The auditor G Karthikeyan has highlighted the salient features of the Union Budget of 2022 released on 1st of February
Coimbatore: The auditor G Karthikeyan has highlighted the salient features of the Union Budget of 2022 released on 1st of February.
The Union Budget for the Year 2022 has been presented by the Union Finance Minister Nirmala Sitharaman on Tuesday. CA G Karthikeyan has called it a Budget with No Major New Taxes.
He stated, “We are living in a changing world. A two year old pandemic and into its third wave now in India has brought innumerable changes in daily lives and governance. Most countries have dealt with the pandemic wrought havoc by providing economic stimuli to their people sometimes as high as 10% to 20% of their GDP, resulting in high rates of inflation.
Most of the countries have been impacted by inflation which includes USA (7%) and India is also no exception, of course with minimum impact with less than 5%. In this background FM has presented the budget today and the salient features are as below:
Direct Taxes:
1. New provision introduced to file updated Income Tax Return on payment of additional tax within 2 years from the end of relevant Assessment Year. This includes revision of return for omissions and declaring income hitherto unreported.
2. Decision to extend the period of incorporation of eligible start-ups by one more year for providing tax incentives as a boost for young startups in the country. The country now has over 61,400 startups recognized with almost 75% of districts having at least one startup each.
3. Surcharge on AMT (Alternate Minimum Tax) for cooperative societies to be reduced to 15% from 18.5%. Surcharge now at 7% compared to 12% earlier for income between 1 crore to 10 crores.
4. A concessional 15% Income Tax has been announced for new domestic manufacturing companies, with manufacturing to start before March 31, 2023. They will now get one more year to start operations, till March 31, 2024. This will be useful for companies who are planning new projects through separate companies whose plans may have been delayed by the pandemic.
5. Tax deduction limit increased from 10% to 14% on employers’ contribution to New Pension Scheme (NPS) account of State Government Employees to help them realize social security benefits and bring them at par with Central Government Employees.
6. The parent/guardian of the differently-abled can get a tax deduction on payment of the annuity or lump sum during the lifetime of parent or guardian, once the parent or guardian has attained 60 years.
7. No set off of brought forward loss against undisclosed income detected during any survey or search.
8. Gifts provided as part of business promotion valued at over INR 20,000 p.a. would be subject to TDS.
9. Surcharge for Association of Persons (AOP) reduced from 37% to 15%.
10. Any surcharge and cess levied on income are not allowed as business expenditure.
11. For companies with no transactions, the voluntary liquidation timeline is reduced from 2 years to 6 months.
Cryptocurrency & blockchain:
12. Digital Rupee to be introduced by RBI using Blockchain technology in 2022-23
13. Income from transfer of digital assets such as crypto to be taxed at 30%. No deductions except the cost of acquisition of digital assets to be allowed.
14. Loss on sale of digital assets cannot be set off against any other income. TDS at 1% will be levied on the transfer of virtual digital assets above the threshold.
15. Gifting of digital assets will also be taxable in the hands of the receiver.
Ease of doing business:
16. To enable ease of setting up and doing business in India, the Single Window Portal introduced in 2018 catering currently to the Green Energy sector to be further extended.
17. Cooperative approach with state governments to ensure Tier II and Tier III cities’ infrastructure is strengthened. Any overlapping compliances between the Centre & States to be studied and removed.
18. Emergency credit line guarantee scheme for small and medium-sized businesses to be extended to March 2023
Internet Connectivity:
19. 5G spectrum auctions to be conducted in 2022-23
Housing & Amenities:
20. 80 lakh affordable households to be identified for the affordable housing scheme in 2022-23.
Employment:
21. New rail products in the form of ‘One Station – One Product’, 400 next-gen Vande Bharat trains, and 100 PM Gati Shakti cargo terminals over the next three years provides integration of NIP with Gati Shakti and is likely to prove crucial in employment generation as the transport network is rich in terms of backward and forward linkages with the rest of the economy.
Defence:
22. 68% of the capital procurement budget in defence will be earmarked for the domestic industry in 2022-23
e-Passport:
23. e-Passports with embedded chips to be rolled out in 2022-23.
Hospitality:
24. Hospitality services by the small and medium sector are yet to bounce back, therefore, the government has decided to extend the ECGL service for this sector by March 2023 with an increased cover of Rs 50,000.
25. Enhanced financial feasibility of PPP model to encourage private participation.
Solar Boost & Batter Swapping Policy:
26. To facilitate domestic manufacturing of 280 gigawatts of installed solar capacity by 2030, an additional allocation of Rs 19,500 crore for PLI for manufacturing of high-efficiency modules with priority to fully integrate manufacturing units to solar PV modules will be made by the government. Special mobility zones to be introduced, battery as a service encouraged.
Animation & Gaming:
27. Animation, Visual Effect, Gaming & Comics identified as a sector with immense potential for employment to country’s youth. A promotion task force with all stakeholders will be set up to recommend ways to realize this and build domestic capacity for serving our markets and the global demand.
PM Gati Shakti Scheme & Infrastructure
Big private investment in infra would be guided by Gati Shakti. It will encompass the 7 engines for multi-modal connectivity for the states with speedier implementation of development projects through technology to facilitate faster movement of people & goods through 20,000 crores financed by the govt to speed up this project.
28. Uniform land registration policy to be implemented across India aiming towards digitization of land records.
29. Capital outlay increased by 35% from 5.54 lakh crore to 7.5 lakh crore.
30. Fiscal deficit estimated at 6.4% in 2022-23 (approximately Rs. 15 lakh crore)
The GDP comprises four major cornerstones to include private consumption, private savings, Government spending, and net exports. While the focus is adequately provided to Government spending, it would have been an accelerator with the support of private consumption and savings.
The general populace as well as industrialists and economists were expecting a booster in the form of reduction in tax rates, increase in the standard deduction, and a consequential fillip to savings and investment but the budget has yielded nothing of the sort.
A multiplier impact is missing from the budget and perhaps a major negative in a general growth-focused budget presented with a sharp emphasis on the country’s image as a major emerging economy though the budget is forward-looking and positive overall.