Finance Minister presented Union Budget, 2022 in the Lok Sabha - (01 Feb 2022)

Civil

The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman tabled the Union Budget 2022-23 in Parliament. The Union Budget while continuing with the declared policy of stable and predictable tax regime, intends to bring more reforms that will take ahead the vision to establish a trustworthy tax regime. The Union Minister said that, proposals relating to taxes and duties will further simplify the tax system, promote voluntary compliance by taxpayers, and reduce litigation. India’s economic growth in the current year is estimated to be 9.2 per cent, highest among all large economies.

The budget allows taxpayers to file updated income tax return within 2 years for correcting errors. It also provides tax relief to persons with disability. The budget also reduces Alternate minimum tax rate and surcharge for cooperatives. As an incentive for startups, period of incorporation of eligible startups has been extended by one more year. The budget proposes to increase tax deduction limit on employer’s contribution to NPS account of state government employees to bring parity with central government employees. Newly incorporated manufacturing entities will be incentivized under concessional tax regime. The budget proposes better litigation management to avoid repetitive appeals.

Union Budget proposes that for taxation of Virtual Digital Asset (VDA), any income from transfer of VDA shall be taxed at rate of 30% without any deduction. Loss cannot be set off. Gift of VDA also to be taxed in hands of recipient. It has been clarified in the budget that, any surcharge or cess on income and profits is not allowable as business expenditure. In order to bring certainty and to increase deterrence among tax evaders, the Finance Minister proposed to provide that no set off, of any loss shall be allowed against undisclosed income detected during search and survey operations. Union Budget proposes to cap surcharge of AOPs at 15%.

Long term capital gains on listed equity share units liable to surcharge of 15%. Customs administration in Special Economic Zones will be fully IT driven. The budget proposes to phase out the concessional rates in capital goods and project imports gradually and apply a moderate tariff of 7.5 per cent. Certain exemptions for advanced machineries that are not manufactured within the country shall continue. The budget underlines review of customs exemptions and tariff simplification, with more than 350 exemptions proposed to be gradually phased out.

Tags : BUDGET PROPOSAL TAXPAYERS