Come April 1st, 2022 and with it, a new financial year, 2022-2023, brings several changes in tax laws. The Union Budget 2022-2023 has brought about several amendments to the Income Tax Act that would be effective from April 1st, 2022. The government has announced several proposals that are bound to bring about a substantial change to various provisions in income tax law.
Some key changes in income tax laws are:
- There has been no change in the income tax rate and slabs for individual taxpayers and hence they would be charged at the same rate based on the tax regime of their choice as in the previous assessment year.
- A new provision has been introduced. That focuses on trust-based governance which allows assesses to revise and update their returns and correct their errors due to mistakes or omissions. Under this, an assessee can file their updated return within two years of the relevant assessment year.
- Any amount received by the assessee from any person. Regarding the medical treatment of Covid-19 for himself or his/, her family members shall not be considered as an income. Also, the amount received due to the death of a family member due to Covid-19 within one year from the death of such person. Shall not be charged to tax up to a limit not exceeding the sum of Rupees 10 lakh. This amendment is applicable retrospectively from April 1st, 2020.
- Purchasing vehicles from April 1st, 2022 is going to pinch the consumers. As they would have to pay 17 to 23 percent more for third-party insurance of cars and bikes. As per the Supreme court verdict, third-party insurance of 3 years for four-wheelers. And 5 years for two-wheelers is now mandatory. However, a discount on third-party insurance would be given at 15% for electric vehicles and a 7.5% discount to hybrid electric vehicles.
- Any freebies and gifts given to doctors violate professional conduct and etiquette under the Indian Medical Council Regulations and the same is disallowed as an item of business expenditure.
- No TDS shall be deducted for the sale of immovable property (other than agricultural property). If the consideration paid is less than Rupees 50 lakh. Where consideration paid for the sale exceeds rupees 50 lakhs, the payer should deduct TDS at the rate of 1% of the sale value.
- Any person being a resident of India who pays a sum exceeding Rs.20,000 to another person. Either through employment or business is required to deduct a TDS of 10% from such benefit.
- Differently abled persons can now avail deduction on withdrawal of any lump sum or annuity payment from the insurance scheme. During the lifetime of their parents or guardians. Earlier, they could avail of this deduction only on the amount received on the death of their parent/guardian.
- The co-operative societies can now heave a sigh of relief as the Alternate Minimum Tax has been reduced to 15% from the earlier 18.5%
- Manufacturing start-ups incorporated on or after October 1st, 2019 can now avail tax benefits for 4 years, i.e., up to 31st March 2024.
- Employees of the state government whose employer contributes to the National Pension Scheme (NPS) are eligible for a tax deduction of 14%. As opposed to the previous deduction of 10%. This deduction is only for the employer’s contribution to state government employees. And does not apply to employers of non-government employees.
- A new section 115BBH has been introduced for charging income tax on the sale of digital/ virtual assets. Including cryptocurrency at the rate of 30%. It must be noted that only the cost of acquiring the asset can be claimed as a set-off from the proceeds of the sale.
- Similarly, a new section 194S provides for a TDS of 1% to be charged. By any person who credits money in any manner or mode, which is a consideration for the sale of virtual/ digital assets.
- Earlier the surcharge for only long-term gains from the sale of listed shares and equity units of mutual funds were charged at 15%. And long-term gains from other classes of assets were charged on total income. However, from the financial year 2022-to 2023, the surcharge on long-term capital gains from all classes of assets is now capped at 15%.
- An additional levy of 12% surcharge would be applicable for domestic companies who pay taxes on;
- Excess money receivable by the assessee in India from any associated enterprise – Section 92E (2a)
- Any income distributed through buyback of shares – Section 115QA
- Income distributed to investors- Section 115TA
- Accreted Income – Section 115TD
As per the GST Act, from April 1st, 2022, all companies with an annual turnover of more than Rs. 20 crores have to generate E- invoices for all their Business to Business (B2B) transactions.
Every year several amendments and provisions are introduced by the government for the taxpayers. However, it is not possible to keep a track of all these changes and stay updated. A tax expert or a financial professional may also find it difficult to make notes and help companies in implementing the updated changes.
A financial service provider usually has a pool of financial, legal, and tax professionals and experts. Who are constantly updated on all tax-related changes. And come to the quick rescue of individual taxpayers as well as various co-operations and organizations.
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Diligen is a financial service provider who is well equipped with expert tax consultants and experts. At Diligen, we not only serve our corporate clients but even cater to the needs of individuals who have little or no knowledge about income tax filing and various investment avenues that can help them save tax.
The financial and tax experts at Diligen have years of experience in both individual and corporate tax matters. We carefully understand our clients’ needs and provide a range of customized tax solutions which are pocket friendly. We not only provide the best investment solutions but also help clients in filing their returns accurately before the due dates. Having successfully helped clients over the years with their tax and investment issues, Diligen is proud to serve the country by helping our clients across sectors and various entities in being tax compliant.