Laundry list of North Block’s February 1 presentation

At 11 am on February 1, the Union Finance Minister, Nirmala Sitharaman, will present her straight fifth Budget. Pursuant to the presentations before both the houses of Parliament, the soft copies will be made available to the general public at www.indiabudget.gov.in and the “Union Budget” mobile applications (that can be downloaded from www.indiabudget.gov.in/downloadapp.php).

Besides the finance minister’s speech, the budget documents will include the Finance Bill 2023 with a memorandum explaining the provisions provided in it, the annual finance statement, the demands for grants, statements mandated under the Fiscal Responsibility and Budget Management (FRBM) Act 2003, expenditure budget, receipts budget, ‘budget at a glance’, outcome monitoring framework, key features of Budget 2023-24 and implementation of budget announcements for 2022-23.

The documents that matter most to taxpayers, investors and senior citizens, are the budget speech and the Finance Bill and its memorandum, as these will disclose the tax they will have to pay in the new financial year and enable their tax planning.

As per the schedule set down by the latest Budget Manual, the Law Ministry would have completed the drafting and collation process by January 20, to deliver the ‘final print-ready version’ of the Finance Bill, with the memorandum by January 25. The Finance Minister’s speech and the budget summary was to be done by January 28 and the “Summary for the President” will go up for the Prime Minister’s approval on January 31. The Budget Speech will also be printed on January 31. On the D-day the President’s recommendation will come in, followed by printing of other Budget documents., the cabinet meeting, the presentation of the Budget and introduction of the Finance Bill in both Houses of Parliament.

Budget speech: The Finance Minister’s Budget speech consists of two parts: Part – A covers the state of the economy, likely impetus for growth, comparative figures of the projected expenditure with revised estimates for the previous year and fiscal estimates for the new financial year. Part-B consists of key direct tax and indirect tax proposals for the coming new financial year.

The Finance Bill, 2023: The key object of the Finance Bill, 2023 is to give effect to the financial proposals of the Union Government for the financial year 2023-24 and it will be introduced immediately after the presentation of the Budget.

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However, the Bill will be subject to certain amendments, carrying out post-budget recommendations and suggestions, if any, received from stakeholders. This will be done before it is passed in the Lok Sabha, returned by the Rajya Sabha and goes for the Presidential assent.

Generally, it consists of five chapters dealing with proposed section-wise amendments to the Income Tax Act, 1961, Customs Act, 1962, Central Goods & Services Act, 2017, Integrated Goods & Services Act, 2017 and Schedules. The first Schedule consists of three parts, wherein the Part-1 deals with the normal income tax rates and surcharges for various assesses. Part – 2 relates to TDS rates, capital gains and losses and Part-3 proposes new tax rates, advance tax rates, rates for deducting income-tax from income chargeable under the head of salaries. Finally, Part-4 provides rules for computing net agricultural income.

On getting the Presidential assent, that is likely on March 28 or 29, the Bill will become an ‘Act’ and these provisions will be incorporated in the Income Tax Act, 1961 and come into force on April 1 - the first day of the new financial year.

As elsewhere, the once-in-a-century pandemic has broken the back of the Indian economy. However, the country has managed to rally its economic strength back to what it was in the pre-pandemic days. At the same time, it is staring at a global recession, coupled with record-level job losses. It will take another 2-3 years to fully recover. Against this extraordinary backdrop, the government has to contend with upcoming state elections this year and then the general elections next year. It is expected that the Finance Minister will take a holistic approach to offer much-needed tax reliefs, ease up on tax compliances and throw in some measures for economic stimulation.

(The author is founder and chief
executive officer of Shree Tax Chambers)