On February 2nd in Chennai, AMCHAM hosted a budget session with EY. Mr. Rajan Aiyer, Chairman – Tamil Nadu Chapter, AMCHAM opened the session by mentioning that true understanding of Union Budget 2023 lies in the details and he was grateful for EY to share their expertise. Mr. Ashwin Ravindranath, Partner, EY in Chennai began by saying the geopolitical conditions around the world, the oil prices, jobs, pharma, manufacturing, sensex figures, economic conditions amongst others are important factors to be considered while trying to understand the impact of the budget. Budget 2023 continues its focus led by capex push with 33% growth in spend. There is a continued pivot in the government’s focus on agriculture and allied areas, from productivity and price to democratising market information, reducing dependence on chemicals and using technology to solve problems. The rejig in tax slabs under the new personal tax regime are made attractive to middleclass as-well-as high-net worth individuals.

Mr. Swathanth, Partner, EY in Chennai highlighted the direct tax proposals of Finance Bill 2023 and he said that the Finance Minister has made several announcements in Budget 2023 regarding personal income tax amendments, including an increase in the tax rebate limit, an increase in the tax-exempt income slab, an increase in the tax-exempt leave encashment limit, and so on. In addition, the benefit of the standard deduction has been extended to salaried and pensioner taxpayers, and the highest surcharge rate has been reduced under the new tax regime. Budget 2023 direct tax proposals aim to maintain continuity and stability in taxation, simplify and rationalize various provisions to reduce compliance burden, promote entrepreneurial spirit, and provide tax relief to citizens. Certain tax proposals often tend to mutate beyond their origins in previous budgets. Two such is the proposed taxation of “excess” premiums paid by non-resident investors in Indian companies and withholding of tax refunds by the department, which did not find its place in the FM’s speech. Mr. Sriram, Partner, EY took participants through the indirect tax proposals and mentioned that GST and excise duty were now out of the budget and being dealt with by the GST Council. He mentioned the various changes being proposed in customs duty, SEZ, taxes concerning warehousing sales and duty free shops etc. with the intent of promoting ‘Make in India.’ Overall, this appears to be a befitting budget to usher India into Amrit Kaal with a positive outlook.