Budget 2022: government proposals on income tax, corporate tax, NPS, digital assets

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Several tax announcements were made on Tuesday by Union Finance Minister Nirmala Sitharaman during the presentation of the Union Budget 2022-2023. While the government has made no changes to the income tax slab, it has announced taxation on the transfer of virtual digital assets.

Digital assets

Sitharaman said the government decided to levy a 30% tax, the highest tax bracket in the country, on income from the sale of digital assets. However, losses resulting from the sale of digital assets will not be compensated by other income, she added.

“The introduction of a central bank digital currency will give a big boost to the digital economy. The digital currency will also lead to a more efficient and cheaper currency management system,” Sitharaman said during the presentation. from the budget.

The government has proposed an additional 1% TDS (withholding tax) on payments made in the transfer of virtual digital assets. Recipients of gifts in the form of virtual digital assets will also be taxed.

National pension scheme

The government has proposed to increase the tax deduction from 10% to 14% on state governments’ contribution to the national pension scheme for their employees. On the other hand, he proposed an increase in the tax deduction limit on the contribution to the NPS by state employees from 10% to 14%. Sitharaman said the changes were proposed to help state government employee social security benefits provide equal treatment to central government employees.

Full budget coverage here

Income tax

No changes to the income tax rates and slab have been proposed by the government for the Union Budget 2022-23. The government has proposed a new provision allowing taxpayers to file an updated return on the payment of additional tax. The updated declaration can be filed within two years from the end of the relevant tax year.

Corporation tax

Sitharaman said a concessional corporate tax rate of 15% would be available for one more year until March 2024 for newly incorporated manufacturing companies.

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