Taxpayers were expecting changes to the Income Tax Slabs and Rates to be announced in the Budget. The following are the main points raised by FM throughout her address.
1. Taxpayers who inadvertently made mistakes in their tax return (omission of income, etc.) have two years from the end of the relevant AY to file a revised return by paying taxes.
2. Parity in tax deductions for NPS contributions between the federal and state governments. For state government employees, the maximum tax deduction allowed has been raised to 14 percent from 10 percent.
3. Virtual/digital asset taxation:
- Any revenue derived from the transfer of virtual digital assets will be taxed at a rate of 30%.
- No deductions are allowed except for purchase costs.
- Any loss incurred as a result of the transfer is not to be offset against any other income.
- Virtual asset gifts will be taxed in the hands of the recipients.
- TDS of 1% on payments paid for transfers over a certain amount
4. Surcharge rationalisation — Surcharge on AOPs and long-term capital gains is restricted at 15%.
5. No set-off of loss against revenue discovered during search and seizure is permitted.
6. Tax relief for people with impairments is alive and well. Insurance can be purchased by the parents or guardians. Tax reduction is available for annuities and lump-sum payments made to parents or guardians who reach the age of 60 during the lifespan of the incapacitated individual.
7. Income Tax is still in effect, there are no changes to the income tax slabs or tax rates!
FM Sitharaman did not announce any changes to income tax brackets for 2022-23, which is a major disappointment for salaried individuals. The tax rates for 2022-23 have likewise not been changed.
8. In her Budget 2022 speech, FM Nirmala Sitharaman announced the introduction of new updated returns provisions. This revised return can be submitted up to two years after the assessment year has ended.
9. A new provision allowing taxpayers to update their returns. Within two years of the conclusion of the relevant assessment year, an updated return can be filed. For cooperative groups, the alternative minimum tax will be decreased to 15%.
In her Budget Speech 2022, the Finance Minister also stated that all post offices in the country will be connected to the main banking system this year. Account holders of the post office will be able to conduct online transactions and even transfer funds to other bank accounts using net banking.