The Union Budget 2022-23 has kept income tax slabs unchanged while allowing tax payers two years to file their returns.

Union Finance Minister Nirmala Sitharaman on Tuesday while presenting budget proposals said the government’s objective was to further simplify the tax system, promote voluntary compliance by taxpayers, and reduce litigation.

She introduced ‘Updated return’ to provide taxpayers an opportunity to correct errors while filing returns or not reporting certain transactions.

“I am proposing a new provision permitting taxpayers to file an Updated Return on payment of additional tax. This updated return can be filed within two years from the end of the relevant assessment year,” she said.

With this proposal now, there will be a trust reposed in the taxpayers that will enable the assessee herself to declare the income that she may have missed out earlier while filing her return, she said.

“It is an affirmative step in the direction of voluntary tax compliance,” she said.

To bring parity between employees of State and Central government she has proposed to increase the tax deduction limit from 10% to 14% on employer’s contribution to the National Pension System (NPS) account of State Government employees as well. This would help in enhancing the social security benefits of the state government employees and bring them at par with central government employees.

To establish a globally competitive business environment for certain domestic companies, a concessional tax regime of 15% tax was introduced by our government for newly incorporated domestic manufacturing companies.

The FM has prosed to extend the last date for commencement of manufacturing or production under section 115BAB by one year i.e. from 31st March, 2023 to 31st March, 2024.

The FM has proposed to cap the Surcharge on consortium of companies at 15% from a graded surcharge of 37% currently.

She has also proposed to cap the surcharge on long term capital gains arising on transfer of any type of assets at 15% from graded surcharge of up to 37% currently.

To track transactions involving businesses passing on benefits to their agents the budget has proposed to provide for tax deduction by the person giving benefits, if the aggregate value of such benefits exceeds ` 20,000 during the financial year.

The budget has proposed to reduce Customs duty on cut and polished diamonds and gemstones to 5%. Simply sawn diamond would attract nil customs duty. To disincentivise import of undervalued imitation jewellery, the customs duty on imitation jewellery has been imposed.

The minister proposed to reduce customs duty on methanol, acetic acid and heavy feed stocks for petroleum refining are being reduced, while duty is being raised on sodium cyanide for which adequate domestic capacity exists. “These changes will help in enhancing domestic value addition,” she said.

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 is being reduced on certain inputs required for shrimp aquaculture so as to promote its exports.

To encourage the efforts for blending of fuel, unblended fuel shall attract an additional differential excise duty of ` 2/ litre from the 1st day of October 2022.

Divya Baweja, Partner, Deloitte India said the budget’s proposal to extend the benefit to long term capital gains arising on the sale of any other capital assets is a welcome move.

On the two-year time for filing of returns he said, “This is an additional recourse available to the taxpayers who missed reporting their correct income in earlier returns, subject to the payment additional tax as prescribed. While these timelines are extended beyond the current provisions of filing the revised return, it is important to note that filing the updated return is likely to prove beneficial in case the updated return is filed within 12 months from the end of the assessment year rather than pushing it to a later date. This provision is a step in the direction to minimize the tax litigation thereby benefitting both the taxpayer and the revenue authorities”.



Source link

Leave a Reply

Your email address will not be published.