Lok Sabha passes Finance Bill, set to tax investors heavily from April

The Finance Bill, 2023 was passed in the Lok Sabha on Friday with over 45 amendments amidst sloganeering by opposition members for setting up a JPC in the Adani-Hindenburg issue.

This comes a day after the demand for grants was passed in Parliament.

The Finance Bill 2023, gives effect to the financial proposals of the central government for the financial year 2023-24 to be taken into consideration.

Debt mutual funds have been stripped of the long-term tax benefit if they invest less than 35 per cent of their assets in equities. Such mutual funds will attract short-term capital gains tax.
Punit Shah, Partner, Dhruva Advisors on Debt Mutual Fund “The amendment to treat gains on debt mutual fund as short term gains will substantially diminish the attractiveness of such products. The rationale of treating the debt mutual funds at par with MLDs is not very clear”.

Amid the debate over certain Opposition-ruled states adopting the Old Pension Scheme (OPS), FM Sitharaman said that a new committee will be set up under Finance Secretary to look into the National Pension System (NPS) for government employees.

Speaking in the Lok Sabha during the consideration and passage of the Finance Bill, 2023, Sitharaman said the committee will set up for looking into the pension system in order to address the needs of employees, while also maintaining the fiscal prudence of the country.

"One amendment is for the GST council which is establishing the tribunal. More importantly, representations have been received that the National Pension System for government employees need to be improved. I propose to set up a committee, under the Finance Secretary to look into the issue of pensions and evolve an approach, which addresses the need of the employees, while maintaining fiscal prudence to protect the common citizen. The approach will be designed for adoption by both central and state governments," she added.

Sitharaman said that the Reserve Bank of India (RBI) will look into bringing payments made for foreign tours using credit cards, under tax collection.

"It has been represented that payments for foreign tours through credit cards are not being captured, under the Liberalised Remittance Scheme (LRS) and such payments escape tax collection at source. The Reserve Bank is being requested to look into this with a view to bring credit card payments for foreign tours within the ambit of LRS and tax collection at source thereon," Sitharaman further said.

Also Read: No LTCG tax benefit on these debt mutual funds from April 1: Budget 2023

Earlier on Thursday, the Lok Sabha on passed demands for grants authorising expenditure of about Rs 45 lakh crore for 2023-24. The proposal was passed by voice vote amid protests by opposition members over their demand for a JPC probe into the Adani issue.

The two Houses of Parliament have been witnessing adjournments over the repeated logjam. While the BJP has been demanding an apology from Congress leader Rahul Gandhi over his remarks in the United Kingdom, the opposition has been demanding a Joint Parliamentary Committee probe into the Hindenburg-Adani row.


The second half of the budget session began on March 13 and will commence on April 6.

The Finance Minister presented the Union Budget on February 1.

Top announcements made by FM Sitharaman during the Budget:

• The government announced a bigger-than-anticipated boost in its capital investment — to Rs 10 trillion ($122 billion) in the fiscal year starting April from Rs 7.5 trillion in the year ending March
• Sitharaman also vowed to narrow the fiscal deficit target to 5.9% of GDP in FY24 versus 6.4% in FY23. Ten-year yields climbed as much as 6 basis points initially, before swinging lower, by as much as 6 basis points to 7.28%
• The budget would entail a gross borrowing of 15.43 trillion rupees, lower than the Bloomberg survey estimate of Rs 15.77 trillion
• Middle income taxpayers got some relief as the budget proposed to raise the rebate threshold in the new personal income tax regime. Income up to Rs 7,00,000 will be tax-free versus the earlier threshold of Rs 5,00,000. Changes were also announced to reduce number of slabs, increase tax exemption limit, make standard deduction available, cut the surcharge on the highest tax rate and increase exemption limit for leave encashment
• The government also announced customs duty relief on mobile phones components, capital goods for lithium batteries and other such items to boost green energy, exports
• The construction industry will cheer an increase of 66% in the outlay on the affordable housing scheme, popularly called the PM Awas Yojana, to Rs 790 billion.