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Even as the middle and salaried class had a high hope over Union Finance Minister's Midas touch in the realm of personal taxes, the cautious Sitharaman didn't affect any change in the tax slabs, nor allowed a hike in the standard deduction.
In a pre-budget survey conducted by reputed research firm KPMG, to a question, Do you expect the Honourable Finance Minister to enhance the basic exemption limit of Rs 2.5 lakh which has remained unchanged for the last few years?
A whopping 64 percent of respondents have answered YES. The overwhelming response speaks all about the 'high' expectations they had from the Budget.
However, as per the Tax proposals in the Budget document, the rates for the year 2021-22 will continue in the assessment year 2022-23. The rates are given below.
Old Regime
• the rate of IT for income over Rs 2.5- 5 lakhs is at 5 percent + 4 percent cess.
• Between Rs 5 lakh - 10 lakhs, the rate is 20 percent + Rs 12,500 + 4 percent cess.
• And for the slab of above Rs 10 lakh , the IT rate is 30 percent + Rs 1, 12,500 + 4 percent cess.
Besides, there can avail deductions like 80C, 80CCD and others etc.
New Regime
• Exemption limit Rs 2.5 lakh
• 5 percent IT rate on income between Rs 2.5 - 5 lakhs
• Above Rs.5 lakh - Rs.7.50 lakh ----- 10% of the total income that is more than Rs.5 lakh + Rs.12,500
• Above Rs.7.50 lakh - Rs.10 lakh ----- 15% of the total income that is more than Rs.7.5 lakh + Rs.37,500
• Above Rs.10 lakh - Rs.12.50 lakh ----- 20% of the total income that is more than Rs.10 lakh + Rs.75,000
• Above Rs.12.50 - Rs.15 lakh ------- 25% of the total income that is more than Rs.12.5 lakh + Rs.1,25,000
• Above Rs.15 lakh ---------- 30% of the total income that is more than Rs.15 lakh + Rs.1,87,500
The New Proposals In 2022:
• A new updated return filing system is proposed wherein a voluntary updated return can be filed within 2 years from the end of the relevant Assessment Year (AY) on payment of additional taxes (25% or 50% of taxes and interest) and applicable interest and fee.
• Presently, buyers of immovable property are required to deduct tax @ 1% on the sales consideration where the same exceeds INR 50 lakhs. An amendment has been made to deduct such TDS on the stamp duty value where the stamp duty value of the property is more than the actual sales consideration.
• The budget proposed to extend the capping of the 15% surcharge on long-term capital gain (LTCG) from any asset. Those taxpayers falling in the income bracket of more than INR 20 million stands to benefit.
• Any payment received from an employer and/or any other person for medical treatment of COVID-19 is proposed to be fully exempt in the hands of the recipient individual. Further, any ex-gratia payment made to the family members of an employee within 12 months from the date of death of such employee on account of COVID-19 is exempt from tax in the hands of the recipient family members without any limit (if paid by the employee of such person) and to the extent of INR 10 lakhs were paid by any other person.
The tax proposals in the budget have received praise from Amit Rana, Partner, PwC, India,
He said, "A new scheme has been introduced in the budget with regard to digital assets. The definition suggests this would include cryptocurrencies, NFTs and similar assets. Any income from such assets will be taxable at the rate of 30 percent. There will be no deduction from any expenses incurred on such transactions, other than the cost of acquiring such assets. Any loss incurred from such transactions cannot be set off against any other income of the taxpayer. In addition, any payments of proceeds to a taxpayer from the sale of such digital assets will require a 1 per cent TDS on transactions above Rs 50,000 in a year. Gifting of digital assets will also be taxable for the recipient.
