The Buyt Desk
The new financial year of 2022-23 is bringing about many changes in the income tax rules. The way you pay your tax and the asset on which you pay tax will have to adhere to new rules. To name a few, your EPF contribution beyond Rs 2.5 lakhs will be taxed, Cryptos will be brought under taxation and a new deadline for filing an updated Income Tax Return will be implemented. Let’s look at 5 major income tax changes that will be effective from the new financial year starting on 1st April 2022.
Tax on Cryptocurrency And Other Virtual Digital Assets – Cryptocurrency is the new talk of the town among investors in India. The Union Budget 2022-23 announced levying income tax on the gains of crypto. There is a provision for a 30% tax on crypto gains which will be effective from the start of the financial year 2022-2023. Those who fall in the 1% TDS category for the gains of crypto will be taxed from 1st July 2022. Furthermore, cryptocurrency or any form of virtual digital asset gift will be taxed as a gift.
VDA Gains Can’t Be Offset By VDA Losses – Gains incurred on virtual digital asset(VDA) trade will come under the 30% tax slab. The loss an investor incurs on VDA cannot be adjusted against any other form of virtual or crypto holdings.
Update ITR After Filing The ITR – The income tax department has added a new subsection in Income Tax Act. This option will let taxpayers file an updated return. It is for removing any error or mistake made in the filed income tax return.
This option allows individuals to update returns within three years from the end of the financial year in which one filed the return. The update returned could be filed whether the individual has filed original/belated ITR or not.
Tax On Provident Fund – The interest earned on contributions above 2.5 Lakhs in the EPF account in the financial year 2021-22 will be taxable. And it will be taxed after that. To calculate the taxable interest in the EPF account, the department will create a separate EPF. The interest earned on the first 2.5 Lakhs will remain unaffected, which means it will not be taxed. The interest earned on over Rs 2.5 Lakh contribution will be taxed. In addition to that, the income received on ULIPs where the yearly premium is over Rs 2.5 Lakhs will also be taxed.
Hike In Tax Exemption On Employer’s NPS Deduction – From the financial year 2022-23, the state government employees can claim a tax benefit of up to 14% on the NPS contribution made by the employer. It was 10% earlier, and the 14% deduction was only for central government employees.
Apart from that, the budget 2021-22 has proposed the launch of the digital rupee. It will be a central bank digital currency. The surcharge on unlisted shares has been reduced to 23% from 28.5%.
