Tag: Nirmala Sitharaman

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Finance News

Major Income Tax Rule Changes starting from April 1, 2023

Income Tax Rule 2023-2024
Major Income Tax Rule Changes that came into effect from April 1, 2023.

Various changes to the income tax laws came into effect that will impact Indian taxpayers from April 1, 2023, which marks the start of the new fiscal year 2023-24.

The Indian economy has seen a boom, especially in the tax collections from the past few years. For the Financial Year 2022–2023, direct tax revenue increased by more than 20%. This number is expected to rise with time as the economy is on upside tack.

Nirmala Sitharaman, the Union Finance Minister, made the revisions public at the presentation of the Union Budget on February 1, 2023. A few modifications that were recently made in the Finance Bill 2023 are also expected to have an impact on some payers and entrepreneurs.

Some of the major changes that should affect everyone are as follows:

  1. The new income tax regime will be the default tax regime as of April 1, 2023. Tax assessors will still have the option to choose from the prior regime. For salaried individuals and pensioners, the standard deduction for taxable income exceeding Rs.15.5 lakhs is now set at ₹52,500.
  2. The standard deduction for employees under the old tax regime remains at ₹50,000. However, the finance minister has extended this benefit to pensioners under the new tax regime. Every salaried individual earning ₹15.5 lakhs or more will benefit from this at ₹52,500.
  3. Additionally, the government introduced an optional income tax regime in the 2020-21 Budget. Individuals and Hindu Undivided Families (HUFs) opting for this regime would be taxed at lower rates if they did not avail of specified exemptions and deductions such as house rent allowance (HRA), interest on the home loan, and investments made under Section 80C, 80D, and 80CCD.
  4. The enhancement of the tax rebate limit to ₹7 lakhs from ₹5 lakhs implies that individuals whose income is less than ₹7 lakhs need not invest anything to claim exemptions. Their entire income would be tax-free, regardless of the amount of investment made.
  5. Income tax slabs have undergone significant changes, with new tax rates as follows: nil for income up to ₹3 lakhs, 5% for income between ₹3 lakhs to ₹6 lakhs, 10% for income between ₹6 lakhs to ₹9 lakhs, and 30% for income above ₹15 lakhs.
  6. The leave encashment for non-government employees is exempt up to a certain limit, which was ₹3 lakhs in 2002 and has now increased to ₹25 lakhs.
  7. Investments made in debt mutual funds after April 1, 2023, will be taxed as short-term capital gains. This change will strip investors of the long-term tax benefits that had made such investments popular. Additionally, investments in Market Linked Debentures (MLDs) after April 1 will also be short-term capital assets. The grandfathering of earlier investments will end, and the mutual fund industry will be slightly impacted.
  8. Life insurance premiums over the annual premium of ₹5 lakhs would be taxable from the new financial year, which is from April 1, 2023. However, the new income tax rule will not apply to ULIP (Unit Linked Insurance Plan).
  9. Senior citizens will benefit from increased deposit limits for the senior citizen savings scheme and monthly income scheme. The maximum deposit limit for the former will be increased to ₹30 lakhs from ₹15 lakhs. For the latter, the maximum deposit limit for single accounts will increase to ₹9 lakhs from ₹4.5 lakhs, and for joint accounts, it will increase to ₹15 lakhs from ₹7.5 lakhs.
  10. Lastly, converting physical gold to an Electronic Gold Receipt (EGR) and vice versa will not attract any capital gain tax, effective April 1, 2023. These changes in income tax rules will have a significant impact on taxpayers, and it is advisable to consult with a financial expert to make informed decisions regarding tax planning and investment strategies.

The financial year of 2023 has brought numerous changes to income tax rules in India. Among the significant changes are the new income tax regime, tax rebate limit increase, the elimination of LTCG tax benefits on some debt mutual funds, and alterations to income tax slabs. The changes have now come into effect for everyone in the country. What will be the results of these changes? Only time will tell.

You can submit your comment regarding the article by commenting in the comment section. If you are looking for new opportunities in this field you should straightaway register for this Anybody Can Earn webinar by Dr. Vivek Bindra.

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Technology

Bengaluru Tech Summit-2021 To Be Held In Hybrid Mode This November

Bengaluru Tech Summit-2021 To Be Held In Hybrid Mode This November
Bengaluru Tech Summit-2021 To Be Held In Hybrid Mode This November

Bengaluru Tech 2021 with the tagline ‘Driving the Next’- a three-day annual flagship event will be held in a hybrid format from November 17, 2021.

The event will be inaugurated by the Prime Minister Narendra Modi. Not only that the U.S. Vice-President Kamala Harris will be invited to participate in the event, said Deputy Chief Minister C.N. Ashwath Narayan, who holds the IT/ BT, Science and Technology portfolio, told reporters here on Monday after holding preparatory meeting with the officials and chairpersons of Vision groups.

He also said that in the view of the possible third wave of COVID 19 breaking out the event will be organized in a hybrid format with one part being virtual and the other physical. The last event was held virtually for the first time, and the event had received an overwhelming response and participation from delegates of 25 countries, he added.

The three-day event will have distinct theme and topic. ‘Thought Leadership Day’ will be held on the first day of the event, while ‘Technologies and Strategies Day’ and ‘Startups Day’ will be held on the second and the third day respectively.

Prior to the event, ‘Beyond Bengaluru’ will be held in Mysuru, Mangaluru, and Hubballi during September and October. The event received overwhelming response from experts and delegates from 25 countries all over the world when it was held in virtual mode for the first time in 2020 due to the Covid-induced restrictions,” Narayan said.

Dr. Narayan said that Union Ministers Nirmala Sitharaman, Ravi Shankar Prasad, Harsh Vardhan, and Nitin Gadkari, among others, will also be invited for the event.

“To actively involve academia, VTU and Higher Education Council will be roped in for all the events,” he added.

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Finance

FM Rolls Out Loan Guarantee Scheme To Revive The Worst-hit Travel & Tourism Sector

FM Rolls Out Loan Guarantee Scheme To Revive The Worst-hit Travel & Tourism Sector
FM Rolls Out Loan Guarantee Scheme To Revive The Worst-hit Travel & Tourism Sector

Due to the Covid-19 induced pandemic, the tourism sector across the globe has been affected badly. Not only it has been downhill since 2020 due to imposed guidelines and travel restrictions, but it is still on its knees trying to find its balance.

The Finance Minister of India Nirmala Sitharaman, on Monday, announced a new 100% guaranteed loan scheme that will be provided to registered tourist guides and other travel and tourism stakeholders who are facing a financial crisis.

Tourist guides who are registered at the regional or state level and are licensed can get loans up to INR 1 Lakh with a guarantee. A total of 10,700 regional level tourist guides are recognized by the Minister of Tourism and state governments would benefit from the scheme.

Loans with an upper limit of INR 10 Lakh would be available with a 100% guarantee to travel and tourism stakeholders such as travel agencies. Around 904 stakeholders are recognized by the Ministry of Tourism who are eligible for this loan guarantee scheme.

The Finance Minister said that under the new loan guarantee scheme for Covid affected sectors, working capital or personal loans will be provided to people in the tourism sector to discharge liabilities and restart businesses impacted due to Covid-19.

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Finance

No Complete Ban on Cryptocurrency or Blockchain And Fintech: Finance Minister Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman. (Photo Credit: PIB)
Union Finance Minister Nirmala Sitharaman. (Photo Credit: PIB)

New Delhi, March 17: Union Finance Minister Nirmala Sitharaman on Monday, March 16, 2021, cleared that there will be no complete ban on cryptocurrency or blockchain and fintech. The minister said that a Cabinet note will all details will get ready soon.

“My view on this is that of course the Supreme Court had commented on cryptocurrency and while the RBI may take a call on official cryptocurrency but from our side, we are very clear that we are not shutting off all options,” Sitharaman had said at an India Today conclave.

She said that people will get adequate time to experiment with bitcoins, cryptocurrency and blockchain. “We will allow a certain amount of window for people to experiment on blockchain and bitcoin. However, the what formulation of cryptocurrency will be part of the Cabinet note which will get ready soon,” Sitharaman said.

Currently, the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) do not have a legal framework to regulate cryptocurrencies. Recently RBI governor Shaktikanta said that the RBI has certain “major concerns” regarding the financial stability of cryptocurrencies.

The apex court had virtually banned cryptocurrency trading in 2018. However, Supreme Court last year struck down RBI’s banking ban on digital currencies, terming it unconstitutional.

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Finance

Rakesh Jhunjhunwala Says He Will Never Buy Bitcoin, Cryptocurrencies Should Be Ban

Bitcoin (Photo Credits: Pexels)

The digital token, Bitcoin, recently hit an all-time high of USD 58,332.36. However, this was not enough to allure ace investor Rakesh Jhunjhunwala. On the trading of bitcoins, the big bull told CNBC’s “Street Signs Asia” that he would never invest in the cryptocurrency.

“I won’t buy Bitcoin even for $5. In the world, only the sovereign has the right to create currency. The dollar move of 1-2 per cent is news but here the fluctuation is 10-15 per cent in a day, hence the speculation is the highest,” Jhunjhunwala said.

He said that he will never buy bitcoin in his life and “cryptocurrencies should be banned.” The investor further said that India’s regulators should step in and keep bitcoin out.

In 2021, bitcoin surged more than 90 per cent. The spectacular run was due to increased adaption of the digital token by major investors and companies, including Bank of New York Mellon and Elon Musk’s Tesla. There is no decision on bitcoin and other cryptocurrencies by India’s regulators, but there is speculation that the Centre is planning to ban all private digital currencies and launch its own official virtual currency.

“A high-level Inter-Ministerial Committee (IMC) was constituted under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies and propose specific actions to be taken in the matter recommended in its report that all private cryptocurrencies, except any virtual currencies issued by a state, will be prohibited in India,” Finance Minister Nirmala Sitharaman had said during the Parliament Session.

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Startup

Union Budget 2021-22: Here Is What the First Paperless Budget Has In Store for Business Start-Ups

Union Budget 2021: Key Takeaways for Start-Ups| Representational Image (Photo Credits: Pixabay)
Union Budget 2021: Key Takeaways for Start-Ups| Representational Image (Photo Credits: Pixabay)

Union Finance Minister Nirmala Sitharaman on Monday presented the central government budget for the upcoming financial year 2021-22 in the parliament. The start-up sector also received a fair share of the estimated public expenditure for the fiscal year set ti begin from April 1, this year. To encourage budding start-up owners and aspiring business person, several steps have been proposed by the Finance Minister in the Union Budget that unveiled in the Lok Sabha yesterday. The allocation for Startup India initiative has been increased marginally to Rs 20.83 crore for the fiscal 2021-22 from  Rs 20 crore in 2020-21.

Mostly importantly, Sitharaman proposed to provide an extension of tax holiday to start-up owners for one additional year upto March 31, 2022. Along with this, he eligibility period of claiming capital gains exemption for investment made in the startups has also been extended till March 31, 2022. Union Budget 2021: Here Is What the First Paperless Budget Has In Store for the MSME Sector.

In the Union Budget 2021-22, Nirmala Sithraman has also proposed to set up a ‘world class’ Fintech (Finance-Technology Firms) park at Gujarat International Finance Tec-City, near state’s capital Gandhinagar. It has also been proposed to apportion a sum of Rs 15,000 to enhance the penetration of digital payments as well as other measures to boost financial inclusion.

For making legal compliance and regulations easier, the finance minister has proposed to use data analytics, artificial intelligence, machine learning to make regulatory filings more frictionless for businesses and startups in a revamp of the ministry of corporate affairs (MCA) portal. Centre had said that the ministry would look to introduce AI-based features in MCA-21 when version 3.0 of the portal is rolled out. Union Budget 2021 Highlights: The 5 Big Takeaways.

MCA-21 shares crucial information about firms to various stakeholders such as the regulators, investors, creditors and companies. The MCA-21 3.0 will reportedly have various process to ease the regulatory process. It is expected to have a single source of truth, ease of doing business, e-adjudication, online compliance monitoring, among others, thereby making the authenticity and comprehensiveness of corporate affairs even better.

For the start-ups and initiatives in the healthcare and wellness sector, the Budget has proposed to allocate a sum of Rs 2.23 Lakh Crore. It includes a healthcare portal for the entire country for digital health management, as well as a Mission Poshan 2.0 for nutrition and diet programmes in rural districts.

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MSME

Union Budget 2021: Here Is What the First Paperless Budget Has In Store for the MSME Sector

union budget-2021
Union Budget 2021-22 | Representational Image

Union Finance Minister Nirmala Sitharaman on Monday presented the central government’s Budget for the upcoming financial year 2021-22 in the Parliament. The MSME sector got a fair share of the estimated public expenditure for the next fiscal year set to begin from April 1 this year. In the budget unveiled today in Lok Sabha, Sitharaman has allocated a fund of over Rs 15,000 Crore to the Micro, Small and Medium Enterprises, which stands at double the amount apportioned to the sector last fiscal. “We have taken a number of steps to support the MSME sector in this budget. I have provided Rs 15,700 crore more than double the previous year,” said the Finance Minister. Union Budget 2021: How the post-COVID Budget will Impact the Corporates & Common Taxpayers?

The budget has also slashed the custom duty rates on various commodities to support the MSMEs affected by the COVID-19 induced economic slowdown. Customs duty on semis, flat, and long products of non-alloy, alloy, and stainless steels has been reduced to 7.5 per cent uniformly as per the Union Budget for 2021-22.  “To provide relief to metal recyclers, mostly MSMEs, I am exempting duty on steel scrap for a period up to March 31, 2022. Further, I am also revoking ADD and CVD on certain steel products,” said Nirmala Sitharaman.

The custom duties on steel screws and plastic builder wares has been increased from 10 per cent to 15 per cent while on prawn feed it has increased to 15 per cent from the existing 5 per cent. Meanwhile the duty on cooper scrap has been halved from 5 per cent to 2.5 per cent. For MSMEs dealing in the textile industry,  nylon chain has been made in par to polyester and other artificial fabrics as part of easing duty on raw materials and inputs.Union Budget 2021: Healthcare, Infrastructure will remain in the limelight!

In order to provide budgetary incentives to the promoters and exporters of garments, leather and handicraft products that are in the MSME sector, Nirmala Sitharaman announced the withdrawal of exemptions on imports of some types of leathers as they are manufactured domestically in quality and quantity.

Apart from the above measures, the finance minister has announced the establishment of a special framework for MSMEs for debt resolution. To resolve cases faster, the NCLT framework will also be strengthened including the implementation of the e-Courts system from the businesses in the sector. An additional year of tax holiday has also been provided to the affordable housing business.

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Finance

India’s Economic Growth in FY21 May Be Negative or Near Zero Due to Ongoing Coronavirus Pandemic, Says Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman. (Photo Credit: PIB)
Union Finance Minister Nirmala Sitharaman. (Photo Credit: PIB)

New Delhi, October 28: Finance Minister Nirmala Sitharaman on Tuesday said that India’s economic growth in the current financial year may be in the negative zone or near zero amid the ongoing coronavirus pandemic.

Speaking at the India Energy Forum of CERAWeek, Sitharaman, however, noted that signs of revival are visible now and India would be among the fastest growing nations in the next fiscal. She added that the festive season will further spur the economy which may lead to positive growth in the third and fourth quarters of the current financial year.

The Finance Minister said that the focus of the government is on public spending to boost economic activity. Earlier this month, she had said that another round of stimulus for the economy is not off the table.

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MSME

ECLGS for MSMEs: Banks Sanction Rs 1.87 Lakh Cr to 50.7 Lakh Business Units Under Credit Guarantee Scheme

Money (Photo Credits: Unsplash)

New Delhi, October 10: In a bid to help the micro, small and medium enterprises (MSMEs) sector, which has been the worst-hit by the COVID-19 pandemic, the Finance Ministry announced that banks have sanctioned loans of about Rs 1,87,579 crore to 50.7 lakh business units under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector. Reports inform that of the 50.7 lakh business units, about 27 lakh MSME units received cumulative disbursement of Rs 1,36,140 crore till October 5.

The scheme is the biggest fiscal component of the Rs 20-lakh crore Atmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May 2020 to mitigate the distress caused by lockdown due to COVID-19 by providing credit to different sectors, especially MSMEs. As released by the Finance Ministry, the latest numbers on ECLGS comprise disbursements by all 12 public sector banks (PSBs), 24 private sector banks and 31 non-banking financial companies (NBFCs).

“As of 5 Oct 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by PSBs, private banks & NBFCs to MSMEs and individuals stands at Rs 1,87,579 cr, of which Rs 1,36,140 cr has already been disbursed,” the finance minister said in a tweet. The loan amounts sanctioned by PSBs increased to Rs 81,648.82 crore, of which Rs 68,814.43 crore has been disbursed as of October 5, Sitharaman further added. At the same time, private sector banks have sanctioned Rs 86,576 crore of loans and disbursed Rs 59,740 crore, while NBFCs sanctioned Rs 3,032 crore with disbursement of Rs 2,227 crore.

“The ambit of the Scheme was expanded to include MSMEs with turnover of up to Rs 250 crore & individuals for business purposes. As of 05 Oct 2020, Rs 17,460 crore of loans to individuals have been sanctioned, of which Rs 5,939 crore has been disbursed,” she in a tweet. In another tweet, Sitharaman said as many as 33 stranded housing projects with investment of Rs 4,197 crore were accorded final approval under the SWAMIH scheme. “Special window for Affordable & Mid Income Housing Fund (SWAMIH) is working at a fast pace to provide relief to homeowners. As on 05.10.2020, 33 projects with investment of Rs 4,197 cr accorded final approval & will lead to completion of 25,048 home units,” the finance minister said in tweet.

The overall, 123 projects have now been sanctioned, including final approval to 33 projects, with an investment of Rs 12,079 crore that would target to provide relief to 81,308 homeowners, she said. On May 20, the Cabinet approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through ECLGS for MSME sector.

Under the scheme, 100 percent guarantee coverage will be provided by the National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line (GECL) facility. According to a report by PTI, for this purpose, a corpus of Rs 41,600 crore was set up by the government, spread over the current and next three financial years. The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.

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Finance MSME

Finance Ministry Sanctions Rs 1.61 Lakh Crore Worth of Bank Loans to MSMEs Under ECLGS to Battle COVID-19 Pandemic

Union FM Nirmala Sitharaman, with other Finance Ministry officials. (Photo Credit: PIB)
Union FM Nirmala Sitharaman, with other Finance Ministry officials. (Photo Credit: PIB)

New Delhi, September 8: Union Finance Minister Nirmala Sitharaman on Monday announced that the Central government had so far sanctioned loans amounting to Rs 1.61 lakh crore to MSMEs under the Emergency Credit Line Guarantee Scheme (ECLGS). The amount has been sanctioned as a component of the Rs 20-lakh crore Self-Reliant India Mission package, announced by FM Sitharaman in May 2020 for firms to tackle the economic effect of COVID-19 pandemic.

Informing about the update, the Union Finance Minister took to Twitter and wrote, “As of 03 Sept 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by #PSBs and private banks stand at Rs 1,61,017.68 crore, of which Rs 1,13,713.15 crore has already been disbursed.”

Adding more, Sitharaman wrote, “Compared to 24 Aug 2020, there is an increase of Rs 5,022.06 crore in the cumulative amount of loans sanctioned & an increase of Rs 7,786.16 crore in the cumulative amount of loans disbursed by both #PSBs and private sector banks combined as on 03 Sept 2020.”

Here’s what the Finance Minister’s office tweeted:

Among other details, the Finance Minister said that public sector banks have so far sanctioned Rs 78,067.21 crore under the ECLG scheme, and Rs 62,025.79 crore has been disbursed as of September 3, 2020. She added that the Union Finance Ministry regularly held review meetings with the banks to ensure that the scheme achieves its objective of providing adequate liquidity to the MSME segment during the current difficult period.

As per government estimate, the ECLG scheme would benefit more than 30 lakh units of MSMEs and other businesses to restart their businesses after the COVID-19 lockdown. It is to be known that the government had announced its plans for Rs 3 lakh crore as an additional credit to MSMEs and small businesses under Aatma Nirbhar package.

Under the scheme, the loans would be available to units — whose accounts are standard — with up to Rs 25 crore outstanding and turnover of up to Rs 100 crore. However, these firms will not have to provide any guarantee or collateral of their own as it will be 100 per cent guaranteed by the government and a total liquidity of Rs 3 lakh crore to more than 45 lakh MSMEs will be provided.