Just like every year, Union Budget 2022 has dived in this year too!
On 1st February 2022, Nirmala Sitharaman presented her 4th speech on union budget 2022 as Finance Minister of
India.
2022 union budget majorly focused on digital and technology. Not only this there were hosts of measures applicable for various sectors like infrastructure, healthcare, provision of e-services, etc. The agenda behind these measures is to boost growth amid high & rising inflation and pandemic uncertainties.
Union Budget laid out remarkable changes concerning personal income tax structures. Amongst that, ‘Digital Rupee’ became the main magnet of the meeting.
Without further ado, let's dive into the detailed financial sector reading of the measures as disclosed by the finance minister:
- Direct
Taxes – Income Tax
●
A stable and predictable tax regime has
been vowed to establish a trustworthy tax regime. A one-time window will be
provided to correct the omissions in the ITRs filed and has allowed updating
past returns too within two years from the end of the relevant assessment year.
●
For startups, an extension of the tax
incentive period has been given. This means that under Section 80-IAC eligible
startups will now get tax benefits until March 31, 2023.
●
A reduction of corporate surcharge from
12% to 7% has been advised.
●
For co-operative societies, the Alternate
Minimum Tax (AMT) will be reduced to 15%.
●
Income will be taxed by the government
from the transfer of digital assets such as crypto at 30%. Except for the cost
of acquisition of digital assets, no further deductions will be permitted. The
gifting of digital assets will be too taxed in the hands of the receiver.
●
The employer's contribution towards the
NPS (National Pension Scheme) will increase from 10% to 14%
●
At 15% the surcharge on long-term capital
gains will be capped.
●
A tax deduction can be claimed on payment
of the annuity or lump sum during the lifetime of a differently-abled parent or
guardian only after their attaining the age of 60 years.
- Indirect Taxes – GST & Customs
● The last date to make amendments,
corrections, upload missed sales invoices or notes, or to claim any missed
Input Tax Credit or ITC of one financial year is no longer due to date to file
September return of the following year, but it is 30th November of the
following year.
● Failure to file an annual return for 3
months beyond the due date of 30th April will be bound to cancellation of their
registration, under Section 29 of the CGST Act.
● A revised due date to file GSTR-5 by the
Non-resident taxable is now moved from 20th of next month to 13th of next
month.
● Sections 42, 43, and 43A of matching,
reversal of tax credits have been terminated.
● Since the GST inception, January 2022,
recorded the highest gross GST Revenues of Rs.1,40,986 crore
● Concessional customs duty on import of
capital goods to be phased out, the initial rate of 7.5% to be imposed.
● Enabling domestic manufacturing will foresee
duty concessions on the import of phone chargers, transformers, etc.
● Customs duty on imitation jewelry has
been raised to demoralize their imports.
● Reduction on duty on specified leather,
packaging boxes will be done to incentivize exports.
● A 5% reduction of customs duty on cut
& polished diamond, gems will incur.
● An extension of a year is given on custom
duty on steel scrap to help MSMEs.
● Reduction in customs duty on methanol.
- Budget
allocation
●
For India, in FY23 a 6.4 % fiscal deficit
has been hurled.
●
Revised fiscal obligation assessed at 6.9%
of GDP.
●
To help PM Gati Shakti-related
investments, states will receive Rs. 1 lakh crore as a 50-year interest-free
loan.
●
Around 4.1% of GDP, for the government’s
effective capital expenditure, has been estimated at Rs 10.68 lakh crore in
2022-23.
●
The expenditure for capital expenditure to
be stepped up sharply by 35.4% from Rs 4.54 lakh crore to Rs 7.50 lakh crore in
2022-23.
- Investment,
Sectoral allocation
●
An expert committee will be set up to
review the regulatory framework for venture capital.
●
For the North Eastern Council, PM
development initiatives will be executed concerning the northeast. Under this,
livelihood activities for both youth and women will be enforced.
- Virtual
currency
●
From 2022-to 2023, RBI is keen to
introduce the digital rupee using blockchain technology.
- MSME
●
The ease of doing business and living will
be launched in the next phase.
●
An extension of ECLGS till March-23 has
been provided to support the sectors disproportionately impacted by the
pandemic. Concerning this, around 95% of ECLGS borrowers are MSMEs. This
extension will help the continuation of the handholding of MSMEs and the
services sector.
●
More than 60% of India’s GDP consists of
the services sector is an important paramount engine for not only economic
growth but also for job creation, income generation, and livelihood support.
●
This extension will entail a boom in
lending to the MSME sector.
●
The extension of ECLG will provide a boon
to lending to the MSME sector..
●
To make MSMEs competitive and resilient,
these measures have been taken by the government
- Digital banking
●
To
reduce delays in payments an online bill system will be launched that will be
used by central ministries.
In
many years, credit growth has increased at its highest by Rs. 5.4 lakh this
year.