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Business News/ Budget / News/  New income tax changes announced in Budget 2022. Details here
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New income tax changes announced in Budget 2022. Details here

Taxpayers can file updated ITR within two years of the relevant assessment year, says FM

New income tax changes announced in Budget 2022Premium
New income tax changes announced in Budget 2022

Finance Minister Nirmala Sitharaman said the government will provide a one-time window to correct omissions in income tax returns (ITRs) filed. The Finance Minister announced a new tax rule for taxpayers where a taxpayer can file an updated return on payment of taxes within two years from the end of the relevant assessment year.

1) ITR filing: Relief for taxpayers

Taxpayers can file updated ITR within two years of the relevant assessment year, says FM. This is a new provision that will ensure voluntary tax filing and reduce litigation, the FM said.

“Trust-based governance as a concept is now also being introduced in the income-tax law. If the omissions and mistakes, a new provision is announced to file an updated return to revise and make payment of appropriate taxes, which can be filed within two years from the relevant assessment year. Promotes the trust-based governance," says Ritesh Kumar, Partner, IndusLaw.

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2) 30% tax on proceeds of digital assets

Finance minister Nirmala Sitharaman announces 30% tax on proceeds of virtual/digital assets.

"Taxation of virtual digital assets - at 30%. No deductions are other than cost of acquisition. No set off permitted against other income. Tax withholding to be triggered on sale at 1% beyond a certain threshold. Deduction for employer contribution to NPS increased from 10 % to 14% for state govt employees on par with central govt employees. Not extended to non-govt employees," said Saraswathi Kasturirangan, Partner, Deloitte India.

“Virtual digital assets (crypto): including a specific tax regime for virtual digital assets (such as crypto) while providing clarity is not in line with what the industry was expecting. the 30% rate of tax and restriction to set-off losses is a very bold move in discouraging transactions in crypto," said Ritesh Kumar, Partner, IndusLaw.

3) NPS

The tax deduction limit for state government employees contribution to NPS raised to 14% from 10%.

“We have deeply realized the benefit of the latest provisions for the taxpayer community. One better scheme is for the tax deduction limit which is now hiked to 14% on the employer's contribution to the NPS account of the state government employees. And the updated return filing provision is much better than the previous with the time bracket of 2 years at maximum to the end of the assessment year. To add a delight, the tax benefits to the startups have been offered redemption of taxes to the 3 consecutive years is now extended to one more year," said Amit Gupta, MD, SAG Infotech.

“Hike to 14% on the employer’s contribution to the NPS account of the central & state government employees is a good step to ease the tax burden of the employees. The time limit extension to 2 years for return filing would alleviate the burden of the assesses and ITOs. However, we were expecting that the budget would enhance the limit of the standard deduction from Rs. 50,000 to Rs. 1,00,000 and WFH employees were also expecting some tax relief especially for them," said Gaurav Kapoor, Director & Co-Founder, Fincorpit Consulting Private Limited.

4) 1% TDS will be levied on payments made on the transfer of digital assets

5) Long term capital gains to be subject to surcharge only at 15% for all assets

"Long term capital gains to be subject to surcharge only at 15% for all assets as against graded surcharge. Currently, this is available only for listed shares and units of mutual funds," said FM Sitharaman.

“Presently surcharge on long term capital gain on listed share and equity fund is capped at 15% but for other LTCG the surcharge us based on total income. Now the FM has proposed a cap on all LTCG," said tax expert Balwant Jain.

Income tax relief on Covid-19 treatment expenses and compensation

“The budget does not have much to offer on personal tax. However, relief has been provided to persons who have received money for expenses incurred on treatment of Covid 19. Likewise, money received by family members on the death of a person will be exempt up to 10 lakhs for family members," said tax expert Balwant Jain.

Tax relief to persons with disability

The parent or guardian of a differently-abled person can take an insurance scheme for such person. The present law provides for a 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.

There could be situations where differently-abled dependants may need payment of annuity or lump sum amount even during the lifetime of their parents/guardians. I propose to thus allow 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.

 

 

 

 

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ABOUT THE AUTHOR
Sangeeta Ojha
A business media enthusiast. Writes on personal finance, business and banking.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
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Published: 01 Feb 2022, 12:25 PM IST
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