05/02/2022
-2022-23
Major Key Highlights in Union Budget 2022 for stakeholders.
Finance Minister Smt Nirmala Sitharaman Ji has announced Union Budget 2022 on 1st Feb 2022. Major highlights of Budget 2022 are:
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Emergency Credit Linked Guarantee Scheme (ECLGS) will be extended till 31st March 2023.
The tariff exemption granted to steel scrap last year has been extended for another one year in order to help MSME secondary steel makers.
Udyam, e-shram, NCS and ASEEM portals to be interlinked.
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In India, e-passports with integrated chips will be available in FY 2022-2023. E-passports will function in the same way as regular passports.
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A Center for Processing Accelerated Corporate Exit (C-PACE) will be formed to expedite the winding-up of businesses.
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Sovereign Green Bonds will be issued to raise funds for green infrastructure.
RBI will introduce Digital Rupee also known as Central Bank Digital Currency in the FY 2022-23.
The Digital Rupee will be issued by the RBI using blockchain technology starting from the next financial year.
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The Special Economic Zones Act will be replaced by new law that would allow states to collaborate on the "Development of Enterprise and Service Hubs."
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Foreign universities and institutes of international renown will be permitted to operate in the GIFT City.
An International Arbitration Centre will be established to expedite the resolution of disputes under international law.
Subject to specified conditions, the following to be exempt from :
Income of a non-resident from offshore derivative instruments.
Income from over-the-counter derivatives issued by an offshore banking unit.
Income from royalty and interest on account of lease of ship.
Income received from portfolio management services in IFSC.
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Taxpayer will be able to file an “Updated Return” for any unreported income
within two years from the end of the relevant assessment year with an additional tax.
Benefits passed on to agents as business promotion strategy taxable in hands of agents.
Any surcharge or cess on income and profits is not allowable as business expenditure.
The maximum tax deduction for employer contributions to State Government workers' NPS accounts has been raised from 10% to 14%.
Any surcharge or Cess on revenue or profits will not be acceptable as a business expense.
There will be no set-off of any loss against undeclared income discovered during search and survey activities.
Currently, the surcharge on LTCG on listed shares and equity-oriented units included in your income is capped at a maximum of 15% even if otherwise you are liable to pay the surcharge at a higher rate on other income. This cap of 15% is applied only for one category of long-term capital gains but for the rest of long-term capital gains, you have to pay the surcharge at applicable rates. The finance minister has proposed the cap of 15% surcharge on LTCG of all nature.
Surcharge on certain AOPs (Association of Persons) limited to 15%.
Payment of annuity and lump sum amount from insurance plan to be allowed to differently-abled dependents during parents'/guardians' lifetimes, i.e., when parents/guardians reach the age of 60.
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Minimum Alternate Tax (MAT) will be reduced to 15% from the current 18.5% for Cooperative Societies.
The surcharge on cooperative societies has been cut down from 12% to 7% for those having total revenue between Rs 1 crore to Rs 10 crores.
Virtual Asset Taxation:
Any revenue derived from the transfer of any virtual digital asset will be taxed at a rate of 30%.
No deductions for expenses except the cost of acquisition of assets are considered for calculating such income.
No set-off of losses is allowed against such income.
TDS @ 1% under Section 194S will be levied on payments made in relation to the transfer of virtual digital assets above a specific threshold limit.
Gifts of virtual digital assets will be taxed under section 56(2)(x) in the recipient's hands as well.
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The government had announced a 15 percent corporate tax rate for newly incorporated manufacturing companies under section 115BAB till March 31, 2023, which has now been extended till March 31, 2024.
The period of incorporation for startups to avail tax benefits of eligible start-ups has also been extended by a year to March 31, 2023.
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Gradually phase down concessional rates on capital goods and project imports, and implement a reasonable tariff of 7.5 percent
A few exclusions for inputs, such as specialized castings, ball screws, and linear motion guides will be introduced to stimulate domestic capital goods manufacture.
Customs duty on umbrellas being raised to 20%.
Customs charge on cut and polished diamonds and gemstones is being decreased to 5%; simply sawn diamonds have no customs duty.
Custom duty will be reduced for manufacturers of wearable devices, hearable devices, and electronic smart meters.
Duty concessions will be provided for parts of the transformer of mobile phone chargers and the camera lens of the mobile camera module and certain other items.
Unblended petrol will be subject to an extra differential excise levy of Rs 2/litre from October 1, 2022.
