Though the common man of India along with most of the salaried individuals had expected changes in the income tax slabs, changes in the income tax rates, hike in the standard deduction, hike in basic exemption limit, section 80C limit, work from home tax benefits and more… But none of them were initiated in the Union Budget 2022-23.
Though Finance Minister Nirmala Sitharaman did not make any major tax-related announcements in the Budget 2022, here are a few tax-related proposals that all taxpayers should be aware of;
Updated Returns
As per the tax updates announced in the budget 2022-23, the taxpayers who have either missed the income declaration or the ones who have filed erroneous tax returns by mistake can file their updated returns within 2 years after the current assessment year.
This feature is exclusively introduced this two years additional period for conditional voluntary tax compliance for unreported income. This initiative will promote the taxpayers to voluntarily comply and pay the additional taxes.
This initiative will undoubtedly benefit the taxpayers who have made mistakes while filing their returns. It will also contribute towards reducing the tax litigations.
Tax Relief For People With Disability:
This is allocation is surely going to bring a smile to the faces of people with disability and their parents.
The annuity payment
Until now the tax deduction for the insurance premium paid for the disabled dependent to the parent or the guardian of a person with a disability was permitted only if the lumpsum payment or the annuity was paid on the insured’s, parent’s or the guardian’s death. But, according to the announcement in the budget 2022-23, the deduction benefit will be available even if the payment is made during the lifetime of the parent or the insured i.e. when they attain the age of 60.
This initiative will undoubtedly help differently-abled people and their family members.
Deduction for NPS for State Government employees
Currently, the state government employees could claim a 10% deduction on the government’s contribution towards the NPS. However, for the central government employees, the number was 14%.
Going forward, according to the allocation in the budget 2022-23, the state government employees will also be able to get up to 14% deduction and this should definitely give them the feeling of getting benefited.
Above all, this deduction does not apply to private-sector employees.
RBI Would Introduce Digital Currency Using Blockchain Technology
The introduction of India’s very own cryptocurrency based on blockchain technology will surely boost India’s digital economy.
Tax Imposed On The Transfer Of Virtual Digital Assets.
If any person invests in cryptocurrency or any other virtual digital assets and earns profit from it, the investor is liable to pay the flat rate of 30%.
Moreover, apart from the 30% tax, there are no other deductions allowed on the amount that you earn by selling your virtual or digital assets, except for the cost of acquisition.
Above all, you cannot even set off the losses which you might incur on selling these virtual digital assets against any other income. Plus, you will also be charged 1% TDS on every transaction you make, either to buy or sell your virtual digital assets.
The government will be the prime beneficiary of this initiative as it will be able to collect a substantial amount as taxes. On the other hand, these taxes will only add an extra burden on the crypto or digital investors.
Surcharge On Long Term Capital Gains On Any Assets To Be Capped At 15%.
Till now, the surcharge was applicable only on capital gains from listed equity shares and equity MFs. This means the surcharge on LTCG tax from unlisted shares, property, artefacts is capped at 15% which was in the range of 25-37% based on the income slab of the taxpayer.
This initiative will help the startups along with people holding ESOPs of unlisted companies. The most important aspect of this initiative is that it will benefit only the people having an income of 2 crores and above as the surcharge applicable below this income is already at 15%.
These were the prime tax-related allocations introduced in the budget of 2022-23. For more details, about the other aspects of the budget.
Read Our Blog On Union Budget 2022
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