Budget 2022 Highlights: Key takeways from FM’s Budget speech

Finance Minister Nirmala Sitharaman presented her fourth Budget today. This is Narendra Modi government’s tenth Budget, and the second paperless budget in view of the ongoing Covid-19 pandemic situation. India’s economic growth in FY22 to be at 9.2 per cent, highest among all large economies, said FM in her address.

Highlights of Budget 2022 speech:

• Public Issue of Life Insurance Corporation expected shortly
• 400 new generation Vande Bharat trains with better efficiency to be brought in and 100 PM Gati Shakti Cargo terminals to be developed during next 3 years
• The Emergency Credit Line Guarantee Scheme (ECLGS) to be extended till March 2023.
• The 5G Spectrum auction will begin in 2022 to roll out the 5G services by the private players in FY 2022-23
• Taxpayers can now file an updated return on payment of additional tax within 2 years from the end of the relevant assessment year. It will provide taxpayers an opportunity to correct errors.
• The AMT rate for co-operative societies has been reduced from 18.5% to 15% . Also, there is a  reduction in rate of surcharge from 12% to 7% for income upto Rs 10 crores
• Digital rupee will be issued by The Reserve Bank of India (RBI) using blockchain and other technologies starting 2022-23. Introduction of a central bank digital will give big boost to the digital economy : says FM.
• Income from virtual digital assets brought under tax net. Gaines taxable at 30%.

(a) No deduction of any expenditure except cost of acquisition is allowed.

(b) No set off of losses against any other income are allowed.

(c) TDS on payment made in relation to transfer of virtual digital asset @1% of such consideration above a monetary threshold

(d) Gift of virtual digital asset will also be taxed in the hands of recipient.

• States govt employees’ tax deduction limit on Employer’s Contribution to NPS to be increased from 10% to 14% to help the social security benefits of state govt employees and bring them at par with the Central govt employees.
• The parent/guardian of a differently abled person can take an insurance scheme for such person. The present law provides for deduction to the parent/guardian only if the annuity is available to the differently abled person on the death of the subscriber . The new budget proposes to allow the payment of annuity to the differently abled dependent on parents/guardians attaining the age of sixty years.
• Eligible startups established before 31.03.2022 had been provided a tax incentive for 3 consecutive years out of 10 years from the date of incorporation. This period of incorporation has been extended by one more year i.e. upto 31/03/2023.
• Likewise, the last date for commencement of manufacturing or production U/S 115BAB has been extended by one more year i.e. from 31/03/2023 to 31/03/2024.
• The surcharge of 37% on the income of AOPs has been reduced to 15%.
• The surcharge on Long Term Capital gains from any type of assets has been capped at 15%.Earlier it was 37% .
• No set off of any loss shall be allowed against income detected during search and survey operations.
• TDS will be charged in the hands of the people passing on some benefits to their agents as a business promotion strategy where amount is more than Rs. 20,000/- in a financial year.
• The concessional rates in capital goods and project imports will be phased out gradually and a flat 7.5% tariff rate will be applied. However, certain exemptions for advanced machineries that are not manufactured within the country will be continued.
• Due to hike in customs duties on imported parts several commonly used items will become more expensive such as umbrellas, headphones, earphones, loudspeakers, X-ray Machines, parts of electronic toys etc.
• To give boost to the Gems & Jewellery sector, Customs duty on cuts and polished diamonds and gemstones is being reduced to 5% .
• Duty concessions are also being given to parts of transformer of mobile phone charges and camera lens of mobile camera modules.