Highlights of Union Budget for the FY 2022-2023
- We have a promise from the government for a steady & predictable tax system
- Demystified old & new tax regimes – benefit for employees to take decision
- Option to switch from old tax regime to new tax regime every year by the employees
Impact for Small Business
- Tax Incentive Period extended for startups
- The benefits under section 80-IAC are now extended for startups formed before March 2023
What is the impact for your employees on the budget 2022 -2023?
- No prominent changes appear for new/old tax regime in Budget 2022
- Benefits to be continued for taxpayers who are claiming HRA, LTC, etc
- Standard Deduction Ceiling continues to be at Rs. 50,000 under section 16
- Tax-free work-from-home allowances to set up a home office (Revised ceiling of Rs.1,00,000)
- At SumoPayroll, optionally you can configure employee’s compensation by adding a new allowance called WFH & make it tax-free upto Rs. 1,00,000
- Extension of Leave Travel Concession cash voucher scheme till March 2023
Want to be taxed at lower rates?
- Opt for personal income tax under new tax regime applicable from FY 2020 – 21
- Reduced slab rates on annual income upto 15 lakhs
What is to be learned from Budget 2022 – 2023 for salaried employees?
- Taxpayers can now update returns of 2 years of assessment year
- Slabs rates are as follows
| New Tax Regime U/S 115 BAC | |
| Income Tax Slab | Income Tax Rate |
| Upto 2,50,000 | Nil |
| 2,50,001 – 5,00,000 | 5% |
| 5,00,001 – 7,50,000 | 10% + 12,500 |
| 7,50,001 – 10,00,000 | 15% + 37,500 |
| 10,00,000 – 12,50,000 | 20% + 75,000 |
| 12,50,001 – 15,00,000 | 25% + 1,25,000 |
| Above 15,00,001 | 30% + 1,87,500 |
| Old Tax Regime | |
| Income Tax Slab | Income Tax Rate |
| Upto 2,50,000 | Nil |
| 2,50,001 – 5,00,000 | 5% |
| 5,00,001 – 10,00,000 | 20% + 12,500 |
| Above 10,00,001 | 30% + 1,12,500 |
On Tuesday, February 1, 2022, Finance Minister Shri Nirmala Sitharaman announced the huge Indian Budget 2022. Many Indian citizens and businesses are excited to learn about the changes that will occur in the fiscal year FY 2022-23.
The focus of Budget 2022 was on ‘digital and technology,’ as well as infrastructure, health, education, and the provision of e-services to the common people. This Union Budget set the foundation and laid out the economic roadmap for the next 25 years
India had the highest GDP growth rate of any economy, at 9.2%. We are in the midst of the Omicron wave, and the rapidity of our vaccine effort has made a significant difference. ‘Sabka Prayas’ will continue to grow, according to the FM. Budget 2022 includes a significant rise in public investment and capital spending.
New Provision for Updation of ITR
A new option has been added that permits taxpayers to file an updated return if their income tax filings contain errors or mistakes. Taxpayers now have two years from the end of the relevant assessment year to file an updated return. It is regarded as a positive move in the direction of encouraging voluntary compliance.
The benefit of tax incentives under Section 80-IAC was offered to start-ups that were incorporated up to 31st March 2022, citing start-ups as drivers of the economy’s growth. The benefit of tax benefits, on the other hand, is extended to start-ups formed before March 31, 2023.
Employees of the state government are eligible for an NPS deduction.
State government employees will now be allowed to deduct up to 14 percent of their basic pay and dearness allowance for NPS contributions made by their employers under Section 80CCD(2), which is the same as the deduction available to Central Government employees under the same section.
Changes in GST :
- The deadline for making adjustments, uploading missing sales invoices or notes, and claiming any lost Input Tax Credit (ITC) for a given fiscal year has been extended to November 30th of the following year.
- Assume that a person enrolled in the composition scheme fails to file an annual return within three months of the deadline, which is April 30th of the following year. In that instance, the officer has the authority to cancel his registration. Similarly, for any other taxpayer, the six-month consecutive default in filing a return is replaced with defaulting for as many tax periods as may be prescribed.
- Section 38, formerly known as supplying of inward supplies, has been rewritten to eliminate any references to GSTR-2 and replace them with GSTR-2A and GSTR-2B, as well as new rules on ‘Communication of details of inbound supplies and input tax credit.’
- The deadline for non-resident taxable people to file GSTR-5 has been moved from the 20th to the 13th of next month.
- The corresponding reversal of input tax credits sections 42, 43, and 43A have been abolished.
Taxes :
- The government promises a steady and predictable tax system.
- The government will allow a one-time chance to amend omissions in previously filed ITRs, with new returns due within two years.
- Any tax or surcharge on income is not deductible as a business expense.
- TDS of 1% on transfers of virtual assets above a certain threshold and gifts will be taxed
- The long-term capital gains surcharge is restricted at 15%.
- The government would tax digital asset transactions at a rate of 30%.
- Except for acquisition costs, no deductions are allowed for calculating income.
- Losses cannot be deducted from other sources of income.
- Cryptocurrency gifts will be taxed at the receiver’s end.
- A new provision allowing taxpayers to file an amended return has been enacted.
- Within two years of the end of the relevant assessment year, an updated return can be filed.
- The Alternative Minimum Tax for cooperative societies will be reduced to 15%.
- For cooperative societies with an annual income of between Rs 1 crore and Rs 10 crore, the proposal will cut the surcharge to 7%.
- Employer contributions to state government employees’ NPS accounts are now eligible for a 14 percent tax deduction.
