A new provision has been added to let taxpayers rationalize the past return and incorporate the amount of omitted income through additional tax payments. The updated return could be filed within two years from the end of the applicable assessment year.
It is good news that The tax incentive period has been extended by one year for startups. Eligible startups registered under Section 80-IAC can get tax benefits until March 31, 2023.
A reduction in Corporate surcharge: from 12% to 7%.
15% Reduction in Alternate Minimum Tax (AMT) for cooperative societies
30 % tax for the income earned through the transfer of digital assets including crypto. No deductions are allowed with an exception to the digital assets acquisition cost. In case any Loss happens on the sale of digital assets, it cannot be set off against any other income. 1%TDS would be imposed above the limit. digital assets in nature of gifts would also be taxable in the hands of the receiver.
To bring uniformity between Central and state government employees, the Finance Ministry decided to increase the limit of employers' contribution to the National Pension Scheme (NPS) Tier-I account from 10% to 14%.
The parent or guardian of the disabled could claim a tax deduction on payment of the annuity or single payment during the lifetime of parent or guardian, as the parent or guardian has got 60 years.
Any surcharge and cess imposed on income are not allowed as business expenditure.
Brought forward loss cannot be remedied against undisclosed income identified during any survey or search.
Indirect Taxes - GST & Customs
An important amendment that has been added to the CGST Act is in Sections 16, 34, 37, 39, and 52. deadline to make changes, corrections, upload missed sales invoices or notes or to claim any missed ITC of one financial year is no longer due date to file September return of the following year, but it is 30th November of the succeeding year.
Section 29 of the CGST Act is changed for the Cancellation of GSTIN by an officer. Unless a composition taxable person files an annual return for three months beyond the deadline of 30th April of the succeeding year, his registration can get canceled. Like that, for any other taxpayer, the six months consecutive default in return filing is replaced with consecutive tax period default as may be prescribed.
Section 38, earlier known for furnishing of inward supplies, is altered entirely to remove reference of earlier GSTR-2 and replace it with GSTR-2A and GSTR-2B with new heads as ‘Communication of details of inward supplies and input tax credit’.
The due date to file GSTR-5 by Non-resident taxable persons is get revised from the 20th of next month to the 13th of next month.
Sections 42, 43, and 43A with regards to matching, reversal of tax credits have been removed.
The record collection of Rs.1,40,986crore gross GST revenues in January 2022 was the highest since GST came into being.
Concessional customs duty on import of capital goods is about to be phased out, the initial rate of 7.5% to be imposed in place.
More than 350 exemptions on importing some Agri products, chemicals, drugs, etc., would be removed.
Duty concession on import of phone chargers, transformers, etc., facilitates domestic manufacturing.
Customs duty on imitation jewelry was hiked to not promote their imports.
Duty on specified leather, packaging boxes was reduced to encourage exports.
Customs duty on cut and polished diamonds, gems are about to be reduced to 5%.
Customs duty exemption on steel scrap is being extended by a year to lend a helping handing to MSMEs.
Customs duty on methanol is about to be reduced.
imposing additional excise duty at Rs.2 per liter on unblended fuel to promote fuel blending.
The budget allocation
fiscal deficit has been projected as 6.4% in FY23.
Revised fiscal deficit estimated at 6.9% of GDP.
States would get Rs 1 lakh crore as 50-year interest-free loans to help fund PM Gati Shakti-related investments.
The government’s effective capital expenditure is assesed at Rs 10.68 lakh crore in 2022-23, about 4.1% of GDP.
The outlay for capital expenditure to be increased sharply by 35.4% from Rs 4.54 lakh crore to Rs 7.50 lakh crore in 2022-23.
Budget Allocation in Education
2 lakh Anganwadis to be renovated for addressing child health.
Two years of education regression for school-going children intends that we require to increase efforts and spending to bridge education gaps. NEP envisages to have a 6% of GDP for education. While we are not on that, the announcement of tech-based platforms ‘One class, one TV channel’ program of PM eVIDYA for school children and the establishment of a digital university is essential.
Digital university to set up for online education focusing on ICT by means of a hub and spoke model.
Select ITIs in all states that would offer skill-based courses.
One class, one TV channel’ program of PM eVIDYA would be expanded from 12 to 200 TV channels. This would enable all states to offer supplementary education in regional languages for classes 1 to 12.
Budget allocation in Startups (drones etc)
Defense Research &Development to be opened up for industry and startups.
Startups would be promoted to facilitate ‘drone shakti’ to encourage drone usage.
Budget allocation in Agriculture
Government to fund blended finance (government share limit is 20%) for sunrise opportunities such as climate action, agri-tech, etc.
Fund to be arranged through NABARD to finance startups for agriculture and rural enterprise, significant for farm produce value chain. Startups would support FPOs and offer tech to farmers.
Use of Kisan Drones to be promoted for crop assessment, digitization of land records, spraying of insecticides and nutrients.
Wheat Procurement during Rabi season 2021-22 and the estimated paddy procurement in Kharif season 2021-22 would give cover 1208 lakh metric tonnes of wheat & paddy from 163 lakh farmers with Rs 2.37 lakh crore will be the direct payment of MSP value to their accounts.
Delivery of hi-tech services for farmers to be started.
Direct bank transfer of MSP to farmers.
organic farming to be promoted in India.
Budget allocation in Investment, Sectoral allocation
Regulatory mechanism for venture capital to be reviewed; with an expert committee.
PM development initiatives for the northeast would be implemented for the North Eastern Council. This would help livelihood activities for youth and women. It is not a substitute for the existing Centre or State schemes.
Budget allocation in Virtual Currency
RBI would introduce the digital rupee by means of blockchain technology for 2022-23.
Budget allocation in MSME
The next step of ease of doing business and living would be launched.
To back up the sectors disproportionately struck by the pandemic, FM announces extension of ECLGS till Mar-23. Given that nearly 95% of ECLGS borrowers are MSMEs, this measure will be a great relief. The services sector plays a significant role for economic growth, job creation, income generation, and livelihood support.
The extension of ECLG offers a blessing to lending to the MSME sector.
Experts say ECLGS (emergency credit line) extension till March 2023 is a crucial step.
The govt took measures to make MSMEs more resilient and competitive.
Emergency Credit Line Guarantee Scheme has enabled 130 lakh MSMEs mitigate the worst impact of the pandemic.
Budget allocation in e-Vehicles and energy
Energy efficiency and saving measures would be encouraged.
A battery-swapping policy to be brought out with interoperability standards to enhance the EV ecosystem.
FM announces Rs 19,500 crore allocation in PLI for solar modules.
Budget allocation in Digital banking & Internet connectivity
An online bill system would be launched to shorten the delay in payment. All central ministries may rely on it.
Credit growth raised by Rs 5.4 lakh crore this year, the highest in many years.
5G spectrum auction in 2022-23.
Bharat net project contracts for optical fiber networks will be handed out under the PPP model.
All villages should have the same accessibility to digital resources as urban.
Budget allocation in Defence
68% of the capital procurement budget in defence would be given for the domestic industry in 2022-23.
Budget allocation in e-Passport
Issuance of e-passports with modern tech to be introduced in 2022-23.
The finance minister has said India would start issuing e-passports in 2022-23. As it announced in 2019, these were some of the features proposed:
These e-passports will take a few seconds to read.
The prototype was tested in a US government-identified laboratory.
It is anticipated to have thicker front and back covers.
The back cover has a small silicon chip.
The chip will have 64 kilobytes of memory space.
Holder’s photograph and fingerprints would be stored in the chip.
capacity to store 30 visits.
States to be backed up for urban capacity building.
Budget allocation in Healthcare
A free platform for the National Digital Health Ecosystem would be launched. It consists of digital registries of health providers and facilities, unique health identity, and universal access to health facilities.
mental health is an issue during the pandemic. A national tele mental health program would be launched.
Budget allocation in Infra, Roadways, Railways, Waterways, and Logistics
New rail products have been envisaged in the form of ‘One Station – One Product’, 400 next-gen Vande Bharat trains, and 100 PM Gati Shakti cargo terminals over the next three years offer integration of NIP with Gati Shakti and are likely to prove significant in employment generation as the transport network is rich in terms of backward and forward linkages with the rest of the economy.
Draft DPRs for five river links have been finalized.
400 Vande Bharat trains with higher efficiency for passengers would be developed within the next three years.
The Budget focuses on public investment to modernize infrastructure over the medium term, promoting the tech platform of Gati Shakti through a multi-modal approach.
Four multi-modal national parks contracts would be given in FY23.
PM Gatishakti's master plan for expressways would be worked out in the next financial year.
The scope of PM Gatishakti's master plan includes the seven engines of economic transformation.
Budget allocation in Housing and basic amenities
In 2022-23, 80 lakh households would be identified for the implementing affordable household scheme.
60,000 crore earmarked for providing access to tap water to 3.8 crore households.
The value of the increase in infra spend is unclear through PM Gati Shakti plan, unlike the clear 34.5% increase last year to Rs 5.5 lakh crore.
Ken-Betwa link at Rs 44,605 crore to be taken up for the purpose of irrigation to 9.05 lakh hectares, 65 lakh people drinking water, hydro and solar power.
Budget allocation in Employment
Production Linked Incentive (PLI) Scheme for attaining Aatmanirbhar Bharat has received an excellent response, potentially creating 60 lakh new jobs and additional production of 30 lakh crore during the next Keycap digit five years.
Production Linked Incentive schemes across 14 sectors have got a tremendous response and created 60 lakh job opportunities.