Union Budget 2022

Union Budget 2022
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Last updated on July 30th, 2022 at 08:35 pm

Union Budget 2022 is the tenth budget under the Modi Government and the fourth budget of Finance Minister Nirmala Sitharaman.

The Union Budget 2022 is likely to focus on boosting the economic growth and consumption, on the premise of better than expected financial conditions in FY 2021-22 and expected end of the COVID-19 pandemic.

The Honorable FM started the first “digital budget”with a positive note  mentioning that economic growth for FY 22 is likely to be highest among large economies at 9.2%.

Key Highlights of the budget are:

  • Economic growth for FY 22 expected at 9.2%.
  • Focus on Fintech and Digital companies
  • ‘Make in India’ to create 6 millions of new jobs
  • Digital services to farmers planned; Kisan drones to be used for farming.
  • Reduction in oilseed imports promoted
  • Emergency Credit line guarantee (ECLGs) scheme to MSMEs expanded by 50,000 crores and extended till March 2023.
  • National digital health ecosystem to be rolled out.
  • Reduction in cost of intermediaries planned in the financials service sector.
  • PM development initiative for North East for infrastructure development and creation of jobs in that region.
  • Housing projects allocated Rs 48,000 crore under PM housing scheme
  • Post offices to come under Banking Systems with financial inclusion and interoperability
  • 75 digital banking units by scheduled commercial banks planned in 75 districts.
  • The next phase of ease of doing business 2.0 launched
  • Issuance of e-passports using embedded chips will be rolled out in 22-23.
  • IT-based management of land record and “one nation one registration” scheme for document registration proposed
  • A battery swapping policy will be brought out to help people switch to EVs for mobility. Pvt sector will be encouraged to develop in these services and areas
  • Proposes to accelerate voluntary winding up of companies
  • Telecom – 5G spectrucm auction in 22-23
  • SEZ will be replaced with new legislation.
  • 68% of defense budget on “Aatmanirbhar defense”. R&D in defense allocated 25% and open for pvt companies
  • Additional 19,500 crores allocated for manufacturing in Solar PV module
  • Capital Investments sharply increased. 35.4% increase to 7.50lacs crores (2.9% of GDP)
  •  Souvenir Green bonds to be issued in FY 22-23.
  • Digital Rupee – Digital currency using blockchain technology will be issued by central bank.
  • Rs 1 lac crore to assist the states for state level capex. The loan is interest free to states.
  • Budget estimate -Estimated Deficit of 6.9% of gdp in FY 22 and FY 23 deficit estimated at 6.4%

Direct Taxation

  • Updated returns to be filed within 2 years from the relevant Assessment Year to avoid litigations on account of omissions. (Read the detailed provision)
  • MAT for co-operative societies reduced to 15% from 18.5% and reduction in surcharge
  • Incentives for startups – extended by 1 more year.
  • Incentives for manufacturing units at concessional rates extended by 1 more year to 31 Mar 24 (Sec115AD)
  • Income from transfer of Virtual digital assets – taxed at 30%. Only the cost of acquisition to be allowed as a deduction. TDS at 1%. (Read for detailed provision)
  • Certain Income of NRI exempt from tax subject to certain conditions
  • Surcharge of AOP caps at 15%
  • Surcharge on LTCG on transfer of any asset capped at 15%. In effect, the effective tax on long term capital gains tax on unlisted shares has been reduced from 28% to 24%
  • Health & Education cess CANNOT be allowed as Business Expenditure.
  • No set off of loss against any undisclosed income detected in search operation

Indirect Taxation

  • Gross GST collection for Jan 2022 highest since the inception of GST. FM gave credit to recovering economy and administrative measures taken by revenue department.
  • Fully IT driven customs reforms
  • Customs duty reduced in several sectors

 

 

Disclaimer: The above content is for general information purpose only and does not constitute professional advice. The author/ website will not be liable for any false, inaccurate, incomplete information. Any reliance you place on above content is therefore strictly at your risk.

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About CA Janhavi Phadnis 73 Articles
Chartered Accountant and financial consultant. She has worked with corporates for 14 years with expertise in Forex-Treasury, Accounting, and Corporate Tax. She can be contacted at info.financepost@gmail.com

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