Finance Minister Nirmala Sitharaman presented Union Budget 2022-23 in Parliament today (February 1, 2022). The Finance Minister announced no change in personal income tax slabs and rates. Thus, with no change in the income tax rates and slabs, an individual taxpayer will continue to pay the same rate of tax depending on the tax regime chosen for FY 2022-23.
Effective from April 1, 2020, an individual salaried taxpayer has been given the option to continue with the old tax regime and avail deductions/tax exemptions such section 80C, 80D deductions, HRA, LTA tax exemptions etc. or to opt for the new tax regime and forgoing approximately 70 deductions and tax exemptions. The new tax regime offers lower tax rates as compared to the old tax regime.
Further, under both the regimes, a tax rebate of up to Rs 12,500 is available to an individual taxpayer under section 87A of the Income-tax Act, 1961. Here is a look at income tax rates and slabs under both the old and new tax regimes.
She, however, proposed that both Centre and states government employees’ tax deduction limit should be increased from 10 per cent to 14 per cent. The move, she said, will help the social security benefits of state government employees and bring them at par with the Central government employees.
The Finance Minister also proposed a reduction in corporate surcharge and said that the transfer of any virtual digital asset shall be taxed at the rate of 30 per cent. “Corporate surcharge to be reduced from 12 per cent to 7 per cent. I propose to provide that any income from the transfer of any virtual digital asset shall be taxed at the rate of 30 per cent. No deduction in respect of any expenditure or allowance shall be allowed while computing such income, except the cost of acquisition,” she said in her Budget 2022 speech.
With the Budget proposing taxing virtual assets at 30 per cent, Sitharaman said that it cannot be mentioned as a replacement of any other income and 1 per cent TDS to be charged further on payments made using digital assets to keep a track on transactions.
She added, “To provide an opportunity to correct an error, taxpayers can now file an updated return within 2 years from the relevant assessment year…Digital rupee to be issued using blockchain and other technologies; to be issued by RBI starting 2022-23. This will give a big boost to the economy.” The Finance Minister also announced tax relief for persons with disabilities. The parents or guardian can take insurance from their children with disabilities, she said. The payment of annuity or lump sum for disabled dependent will be exempted during the lifetime, she added