Finance Minister Nirmala Sitharaman presented the Union Budget 2022-23 to Parliament today (1 February 2021). The Minister of Finance has not announced any changes to personal income tax brackets and rates. Thus, without changing the rates and slabs of income tax, an individual taxpayer will continue to pay the same tax rate according to the tax regime chosen for the 2022-23 financial year.
Effective April 1, 2020, an individual salaried taxpayer has the option to continue with the old tax regime and benefit from tax deductions/exemptions such as Section 80C, 80D, HRA deductions, LTA tax exemptions, etc. or opt for the new tax. and waiving approximately 70 tax deductions and exemptions. The new tax system offers lower tax rates than the old tax system.
Further, under both schemes, a tax refund of up to Rs 12,500 is available to an individual taxpayer under Section 87A of the Income Tax Act 1961.
Here is an overview of income tax rates and brackets under the old and new tax regime.
|Income tax plates for fiscal year 2022-2023|
|Old tax regime (With deductions and exemptions)||Total income||New tax regime (With deductions and exemptions)|
|None||Up to Rs 2.5 lakh||None|
|5 percent||From 2,50,000 to 5 lakh||5 percent|
She did, however, propose that the tax deduction limit for Center and state employees be increased from 10% to 14%. The move, she said, will help state government employees’ social security benefits and put them on par with central government employees.
The Minister of Finance also proposed a reduction in the business surtax and said that the transfer of any virtual digital assets would be taxed at the rate of 30%. “The business surcharge must be reduced from 12% to 7%. I propose to provide that any income derived from the transfer of any virtual digital asset will be taxed at the rate of 30%. No deduction in respect of any expense or allowance will be allowed when computing this income, except for the cost of acquisition,” she said in her 2022 budget speech.
The budget proposing to tax virtual assets at 30%, Sitharaman said it cannot be mentioned as a replacement for any other income and 1% TDS will be charged additionally on payments made using assets digital to keep track of 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… The digital rupee will be issued using the blockchain and other technologies; to be issued by RBI from 2022-23. This will give a big boost to the economy. »
The Minister of Finance also announced tax relief for persons with disabilities. Parents or guardian can purchase insurance from their disabled children, she said. The payment of an annuity or capital for disabled dependents will be exempt from living, she added.
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