Amendment In Income Tax In Budget 2022

Amendment In Income Tax In Budget 2022

The government tabled bound amendments to budget 2022 within the lok sabha nowadays the budget 2022 was originally conferred on 1st February 2022. Following public and skilled feedback, the govt usually introduces amendments in its budget proposals and these were introduced within the lok sabha nowadays. According to tax experts, there are a few amendments that individuals should take note of, from an income tax point of views:-

  • Tax on Crypto currencies: From April 1, a flat 30 % will be levied on the crypto assets. These will be considered the new-age-asset class. The investors may stay in the investment for longer period of time in order to boost their income despite taxation.
  • Transfer of Virtual Asset: On Transfer of Virtual Assets there will be loss or profit in transferring, will not be allowed to set off against any other income. More clearly, virtual tokens will be considered as the Capital assets, which would need the investors to pay Capital gain Tax.
  • Gifting of Crypto currencies: Gifting also liable to pay tax by recipient of Virtual Assets and proposed to deduct 1% TDS on payments towards virtual currencies beyond Rs. 10,000 in a year.
  • Tax on Employee’s Provident Fund: If the employee’s contribution to the Employees’ Provident Fund (EPF) account exceeds Rs 2.5 lakh in the previous financial year 2021-22, then interest earned on the excess contribution will be taxable in his/her hands. To calculate the interest that will be taxable in the hands of an employee, a new EPF account will be created. For individuals not having employer’s contribution to their EPF accounts, such as government employees, the threshold is Rs 5 lakh.
  • Long Term Capital Gain: Till April 1, there was a cap on the surcharge of 15% on the long term capital gains from equity and mutual funds. Now, it will be levied on all long term assets.
  • Buying a new House: First time addition of this point that, an additional deduction of 1.5 lakh has been allowed when the value of house is less than Rs. 45 Lakh, if individual is a first time home buyer.
  • Treatment of COVID-19: If a person received any amount of money for the expenses incurred on treatment of COVID-19, they will not need to pay tax on it. Also, in case of death, money received by Family is tax free, upto 10 lakh.
  • Updated Income Tax Return: Now, we can update our Income Tax Return to correct errors in original Return. It will be allowed for the 2 years after filing of particular Financial Year.
  • State Government Employees: Now, employer’s contribution to NPS (National Pension Scheme) is 14% from 10% of their Dearness Allowance (DA) and Basic Salary for Central and State Government employees.
  • Startups : To add a delight, the tax benefits to the startups have been offered redemption of taxes to the 3 consecutive years is now extended to one more year.

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~By Himanshu

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