Personal Taxes

No Midas touches personal taxes, is aware of new tax proposals for digital belongings

Although the middle and white-collar classes had high hopes for the Union Treasury Secretary’s Midas intervention on personal taxes, the cautious sitharaman did not influence tax rate changes or allow the standard deduction to be increased.

In a pre-budget survey conducted by renowned research firm KPMG, when asked Do you expect the Honorable Finance Minister to increase the basic exemption limit of Rs 2.5 lakh, which has remained unchanged in recent years?

A whopping 64 percent of those surveyed answered YES. The overwhelming response speaks to the “high” expectations they had of the budget.

However, according to the tax proposals in the budget document, the rates for the year 2021-22 will continue in the tax year 2022-23. The prices are given below.

old regime
• The IT rate for income above 2.5 to 5 lakhs is 5 per cent + 4 per cent levy.
• Between Rs 5 lakh and 10 lakh the rate is 20 per cent + Rs 12,500 + 4 per cent cess.
• And for the plate above Rs 10 lakh the IT rate is 30 per cent + Rs 1,12,500 + 4 per cent.
Also, deductions like 80C, 80CCD and others etc. can be availed.

new regime
• Exemption limit Rs 2.5 lakh
• 5 per cent IT rate on income between Rs 2.5 – 5 lakhs
• Over Rs.5 lakh – Rs.7.50 lakh —– 10% of total income that is more than Rs.5 lakh + Rs.12,500
• Above Rs.7.50 lakh – Rs.10 lakh —– 15% of total income that is more than Rs.7.5 lakh + Rs.37,500
• Over Rs.10 lakh – Rs.12.50 lakh —– 20% of total income that is more than Rs.10 lakh + Rs.75,000
• Over Rs.12.50 – Rs.15,000 ——- 25% of total income which is more than Rs.12.5,000 + Rs.1,25,000
• Over Rs.15 lakh ———- 30% of total income that is over Rs.15 lakh + Rs.1,87,500

The new proposals in 2022:
• A new updated levy system is proposed whereby a voluntary updated levy can be filed within 2 years from the end of the relevant year of assessment (AY) against payment of additional tax (25% or 50% of tax and interest) and applicable interest and fee.
• Currently property buyers are required to deduct a 1% tax on the sale price if it exceeds INR 50,000. A change has been made to deduct such TDS from the stamp duty value when the stamp duty value of the property is higher than the actual sale price.
• The proposed budget to extend the 15% cap on Long-Term Capital Gains (LTCG) on all assets. Those taxpayers who fall in the income bracket of more than INR 20 million will benefit.
• It is proposed that all payments received from an employer and/or other individual for COVID-19 medical treatment be fully tax-free in the hands of the recipient. In addition, any voluntary payment made to an employee’s family members within 12 months of that employee’s date of death as a result of COVID-19 is tax-free indefinitely in the hands of the beneficiary family members (if paid by that individual’s employee) and in the amount of 10 lakhs INR was paid by each other person.

Budget tax proposals praised by Amit Rana, Partner, PwC, India,

He said: “A new system regarding digital assets has been introduced into the budget. The definition suggests that this would include cryptocurrencies, NFTs and similar assets. All income from such assets is taxed at a rate of 30 percent. There will be no deduction for expenses incurred in such transactions, other than the cost of acquiring those assets. Losses from such transactions cannot be offset against other income of the taxpayer. It also requires payments of proceeds to a taxpayer from the sale of such digital assets a 1 percent TDS on transactions over Rs 50,000 in a year. Gifting of digital assets is also taxable for the recipient.

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