The new measures in the Union Budget 2022 related to income tax (IT) will enter into force on April 1, 2022, for the next fiscal year 2022-23. From the filing of the updated returns, income tax on crypto-assets to tax relief for cooperatives and startups as well as for Covid-19 treatment, here are 7 major changes in the Income Tax rules.
- Tax on Crypto assets and Crypto gifts
The budget 2022 which introduced a provision for a 30 percent tax on the transfer of digital assets will now be effective from April 1, 2022. The Budget also included a provision for a 1 percent TDS on payments made in relation to the transfer of cryptos/digital assets beyond a limit of INR 50000 per year for specified persons. Specified persons/HUFs will be compelled to have their finances audited as a result of the IT Act. If you receive a cryptocurrency or other virtual digital asset as a gift, it will be subject to taxation as a gift.
- Filing of updated IT Return
A new provision permits taxpayers to file an updated return if they make any error, omission, or make a mistake on their income tax returns. Taxpayers now have two years from the end of the relevant assessment year to file an updated return.
- Tax of Provident Fund account
From April 1, the Central Board of Direct Taxes (CBDT) will adopt Income-tax (25th Amendment) Rule 2021. It means that the Employee Provident Fund (EPF) account will have a tax-free contribution limit of up to Rs 2.5 lakh. The interest income will be taxed if the payment is higher than the above-mentioned amount.
- Tax relief for people with disability
The new regulations provide for the availability of an annuity or lump sum to a differently-abled individual during the subscriber’s lifetime, i.e. after the latter’s parent or guardian reaches the age of 60.
- Tax relief for Covid-19 treatment
Individuals who have received monetary assistance for COVID therapy will be eligible for tax relief under the provision, which will take effect on April 1, 2020. The money received by the relatives of COVID victims will be tax-free up to INR 10 lakh. This applies to families who received the money within 12 months of the deceased person’s death.
- Surcharge on LTCG
Long-term capital gains on the sale of listed stock or mutual funds are currently subject to a 15 percent surcharge. This cap will apply to long-term capital gains on all assets beginning April 1, 2022.
- Tax relief for Startups
Startups founded before March 31, 2022 will receive an additional year of tax benefits in addition to the three years already granted (out of 10 years from incorporation).