Highlights of Union Budget 2022-23
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Today our country’s Finance Minister Smt. Nirmala Sitharaman presented Budget for year 2022-23 before parliament. This Budget seeks to compliment macro-economic level growth with focus on micro-economic level.
On very High Level: The Slab rate would remain same as of previous budget with no increase in any tax rates as stated in Income Slab.
Below we try to capture Few highlights of Budget 2022-23:
- India’s economic growth estimated at 9.2% and this would be highest among all the other economies with an aim to create 60 Lakhs new jobs in view of productivity link scheme across 14 sectors.
- There is an plan to expand national highway network by 25000 km in 2022-23 thru expansion plan of Rs 20,000 crores which is mobilized for National highway Network expansion.
- Government also planned to manufacture 400 new generation Vande Bharat trains during next three years and also planned 2000 Km of railway network to be brought under Kavach and further 100 PM Gatishakti Cargo terminals for multi-model logistics to be developed during next three years.
- Government also make major boost to Agricultural sector by proposing to expand Rs 2.37 lakh crores direct payment to 1.63 crores farmers for procurement of wheat and paddy.
- Government also encourage chemical free natural farming throughout the country. The Government will initially focus farmer’s land in 5 Km wide corridors along with River Ganga.
- For MSME sector, there is an inter-linking of Udyam, e-shram, NCS and ASEEM portals.
- Also, there is additional credit proposal for 130 Lakhs MSME’s of Rs 4,50,000 crores (i.e. existing Rs 50,000 crores to total cover of Rs 5 Lakhs crores) under Emergency credit Linked Guarantee Scheme (ECLGS)
- Rs 2 lakhs crores additional credit for Micro and small enterprises to be facilitated under Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).
- Also, There is capital layout of Rs 6000 crores to rolled out for Raising and Accelerating MSME performance (RAMP) programme.
- Budget also revamp Educational sector, where Government proposes to expand to 200 TV channels under “One class-one TV Channel” programme of PM eVidya, where Virtual labs and skilling e-labs to be setup to promote critical thinking and skills and simulated learning environment and further, High-Quality e-content will be developed for delivery through Digital teachers.
- There is also reforms in Health Sector, where Government introduces National Tele Mental Health Programme for quality mental health counselling and care services, where 23 tele-mental health centres of excellence will be setup.
- Government allocated Rs 60,000 crores to cover 3.8 crores households in 2022-23 under Har Ghar, Nal se Jal.
- Also, Government allocated Rs 48,000 crores for completion of 80 Lakhs houses in 2022-23 under PM Awas Yojana.
- For Banking sector, Government proposes to make 100% post offices which is around 1.5 Lakhs post offices under core banking system.
- Government proposes to design a scheme to build a strong eco-system for 5G as part of production linked incentive scheme.
- The major reform introduced in this budget, where Government introduces Digital rupee by RBI starting 2022-23, RBI will introduce India’s own Digital rupee in this year.
Below are the major proposed amendments in Direct and Indirect Taxes
- There is an introduction of new provision to update Income Tax return where tax payers in event of any income not declared earlier, can be filed within two years from end of the relevant assessment year. (Read detailed analysis)
- There is an major relief to co-operative societies, where Alternate minimum tax rate has proposed to be reduced from 18.5% to 15% and also surcharge has been proposed to be reduced from 12% to 7% for those having total income of more than Rs 1 crores and upto Rs 10 crores.
- There is an tax relief to person with disability where payment of annuity and lump sum amount from the insurance company to be allowed to differently abled dependent during the lifetime of parents/guardians i.e., on parents/guardian attaining the age of 60 years.
- There is an proposal of parity in national pension scheme contribution where tax deduction limit has been increased from 10% to 14% on employer’s contribution to NPS account of State Government employees. This will bring State Government employees at par with Central Government Employees.
- The Government also give tax incentive to startups where period of incorporation extended by one year from 31.3.2022 to 31.3.2023.
- Also, last date for commencement of manufacturing or production under Section 115BAB (Incentive under concessional tax regime) shall be proposed to extended by one year i.e. from 31.3.2023 to 31.3.2024.
- Government also introduces tax on virtual digital assets where if there is any income from transfer of any virtual digital asset to be taxed at the rate of 30% and also there will no deduction in respect of any expenditure or allowance to be allowed while computing such income except cost of acquisition. Further, there will no setoff of any loss from transfer of virtual digital asset against any other income. In case, there will be any gift of virtual digital asset, it will be taxed in hands of recipient.
- Government also introduces to defer filing of appeal by the department where there will be any identical question of law pending in High Court or Supreme Court. This proposal will greatly help in reducing litigation between taxpayers and the department.
- Government also proposed to give tax incentive to IFSC for certain income where if such income will be earned by certain person to be exempt from tax.
- Government also rationalize surcharge on AOP’s to be capped at 15% to boost the startup community.
- Government also give clarification, where any surcharge or cess (Health and education cess) on income and profit shall not be allowed as Business expenditure.
- Government also clarifies that there will be no set off any losses shall be allowed against undisclosed income detected during the search and survey operations.
- In case of any benefit being passed on to agents as Business promotion strategy and such benefit exceeds Rs 20,000 during the financial year, then there will be proposal to deduct TDS to rationalize TDS provisions.
- For Indirect taxes, Government proposed to gradually phase out the concessional rates in capital goods and project imports and will apply a moderate tariff of 7.5% for conductive growth of domestic sector and “Make in India”
- Government also proposed to gradually phase out more than 350 exemption entries on certain agricultural produce, chemical fabrics, medical devices and drugs and medicines for which sufficient domestic capacity exists.
- For Electronic sector, there is an proposal for duty concession to parts of transformers of mobile phones chargers and camera lens of mobile camera module and certain other items.
- Custom duty is proposed to be reduced to 5% for Gems and Jewellery
- There is an proposal to increase additional differential excise duty of Rs 2/litre of unblended fuel to encourage blending of fuel.
Source: PIB
We hope that you must have gain some insight about the Budget presented to Parliament. However, in case you have any question or anything you like to share, please feel free to share your thoughts. Specially, we like to know, How you find the Budget for year 2022-23, whether this Budget meets for expectation or anything else in comments box.
Team Taxation Insight
Disclaimer: There might be any possibility of typing error, for which you are requested to cross verify the above highlights with the information shared by Government on PIB (link stated above)
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