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Highlights of Union Budget 2022-23

Highlights of Union Budget 2022-23

Highlights of Union Budget 2022-23 | Union Budget
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Union Budget has been an annual event everyone attends with full of expectations. This year too, a host of expectations had been put forth by the taxpayers from all corners.

However, the budget seems to be focusing in a broad and specific direction.

Union Budget 2022-23 seems to be focused on tackling modern challenges and capital expenditure more than individual sweet pies. Here are the key highlights of the Union Budget 2022-23 tabled today in the parliament.

Economic Scenario

Economic growth for the financial year 2022-23 has been projected at 9.2% against the negative 8% of the last year.

General & Infrastructure Push

This was the second paperless budget after the Pandemic Union Budget of 2021-22. This union budget aims to push infrastructure and adaptation of next-generation tech in the country with the following changes:

a) Railways to develop projects for Medium, Small and Micro Enterprises (MSME)
b) ECLGS (Emergency Credit Line Guarantee Scheme) extended till March 2023
c) E-Passports will be rolled out in FY 2022-23
d) Push to the next stage of EV adaptation in the country with Battery Swapping Policy, will be implemented within next FY
e) SEZ (Special Economic Zones) will be replaced with new legislation
f) Good news for homebuyers with the allocation of Rs 48,000 crores for completion of housing projects

Direct Tax Proposed Changes

Although the Union Budget 2022 has left the primary body of direct taxes untouched, many small yet far-reaching changes have been announced. A few of such prominent changes are given below:

1. ITR Filing

Now you can file updated returns within the next two years after the Assessment Year with the additional tax.

2. Corporate Tax & Cooperative Societies

Corporate and cooperative societies now have at par direct tax rates with the following changes:

a) MAT for cooperative societies reduced to 15% from 18.5%
b) Surcharge reduced to 7.5% between 1 crore to 10 crore
c) Corporate Surcharge reduced to 7% from 12%

Also Read about - Corporate Tax

3. Digital Assets

With digital currencies pushing their way into the mainstream economies, the government seems to be taking the initiative to bring the control back. Following tax reforms should push digital currencies to mainstream:

a) RBI will issue digital Rupee in FY 2022-23
b) Gains from Digital Assets taxable at 30%
c) Losses cannot be set off against any other income

4. Soaps for Individual Taxpayers

Only government employees and differently-abled have been awarded some additional tax deduction limits. Following are the key updates from Union Budget 2022:

a) Higher deduction for differently-abled
b) NPS deduction for state govt employees up to 14% from 10%

5. Capital Gains

Capital gain changes are another small step towards making start-up world investments flow faster. Following changes should improve investor churn in the start-up world:

a) Surcharge on unlisted shares reduced from 28.5% to 23%
b) Long term capital gains to be taxed at 15%, reduced from 20% (after indexation)

Other Changes Announced in Union Budget 2022-23

India has been a leader in jewellery manufacturing and gem cutting for more than a decade now. The reduction in customs duty to 5% for polished diamonds and gems in the Union Budget announcements should improve export opportunities for Indian jewellery and gemstone producers.

What has Remained Unchanged in Union Budget 2022?

Against the popular expectations the following primary direct tax heads have been left unchanged again by the Union Budget 2022:

a) Income Tax Slabs
b) Deductions from gross total income
c) Standard deduction
d) Taxation of Short-Term Capital Gains

Choose your Income Tax Slab Carefully

After the Union Budget 2019-20, as an individual taxpayer, you have two income tax slab options. While the old tax regime continues to serve with deductions from gross total income and standard deduction, the new tax regime doesn’t.

Thus, you have the responsibility to figure out the minimum tax liability regime for your income and taxpayer status.

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