By CA Nishika Jain
Finance Minister Nirmala Sitharaman presented her fourth Budget today. This is Narendra Modi government’s tenth Budget, and the second paperless budget in view of the ongoing Covid-19 pandemic situation. India’s economic growth in FY22 to be at 9.2 per cent, highest among all large economies, said FM in her address.
Highlights of Budget 2022 speech:
- Public Issue of Life Insurance Corporation expected shortly
- 400 new generation Vande Bharat trains with better efficiency to be brought in and 100 PM Gati Shakti Cargo terminals to be developed during next 3 years
- The Emergency Credit Line Guarantee Scheme (ECLGS) to be extended till March 2023.
- The 5G Spectrum auction will begin in 2022 to roll out the 5G services by the private players in FY 2022-23
- Taxpayers can now file an updated return on payment of additional tax within 2 years from the end of the relevant assessment year. It will provide taxpayers an opportunity to correct errors.
- The AMT rate for co-operative societies has been reduced from 18.5% to 15% . Also, there is a reduction in rate of surcharge from 12% to 7% for income upto Rs 10 crores
- Digital rupee will be issued by The Reserve Bank of India (RBI) using blockchain and other technologies starting 2022-23. Introduction of a central bank digital will give big boost to the digital economy : says FM.
- Income from virtual digital assets brought under tax net. Gaines taxable at 30%.
- No deduction of any expenditure except cost of acquisition is allowed.
- No set off of losses against any other income are allowed.
- TDS on payment made in relation to transfer of virtual digital asset @1% of such consideration above a monetary threshold
- Gift of virtual digital asset will also be taxed in the hands of recipient.
- States govt employees’ tax deduction limit on Employer’s Contribution to NPS to be increased from 10% to 14% to help the social security benefits of state govt employees and bring them at par with the Central govt employees.
- The parent/guardian of a differently abled person can take an insurance scheme for such person. The present law provides for deduction to the parent/guardian only if the annuity is available to the differently abled person on the death of the subscriber . The new budget proposes to allow the payment of annuity to the differently abled dependent on parents/guardians attaining the age of sixty years.
- Eligible startups established before 31.03.2022 had been provided a tax incentive for 3 consecutive years out of 10 years from the date of incorporation. This period of incorporation has been extended by one more year i.e. upto 31/03/2023.
- Likewise, the last date for commencement of manufacturing or production U/S 115BAB has been extended by one more year i.e. from 31/03/2023 to 31/03/2024.
- The surcharge of 37% on the income of AOPs has been reduced to 15%.
- The surcharge on Long Term Capital gains from any type of assets has been capped at 15%.Earlier it was 37% .
- No set off of any loss shall be allowed against income detected during search and survey operations.
- TDS will be charged in the hands of the people passing on some benefits to their agents as a business promotion strategy where amount is more than Rs. 20,000/- in a financial year.
- The concessional rates in capital goods and project imports will be phased out gradually and a flat 7.5% tariff rate will be applied. However, certain exemptions for advanced machineries that are not manufactured within the country will be continued.
- Due to hike in customs duties on imported parts several commonly used items will become more expensive such as umbrellas, headphones, earphones, loudspeakers, X-ray Machines, parts of electronic toys etc.
- To give boost to the Gems & Jewellery sector, Customs duty on cuts and polished diamonds and gemstones is being reduced to 5% .
- Duty concessions are also being given to parts of transformer of mobile phone charges and camera lens of mobile camera modules