January 8, 2023 1 minute
As the Union Budget 2023–24 knocks on investors’ doors, it is time that they brace for possible additional volatility in the financial markets. The Finance Minister will present the budget on February 1st, 2023 and the expectation is that she will continue and also expand on the already laid down path of structural reforms while adhering to a fiscally prudent course of action with a targetted fiscal deficit of 5.8–6%.
As every year, this year too, expectations run high among individual taxpayers on the reduction and revision of the tax slabs as higher inflation has put a hole in their pocket. There could be a reduction in the top tax bracket from 30% to 25% and/or an increase in the number of threshold slabs. Additionally, it is possible that the investment limit under Section 80(C) may be raised from Rs 1.5 lakh to Rs 2.5 lakh, which will be well-received by individual taxpayers. A boost to the capital markets could arise from an increase in the 80C limit in the form of more positive cash flows to equity-linked savings schemes (ELSS) of mutual funds.