India’s latest budget announcement is currently making waves, with people already drawing comparison of old vs new budget. In this article, we aim to throw light on key elements of the Union Budget 2023-24 that have deviated from the previous budget and assess their relative merits. By examining the differences between the two, we aim to understand the shifts in allocations, identify areas of increased or decreased spending, and assess the overall impact on the organization’s goals and objectives. Through this analysis, we will provide a comprehensive overview of the budgetary changes and their potential implications.
Budget Review: Comparison of Old vs New Budget
For anyone who followed the budget briefing live or has gotten a chance to hear about it, look at it or go through it they have at least once come across phrases like comparison of old vs new budget, progressive budget, better tax brackets, and so on.
Now it is easy to be swayed by stuff said on social media especially when there are a lot of people saying the same thing and more importantly repeatedly. However, you don’t have to rely just on their statements as we have a comparison of the two for you where you can look at the facts and figures and decide for yourself if the new budget is better or if the older tax regime was.
Under the old tax regime if you had an income of up to 5 lakhs then you were free from paying any taxes, but the new figure is 7 lakhs, which means a person earning up to 7 lakhs can be exempted from taxes. The tax exemption limit has been increased by 50,000 rupees and now stands at 3 lakhs. An income of 7,00,001 rupees will be rounded off to 7 lakhs and get you tax exemption altogether while if you add 9 more rupees to this income then you will be taxed 26,001 rupees for the same.
A person earning 15 lakhs would pay a tax of 2,73,000 rupees under the older tax regime, but they would now pay 1,56,000 rupees for bringing in an identical amount. This would save them 1,17,000 rupees a year. And for a person earning 30 lakhs, the older tax regime would require them to pay 7,41,000 rupees and the newer would ask them to pay just 6,23,000 rupees which would save them 1,17,780 rupees.
A newer tax structure has also been proposed by the government as the surcharge rate from a high of 37% has been reduced to 25%. Personal income tax rates proposed by the government are 0% for an amount ranging between 0 rupees and 3 lakhs, 5% for income between 3 and 6 lakhs, 10% for income between 6 and 9 lakhs, 15% for income between 9 and 12 lakhs, 20% for income between 12 and 15 lakhs and lastly people with income above 15 lakhs in income will pay 30%.
Also Read: 40 Ways to Save Income Tax Legally in India
Here’s a table on comparison of old vs new budget tax and savings amount.
|Amount||Old regime||New regime||Savings|
Old vs New Budget Highlights
So, as we saw above the old vs new budget highlights the difference itself. A person warming anywhere between 15 to 40 lakhs now stands to save more than 1 lakh rupees thanks to the proposed changes in tax brackets. Though there have been quite a few deductions and exemptions that have been eliminated in the newer tax regime the government has compensated for them by making some more than-needed positive changes in the tax brackets.
One very good thing about the new tax regime is its focus on the middle-class or middle-income people who have been provided much-needed relief. Also, the new tax regime has been made the default to make tax filing easier and make life easier for taxpayers while bringing more transparency to the taxation process. However, salaried people can still choose to be taxed under the older tax regime giving them a choice.
Old vs New Budget which is Better?
Depending on which article you read and what formulation you understand people can come up with various reasons for the new budget being better than the old one and vice versa. But the question does come up as a genuine one, old vs new budget which is better? Now we are no tax experts but let us work out something for you and provide you with a clear answer.
While the new tax regime has a lot of supporters because of its slab offerings and rates, the older regime had better exemption and deduction aspects to it.
So, if we took into consideration a person with a salary of 15 lakhs and went ahead with the comparison of old vs new budget numbers then this person would be paying an amount of rupees 1,24,800 in taxes under the old tax regime where he/she would have a range of deductions to claim. However, if rates from the new tax regime are used then the taxable amount comes up to 1,50,000 rupees while previous rates bring up the amount to 1,87,500 rupees.
So, the conclusion to the comparison is the same as the intro, new tax rates and slabs and more attractive while the older regime offered better exemption and deduction options.
Union Budget 2023-24
We won’t go into the depths of intricate details of every fact and figure associated with Union Budget 2023-24. We have looked at tax rates and slabs above which is one thing that affects the majority of people and now we look at another important detail that matters to mostly everyone. We are talking about mentioning things that have become costlier or cheaper.
1. Things that Experienced Rise in Price
Articles that are made of either gold bars or platinum are now set to attract a higher customs duty. Custom duty on kitchen electric chimneys also went up. Doors and Bars made of Silver also see a price hike. Clothes, Cigarettes, Compound Rubber and Copper joined the list of items whose prices increased.
2. Things that Became Cheaper
Custom duty on seeds used to create diamonds in labs saw their price go down. Mobile phones, Camera lenses, TV parts, Domestic manufacturing of shrimp, denatured ethyl alcohol, and acid grade fluorspar were some of the things that saw their prices come down.
So that’s all of it or at least the most important bits that you should know about the new and old tax regimes as mentioned in the comparison of old vs new budget section. Before the budget comes out each year people already know that some things are going to rise in price while others will get a concession.
It is just a matter of finding out what got pricier and what got cheaper and what stayed the same as we have mentioned in the old vs new budget highlights.
While we can’t talk about all the budgets, we can say that for the most recent one, the government patted itself on the back while the overall responses are mostly mixed as they always are or somewhat positive – so it is a win-win situation after a long time.
So, old vs new budget which is better? The comparison between the old and new budget reveals notable changes and adjustments. These modifications reflect a strategic approach to financial planning and aim to enhance overall efficiency and effectiveness.