New income tax rule changes applicable from 1 April 2022 as per Finance Bill 2022 tax rule changes applicable from 1 April 2022
New income tax rule changes applicable from 1 April 2022 as per Finance Bill 2022.
Finance Bill 2022 which is knows as Budget recently gets approved by parliament.New income tax rule changd in budge will effective from 1st April 2022.
Let's have a look at the new tax rules effective or this financial year.
There are many changes in the income tax rules effective from this April 2022. Income tax on crypto assets NFT, filing of updated tax returns, new tax rules on EPF interest received, and tax relief on Covid-19 treatment are some of the major changes effective from 1 April 2022.
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| Finance Minister before Budget speech 2022 |
10 major changes in income tax Act effective from 1 April 2022 as per Finance Bill 2022:
1) Crypto Tax
The crypto based asset tax regime in India will gradually roll out in the financial year starting 1st April 2022. Provisions on the 30% tax will be effective at the start of current fiscal year while those related to the 1% Tax deduction will come into effect from 1st July 2022. The 2022-23 Budget has brought in clarity concerning the levy of tac on crypto assets. The threshold limit for TDS would be ₹50,000 a year for specified persons, which includes individuals/HUFs who are required to get their accounts audited under the I-T Act 1961.
2) Crypto Asset received as gifts will be taxable:
Also, if you receive a gift in form of cryptocurrency or NFT or any other virtual digital asset, it would be liable for taxation as a gift on the hands of receiver.
3) Crypto losses cannot be set off against crypto gains with other assets:
The Indian government has prescribed norms for crypto by disallowing losses incurred in a particular digital asset to be set off against income created from another version of a crypto holding. The government won’t allow tax breaks on infrastructure set up costs incurred while mining cryptocoin as it won’t be treated as the cost of acquisition. For instance, if you make a ₹2000 gain on bitcoin and a ₹7000 loss on Ethereum, you have to pay tax on ₹1000 and not on your net loss of ₹5000. Similarly, you cannot set off gains and losses on crypto asset against gains and losses in other assets like stocks, mutual funds or real estate.
4) Filing of updated IT Return
A new provision is being inserted that allows the taxpayers to file an updated return for errors or mistakes done in income tax returns previously filled. Taxpayers can now file an updated tax return within two years from the end of the relevant assessment year.
5) NPS deduction to State government employees
The new provision allows State government employeesto claim deduction under Section 80CCD(2) for NPS contribution made by the employer up to 14% of their basic salary and dearness allowance(DA) , which is at par with the deduction available to the Central government employees under the said section of IT Act.
6) Tax on PF account:
The Central Board of Direct Taxes (CBDT) has decided to implement Income-tax (25th Amendment) Rule 2021 from April 1,2022. This means that a cap of tax-free contributions up to ₹5 lakh is being imposed on the Employee Provident Fund (EPF) account. If the contribution is made above this limit, then the interest income will be taxed as per slab.
7) Surcharge on LTCG
Presently, there is a cap of 15% surcharge on long term capital gain on the sale of listed equity share or mutual funds units. From 1st April 2022, this cap will be extended to long term capital gain on all type of assets.
8) Removal of benefit under section 80EEA
There was an additional deduction on home loan interest upto ₹1.5 Lakh above ₹2 lakh on house properties valued less than ₹45 Lakh for first time home buyers. Finance Bill has not extended this scheme beyond 31st March 2022. So this additional deduction of ₹1.5 Lakh won’t be available from 1st April 2022. Existing deductions on account of home loan interest upto ₹2 Lakh would be continued u/s 24 of Income Tax Act.
9) Tax relief on Covid-19 treatment expenses
As per the Government Press Release on June 2021, tax exemption has been provided to persons who have received money for Covid-19 medical treatment. Likewise, money received as compensation by family members on the death of a person due to Covid will also be exempt up to Rs. 10 lakhs for family members provided such payment is received within 12 months from the date of death of person. This amendment to IT Act will be effective retrospectively from April 1, 2020.
10) Tax relief to persons with disability
The parent or guardian of a disabled person can take an insurance scheme for such a person
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