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Tax on digital assets, digital rupee by RBI, no change in tax slabs : Big announcements from Budget 2022
A big spike in capital expenditure and a 30 per cent tax on transfer or sale of digital assets, e-passports were the highlights of Finance Minister Nirmala Sitharaman's Budget 2022 today . With no change in the income tax rates and slabs, an individual taxpayer will continue to pay the same rate of tax depending on the tax regime chosen for FY 2022-23.
Some of the biggest announcements that were tabled:
Jump in Capital expenditure: The government announced that the capital expenditure has been increased sharply by 35.4 per cent to ₹ 7.50 lakh crore. This is one of the biggest announcement made by the Finance Minister.
Digital Rupee proposed:
Digital Rupee is proposed to be introduced by RBI using blockchain technology starting from 2022-23, Finance Minister Nirmala Sitharaman said. She also said Rs 1 lakh crore financial assistance to states will be provided in 2022-23 to catalyse investments. The Finance Minister further said that in 2022-23, states will be allowed fiscal deficit of up to 4 pc of GSDP.
Tax on digital assets:
Any income from transfer of any virtual digital asset shall be taxed at the rate of 30%. No deduction in respect of any expenditure or allowance shall be allowed while computing such income, except cost of acquisition.
e-passports to be introduced:
Issuance of E-passports will be rolled out in 2022-23 to enhance convenience for citizens, the government announced. The passport jacket will contain an electronic chip which will have important security-related data encoded on it.
One-time window to correct omissions in filed ITRs:
The government will provide a one-time window to correct omissions in income tax returns (ITRs) filed. The Finance Minister said that the updated returns will have to be filed within two years. The government proposes to reduce Minimum Alternative Tax (MAT) to 15 per cent for co-operative societies, at par with corporates.
Swapping policy to promote electric vehicles:
The government will bring a battery swapping policy to boost use of electric vehicles in the country in view of space constraints for setting up charging stations. "Considering the constraint space in urban areas for setting up (electric vehicles) charging stations, a battery swapping policy will be brought out and interoperability standards will be formulated," Sitharaman said in her Budget speech in the Lok Sabha.
Fiscal deficit at 6.9%:
India's fiscal deficit will unexpectedly rise to 6.9 per cent of GDP in the current fiscal and it is being targeted to be cut to 6.4 per cent in the next financial year. The fiscal deficit or the gap between expenditure and revenue was estimated at 6.8 per cent of the gross domestic product (GDP) in the current financial year ending March 31, 2022.
GST buoyant despite pandemic:
Gross GST collection for month of January are over Rs. 1.4 lakh crore. The highest since the inception of GST.
Water connections for 3.8 cr households:
Rs 60,000 crore has been allocated to provide tap water connections to 3.8 crore households in 2022-23. The government also informed that the government has decided to extend the period of incorporation by one year up to March 31, 2023, for startups to avail tax incentives. The finance minister said the government proposes to increase tax deduction from 10 per cent to 14 per cent on contribution in NPS (National Pension System) by the state government to employees.
Tax deduction limit reduced for central govt employees:
Tax deduction limit to be reduced for central government employees from 18 percent to 15 percent in their contribution to NPAs, said the finance minister.
Tax relief for the differently-abled:
The Finance Minister proposed to allow a payment annuity and lump-sum amount to dependents of differently-abled, during lifetime of parent or guardian reaching 60 years.