The following are my thoughts on the Union Budget 2023 proposed by our Honorable Finance Minister. I have specifically addressed the relevance on one’s personal finances leaving the other things for the economists to dissect. Also, I have given a simplified view leaving the complications to be discussed later.

  1. There is clear nudge for the tax payers to opt for the new tax regime which is very plain and simple. New tax regime makes tax filing easy and also gives the initiative to the tax payer to build his personal financial portfolio based on one’s risk profile rather than on the tax savings while investing. However, the old tax regime will continue for the time being but our belief is that it might get phased out altogether in the years to come. Opting for new or old tax regime is a individual call as many might already have lot of deductions such as Sec 80C ( epf, ppf, life insurance premium, elss, housing loan principle, tuition fees etc), 80CCD ( voluntary nps), 80D( health insurance premium), 24 ( housing loan interest), 10(13A) & 80GG( HRA) etc. New tax regime would be the default option while filing IT returns.
    Bottomline: Annual Income up to Rs 7 lakhs p.a. is tax exempt for Resident Indians under the new regime which is a lot of money. With some adjustments, similar amounts would be tax exempt too in the older regime.
  2. NRI’s too can opt for old or the new tax regime on their Indian taxable Income. However, the basic exemption would be capped at Rs 2.50 lakhs in the old regime and Rs 3 lakhs in the new regime. Long Term capital gains
    would not be part of this exemption for NRI’s.
    Bottomline: NRIs should plan their tax filing accordingly to make best use of the available tax provisions.
  3. There is increase in limit for the Senior Citizens Savings Scheme from the current Rs 15 lakhs per account holder to Rs 30 lakhs. Increase in interest rates recently to 8% p.a. makes this a must have on each Resident Senior Citizen portfolio. This is a 5-year account extendable by another 3 years based on the interest rates then. Interest is payable monthly, quarterly, half yearly or annually. Interest is fully taxable. One can visit local post office or any of the PSU banks to open this account. However, there is no mention of the extension of another wonderful scheme for Senior Citizens called Pradhan Mantri Vaya Vandana Yojana (PMVVY) which is set for closure on 31st March 2023.
    Bottomline: Senior Citizens should make the best use of such products in their retirement portfolio and rest easy.
  4. There is increase in limit for the Postal MIS from the current Rs 4.50 lakhs per account holder to Rs 9 lakhs and for joint accounts to Rs 15 lakhs. Interest rates were recently increased to 7.10% p.a. This is a 5 year account and the payouts are made monthly. Interest is fully taxable. NRI’s are not eligible.
    Bottomline: Retirees can also look at these ultra-safe options:

5. There is specific mention on a Women only investment called Mahila Samman savings Certificates. This is for a woman or a girl child with a maximum amount of investment restricted to Rs 2 lakhs for a 2-year term and 7.50% p.a. returns. More details are awaited.
Bottomline: Sukanya Samriddhi Yojana for Resident girl child below10 years seems to be more attractive.

6. Tax authorities seem to be behind the Life Insurance industry which seem to be serving the agents/bankers more than the customers. While contributions upwards of Rs 2.50 lakhs p.a. towards ULIPs have lost tax free status earlier, the current budget proposes to tax maturity proceeds for traditional plans (endowment, money back, guaranteed income, single premium etc) where the cumulative annual contribution is greater than Rs 5 lakhs p.a. This would be effective for policies issued from 1st April 2023.
Bottomline: Insurance agents and bankers would nudge you to buy these low returns inefficient products till 31st March 2023. Stay away.

7. Tax Collected at Source (TCS) for Remittances under Liberalised Remittance Scheme (LRS) have been increased to 20%. Any Indian resident can participate in LRS and transfer up to $250,000 abroad in a financial year. This would be for investing money abroad in stocks, crypto or real estate, travel, education, health etc. However, the hike in TCS for education or medical requirements are not covered by this. Some clarifications are awaited in the days to come.
Bottomline: If planning to invest abroad through stocks or real estate, be ready to block 20% extra money for a year or so and get a refund post filing the returns. Alternatively, you could look at Indian Mutual Funds which invest in various themes abroad.

8. Tax arbitrage in exotic products like NIFTY Linked Debentures have been plugged. Hence forth, any gains/income in such products would be taxed under one’s marginal tax rate. This was a clear case of tax evasion by some high-net-worth investors by clever packaging of financial products.
Bottomline: A clear message by the department that they are watching and are ready to plug any gaps.

9. Investors having Gold in physical form either as jewelry or gold bars can convert them into Electronic Gold Receipt (EGR’s) without any immediate tax implications. These could be traded like stocks and converted back to Gold whenever required.
Bottomline: Holding gold in EGR form is always better and safer. However, that portion of gold which is for consumption usage should always be retained in physical form.

10. Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (Invits) have become quite popular investment avenues for diversification and receiving regular tax efficient income. However, tax authorities have not taken kindly for tax efficiency of all income streams received by unitholders and hence going forward all income received from these products might be taxable.
Bottomline: These products should continue to be part of a diversified portfolio and especially for those who have lower taxable income.

11. One could set off the Long Term Capital gains from a residential property (under Sec54) and the net proceeds from a non-residential property (under Sec 54F) by investing in residential Real estate. This has been capped @ Rs 10 crores going forward. This would be big dampener for lot of NEW RICH promoters of start-ups or those having large ESOPs.
Bottomline: Tax benefits which are benefitting a smaller section of the population are getting plugged.

12. IT portal is being set up for easier settlement of dividends and shares stuck in Investor Education and Protection Fund Authority (IEPFA). This will usher ease and convenience, and free hapless investors from the hands of touts and brokers.
Bottomline: Implementation will be the key.


1.The above are my personal thoughts and not Investment Advice. Please consult a professional and a registered expert before acting on the above.

2. I am reachable @9845557582 / for any broad discussions on the relevance of the above in your personal finances.

Naveen Julian Rego-CFPCM
SEBI Registered Investment Adviser

2nd Feb, 2023