Finance Minister Nirmala Sitharaman presented the Union Budget 2022-23 on Tuesday. She announced several direct tax reforms in her budget speech.
The theme for the direct tax proposal in the Union Budget 2022-23 was the simplification of the tax administration, ease of compliance and relief to disabled and senior citizens. The key aspects of the direct tax proposals impacting individual taxpayers are discussed below.
Direct Tax Proposals:
In a significant reform to tax compliance, Finance Minister Sitharaman announced that a new provision would be introduced to provide an opportunity to taxpayers to file the updated returns, on payment of additional tax, within two years of the end of the relevant assessment year.
Finance Minister Sitharaman also proposed to cut the Alternate Minimum Tax for cooperative societies to 15% to provide them with a level playing field with companies. In addition, this proposal will decrease the surcharge on cooperative societies to 7% for those whose income is between Rs 1 crore and Rs 10 crore.
FM Sitharaman did not announce any change in income tax slabs for 2022-23. There are no changes in slabs or rates and no changes in deductions except NPS. Further, Long Time Capital Gains surcharge is capped at 15% for unlisted assets.
In her budget speech, the Finance Minister also announced to allow payment annuity and lump-sum amount to dependents of differently-abled, during the lifetime of parent or guardian reaching 60 years.
In a first, the Union government also announced a tax on income derived from digital assets. Finance Minister Sitharaman proposed that the government tax income from digital asset transfers at 30%.
The Finance Minister also said that no deduction is allowed while computing income except the cost of acquisition.
TDS of 1% on the payment made for the transfer of a virtual digital asset, above a monetary threshold, announced Finance Minister. The gifts of digital assets will be taxed in the hands of the recipient, Nirmala Sitharaman said.
The Finance Minister said that the corporate surcharge would be reduced from 12% to 7%.
Earlier, she also announced that the government would introduce Digital Rupee using blockchain and other technologies, which is to be issued by RBI starting 2022-23.
In her speech, Finance Minister Nirmala Sitharaman said that the Union Budget sought to lay the foundation and give a blueprint of the economy over ‘Amrit Kal’ of the next 25 years – from India at 75 to India at 100.
