Budget 2023: FM’s Pathaan and PM’s Tiger deliver box-office budget

India is aiming to become the superpower of this century That is what our finance minister has done with our prime ministermdashthe PathaanTiger combine They are going to collect taxes from high networth individuals HNIs and super HNIs using all avenues possible One of them is tax collected at source TCS on overseas tour packages which has increased from five to 20 per cent and the money will be used for massive infrastructure and defence outlaysWhile there are recent initiatives that may set us on the superpower track there are some overlooks in the Amrit Kaal offering Let us take a look at the main points of Budget 2023Taxing issuesLet us look at the redevelopment boom in cities like Mumbai An individual who gives his house to a builder for a new one where such gain exceeds R10 crore would be subjected to 24 per cent tax Is this inheritance tax of sorts for the super rich through the backdoorAlso Read Substantial changes made in personal IT in Budget 2023 says FM Nirmala SitharamanPeople watch Union Budget 2023 announcements at a shop in Dadar on Wednesday PicPradeep DhivarThe surcharge for those earning more than Rs 5 crore has been reduced from 37 per cent to 25 per cent under the new tax regime as if it really mattered at those levels Effective tax rate has been reduced from 42 per cent to 39 per cent under the new regimeThere are benefits for the common manmdashsoldiers of Pathaan and Tigermdashin the new regime of taxation Those with a gross income of Rs 15 lakh who would have been taxed for Rs 187 lakh earlier will now be taxed for Rs 150 lakh Then we also have the benefit of the revised threshold of rebate from Rs 5 lakh to Rs 7 lakhEase pleaseThe FM aims at reducing 39000 compliances and decriminalising 3400 legal provisions to continue the lsquoease of doing businessrsquo and reduce unnecessary prosecution To promote ldquoMake Artificial Intelligence AI in India and Make AI work for Indiardquo three centres of excellence for AI will be set up in top educational institutions Leading industry players will partner in developing cuttingedge scalable applications in the areas of agriculture health tourism and sustainable citiesWhile systems around KYC DigiLocker are being set up the establishment of ecourts is the real showstopper To promote growth startup losses can be carried forward for 10 years instead of the erstwhile seven turnover limits of presumptive taxation for small businesses have been enhanced from the current Rs 2 crore to Rs 3 crore and professionals from Rs 50 lakh to Rs 75 lakh to mitigate compliance burdenHowever the Budget neither captures the problems of the nonresident Indian NRI class confused with the issue of residential status nor the double taxation of dividend in the hands of the company corporate tax and the individual income taxOne should not take the credit away from the FM for measures to reduce time limits for income tax and GST administration Matters like reduced time limits from 30 days to 10 days for the transfer pricing officer for production of documents or processing tax returns or even completing assessment orders from 93 days to 16 days thus aiming at realtime compliance by the administration also is a sixpack Pathaan moveShine fineThen we have the happy housewife With the incentivisation of lab grown diamonds and import duty reduction on raw material for these the FM has proved that sometimes diamonds and even PathaanTiger are a girlrsquos best friend This is a remarkable move especially when India is one of the leading manufacturers processors of diamonds and jewellery globallyThe Hum Saath Saath Hain approach to take all private employees along with them by revising their leave encashment limit from Rs 3 lakh of 2002 to Rs 25 lakh in current times will make key soldiers adequately resourced for supportHowever this amendment has not been placed in the Finance Bill or memorandum Having done so much one wonders why the medical insurance limit was not increased from the current threshold that would have led to more motivation I guess like they say you cannot win them allThe continued support to GIFT City is manifested in the thrust towards extension in date of transfer resulting in relocation of funds up to 31032025 for GIFT City and IFSC companies set up thereinThere is zero tax on agriculture for farmers and significant taxation of corporations carrying on agricultural activity This has potential to undertake manufacturing by cooperatives at a 15 per cent tax rate something which can provide opportunities for efficiencies through such incentivisationSurgical strikesThe reduction of Goods and Services Tax GST is still wishful thinking and people will need to wait At the same time certain input credits in regard to ultimate corporate social responsibility CSR costs have been done away with Also supply of warehoused goods to any person before clearance for home consumption will now be included in the value of exempt supply and given this claiming of input tax credit on the same will be restrictedThe change in provisions pertaining to place of supply would impact the exporter of goods Currently place of supply of services by way of transportation of goods including by mail or courier to a place outside India where location of supplier and recipient is in India is the place of destination of such goods and is treated as exports This provision has now beenomitted making the same taxable in IndiaMoreover in case of Online Information Database Access and Retrieval OIDAR services irrespective of the purpose of receipt of services ie irrespective of whether the OIDAR services are received for purposes other than commerce industry or any businessprofession or not the same will be taxable if provided by any person located in nontaxable territory to an unregistered person in taxable territory Also the condition in the definition of OIDAR which currently requires the same to be essentially automated with minimum human intervention is removed making it more exhaustiveThose trying to pull a fast one beware Those trying to use avoidance measures for tax brace for more surgical strikes of the Tiger where companies have assigned costs of intangibles that are not paid for and claiming benefit in computing the capital gains The Pathaan and Tiger will need Kabirmdashthe Unicorns from startupsmdashand amendments during the year to clarify positions from time to timeRs 75LTurnover limit of presumptive taxation for professionals