New income tax changes announced in Budget 2022

While presenting the Union Budget on Tuesday, Finance Minister Nirmala Sitharaman proposed no change in income tax slabs. She, however, proposed that both Centre and states government employees’ tax deduction limit be increased from 10% to 14%. The move, she said, will help the social security benefits of state government employees and bring them at par with the Central government employees.

Nirmala Sitharaman, the Finance Minister, announced that the government will allow a one-time window to remedy omissions in income tax returns (ITRs) that have been filed. An updated return on payment of taxes can now be filed within two years after the end of the relevant assessment year, according to a new tax law announced by Finance Minister, which will apply to taxpayers.

1. Relief for taxpayers by filing the ITR with mistakes
   Within two years of the relevant assessment year, taxpayers can file a revised ITR. The FM added that this new rule will ensure that taxpayers file their taxes on their own and limit the amount of litigation.
   Tax law is now incorporating the idea of 'trust-based governance.' New provisions have been announced to file an updated return to modify and pay appropriate taxes, which can be filed within two years of the relevant assessment year if there are errors or omissions therein.
      
2. 30% tax is levied on digital asset profits.
   The finance minister has announced a 30 per cent tax on virtual/digital asset profits. There are no deductions other than the purchase price. The major target are the new generation assets like cryptocurrencies and NFTs. No set-off losses provided are an attempt to discourage transactions in financial markets
     
3. NPS 
   Contributions to the NPS by state government employees are now eligible for a tax deduction of up to 14% of their salaries. This brings the state government employees on par with central government employees on this deduction. The private sector employees are extended this benefit.
     
4. Payments for the transfer of digital assets will bear 1% TDS
   The Finance Minister also proposed to provide for TDS on payment made in relation to transfer of virtual digital assets at the rate of 1 per cent of such consideration above a monetary threshold. The gift of virtual digital assets has also been proposed to be taxed in the hands of the recipient.
     
5. Long term capital gains to be subject to surcharge only at 15% for all assets
   All assets will be subject to a flat 15 per cent tax on long-term capital gains. Listed shares and units of mutual funds are the only ones eligible for this feature currently 
      
6. Relief from income tax on Covid-19 treatment costs and rewards
   Those who have gotten financial assistance for Covid 19 treatment have received assistance. up to a maximum of 10 lakhs for family members who receive money in the event of the death of a person would be free from taxes 
     
7. Tax relief to persons with disability
   The parent or guardian of a differently-abled person can take an insurance scheme for such person. The present law provides for a deduction to the parent or guardian only if the lump-sum payment or annuity is available to the differently-abled person on the death of the subscriber i.e. parent or guardian.