Middle-class people's Expectations were high from Finance Minister in Budget 2022, however not a single demand was met by the Finance mi...
Middle-class people's Expectations were high from Finance Minister in Budget 2022, however not a single demand was met by the Finance minister for the Middle class directly.
No changes have been made in Slab rates
No increase in exemption Limit
No increase in 80C limit
No increase in House loan Internet Limit
But the Economy of India will be expected to grow 8 to 8.5 % in 2022-23 which will effectively help to increase Job opportunities for Middle-class peoples.
The Union Budget 2022-23, while continuing with the declared policy of a stable and predictable tax regime, intends to bring more reforms that will take ahead the vision to establish a trustworthy tax regime. Smt Nirmala Sitharaman said that proposals relating to taxes and duties will further simplify the tax system, promote voluntary compliance by taxpayers, and reduce litigation.
On the Direct Tax side, 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.
- As an incentive for startups, the period of incorporation of eligible startups has been extended by one more year.
- The budget proposes to increase the tax deduction limit on employer’s contributions to the NPS account of state government employees to bring parity with central government employees.
- The budget proposes better litigation management to avoid repetitive appeals.
The budget proposes a new provision permitting taxpayers to file an Updated Return on payment of additional tax. This updated return can be filed within two years from the end of the relevant assessment year. Smt. Sitharaman said that with this proposal, there will be a trust reposed in the taxpayers that will enable the assessee herself to declare the income that she may have missed out on earlier while filing her return. It is an affirmative step in the direction of voluntary tax compliance.
The parent or guardian of a differently-abled person can take an insurance scheme for such person. The present law provides for deduction to the parent or guardian only if the lump sum payment or annuity is available to the differently abled person on the death of the subscriber i.e. parent or guardian. The budget now allows the payment of annuity and lump sum amount to the differently abled dependent during the lifetime of parents/guardians, i.e., on parents/ guardians attaining the age of sixty years.
The Central Government contributes 14 per cent of the salary of its employee to the National Pension System (NPS) Tier-I. This is allowed as a deduction in computing the income of the employee. However, such deduction is allowed only to the extent of 10 per cent of the salary in case of employees of the State government. To provide equal treatment, the budget proposes to increase the tax deduction limit from 10 per cent to 14 per cent on employer’s contribution to the NPS account of State Government employees as well.
Eligible start-ups established before 31.3.2022 had been provided a tax incentive for three consecutive years out of ten years from incorporation. In view of the Covid pandemic, the budget provides for extending the period of incorporation of the eligible start-up by one more year, that is, up to 31.03.2023 for providing such tax incentive.
For the taxation of virtual digital assets, the budget provides that any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent. No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition.
Further, loss from transfer of virtual digital asset cannot be set off against any other income. In order to capture the transaction details, a provision has been made for TDS on payment made in relation to transfer of virtual digital asset at the rate of 1 per cent of such consideration above a monetary threshold. Gift of virtual digital asset is also proposed to be taxed in the hands of the recipient.
Taking forward the policy of sound litigation management, the budget provides that, if a question of law in the case of an assessee is identical to a question of law which is pending in appeal before the jurisdictional High Court or the Supreme Court in any case, the filing of further appeal in the case of this assessee by the department shall be deferred till such question of law is decided by the jurisdictional High Court or the Supreme Court.
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.