Indian Budget 2022 Presentation, Analysis

Budget 2022 Highlights

Taxes in General

1. Fiscal deficit in BE 2022-23 is pegged at 6.4%. Fiscal deficit in current year is 6.9% of GDP as against 6.8% projected in budget estimates last year
2. India's economic growth in the current year is estimated to be 9.2% which is highest among all large economies

Income Tax

1. Updated ITR returns: Taxpayers can file updated returns on payment of additional tax . Updated Returns can be filed within 2 years from the end of the relevant Assessment year.
   Exceptions
   • Updated returns cannot be filed if there is loss
   • Updated returns cannot be filed if it has the effect of decreasing the tax liabilitywhich was already filed in earlier income tax returns
   • Updated returns cannot be filed if it results In refund or increase in refund which was already filed In earlier income tax returns


2. Taxation of Virtual Digital Assets: Income from transfer of any virtual digital asset shall be taxed @ 30%. No deduction in respect of expenditure except Purchase cost is allowed . Losses from transfer of Virtual digital Assets cannot be adjusted against any other income.
3. Gift of Virtual Digital Asset is proposed to be taxed in the hands of recipient
4. TDS needs to be deducted @ 1% on payments made in relation to transfer of virtual digital assets. Section 194S is inserted in Income Tax Act


5. Surcharge on Long Term Capital gains arising on transfer of any type of assets is capped @ 15%. This step will boost the start up community
6. TDS @ 10% needs to be deducted on benefit of perquisite in respect of business or profession if the aggregate value of such benefits exceeds 20000 during the financial year
7. The Period of incorporation of eligible startup is extended by 1 more year i.e., 31st Mar 2023. Startups incorporated before 31st Mar 2023 can get the tax incentives for 3 consecutive years out of ten years from incorporation.
8. Tax Deduction limit on employers contribution to NPS account of State Government employees to be increased from 10% to 14%. This will provide equal treatment to both central and State Govt Employees
9. Tax Relief to allow the payment of annuity and lumpsum amount to the differently abled dependent during the lifetime of parents/guardians i.e., on parents/guardians attaining the age of 60 years


10. Surcharge on Co-operative societies has been reduced to 7% from 12% for those having total income of more than 1 crore and upto 10 crores
11. AMT for Co-Operative Society has been reduced from 18.5% to 15%

for NRIs

No Changes or new rules has been notified for NRI's

GST

1. No major changes in Income Tax or GST
2. Finance Minister has appraised the taxpayers for growth in GST as they adapted to the changes contributed to the cause by paying taxes

Customs Duty

Customs Duty rationalisation to promote domestic production. Promoting domestic manufacturing and helping India get onto global value chain and export better.

• Reforms in Customs Administration of SEZ to be introduced. This will ease doing business by SEZ units Considerably
• Budget 2022 provides for phasing out of concessional rates in capital goods and project imports gradually and apply a moderate tariff of 7.5%
• Rationalization of exemptions on implements and tools for agri sector manufactured in India will be undertaken
• Customs duty exemption to steel scrap will be extended
• Unblended fuel will attract additional differential excise duty.
• Duty is being reduced on certain inputs required for shrimp aquaculture so as to promote its exports
• To incentivise exports, exemptions are being provided on items such as embellishment, trimming, fasteners, buttons, zipper, lining material, specified leather, furniture fittings and packaging boxes that may be needed by bonafide exporters of handicrafts, textiles and leather garments, leather footwear and other goods
• Duty on umbrellas is being raised to 20 percent
• Customs duty on cut and polished diamonds and gemstones is being reduced to 5 percent. Simply sawn diamond would attract nil customs duty
• To disincentivise import of undervalued imitation jewellery, the customs duty on imitation jewellery is being prescribed in a manner that a duty of at least 400 per Kg is paid on its import
• Duty concessions are also being given to parts of transformer of mobile phone chargers and camera lens of mobile camera module and certain other items. This will enable domestic manufacturing of high growth electronic items

Minimum Government & Maximum Governance

1. There are new budget allocation in this category.

Innovation, R&D

1. Delivery of Digital and Hi-tech services to farmers in PPP Mode
2. Defence R&D will be opened up for industry, startups and academia with 25% of defence R&D budget earmarked
3. Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems have immense potential to assist sustainable development at scale and modernize the country
4. RBI to introduce Digital rupee using Block Chain and other technologies
5. Four pilot projects for coal gasification and conversion of coal into chemicals required for the industry will be set-up to evolve technical and financial viability

Reinvigorating Human Capital

1. A Digital University will be established to provide access to students across the country for world class quality education
2. High Quality e-content will be developed in all spoken languages for delivery thru internet, mobiles, TV and Radio through Digital Teachers
3. 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.
4. 750 virtual labs in science and mathematics, and 75 skilling e-labs for simulated learning environment, will be set-up in 2022-23 in Vocational Courses

Infrastructure

1. Chemical-free Natural Farming will be promoted throughout the country.
2. A rationalised and comprehensive scheme to increase domestic production of oilseeds will be implemented
3. Use of Kisan Drones will be promoted for crop assessment, digitization of land records, spraying of insecticides, and nutrients
4. Udyam, e-Shram, NCS and ASEEM portals will be interlinked
5. One Station-One Product’ concept will be popularized to help local businesses & supply chains
6. Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will be revamped with required infusion of funds
7. Skilling programmes and partnership with the industry will be reoriented to promote continuous skilling avenues, sustainability, and employability. The National Skill Qualification Framework (NSQF) will be aligned with dynamic industry needs
8. Digital Ecosystem for Skilling and Livelihood – the DESH-Stack eportal – will be launched
9. Startups will be promoted to facilitate ‘Drone Shakti’ through varied applications and for Drone-As-A-Service (DrAAS)
10. 75 Digital Banking Units (DBUs) in 75 districts of the country are proposed to be set up by Scheduled Commercial Banks
11. Issuance of e-Passports using embedded chip and futuristic technology will be rolled out in 2022-23
12. Telecommunication in general, and 5G technology in particular, can enable growth and offer job opportunities. Required spectrum auctions will be conducted in 2022 to facilitate rollout of 5G mobile services within 2022- 23 by private telecom providers

Health

1. National Digital health eco system will be rolled out.
2. National Tele mental health programme will be launched. This will include a network of 23 tele mental health centres of excellence.
3. Mission Shakti, Mission Vatsalya, Saksham Anganwadi & Poshan 2.0 to be launched. These will provide integrated benefits to Women and Children.

4 Pillars on which #Budget2022 Prepared

1. PM GatiShakti (Economic growth and Sustainable Development)
2. Inclusive Development
3. Productivity Enhancement & Investment, Sunrise Opportunities, Energy Transition, and Climate Action
4. Financing of Investments