The budget for 2022 was presented by Nirmala Sitharaman, the minister of finance. Many tax specialists believe that the 2022 budget is financially sound. The tax on digital currency, along with other planned adjustments, is unquestionably the most notable.
Let’s look at the main conclusions in this blog:
1. New updated return
A new 139 unit (8A) is included in Budget 2022 to amend tax returns. Taxpayers will have the ability to amend their IT filings if they find mistakes after the filing deadline has passed, such as the failure to report some income. Within two years of the conclusion of the applicable assessment year, they may revise the return.
In the following circumstances, the updated return option is not applicable:
- The revised return shows a loss.
- In the event that the amount of the refund or the tax liability is changed,
- If searches or inquiries into the questioned year have been made, or if an action for assessment or reassessment is ongoing or finished
Note:
At the time they file the revised ITR, taxpayers must pay more income tax. It is suggested that a collection of 25% or 50% be made as an additional tax deduction. The additional income offered must also be used to pay interest.
2. Deduction for NPS u/s 80CCD
For central government employees, the current NPS deduction authorization is 14 percent of pay (Basic + DA). For employees of the state government, it is restricted to 10% of the total income (base salary + DA). To achieve parity between central government and state government personnel, see Budget 2022. As a result, the employer contribution deduction cap for workers in state government will increase from 7% to 14%.
3. Virtual digital assets that are taxed: cryptocurrency
A new section 115BBH has been added to address the taxation of virtual digital assets. Any revenue obtained from the transfer of virtual digital assets would be subject to a fixed tax rate of 30%, with no deductions for related expenses (except the cost of acquisition).
4. Long-term capital asset surcharge
Surcharges are limited to 15 percent for listed equity shares, units, and other long-term capital assets and 37 percent for other long-term capital assets. The budget for 2022 suggests reducing the rate of surcharge for other long-term capital assets to 15% in order to achieve parity across all long-term capital assets.
5. Exemption from income taxes for Covid treatment costs
The sum that a taxpayer receives from an employer or another individual for medical treatment related to COVID-19 is not taxable as income. Additionally, the exemption for money received from the employer is proposed to be unlimited, but the exemption for money obtained from other peers is proposed to be limited to a total of Rs. 10 lakh in the event that a family member receives ex-gratia as a result of a death brought on by the Covid-19.
6. Tax Breaks for Disabled People
The existing law only permits a deduction of any money paid into the insurance plan to the parents or guardians in the event of the person’s disability-related death. It results in the disabled person having access to a lump sum payout or annuity. Budget 2022 makes the adjustment that the deduction will still be allowed if a lump-sum payment or annuity is provided to disabled individuals after the subscriber reaches the age of 60.
7. Startups are exempt
Qualifying startups founded on or after April 1, 2016, but before to April 1, 2022, may qualify for tax benefits if a few requirements are satisfied. It is advised to extend the deadline for the incorporation of eligible start-ups by another year, until March 31, 2023, because the pandemic has caused delays in the creation of such units.
Leave a Reply