While presenting the Union Budget 2022, the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman at first emphasized the adverse health and economic effects of the pandemic.

Further stated, “With the accelerated improvement of health infrastructure in the past two years, we are in a strong position to withstand challenges.”

The budget proposal for this year stands on these key pointers:

1. Goals of Amrit Kaal

2. Indian Economy staging a sustained recovery

3. PM GatiShakti

4. Agriculture and Food Processing

5. Education

6. Health

7. All-inclusive welfare focus

8. Productivity enhancement and investment

9. Financing of investment

10. Tax proposals

11. Allocation to major schemes

12. Ministry wise allocations

The overall capital expenditure for FY 2022-23 is increased by 35.40 percent, from 5.54 lakh crore to 7.50 lakh crore. PM Gati Shakti, inclusive development, energy transition, and financing of investments are the four pillars that have been brought into the light.

In few years, there is a goal to reach a $5 trillion economy. Further, the capital expenditure allocation is expected to keep on exceeding up, however good expense revenues and an ultra disinvestment pipeline may help with limiting the financial deficit to 5% in fiscal 2023.

Along with this, one of the highlights is that the yearly assessment portion has remained unchanged by the government but it is to be taken into consideration that 30% tax is levied on the transfer of digital assets.

This financial year, the Reserve Bank of India (RBI) will also introduce a new enhanced rupee based on blockchain technology.

All in all, we understand that the Union Budget 2022-2023 proposal put forward some new questions and doubts which require more clarity. Thus, Webtel has organized India's first live session on Union Budget 2021 Analysis that explains the expert's perspective thoroughly and succinctly. Watch this video to see the recorded session.

Direct Tax Proposals - Budget Key Highlights 2022-23

• Provision has been granted to file ‘Updated Income Tax returns’ within 2 years from the end of the relevant assessment year.

• AMT rates have been reduced for Co-operatives from 18.5% to 15%.

• Surcharge has been reduced for Co-operatives with a total income of 1 crore to 10 crores.

• Tax relief has been given to persons with disability by allowing annuity payment to differently-abled dependents when parents attain the age of 60 years.

• Deduction for National Pension Scheme for State Government employees u.s 80CCC made at par with Central Government.

• Start-ups will be provided tax breaks if established before 31.03.2023 (earlier – 31.03.2022; now extended by 1 year).

• Last date for commencement of manufacturing for claiming lower tax regime under Section 115 BAB to be 31.03.2024 (earlier 31.03.2023; now extended by 1 year).

• Income from transfer of virtual digital assets to be taxed at 30% with no deduction for expenses other than the cost of acquisition, no set-off of losses, TDS @ 1% on consideration above the specific threshold and Gift to be taxed u.s 56(2)(x).

• No repetitive appeals for common questions of laws will be entertained.

• Exemption has been provided to off-shore banking units/ IFSC income.

• Surcharge of certain AOPs to be capped at 15%.

• Surcharge on Long Term Capital Gains on any assets to be capped at 15%.

• Health and education cess not allowable as business expenditure u/s 37.

• No set-off of losses against undisclosed income was detected during the search.

Indirect Tax Proposals - Budget Key Highlights 2022-23

• Time to avail ITC u/s 16(4) has been extended till 30th November of next year from 30th September.

• Additional Condition for availing of ITC u/s 16(2)- ITC can be availed only if the same is not restricted in GSTR-2B.

• Composition Taxpayers Registration can be canceled suo-moto if they have not filed their GSTR-4 return beyond 3 months from the due date.

• Credit Notes can be issued by 30th November of next financial year (currently allowed till 30th September) in respect of a supply made in a financial year.

• Permission has been granted to rectify any error in GSTR-1/ GSTR-3B till 30th November of the next financial year (currently allowed till 30th September).

• The two-way communication process in filing GST returns is scrapped.

• The due date for filing a return by a non-resident taxable person is prescribed as the 13th day of next month.

• Substitution has been given to Section 41 of the CGST Act to do away with the concept of “claim” of ITC on a “provisional” basis.

• Emendation in Section 47 of the CGST Act has been granted to provide for a levy of late fees for delayed filing of TCS returns.

• Emendation in Section 49 of the CGST Act is permitted to provide for restrictions for utilizing the amount available in the electronic credit ledger.

• Section 49 of the CGST Act is being amended to allow transfer of amount available in the E-cash ledger of a registered person to the E-cash ledger of a distinct person.

• Section 49 of the CGST Act is being amended so as to provide for prescribing the maximum proportion of output tax liability which may be discharged through the electronic credit ledger

• Section 50(3) of the CGST Act is being substituted retrospectively, with effect from the 1st July 2017, to provide for levy of interest on input tax credit wrongly availed and utilized.

• Refund claims of any balance in the electronic cash ledger shall be made available.

• Rate of Interest u/s 50(3) prescribed as 18% in all cases.

If you want to know in detail about these changes or have any doubts about the same, then feel free to ask us by sending an email to contactus@webtel.co.in or by simply commenting on this article.