The Finance Minister Nirmala Sitharaman presented the budget for the financial year 2022-23 on February 1. While there are no changes to income tax slabs, here is a list of some of the key announcements that will have a direct bearing on personal finance –

• Citizens are now allowed a 2-year extended window to file revised IT returns to rectify errors or omissions. Earlier it involved a lengthy process of adjudication.
• Income from transfer of virtual digital assets such as cryptocurrencies (e.g. Bitcoin), non-fungible tokens (NFTs) will be taxed at 30%. A loss from the sale of virtual digital assets can be offset only against gains from sale of virtual digital assets. Cryptocurrencies as a gift will be taxed for the receiver.  Additionally, payments made to transfer these digital assets will attract a TDS of 1%.
• Under section 80DD of the Income Tax Act, taxpayers get a tax deduction if they maintain differently-abled dependents. Until now, this deduction is available only if the annuity or the lump sum is receivable after the taxpayer’s death. This has been relaxed to extend the deduction even if such sum is received by the dependent when the taxpayer attains the age of 60 years provided the payment to the scheme has been discontinued. The amount received by way of annuity or lump sum will not be considered as income of the taxpayer and therefore would not be taxed.
• Any cess or surcharge levied cannot be allowed as a business expense while calculating the total income.
• The government contribution towards the National Pension Scheme (NPS) will be eligible for 14% tax deduction for state government employees, an increase from the earlier rate of 10%.
• Income tax shall not be levied on the amount received by a taxpayer for medical treatment from an employer or from any person for treatment of Covid-19 during FY 2019-20 and subsequent years. Income tax exemption shall be provided to ex-gratia payment up to Rs. 10,00,000 received by family members of a person on their death on account of Covid-19 during FY 2019-20 and subsequent years. While these announcements were made earlier, it has been incorporated within the Income Tax Act. 

Apart from these, some of the other announcements that can impact the common person with immediate effect –

• The RBI will introduce Digital Rupee backed by blockchain technology in 2022-23
• India will also launch e-passports in 2022-23 which will have biometric data.
• It is proposed that the ‘One class, one TV channel’ program of PM eVIDYA will be expanded from 12 to 200 TV channels. A digital university and a National Skill Qualification Framework (NSQF) will be created to cater to dynamic industry needs.

Contact us @ [email protected] or +91 84240 29758 to know more about the budget this year and how your financials will be affected.