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No major changes have been made in this year’s budget, but there are some changes that we have to pay attention to and we will look at some of them here.
Cryptocurrencies:
Let us first talk about crypto-currency and its taxation, as it is something that has stirred a bit of debate in the market. Many people heaved a sigh of relief as they finally heard something about crypto from the government. it is It is now officially legal to trade and transact in crypto-currencies, NFTs, etc., However, taxation is a worrying part of it. Crypto is declared as a virtual or digital asset and will be Income taxed at 30% arising out of such transfer while allowing no deductions or allowances excluding cost of acquisition, The loss on account of such transfer is also not allowed to be set off. against any income under any head, Gift of digital asset is taxable in the hands of the recipient and there is 1% TDS applicable on such transfers/transactions. To sum up everything you do with crypto, you have to pay some part of it as tax to the government.
Digital Rupee/Digital Currency by RBI:
you heard right The Indian government is going to issue its own digital currency using blockchain technology in the year 22-23. This also indicates that the government welcomes technologies like blockchain and other technology and is going to make better use of it in the future. The price of this digital rupee will be equal to the Indian rupee.
Direct Taxation:
The country’s middle class society is quite disappointed because there were No source of tax deduction or exemption was allowed. There were some expectations that certain specific deductions or allowances would be allowed due to Covid and work from home time but nothing of the sort was disclosed in this year’s budget. Internet was flooded with middle class memes after Nirmala Sitharaman’s speech.
Update returns:
Provision for filing of Income Tax Return to rectify errors and omissions can now be made within 2 years from the relevant assessment years.
Many people have doubts regarding the updated return, please note that it will not be applicable, if the updated return is –
- Loss is refundable.
- This has the effect of reducing the total tax liability.
- Results in refunds or refund increases.
It simply means that you can file an updated return only if you have missed any ‘income’ and have paid additional tax on the same.
Surcharge on LTCG:
Surcharge on long-term capital gains on any asset limited to 15% Which simply means that one will not have to pay more than 15% of the surcharge on his total net tax liability.
Cess as Business Expense:
Health and education cess will not be allowed as a business expense at par with income tax and surcharge.
NPS for State Government Employees:
Now state government employees can Claim NPS exemption on 14% of employer’s contribution Which was only 10% earlier.
for start-up,
Now state government employees can Claim NPS exemption on 14% of employer’s contribution Which was only 10% earlier.
for non-residents,
Non-resident income derived from offshore derivative instruments or derivatives issued by an offshore banking entity, income from royalties and interest on account of leasing of a ship, and income from portfolio management services in IFSC shall be exempt from tax.
For Disabled:
Disabled person is exempted from annuity and lump sum payment Even if it was created during the lifetime of the guardian and the parents (at the age of 60 years)
Custom duty:
custom duty on polish Diamonds and gems have decreased by 5%. This simply means that its prices will be much lower in the near future. there is also a Duty exemption on import of parts for phone chargers, transformers, leather, packaging boxes, etc. Which in turn will bring down the prices of these commodities. While the prices of umbrellas are about to rise The duty on umbrellas has been increased by 20%.
Other points:
These are notable proposals by the government in this year’s budget, the market reacted positively during the budget and closed with a positive of +1.31%. Let’s hope the bounce back continues and the market rises even higher.
There was more emphasis on the long future ahead of us in the budget. It has also introduced a battery Swapping policy for setting up of EV stations. The animation, visual effects, gaming and comics sectors have immense potential to provide employment to the youth. An AVGC Promotion Task Force will be set up with all stakeholders to recommend ways to realize this and build domestic capacity to serve our markets and global demand., It has plans to start 5G services within 22-23, broadcast TV channels from standard 1-12 for educational purpose where children can watch and learn, plans to build 25000 km of highways and much more… .
About Tax Planner:
Timely tax planning helps in avoiding many costly financial mistakes that cannot be undone. However, even if you’re late in planning your taxes, you can take some easy last-minute financial steps. These steps will help you reduce your risk and ensure that the investments are in line with your financial needs.
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