Budget 2022: No change in personal income tax, new crypto tax and other highlights


by 5paisa Research Team Last Updated: 2022-12-11T02:32:37+05:30

Finance Minister Nirmala Sitharaman tabled the Union Budget for 2022-23 in parliament on Tuesday. She outlined a number of proposals in an attempt to accelerate economic growth but didn’t offer any relief to the salaried middle class and left the personal income tax slabs unchanged.

In a significant proposal that likely means the government’s intention to recognize digital currencies, the budget proposed to bring cryptocurrencies and non-fungible tokens (NFTs) under the tax net. Here are the main highlights.

Taxation

  • Existing tax benefits for startups, which were offered redemption of taxes for three consecutive years, to be extended by one more year.
  • Long-term capital gains on listed equity share units subject to maximum surcharge at 15%.
  • Tax deduction limit increased to 14% from 10% on employers’ contribution to NPS account of state govt employees.
  • Cap on transfer of long-term capital gains at 15%.
  • Budget proposes 30% tax on income from virtual digital assets.
  • Loss of income from virtual digital assets cannot be offset against other assets.
  • Gift of cryptocurrencies to be taxed at receiver's end.
  • TDS of 1% on payment made for transfer, above a monetary threshold.
  • No change in personal income tax rates
  • Taxpayers can file an updated return on payment of taxes within two years from the end of assessment year.
  • The new provision will ensure voluntary tax filing and reduce litigation, says FM.
  • Alternate Minimum Tax for cooperative societies to be cut to 15%.

Fiscal moves

  • Allocation of Rs 7.5 lakh crore (up 35.4% YoY) as capital expenditure for next fiscal year.
  • Fiscal deficit target set at 6.4% for FY23.
  • FY23 total expenditure seen at Rs 39.45 lakh crore.
  • Total receipts other than borrowing seen at Rs 22.84 lakh crore.
  • India to launch sovereign green bonds.
  • 5G spectrum auctions to be conducted this year.
  • ECLGS scheme extended till March 2023, guaranteed cover extended by Rs 50,000 crore.

Urban development

  • For urban capacity building, modernization of building bylaws, town planning schemes and transit-oriented development will be implemented.
  • Centres of Excellence will be established with an outlay of Rs 250 crore for urban sector development.

Transport and technology

  • Digital Rupee to be rolled out by 2023.
  • ePassports will be rolled out in 2022-23 for convenience in overseas travel.
  • Battery Swapping Policy will be brought out and inter-operational service will be formulated.
  • 'One Nation, One Registration' will be established for anywhere registration to facilitate ease of living and doing business.
  • Private sector will be encouraged to create sustainable and innovative business models for battery and energy as a service, improving the efficiency in the EV ecosystem.
  • Scheme for design-led manufacturing to be launched for 5G ecosystem as part of PLI scheme to enable affordable broadband and mobile communication in rural and remote areas.

Defence

  • Defence R&D will be opened up for industry, startups and academia with 25% of defence R&D budget.
  • Private industry will be encouraged to take up the design and development of military platforms and equipment in collaboration with DRDO and other organizations through SPV model.
  • Government earmarks 68% of capital procurement budget in defence for domestic industry in 2022-23, up from 58% this fiscal year.

Agriculture, rural development

  • Use of Kisan drones will be promoted for crop assessment, digitization of land records, spraying of insect pesticides
  • Rs 2.37 lakh crore worth of MSP direct payments to wheat and paddy farmers
  • A fund with blended capital raised under co-investment model facilitated through NABARD to finance startups in agriculture and rural enterprises for farm produce value chain.
  • All 1.5 lakh post offices will come on the core banking system, enabling online transfer of funds between post office accounts and bank accounts.
  • This will be helpful especially for farmers and senior citizens in rural areas, enabling inter-operability, and financial inclusion.

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