#Budget2022: Roundup of All Income Tax Changes Announced in Union Budget 2022.
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The Finance Minister Nirmala Sitharaman presented the Union Budget 2022 today and made a number of tax-related announcements. In this article, we bring to you all the new Income Tax proposals announced by the Finance Minister in the Budget 2022:
1. Provision to File Updated Returns
The Finance Minister announced a new provision to allow taxpayers to file an updated Income Tax Return (ITR) within 2 years from the end of the relevant assessment year. Taxpayers who made an error while filing a return, can file the updated returns within 2 years from the end of the relevant assessment year. The aim of the provision is to boost voluntary tax filing and reduce litigation.
2. Increased Tax Exemption on Employer’s NPS Contribution For State Employees
The government announced an increase in the tax exemption limit on the employer’s contribution to the National Pension System (NPS) for the State Government Employees. The tax benefit has been increased from 10% to 14% from FY 2022-23 onwards. Currently only Central Government Employees enjoy a 14% tax exemption on the employer’s NPS contribution. The tax benefit for private employees stands at 10%.
3. Taxation for Virtual Digital Assets
The Finance Minister announced that any income arising from the transfer of virtual digital assets will be taxed at 30%. No deduction for any expenditure or allowance will be allowed while computing such income, except the cost of acquisition. The Finance Minister also said that the gifting of digital currencies will be taxed at the recipient’s end. Moreover, on payment made for transfer of digital assets above the monetary threshold, TDS at 1% will be applicable.
4. Surcharge on LTCG capped at 15%
The Finance Minister announced that the surcharge on the long-term capital gains (LTCG) will be capped at 15%, down from up to 37% earlier. Currently LTCG surcharge is available only for listed shares and units of mutual funds.
5. No Changes in Income Tax Slabs
The Finance Minister Nirmala Sitharaman did not announce any change in the Income Tax slabs for FY 2022-23. There were also no announcements regarding any change in the Standard Deduction.
6. Tax Relief for Persons With Disability (PWD)
The Finance Minister announced tax relief to Persons with Disability. Now, annuity and lump sum received to parents or guardians attaining 60 years during lifetime of the disabled persons will be eligible for tax relief. Earlier this tax benefit was available only after the demise of the parent or guardian.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
