Highlights of Union Budget 2022-23.

Highlights of Union Budget 2022-23 in Direct Tax (Income Tax, TDS) & Indirect Tax (GST)

Highlights of Union Budget 2022-23.

1. General:

  • Economic Growth to be 9.2% for FY 2022-23
  • Railways to develop projects for MSME small businesses
  • ECLGS Scheme extended till March 2023
  • E-Passports will be rolled out in FY 2022-23
  • Battery swapping policy will be implemented
  • SEZ will be replaced with new legislation
  • RBI to issue digital Rupee in FY 2022-23


2. Direct tax:

  • New updated Tax Return Forms
  • Updated ITR can be filed within 2 years from the end of relevant AY.
  • Reduce AMT for Cooperative Society from 18.5% to 15% & Surcharge reduced from 12% to 7%.
  • Tax relief for person with disability.
  • Tax deduction limit to NPS Account by state government employees raised to 14% from 10% in line with Central Government employees.
  • Gain on Virtual Digital Asset (VDA) taxed @ 30%. No deduction allowed and no set off allowed.
  • TDS @ 1% on transfer of VDA.
  • Surcharge on LTCG capped at 15%.
  • No set off of loss with the income arises during search operations.
  • Date of tax incentive for startup extended to March 2023.


3. GST Proposals:

  • Time-limit to avail ITC u/s 16(4) extended till 30th November of next year.
  • Additional Condition for availment of ITC u/s 16(2)- ITC can be availed only if the same is not restricted in GSTR-2B.
  • Composition Tax Payer’s Registration can be cancelled suo-moto if they have not filed their GSTR-4 return beyond 3 months from the due date.
  • Credit Notes in respect of supply made in a financial year can be issued by 30th November of next financial year.
  • Any rectification of error in GSTR-1/ GSTR-3B is now permitted till 30th November of next financial year.
  • The two-way communication process in filing GST returns is scrapped.
  • The due date for filing return by non-resident taxable person is prescribed as 13th day of next month.
  • Section 41 of the CGST Act is being substituted so as to do away with the concept of avail of ITC on a provisional basis.
  • Section 47 of the CGST Act is being amended so as to provide for levy of late fee for delayed filing of TCS returns.
  • Section 49 of the CGST Act is being amended so as to provide for restrictions for utilizing the amount available in the electronic credit ledger.
  • Section 49 of the CGST Act is being amended so as to allow transfer of amount available in E- cash ledger of a registered person to the E- cash ledger of a distinct person;
  • Section 49 of the CGST Act is being amended so as to provide for prescribing the maximum proportion of output tax liability which may be discharged through the electronic credit ledger.
  • Section 50(3) of the CGST Act is being substituted retrospectively, with effect from the 1st July, 2017, so as to provide for levy of interest on input tax credit wrongly availed and utilized. (Meaning thereby Interest will not be levied if ITC is not utilized)
  • Refund claim of any balance in the electronic cash ledger shall be made available.
  • Rate of Interest u/s 50(3) prescribed as 18% in all cases.
  • Additional Condition for availment of ITC u/s 16(2)- ITC can be availed only if the same is not restricted in GSTR-2B.
  • Composition Tax Payer’s Registration can be cancelled suo-moto if they have not filed their GSTR-4 return beyond 3 months from the due date.
  • Credit Notes in respect of supply made in a financial year can be issued by 30th November of next financial year.
  • Any rectification of error in GSTR-1/ GSTR-3B is now permitted till 30th November of next financial year.
  • The two-way communication process in filing GST returns is scrapped.
  • The due date for filing return by non-resident taxable person is prescribed as 13th day of next month.
  • Section 41 of the CGST Act is being substituted so as to do away with the concept of avail of ITC on a provisional basis.
  • Section 47 of the CGST Act is being amended so as to provide for levy of late fee for delayed filing of TCS returns.
  • Section 49 of the CGST Act is being amended so as to provide for restrictions for utilizing the amount available in the electronic credit ledger.
  • Section 49 of the CGST Act is being amended so as to allow transfer of amount available in E- cash ledger of a registered person to the E- cash ledger of a distinct person;
  • Section 49 of the CGST Act is being amended so as to provide for prescribing the maximum proportion of output tax liability which may be discharged through the electronic credit ledger.
  • Section 50(3) of the CGST Act is being substituted retrospectively, with effect from the 1st July, 2017, so as to provide for levy of interest on input tax credit wrongly availed and utilized. (Meaning thereby Interest will not be levied if ITC is not utilized)
  • Refund claim of any balance in the electronic cash ledger shall be made available.
  • Rate of Interest u/s 50(3) prescribed as 18% in all cases.

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