth. “Our taxpayers’ portal received a maximum of 72 lakh returns in a day; processed more than 6.5 crore returns this year; average processing period reduced from 93 days in financial year 13-14 to 16 days now; and 45 percent of the returns were processed within 24 hours." Sitharaman said that micro-enterprises with a turnover of up to ₹2 crore and certain professionals with a turnover of up to ₹50 lakh can avail of the benefit of presumptive taxation. She proposed to provide enhanced limits of ₹3 crore and ₹75 lakh respectively, to the tax payers whose cash receipts are no more than 5%. She also proposed to allow a deduction for expenditure incurred on payments made to MSMEs so as to support them in the timely receipt of payments. She proposed to include payments made to such enterprises within the ambit of section 43B of the Micro, Small, and Medium Enterprises Development Act. It will be allowed on an accrual basis only if the payment is within the time mandated under the Act. She further proposed to provide an opportunity to sugar co-operativ...

Industry Benefit Highlights MSMEs: Enhanced limits for micro enterprises & professionals to avail benefits of presumptive taxation ; 95% of receipts to be non cash. Deduction on payments made to MSME to be allowed only when payment is actually made. S tartups : Extension of the date of incorporation by 1 year for income tax benefits to start ups. Benefit of carry forward of losses on change of shareholding of start ups from 7 years of incorporation to 10 years. Rationalisation: Income of authorities, boards, & commissions set up by the statue of Union or States to be exempt from income tax in certain sectors. Extension of period of tax benefits to funds relocating to IFSC, GIFT City till 31st March 2025. Other Benefits: • Expanded Corpus under a revamped scheme to enable additional collateral free guaranteed credit to MSME of ₹ 2 lacs crores. • Enhanced maximum deposit limit for senior citizens savings schemes from ₹ 15 lacs to ₹ 30 lacs. Direct Tax Proposals under Union Budget 2023 MSME and Professionals: Increasing threshold limit for presumptive taxation scheme Existing Provision New Provision The existing provisions of section 44AD and 44ADA provides presumptive taxation benefits to the assessee having turnover and gross receipts of Rs. 2 crores and Rs.50 lacs respectively. It has now been proposed to enhance the threshold limit availing benefit of presumptive taxation, i.e., section 44AD and 44ADA to Rs. 3 crores and Rs. 75 Lacs respectively subject to cash receipts u...

DIRECT TAXES A. RATES OF INCOME-TAX I. Rates of income-tax in respect of income liable to tax for the assessment year 2023-24. In respect of income of all categories of assessee liable to tax for the assessment year 2023-24, the rates of income-tax have either been specified in specific sections of the Act (like section 115BAA or section 115BAB for domestic companies, 115BAC for individual/HUF and 115BAD for cooperative societies) or have been specified in Part I of the First Schedule to the Bill. There is no change proposed in tax rates either in these specific sections or in the First Schedule. The rates provided in sections 115BAA or 115BAB or 115BAC or 115BAD of the Act for the assessment year 2023-24 would be same as already enacted. Similarly, rates laid down in Part III of the First Schedule to the Finance Act, 2022, for the purposes of computation of “advance tax”, deduction of tax at source from “Salaries” and charging of tax payable in certain cases for the assessment year 2023-24 would now become part I of the first schedule. Part III would now apply for the assessment year 2024-25. Total Income (Rs) Rate Up to 2,50,000 Nil From 2,50,001 to 5,00,000 5% From 5,00,001 to 7,50,000 10% From 7,50,001 to 10,00,000 15% From 10,00,001 to 12,50,000 20% From 12,50,001 to 15,00,000 25% Above 15,00,000 30% 2. With effect from assessment year 2024-25, it is proposed that the following rates provided under the proposed sub-section (1A) of section 115BAC of the Act shall be th...

About Us The Tax Foundation is the nation’s leading independent tax policy nonprofit. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and global levels. For over 80 years, our goal has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity. Introduction As legislative sessions wind down in many states, it is evident that 2023 marks a third consecutive year of substantial state tax reform and relief. Since 2021, 24 states have cut individual income tax rates (including 22 reductions to top marginal rates), 13 states have cut corporate income tax rates, two have cut sales tax rates, and many more have made structural improvements like repealing capital stock taxes, adopting permanent full expensing, raising nonresident filing and withholding thresholds, improving treatment of business tangible property, eliminating throwback and throwout rules, and more. After the dramatic rate reductions and reforms in 2021 and 2022, many expected a lull in 2023. Those expectations have been shattered. Eight states adopted individual income tax rate reductions: Arkansas, Indiana, Kentucky, Montana, Nebraska, North Dakota, Utah, and West Virginia. Additionally, Michigan triggered a The table below shows where states’ top marginal income tax rates stood entering 2021—before any retroactive rate changes for that year—and what was implemented for 2022 and ...

Budget 2023 may simplify and rationalise the complex direct tax regime to boost economic growth at a time when Indian economy is facing global headwinds. Will India face recession in 2023? This would be the biggest question on everyone’s mind as finance minister Nirmala Sitharaman prepares to present Budget 2023 on February 1. While economists and industry leaders believe that the Indian economy is resilient to global developments, there is a lurking fear, especially when there is news of layoffs by large multinational companies. With a READ I Income tax rates and slabs From an individual tax perspective, the tax slabs and rates have remained unchanged since FY 2017-18 and the new tax regime (optional) that the government introduced in FY 2020-21 doesn’t seem to have found favor with taxpayers; majority of them have continued to opt for the old tax regime. The government should consider raising the basic exemption limit from Rs 2.5 lakh to Rs 5 lakh and also reduce the tax rate for taxable incomes above Rs 10 lakh to 25% which would broadly be in line with the headline rate for companies. India annual GDP growth Global economic growth trends Further, there has been long-standing demand to increase the deduction under section 80C from Rs 1.50 lakh to at least Rs 3 lakh as this limit was last revised in the 2014 Budget. Additionally, to incentivise savings and boost fund flow to the economy, the cap should be increased further to Rs 5 lakh for taxpayers with income above Rs ...