1. INCOME TAX RATES
- Income Tax Rates and slab rates are proposed to remain the same.
- Surcharge of Co-operative society has been proposed to reduce to 7% (from the earlier rate of 12%) for Societies having Total income more than Rs. 1 crore but less than Rs 10 crore.
- Alternate Minimum Taxation of Co-operative Society has been proposed to reduce to 15% from 18.5%.
- Surcharge of 12% has been proposed to be levied on Transfer Pricing, Buy Back and Exit Tax (In case of Trust)
- Surcharge on AOPs have been proposed to be capped at 15%. Similarly, Surcharge on Long Term Capital Gains has also been proposed to be capped at 15%.
2. 30% TAX ON VIRTUAL DIGITAL ASSET
- Income from Transfer/ sale of virtual or digital assets has been proposed to be taxed at 30% under section 115BBH w.e.f 1st April,2023. No expenditure except Cost of Acquisition shall be allowed to be reduced while calculating such income.
- No set off would be allowed on any loss arising from transfer of virtual digital asset against any other income computed under any other provision of the Act and such loss shall not be allowed to be carried forward to subsequent assessment years.
- Gifting of virtual digital assets is also proposed to be covered under section 56(2)(x). Such gift is proposed to be taxable in hands of the recipient.
- TDS at the rate of 1% on Transfer/ sale of Virtual Digital Assets has to be deducted by the receiver. The same is discussed below.
- Virtual Digital Assets includes any information or code or token generated via Cryptographic means, Non-Fungible Token or any other digital asset as may be notified.
3. TDS SECTIONS
Section 194IA: Rationalization of provisions of TDS on sale of immovable property- introduction of stamp duty value for deduction of 1% TDS
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- TDS is proposed to be deducted at the rate of 1% of purchase consideration or the stamp duty value of such property, whichever is higher.
- No TDS is proposed to be deducted in case the consideration paid and the stamp duty value of such property are both less than fifty lakh rupees.
Section 194R: TDS on benefit or perquisite of a business or profession
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- Section 194R is proposed which requires deduction of TDS at 10% on Value or Aggregate Value of benefits or perquisites provided to resident person, exceeding Rs. 20,000/- w.e.f 01st July, 2022
- Provided it does not apply to Individuals or HUF whose total sales, gross receipts or turnover does not exceed one crore rupees in case of business or fifty lakh rupees in case of profession
Section 194S: TDS on Transfer of Virtual or Digital Assets
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- Section 194S is proposed which requires deduction of TDS of 1% on transfer of Virtual Digital Assets even if such consideration is wholly in kind or partly in kind and partly in cash w.e.f 01st April, 2023.
Section 206AB & 206CCA
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- TDS/ TCS is to be deducted at higher rates by deductor for Specified Persons who have not filed Income Tax Returns for 2 previous years, time limit for filing return under section 139(1) is expired and aggregate TDS or TCS is Rs 50,000/- or more in each of the 2 previous years. Specified Person does not include Non-resident person. The same is proposed to replace 2 previous year to previous year.
- It shall not apply to TDS on Salary, Lottery, Horse Riding, Income in respect of Securitization Trust and Cash Withdrawal in excess of Rs 1 Crore.
- Higher Rate for TDS shall be highest of:
- Twice the rate specified for the Act or
- Twice the rate in force or
- At rate of 5%
- Higher Rate for TCS shall be highest of:
- Twice the rate specified for the Act or
- At rate of 5%
4. COVID RELIEF
- Sum received for treatment of any illness related to Covid-19 of an individual or family member is proposed to not be treated as Income of that individual under Section 56(2)(x) w.e.f 1st April, 2020.
- Any sum of money received by member or employer of Deceased person not exceeding Rs Ten lakhs, where cause of such death is illness relating to Covid-19, within 12 months of death is proposed to not be treated as income of such person w.e.f 1st April, 2020.
5. PERIOD OF UPDATION OF TAX RETURNS
- The Taxpayers are proposed to be allowed to update tax return u/s 139(8A) within Two years from the end of relevant assessment year as compared to One year from end of relevant assessment year.
- This is applicable only if there has been any omitted income and additional taxes are liable to be paid. But in such cases, additional Income Tax is liable to be paid at 25% if filed within 12 months from relevant assessment year and 50% if filed after 12 months under section 140B.
6. INCENTIVES FOR START-UPS
- The period of incorporation has been proposed to be extended to 31st March, 2023 (earlier it was 31st March, 2022) for Eligible Start-ups to avail tax benefit under section 80-IAC.
7. INCENTIVES UNDER CONCESSIONAL TAX REGIME
- The date for commencing production or manufacturing under section 115BAB has been proposed to be extended to 31.03.2024 from 31.03.2023.
- The rates under 115BAB is a total of 17.16% including surcharge and cess.
8. OTHERS
- Any surcharge and cess levied on income are proposed to be disallowed as business expenditure u/s 37.
- Tax Deduction limit is proposed to be increased from 10% to 14% on employer’s contribution to National Pension Scheme accounts of State Government Employees
- Earlier there was no clarity about set off of Brought forward losses against Undisclosed Income which now is proposed to not allow as set off.
- Reduction of amount of goodwill of a business or profession from block of assets has been proposed to be deemed to be transfer under Section 50 w.e.f 1st April,2021.
Feb 02, 2022 - Blog - Team SSB
