Disappointment on Income tax, 30% tax on virtual currency -- Understanding Union Budget 2022 in 10 quick points

New Delhi: Finance Minister Nirmala Sitharaman on Tuesday unveiled a bigger Rs 39.45 lakh crore Budget, with higher spending on highways to affordable housing with a view to fire up the key engines of the economy to sustain a world-beating recovery from the pandemic.

Here's decoding the Union Budget 2022 in 10 quick points that directly impacts the common man

1. FM has proposes to permit taxpayers to file an updated return on payment of additional tax within two years from the end of the relevant assessment year. This would give the taxpayers an opportunity to correct any omissions or mistakes in correctly estimating their income for tax payment.

2. One percent TDS will apply on a non-agriculture immovable property of over Rs 50 lakh on the basis of sale price or the stamp duty value, which ever is higher, after an amendment in the Income Tax Act. Currently, the TDS is deducted basis only the consideration value of the immobile properties.

3. Tax deduction limit increased from 10 percent to 14 percent on employer`s contribution to the NPS account of State Government employees.

4. Sitharaman announced that income from the transfer of any virtual digital asset shall be taxed at a rate of 30 percent, a move seem to bring cryptocurrency transactions under the tax net.

5. Finance Minister also announced the imposition of 1 per cent TDS on payment made in relation to the transfer of virtual digital assets. The move is aimed to capture the transaction details in digital currency. Gift of virtual digital asset is also proposed to be taxed in the hands of the recipient.

6. Sitharaman clarified that the proposed tax will be levied on any income from the digital assets and the government has not taken any stand on the legality of cryptocurrencies per se."We are not taxing currency that`s yet to be issued. Cryptocurrencies are not currencies. RBI is going to issue its digital currency, everything outside is assets created by individuals," she said.

7. FM in her budget speech also announced the introduction of Digital Rupee to be issued by the Reserve Bank of India starting 2022-23. She said Central Bank Digital Currency (CBDC) will give a big boost to the digital economy. The minister said the digital currency will also lead to a more efficient and cheaper currency management system and it will use blockchain and other technologies. 

8. Sitharaman announced a provision of Rs 2.37 crore for direct payment for MSP value in the Union Budget 2022-23.

9. FM announced that ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to total cover of Rs 5 lakh crore.

10. FM Sitharaman proposed to extend the period of incorporation of eligible startups by one more year till March 31, 2023 for providing tax incentives, a move aimed at encouraging budding entrepreneurs.