Income-Tax Slabs Remain Unchanged, Assesses Can File Updated Returns Within 2 Years Of Relevant AY: Highlights Of Union Budget 2022
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The Union Finance Minister Nirmala Sitharaman today presented the Union Budget 2022-23 and stressed that it will lay the foundation for India's economic growth and expansion for the next 25 years. No announcements regarding changes in the income tax slabs were made in the budget speech.It may be noted that Article 112 of the Indian Constitution provides for the Union Budget of a year,...
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The Union Finance Minister Nirmala Sitharaman today presented the Union Budget 2022-23 and stressed that it will lay the foundation for India's economic growth and expansion for the next 25 years. No announcements regarding changes in the income tax slabs were made in the budget speech.
It may be noted that Article 112 of the Indian Constitution provides for the Union Budget of a year, also referred to as the Annual Financial Statement. Essentially, it is a statement of the estimated receipts and expenditure of the government for a particular year.
In her 4th straight Budget speech, FM Sitharaman said that India's economic growth in the current year is estimated to be 9.2 percent, which highest among all large economies. She also stressed that the government aims to attain the followings visions:
- Complementing the macro-economic level growth focus with a microeconomic level all-inclusive welfare focus,
- Promoting digital economy & fintech, technology-enabled development, energy transition, and climate action, and
- Relying on a virtuous cycle starting from private investment with public capital investment helps to crowd-in private investment.
In her speech, she specifically said that Government will be prioritizing PM Gati Shakti, inclusive development, productivity enhancement and investment, sunrise opportunities, energy transition, and climate action.
Here's a quick look at the major announcements made by Union Finance Minister Nirmala Sitharaman in her Budget speech
PART B
Direct tax
- Taxpayers can file an Updated Return on payment of additional tax. This updated return can be filed within two years from the end of the relevant assessment year.
- Assessee would be asked to declare the income that they may have missed out earlier while filing her return.
- Cooperative societies are required to pay Alternate Minimum Tax To the tune of 15 percent (reduced from 18.1%).
- Surcharge on co-operative societies reduced from present 12 per cent to 7 per cent for those having total income of more than ` 1 crore and up to ` 10 crores.
- The parent or guardian of a differently-abled person can take an insurance scheme for such person. There could be situations where differently-abled dependants may need payment of annuity or lump sum amount even during the lifetime of their parents/guardians, therefore, the Government has allowed the payment of annuity and lump sum amount to the differently-abled dependent during the lifetime of parents/guardians, i.e., on parents/ guardians attaining the age of sixty years.
- At present, the Central Government contributes 14 per cent of the salary of its employee to the National Pension System (NPS) Tier-I. This is allowed as a deduction in computing the income of the employee. However, such deduction is allowed only to the extent of 10 per cent of the salary in case of employees of the State government.
Therefore, to provide equal treatment to both Central and State government employees, the Government has now increased the tax deduction limit from 10 per cent to 14 per cent on employer's contribution to the NPS account of State Government employees as well.
- Eligible start-ups established before 31.3.2022 had been provided a tax incentive for three consecutive years out of ten years from incorporation. In view of the Covid pandemic, the Government had extended the period of incorporation of the eligible start-up by one more year, that is, up to 31.03.2023 for providing such tax incentive.
- Any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent.
- Income of a non-resident from offshore derivative instruments, or over the counter derivatives issued by an offshore banking unit, income from royalty and interest on account of lease of ship and income received from portfolio management services in IFSC shall be exempt from tax, subject to specified conditions.
- Any surcharge or cess on income and profits is not allowable as business expenditure.
- No set off, of any loss shall be allowed against undisclosed income detected during search and survey operations.
- In order to remove inconsistency, it is proposed to amend section 194-IA of the Act to provide that in case of transfer of an immovable property (other than agricultural land), TDS is to be deducted at the rate of one per cent. of such sum paid or credited to the resident or the stamp duty value of such property, whichever is higher. In case the consideration paid for the transfer of immovable property and the stamp duty value of such property are both less than fifty lakh rupees, then no tax is to be deducted under section 194-IA.
Indirect taxes
- It is proposed to phase out the concessional rates in capital goods and project imports gradually and apply a moderate tariff of 7.5 per cent. Certain exemptions for advanced machineries that are not manufactured within the country shall continue.
- A few exemptions are being introduced on inputs, like specialised castings, ball screw and linear motion guide, to encourage domestic manufacturing of capital goods. Blending of fuel is a priority of this Government. To encourage the efforts for blending of fuel, unblended fuel shall attract an additional differential excise duty of ` 2/ litre from the 1st day of October 2022.
PART A
PM GatiShakti
PM Gati Shakti is a National Master Plan for Multi-Modal Connectivity and it was launched in October 2021. It aims to bring 16 Ministries including Railways and Roadways together for integrated planning and coordinated implementation of infrastructure connectivity projects.
The scope of PM GatiShakti National Master Plan will encompass the seven engines for economic transformation, seamless multimodal connectivity, and logistics efficiency. The approach is driven by seven engines, namely, Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure.
- The National Highways network will be expanded by 25,000 km in 2022-23. 20,000 crore will be mobilized through innovative ways of financing to complement the public resources.
- Railways will develop new products and efficient logistics services for small farmers and Small and Medium Enterprises, besides taking the lead in the integration of Postal and Railways networks to provide seamless solutions for the movement of parcels.
- 'One Station-One Product' concept will be popularized to help local businesses & supply chains.
- As a part of Atmanirbhar Bharat, 2,000 km of network will be brought under Kavach, the indigenous world-class technology for safety and capacity augmentation in 2022-23.
- 400 new-generation Vande Bharat Trains with better energy efficiency and passenger riding experience will be developed and manufactured during the next three years.
- 100 PM GatiShakti Cargo Terminals for multimodal logistics facilities will be developed during the next three years.
- The design of metro systems, including civil structures, will be re-oriented and standardized for Indian conditions and needs.
- As a preferred ecologically sustainable alternative to conventional roads in difficult hilly areas, National Ropeways Development Programme will be taken up on PPP mode. Contracts for 8 ropeway projects for a length of 60 km will be awarded in 2022-23.
Inclusive Development
For farmers
- The procurement of wheat in Rabi 2021-22 and the estimated procurement of paddy in Kharif 2021-22 will cover 1208 lakh metric tonnes of wheat and paddy from 163 lakh farmers, and 2.37 lakh crore direct payment of MSP value to their accounts.
- Chemical-free Natural Farming will be promoted throughout the country, with a focus on farmers' lands in 5-km wide corridors along river Ganga, at the first stage.
- Use of 'Kisan Drones' will be promoted for crop assessment, digitization of land records, spraying of insecticides, and nutrients.
- States will be encouraged to revise syllabi of agricultural universities to meet the needs of natural, zero-budget and organic farming, modern-day agriculture, value addition and management.
- Implementation of the Ken-Betwa Link Project, at an estimated cost of 44,605 crore will be taken up.
- For farmers to adopt suitable varieties of fruits and vegetables, and to use appropriate production and harvesting techniques, the government will provide a comprehensive package with the participation of state governments.
Skills
- The National Skill Qualification Framework (NSQF) will be aligned with dynamic industry needs.
- Digital Ecosystem for Skilling and Livelihood – the DESH-Stack eportal – will be launched. This aims to empower citizens to skill, reskill or upskill through on-line training.
- Startups will be promoted to facilitate 'Drone Shakti' through varied applications and for Drone-As-A-Service (DrAAS). In select ITIs, in all states, the required courses for skilling, will be started.
Education, skill development
- 'One class-one TV channel' programme of PM eVIDYA will be expanded from 12 to 200 TV channels. This will enable all states to provide supplementary education in regional languages for classes 1-12.
- 750 virtual labs in science and mathematics, and 75 skilling e-labs for simulated learning environment, will be set-up in 2022-23.
- High-quality e-content in all spoken languages will be developed for delivery via internet, mobile phones, TV and radio through Digital Teachers.
- A Digital University will be established to provide access to students across the country for world-class quality universal education with personalised learning experience at their doorsteps. The University will be built on a networked hub-spoke model, with the hub building cutting edge ICT expertise. The best public universities and institutions in the country will collaborate as a network of hub-spokes.
Health
- An open platform, for the National Digital Health Ecosystem, will be rolled out. It will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities.
- To better access quality mental health counselling and care services, a 'National Tele Mental Health Programme' will be launched. This will include a network of 23 tele-mental health centres of excellence, with NIMHANS being the nodal centre and the International Institute of Information Technology-Bangalore (IIITB) providing technical support.
Women, Household
- Three schemes, namely, Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0 were launched recently to provide integrated benefits to women and children.
- Saksham Anganwadis are a new generation anganwadis that have better infrastructure and audio-visual aids, powered by clean energy and providing improved environment for early child development. Two lakh anganwadis will be upgraded under the Scheme.
- The current coverage of Har Ghar, Nal Se Jal is 8.7 crores. Of this 5.5 crore households were provided tap water in last 2 years itself. Allocation of 60,000 crores has been made with an aim to cover 3.8 crore households in 2022-23.
- In 2022-23 80 lakh houses will be completed for the identified eligible beneficiaries of PM Awas Yojana, both rural and urban. 48,000 crore is allocated for this purpose.
- A new scheme, Prime Minister's Development Initiative for NorthEast, PM-DevINE, will be implemented through the North-Eastern Council
Banking
- In 2022, 100 per cent of 1.5 lakh post offices will come on the core banking system enabling financial inclusion and access to accounts through 11 net banking, mobile banking, ATMs, and also provide online transfer of funds between post office accounts and bank accounts.
- 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks.
- The financial support for digital payment ecosystem announced in the previous Budget will continue in 2022-23. This will encourage further adoption of digital payments. There will also be a focus to promote use of payment platforms that are economical and user friendly.
Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition & Climate Action
- In recent years, over 25,000 compliances were reduced and 1486 Union laws were repealed.
- For the Amrit Kaal, the next phase of Ease of Doing Business EODB 2.0 and Ease of Living, will be launched.
- The issuance of e-Passports using embedded chip and futuristic technology will be rolled out in 2022-23 to enhance convenience for the citizens in their overseas travel.
- A high-level committee of reputed urban planners, urban economists and institutions will be formed to make recommendations on urban sector policies, capacity building, planning, implementation and governance.
- For urban capacity building, support will be provided to the states. Modernization of building byelaws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD) will be implemented.
- For developing India specific knowledge in urban planning and design, and to deliver certified training in these areas, up to five existing academic institutions in different regions will be designated as centres of excellence.
- These centres will be provided endowment funds of 250 crores each. In addition, AICTE will take the lead to improve syllabi, quality and access of urban planning courses in other institutions.
- States will be encouraged to adopt Unique Land Parcel Identification Number to facilitate IT-based management of records. The facility for transliteration of land records across any of the Schedule VIII languages will also be rolled out.
- The adoption or linkage with National Generic Document Registration System (NGDRS) with the 'One-Nation One-Registration Software' will be promoted as an option for a uniform process for registration and 'anywhere registration' of deeds & documents.
Telecom-Communication
- Required spectrum auctions will be conducted in 2022 to facilitate the rollout of 5G mobile services within 2022- 23 by private telecom providers.
- To enable affordable broadband and mobile service proliferation in rural and remote areas, five per cent of annual collections under the Universal Service Obligation Fund will be allocated.
- The government's vision is that all villages and their residents should have the same access to e-services, communication facilities, and digital resources as urban areas and their residents.
- The contracts for laying optical fibre in all villages, including remote areas, will be awarded under the Bharatnet project through PPP in 2022-23. Completion is expected in 2025. Measures will be taken to enable better and more efficient use of optical fibre.
Defence
- 68 per cent of the capital procurement budget will be earmarked for the domestic industry in 2022-23, up from 58 per cent in 2021-22.
- Defence R&D will be opened up for industry, startups and academia with 25 per cent of defence R&D budget earmarked.
- Private industry will be encouraged to take up the design and development of military platforms and equipment in collaboration with DRDO and other organizations through SPV model.
- An independent nodal umbrella body will be set up for meeting wide-ranging testing and certification requirements
Energy Transition and Climate Action
- To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of ` 19,500 crore for Production Linked Incentive for the manufacture of high-efficiency modules, with priority to fully integrated manufacturing units from polysilicon to solar PV modules, will be made.
- The policies and required legislative changes to promote agro forestry and private forestry will be brought in. In addition, financial support will be provided to farmers belonging to Scheduled Castes and Scheduled Tribes, who want to take up agro-forestry.
- As a part of the government's overall market borrowings in 2022-23, sovereign Green Bonds will be issued for mobilizing resources for green infrastructure. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.
Finance related plans
- World-class foreign universities and institutions will be allowed in the GIFT City to offer courses in Financial Management, FinTech, Science, Technology, Engineering and Mathematics free from domestic regulations, except those by IFSCA to facilitate the availability of high-end human resources for financial services and technology.
- An International Arbitration Centre will be set up in the GIFT City for timely settlement of disputes under international jurisprudence. 106. Services for global capital for sustainable & climate finance in the country will be facilitated in the GIFT City.
- Venture Capital and Private Equity invested more than ` 5.5 lakh crore last year facilitating one of the largest start-up and growth ecosystem. Scaling up this investment requires a holistic examination of regulatory and other frictions. An expert committee will be set up to examine and suggest appropriate measures.
- For encouraging important sunrise sectors such as Climate Action, Deep-Tech, Digital Economy, Pharma and Agri-Tech, the government will promote thematic funds for blended finance with the government share being limited to 20 per cent and the funds being managed by private fund managers.
Financing of Investments Fiscal Management
- Measures will be taken to enhance the financial viability of projects including PPP, with technical and knowledge assistance from multi-lateral agencies.
- Enhancing financial viability shall also be obtained by adopting global best practices, innovative ways of financing, and balanced risk allocation.
- Introduction of Digital Rupee, using blockchain and other technologies, to be issued by the Reserve Bank of India starting 2022-23.
- For 2022-23, the allocation for Scheme for Financial Assistance to States for Capital Investment` is 1 lakh crore to assist the states in catalysing overall investments in the economy.
- The total expenditure in 2022-23 is estimated at 39.45 lakh crore, while the total receipts other than borrowings are estimated at ` 22.84 lakh crore.
- The Revised Fiscal Deficit in the current year is estimated at 6.9 per cent of GDP as against 6.8 per cent projected in the Budget Estimates. The Fiscal Deficit in 2022-23 is estimated at 6.4 per cent of GDP, which is consistent with the broad path of fiscal consolidation announced by me last year to reach a fiscal deficit level below 4.5 per cent by 2025-26. While setting the fiscal deficit level in 2022-23, I am conscious of the need to nurture growth, through public investment, to become stronger and more sustainable.
It may be noted that during her budget speech, the Finance Minister said thus:
"Since 2014 our government's focus has been on empowerment of citizens, especially the poor and the marginalised. Measures have included programmes that have provided housing, electricity, cooking gas, and access to water. We also have programmes for ensuring financial inclusion and direct benefit transfers. We are committed to strengthening the abilities of the poor to tap all opportunities. Our government constantly strives to provide the necessary ecosystem for the middle classes – a vast and wide section which is populated across various middle-income brackets – to make use of the opportunities they so desire."
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