Brief Overview of Budget 2022 Based on Tax by SAG Infotech

The union budget 2022 has been overall covered by SAG Infotech and our complete team of chartered accountants had come with the basic budget as well as tax-related details from the minute details. The SAG Infotech is dedicated to providing the complete budget news to the assessee and the taxpayers who are concerned with the tax-related provision in the 4th union budget 2022 by the FM Nirmala Sitharaman.

Major Key Highlights on Tax in Budget 2022-23

Check all important key highlights along with the points mentioned as per the tax provisions given by the Nirmala Sitharaman in parliament at the union budget 2022 event in the presence of prime minister Narendra Modi.

Amendment of Section 139 – Insertion of Section 139(8A)

Any person, for an assessment year (herein referred to as the relevant assessment year), may furnish an updated return of his income whether he furnished an original return u/s 139(1) or revised return u/s 139(5) or not at any time within twenty-four months from the end of the relevant assessment year.

• Provided that the provision of this subsection shall not apply, if –
  • The updated return is a return of a loss.
  • Due to the updated return, his original tax liability decreased, original tax liability means the total tax liability determined on the basis of return furnished under subsection (1) or sub-section (4) or sub-section (5).
  • Due to the updated return, his original refund amount increased, the original refund amount means the total tax liability determined on the basis of return furnished under subsection (1) or sub-section (4) or sub-section (5).
• A person shall not be eligible to furnish an updated return, where:
  • A search has been initiated under section 132 or books of account or other documents or any assets are requisitioned under section 132A in case of such a person.
  • A survey has been conducted under section 133A in the case of such a person.

Tax on Income from Virtual Digital Assets Insertion of New Sections 115BBH and 115BBI

Income from the transfer of any virtual digital asset shall be taxable at the rate of thirty per cent. No deduction in respect of any expenditure other than the cost of acquisition shall be allowed to the assessee. Loss from the transfer of the virtual digital asset can not be set off from any other income.

Reduction in Surcharge on LTCG

Surcharge on Long Term Capital Gain u/s 112 (Sale of Land & Building) can not exceed 15% – Earlier Surcharge on Long Term Capital Gain u/s 112A, Short Term Capital Gain u/s 111A, and Dividend Income could not exceed 15%. Now Long Term Capital Gain u/s 112 is also covered.

Reduction in Surcharge in Case of Cooperative Society

• New Rate of Surcharge
  • The surcharge is 7% of Income Tax if net income exceeds Rs 1 Crore but does not exceed Rs 10 Crores.
  • The surcharge is 12 % of Income Tax if net income exceeds Rs 10 Crores
• Old Rate of Surcharge
  • The surcharge is 12 % of Income Tax if net income exceeds Rs 1 Crores.

Reduction in AMT in Case of Cooperative Society

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

Insertion of Section 194S

Any person who buys a virtual digital asset is liable to deduct 1% Tax Deduction Sources (TDS) from sale consideration.

• TDS shall not be deducted in a case, where:
  • The consideration is payable by a specified person and consideration does not exceed fifty thousand rupees during the financial year.
  • The consideration is payable by any person other than a specified person and consideration does not exceed ten thousand rupees during the financial year.
• Specified person:
  • An Individual or a Hindu undivided family, whose total sales, gross receipts, or turnover from the business does not exceed one crore rupees or fifty lakh rupees in case of the profession during the financial year immediately preceding the financial year in which such virtual digital asset is transferred.
  • An individual or a Hindu undivided family, not having any income under the head Profits and gains of business or profession.

Tax Deduction Benefit of Perquisite in Respect of Business or Profession Insertion of U/S 194 R

Any person who is responsible for providing to a resident, any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession by such resident, shall, before providing such benefit or perquisite, as the case may be, to such resident, ensure that tax has been deducted in respect of such benefit or perquisite at the rate of ten per cent. of the value or aggregate of the value of such benefit or perquisite if the value or aggregate of the value of such benefit or perquisite exceeds twenty thousand rupees.

It is also proposed to clarify that the expression “person responsible for providing” means the person providing such benefit or perquisite, or in the case of a company, the company itself including the principal officer thereof.