Finance Bill 2022 is nothing else but the Union budget 2022. The budget was brought into notice of common people in February. However post the Lok Sabha approval and President’s approval, the change is gonna be made in the same. There are in all 39 changes to be done in the Union budget. The major ones are related to taxability, income and immovable property. However there are other inclusions as well which can be noticed in the specific union budget article.
The Finance budget is definitely the base for the nation’s planning for the entire year. This gives a clear ideation of which industries are currently focused or what laws are brought in to tackle economic problems. The budget is also a way for influencing the common people through better ideas regarding development.
Budget 2022 was a complete blast for virtual currency. It brought heavy tax on crypto trading and even levied tax on gifting or transferring ownership of the same. These changes can be very easily termed as bias against the crypto market. The reason is the 30% tax slab and lower threshold for set off of profits.
Modifications in the Budget 2022
The Government of India is constantly making efforts to levy heavy tax rates on cryptocurrency. Not only that, the rules and norms followed are also gonna be tightened in future. Virtual Digital Assets like Cryptocurrency and NFT are on the radar of the Finance Ministry and taxes have been heavily laid on them. Not only 30% tax will be levied on them but it would be accompanied by surcharges and cess. The same system is applicable for horse races and speculative transactions.
Along With this taxability the Virtual currencies are burdened with 1% TDS on its payments. The transaction threshold needs to be above 10000 Rs. The TDS limit is set for HUF and individuals of special category. The amount for the same is 50000 Rs.
For making a smooth procedure for transfer of immovable property the government has proposed amendments in 194 Section. Under the same TDS is directly deducted at 1%. However agricultural lands are not included in this category. The only way to avoid paying this tax is the value of property and stamp duty doesn’t add up to 50 Lakh Rs.
Another inclusion was a deduction of 10% TDS for some class of employees. The employees who have more than 25000 Rs in their perquisites are exposed to this deduction. Another income tax relief was provided to parents or guardians of differently abled persons. If the parent or guardian takes an insurance scheme for the differently abled person then they are availed with a lump sum of deduction under Income Tax act.
The Indian market is definitely moving ahead in good space. With such strong laws on cryptocurrency the money that was having a potential of investment in those assets would be diverted back to Indices. Hypothetically the situation arises where a person needs to diversify his or her portfolio then anyone would definitely want to invest into a less tax burdened investment Investing into real estate currently is also a headache if the amount is above 50 Lakh Rs. Also the Cryptocurrency or any virtual currency investment above 10000 Rs is taxable and only 50000 Rs deduction available for special class of HUF and individuals. Hence all together it is very difficult to think about investing into such options.
Also one needs to evaluate the future market trend. The art of cryptocurrency has lately been off track due to the uncertain rise and fall in the crypto prices. This is due to the volume fluctuations and manipulation from some big bulls. However one needs to understand that the stability of the market can be trusted more above the stability of Virtual Currency. This is the concept that the government wants its people to understand through all these restrictions.
No major changes were noticed inside the bill. People were definitely expecting some reliefs on income tax and tax slabs. However such changes were not provided. Along With this the government added more 30% taxes and TDS applicable on certain modes of income and investment. With such stringent policies the government is trying to control the flow of money into one direction.
Also the monetization plan of the Indian government is taking its full throttle with the latest acquisition by Tata of Air India. The LIC IPO is on its way. The IPO was delayed due to the war situation and also the COVID Crisis. Once the IPO gets launched it would be one of the biggest plans for the Indian government to add money into its monetization wallet. The future goal for all such investment gathering is to develop the infrastructure locally and promote business at maximum potential. Hence with less amendments in needed segments the bill was passed for the year 2022.