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Budget 2023: New tax regime to be default; who will benefit from it?



Union Finance Minister Nirmala Sitharaman announced that the new tax regime will become the default tax regime, while the old will remain an option. Tabling the budget in parliament on Wednesday, Sitharaman also revised the income tax rebate limit under the new tax regime from 5 lakh to 7 lakh.

How the tax structure in new tax regime varies from old tax regime?

New tax regime (now default) Old tax regime
0-3 lakh – Nil 0-2.5 lakh – Nil
3-6 lakh – 5% 2.5-5 lakh – 5%
6-9 lakh – 10% 5-10 lakh – 20%
9-12 lakh – 15% 10 lakh -30%
12-15 lakh – 20%  
Income up to 7 lakh entitled for a rebate Income up to 5 lakh entitled for a rebate

Who will benefit and who will suffer from the revisions?

Presenting the budget, FM Sitharaman said that these changes are made to acknowledge the hard work of middle incom e group tax payers. Modifications announced in Budget 2023 regarding are also seen as measures to promote new tax regime.

Hindustan Times asked experts about their analysis on the budget announcements.

“This is a win win for everyone,” says Deepashree Shetty, Associate Partner- Tax and Regulatory Services, BDO India. He sees the proposals bringing significant change in the payroll procedures of employers for salaried taxpayers.

ALSO READ: Click here for full updates on change in Income tax

“The new Income Tax slabs are a good reflection of fundamental strengthening of the economy,” he adds. He believes that the changes will result in consistent increases in indirect taxes, improved tax inclusion and compliance, and a focus on growth by providing consumers with more money to support both spending and saving.

ALSO READ: Budget 2023 new income tax slabs: How to calculate your tax

Anand K Rathi, Co-founder, MIRA Money says, “Happy that the Government didn’t give in to the pressure from the middle class”. However, he demands a clear rollout plan toward a simpler, more effective, and inclusive income tax regime.

Rathi claims that the government is seeking to render Section 80C of the Income Tax obsolete with the new tax system, but a phased rolldown would b e more advantageous. He continues by saying that many investors push themselves to make ELSS and Term savings, therefore their abolition could result in lower individual savings.

“Modification to the income tax slabs is a delight for the citizens and should encourage more citizens to declare their income statement,” says Vikas Jain of PLAY Design Labs.

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‘We do responsible hiring’: Flipkart takes stand against mass layoffs



In a statement that will bring massive relief to Flipkart employees amid the ongoing layoffs in companies across the globe, Flipkart’s Chief People Officer (CPO) has said the homegrown e-commerce has ‘no intention of making mass layoffs.’

Representational Image

This is because the organisation does not believe in hiring in bulk as doing so often leads to firms laying off staff to lessen the headcount, said Krishna Raghavan in an interview with HT’s sister publication Mint.

“We do responsible hiring and there are no mass layoffs happening at Flipkart. We don’t hire in thousands and then land up figuring out that we have too many people on board, and resort to extreme measures,” remarked Raghavan.

He added that the Walmart-owned company’s recent decision of not giving salary hike to senior management did not mean there would be job cuts, as hikes and promotions were given last year.

Flipkart’s stand is in complete contrast to that of its prime competitor Amazon, where more than 27,000 employees have already lost jobs since January.

‘No delays in onboarding freshers’

Raghavan further said there were ‘no delays’ in onboarding freshers who, he added, will join in June. “We are very thoughtful and deliberate on how we do workflows planning in general,” stated the Chief People Officer.

Wipro, for example, is yet to onboard last year’s graduates. The IT major major says it has been forced to delay this due to the ‘changing macro environment.’

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Rupee finds temporary ease as India’s current account deficit shrinks



Economists are lowering their forecasts for India’s current-account shortfall, thanks to favorable trade trends that are proving to be a blessing for the rupee — among the worst performers in emerging Asia this month.

Economists lowering forecasts for India’s current-account shortfall, thanks to favorable trade trends.(Reuters)

Barclays Plc expects the gap in current account — the broadest measure of trade in goods and services — to be 1.8% of gross domestic product in the year starting April 1, after previously cutting it to 1.9% from 2.3% deficit it had estimated in mid-February. Citigroup Inc. slashed its forecast even further to 1.4% of GDP from 2.2%, reflecting a steady drop in goods imports and strength in services exports.

Also Read: Does Indian currency note with anything written on it become invalid?

The lower prints will provide a tailwind to the rupee, which is vulnerable to a selloff, given the twin deficits in the nation’s budget and current account make it more reliant on foreign inflows. A narrowing shortfall will also take the pressure off the central bank to sell foreign exchange from its reserves to stabilize the currency and check imported inflation.

“We are encouraged by the fact that the narrowing of the trade deficit has sustained and services exports remain strong,” said Ashish Agrawal, head of foreign-exchange and emerging-market macro strategy research at Barclays in Singapore. “The lower current account deficit reduces dependence on financing flows and RBI’s dollar sales at the margin.”

That’s an added positive for the rupee, which along with Asian peers gained against the dollar after a dovish interest-rate hike by the Federal Reserve. The rupee was up 0.2% to 82.30 to a dollar on Monday.

Services Surprise

What seems to have caught economists by surprise is the strong services exports print.

Services trade surplus was strong at $14.6 billion in February, building on January’s revised surplus of $13.8 billion. Services exports nearly touched $30 billion in both January and February, an increase of about 40% on-year.

HSBC Holdings Plc attributes a part of this rise to Global Capability Centres set up by large multinational corporations. India is home to about 40% of global GCCs, and this ratio is only expanding as they rise in scope, an HSBC report said.

Also Read: HSBC puts £2 billion into SVB UK after buying it for £1, promises ‘more cash’

“Services trade surplus is truly a hero in India’s foreign trade story right now,” said Dhiraj Nim, an economist and forex strategist at Australia and New Zealand Banking Group, who is confident the trend will continue.

Barclays expects the improving external sector fundamentals and relatively cheap valuations to help the rupee rally later as the dollar weakens. But most remain cautious amid global volatility and the Reserve Bank of India’s aim to build back reserves at every opportunity.

From the current account perspective, this augurs well for the rupee, said Madhavi Arora, lead economist at Emkay Global Financial Services Ltd. That said, the global situation is extremely fluid and could adversely impact global risk appetite for risk EM assets, including the rupee — emerging Asia’s worst performing currency last year and among the bottom this year.

“Thus the capital account side also needs a watch,” she said.

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Gold and silver prices on March 27: Check rates in your city



The prices of gold and silver in India on Monday experienced a slight decline in comparison to the previous day. According to data by Goodreturns, the rate for 22-carat gold per gram was Rs. 5,471, a decrease from Sunday’s Rs. 5,485. Similarly, the prices for 8 and 10 grams of 22-carat gold stood at Rs. 43,768 and Rs. 54,710, respectively, exhibiting a drop of Rs. 112 and Rs. 140.

The price of one gram of 24k gold stood at Rs. 5,969 per gram and that of 22k gold at Rs. 5,471.(Representative image/ Istock)

The rate for 24-carat gold was Rs. 5,969 per gram, with 8 and 10 grams priced at Rs. 47,752 and Rs. 59,690, respectively.

In addition, the price of silver witnessed a marginal decrease with the rate at Rs. 73.30 per gram on Monday, as compared to the previous day’s Rs. 73.40, as per the Goodreturns figures. Eight grams of silver cost Rs. 586.40, and 10 grams were priced at Rs. 733. For a kilogram of silver, the cost was Rs. 73,300 as of Monday.

Gold prices in India are dependent on the markets. The prices are determined by a range of factors including volatile policies, slowing economic growth and the strength of the Rupee against US dollar.

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