Union Budget 2022-23 update on Direct Taxation

Union Budget 2022-23 update on Direct Taxation

The union budget 2022 made the following announcements in the Income Tax act –

Assessment relief to assess

The tax slab followed in FY 2022-23 has been carried forward without any amendments in the tax chart. However, the taxpayers who committed some error while filing their ITR can now file an updated ITR within two years from the end of the relevant assessment year.

Surcharge

  • The co-operatives with a total income above Rs 1 crore but less than Rs 10 crore shall be charged a surcharge of 7%. (earlier they had to pay a 12% surcharge)
  • The graded surcharge on the Association of Persons (AOPs) and consortium capped at 15% (earlier they had to pay 37%)
  • The surcharge on LTGC (long-term capital gains) has been capped at 15%. ( earlier they were charged up to 37%)

Health and educations cess

The Finance minister made a crucial announcement regarding the health and education cess. She spelled out that surcharge on income and profits shall not be treated as business expenditure.

International Financial Service Centre (IFSC)       

Union Budget 2022-23 made tax exemptions on -

  •  Income generated by a non-resident from the offshore derivative instruments.
  •  Income generated from royalty received from portfolio management services in IFSC.

Alternate Minimum Tax

The alternate minimum tax paid by the co-operative has been brought down from 18.5% to 15%. This will provide a level playing field to the co-operatives.

National Pension Scheme Contribution

Social security of state government employees has been increased with a rise in employer contribution to the NPS account from 10 percent to 14 percent.

Tax Relief For Differently-Abled

Changes have been made in the previous provisions as now the dependent on a differently-abled person can claim the payments on annuity and lump sum payment during the lifetime of the guardians when they attain the age of 60 Years. 

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