1、Union Budget 2022Tax and Policy HighlightsUnion Budget 2022Macro FiscalReal and nominal GDP growth rates are estimated at 8-8.5% (Economic Survey) and 11.1% (Union Budget 2022) respectively for FY23.Total expenditure growth is estimated at 7.4% in FY22 and 4.6% in FY23.There is a focus on uplifting

2、capital expenditure, that is estimated to grow by 41.4% in FY22 and by 24.5% in FY23.As a proportion of GDP, centres capital expenditure is budgeted at 2.9% of GDP in FY23, the highest since at least FY09. Together with the provision made for creation of capital assets through grants-in-aid to State

3、s, effective capex of the Central Government is estimated at INR10.68 lakh crore in FY23, which will be about 4.1% of GDP.INR 1 lakh crore allocated to States for capex in FY23 as 50-year interest-free loans, over and above normal borrowings allowed to States.Revenue expenditure growth is estimated

4、to be low at 2.7% in FY22 and is budgeted to fall to 0.9% in FY23.Within revenue expenditure, there is a significant increase in committed interest payments. Interest payments relative to revenue receipts is expected to increase to 42.7% in FY23, the highest since at least FY09. Growth in Centres gr

5、oss tax revenues is estimated at 24.1% in FY22, slowing to 9.6% in FY23.Accordingly, tax revenue buoyancy is estimated at 1.4 in FY22 and 0.9 in FY23.Fiscal deficit in the current year is estimated at 6.9% of GDP, a marginal slippage from the budgeted target.The Budget signals a return to fiscal con

6、solidation with fiscal deficit reducing to 6.4% of GDP in FY23. This is estimated to gradually reduce to nearly 4.5% by FY26. The quality of fiscal deficit, as indicated by the ratio of revenue deficit to fiscal deficit, shows an improvement in FY23. This ratio stands at 59.6%, the lowest since FY17

7、.HighlightsGovernment Capex24.5% IncreaseFY22 Fiscal Deficit 6.9% of GDPFY23 Fiscal Deficit 6.4% of GDPBudgeted nominal growth at 11.1% in FY23Union Budget 2022Digital Rupee to be rolled out by the RBI in 2022-23 via Blockchain and other Technologies.The share of domestic capital procurement in Defe

8、nce is budgeted to increase to 68% in 2022-23 from 58% in FY22 to reduce dependence on imports.Emergency Credit Line Guarantee Scheme to be extended up to March 2023. Its guarantee cover is expanded to INR5 lakh crore, with a focus on the hospitality and related enterprises. Allocation of INR60,000

9、crore has been made under Har Ghar, Nal Se Jal with an aim to cover 3.8 crore households in 2022-23.INR48,000 crore is allocated under PM AwasYojana for construction of 80 lakh houses in 2022-23. Sunrise Opportunities identified are artificial Intelligence, Geospatial Systems and Drones, Semiconduct

10、or and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility System. Infrastructure impetus through PM GatiShakti National Master Plan: focus on development of transport infrastructure aligned with the National Infrastructure Pipeline. The National Highways ne

11、twork will be expanded by 25,000 km in 2022-23 with INR20,000 crore of additional resources mobilized through innovative financing to complement public resources.Additional allocation of INR19,500 crore towards PLI for manufacture of high efficiency modules so as to achieve the targeted increase in

12、solar capacity by 2030.Battery swapping policy will be formulated to strengthen EV ecosystem.Infrastructure status to Data Centres and Energy Storage Systems including dense charging infrastructure and grid-scale battery systems.HighlightsSunrise Opportunities AI, Drones, Genome, Space, Pharma, Clea

13、n EnergyPM Gati Shakti Master PlanCredit Guarantee extended to MSMEsKey Highlights Other Union Budget 2022Corporate TaxationNew regime for taxation of virtual digital assets (VDA) :VDA to mean any information, code, number or token (not being Indian currency or any foreign currency), generated throu

14、gh cryptographic means and includes non fungible token or tokens (NFTs) of similar nature.Income from transfer of VDA taxable 30% effective from FY 2022-23.No deduction to be allowed on computation of income, except cost of acquisition of VDA.Loss arising from transfer of VDA can neither be set off

15、against any income, nor carried forward to subsequent years .Withholding to apply 1% on payment made for transfer of VDA to resident buyer, where sale consideration is more than or equal to INR 50,000 (for specified individual payers) and INR 10,000 for others. Gift of VDA is also taxable in hands o

16、f recipient.Last date of incorporation for claiming start up incentives is extended by another year i.e., up to 31 March 2023.Last date of commencement of manufacturing or production by new domestic companies for availing15% tax rate is extended by one year to 31 March 2024.Additional incentives in

17、the form of exemptions granted to incentivize operations in IFSC:Income from transfer of offshore derivative instruments or over-the-counter derivatives entered into with offshore banking unit set up in an IFSC.Royalty or interest income received from a unit set up in an IFSC on account of the lease

18、 of a ship, in addition to existing exemption in relation to lease of aircraft.Income of a non-resident from a portfolio of securities or fund maintained with the offshore banking unit set up in IFSC, to the extent such income accrues or arises outside India and is not deemed to accrue or arise in I

19、ndia.Premium on issue of shares in excess of fair value of shares issued to a specified fund set up in an IFSC.Gains from transfer of a ship leased by a unit set up in IFSC.HighlightsDigital asset taxation regimeRationalization of provisionsExtension of incentivesLitigation ManagementUnion Budget 20

20、22It is clarified that expenses incurred for any purpose which is an offence or prohibited by Indian or foreign law (including for the recipient) or for compounding of offences in India or outside India is not allowable. It is clarified, with effect from 1 April 2005, that Health and education cess

21、cannot be allowed as business expenditure. Conversion of interest payable on an existing liability into debenture or any other instrument by which liability to pay is deferred, will not be considered as interest actually paid, not allowed as deduction .No set off allowed of any brought forward loss

22、against any undisclosed income detected during search and survey operations. Option given to file updated tax return within 2 year from end of the relevant assessment year to pay additional tax on undisclosed income.Updated ITR can also be filed even if original ITR was not filed.Concessional rate o

23、f 15% on dividend earned by an Indian company from specified foreign company has been removed, to bring parity in taxation of dividend earned fromdomestic companies.Surcharge on transfer of all long-term capital gains has been capped at 15%.Public sector companies under strategic disinvestment will

24、not lose the benefit of carry forward losses, if the ultimate holding company, immediately after the completion of strategic disinvestment, continues to hold (directly or through its subsidiary(ies) at least 51% of the voting power of the erstwhile public sector company in aggregate.It is clarified

25、that expenditure relating to exempt income shall be disallowed even where exempt income has not accrued, arisen or received during the financial year.HighlightsDigital asset taxation regimeRationalization of provisionsExtension of incentivesLitigation ManagementKey Highlights Corporate TaxationUnion

26、 Budget 2022A payer who has paid taxes under a net of tax arrangement can now make an application to the tax authority for refund of such taxes, if no taxes were deductible by the payer. The order of tax authority will be appealable before appellate tax authority.).Penalties for default in furnishin

27、g of various returns(including withholding tax/tax collection at source) and statements enhanced from INR 100 per day to INR 500 per day New provisions introduced for withholding by a person providing benefit or perquisite to a resident in relation to business or profession carried on by such reside

28、nt.Appeal by tax authority to Appellate Tribunal proposed to be deferred where an identical question of law is pending in appeal before jurisdictional HC or SC and till the same is decided.In case of business reorganization pending before any competent authority, any income tax proceedings/assessmen

29、ts carried on the predecessor entity will be valid, deemed to have been made on the successor entity. Successor entity has been allowed to file modified return for the period between effective date of business reorganization and the date of order of competent authority. HighlightsDigital asset taxat

30、ion regimeRationalization of provisionsExtension of incentivesLitigation ManagementKey Highlights Corporate TaxationUnion Budget 2022Transaction TaxHighlights37%Taxable at30%Surcharge on long term capital gains capped at 15% for Individuals, HUFs, AOPs and BOIs (from the maximum rate of 37% earlier)

31、Dividend stripping provisions to apply for InvITs, REITs and AIF. Bonus stripping provisions extended to cover securities.A new section introduced to tax “virtual digital assets” (VDA) effective 1 April 2023VDA to mean any information or code or number or token (not being Indian currency or any fore

32、ign currency), generated through cryptographic means and includes non fungible token or tokens (NFTs) of similar natureAny income from transfer of VDA will now be taxable 30%No deduction of expenses or allowance of set-off of any loss to be allowed other than cost of acquisition15%Surcharge on LTCGV

33、irtual Digital AssetNo set off of losses or carry forward of losses will be allowed on transfer of VDAGift of VDA will be taxable in the hands of recipientA new withholding section introduced to widen the tax base from transactions in relation to VDA effective 1 July 2022Withholding tax 1% to be app

34、licable on the sum credited to a resident (excluding specified persons)TDS on sale of immovable property to apply on higher of sale consideration or stamp duty valueReduction of goodwill from the block of assets (pursuant to amendment made in Finance Act 2021) shall be deemed to be a transferUnion B

35、udget 2022Transfer PricingFaceless assessmentAs part of the process of making the tax administration transparent and efficient, provisions for notifying faceless scheme for transfer pricing assessments and dispute resolution panel proceedings were introduced with effect from 1 Nov 2020. The procedur

36、es were required to be notified by 31 March 2022. It has now been proposed that such procedure shall be notified no later than 31 March 2024.Revision of transfer pricing orderUnder the existing provisions, an order passed by the assessing officer was subject to revision by the Principal Chief Commis

37、sioner or Chief Commissioner or Principal Commissioner or Commissioner, if it was prejudicial to the interest of revenue. There was an ambiguity as to the concerned authority having jurisdiction to revise the transfer pricing order which could have been prejudicial to the interest of revenue.It is n

38、ow provided that the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or Commissioner having jurisdiction over the taxpayer may revise the transfer pricing order, if it is prejudicial to the interest of revenue.Any consequential order passed by the transfer pricin

39、g officer pursuant to the above revision will be incorporated in the assessment order to be passed by the assessing officer within two months from the end of the month in which such transfer pricing order is received by the assessing officer.Updated tax returnOption given to file updated tax return

40、within 24 months from end of the relevant assessment year on payment of additional tax on undisclosed income.Updated tax return can also be filed even if original tax return was not filed.The updated tax return can be filed for income arising on account of transfer pricing as well.Certain exceptions

41、 also proposed where an updated return cannot be filed, inter alia, resulting in increase of loss/decreasing tax/resulting in refund/increasing refund.Litigation managementTax litigation proposed to be deferred where an identical question of law is pending in appeal before jurisdictional High Court

42、or Supreme Court and till the same is decided.The above is applicable for transfer pricing related appeals as well.HighlightsReview of orderTax returnProcess for Faceless assessment to be notified by 2024Litigation ManagementUnion Budget 2022Personal TaxUpdated tax return introduced for filing at an

43、y time within 2 years from the end of the relevant assessment year to provide an opportunity to correct omissions/mistakes while estimating income. However, such return cannot be filed if it has the effect of decreasing the total tax liability or results in refund or increases the refund due in the

44、previously filed original/belated/revised return.Surcharge on long term capital gains arising from transfer of all long term capital assets capped at 15%.TDS on sale of immovable property to apply on higher of sale consideration or stamp duty value.Now any person responsible for providing any benefi

45、t/perquisite to a resident, arising from business/profession carried out by such resident, shall before providing such benefit/perquisite, ensure that tax has been deducted at sourceat the rate of 10% on the value of such benefit/perquisite. Exemption for COVID related ex-gratia payments for medical

46、 treatment/death Certain exemptions were announced for such payments by press release dated 25 June 2021. Legislative amendments have been introduced to give effect to such announcement.In order to bring parity between Central Government employees and State Government employees, now deduction of emp

47、loyer contribution to National Pension System (NPS)will be increased from 10% to 14% for State Government employees.Now deduction would be allowed for an insurance scheme which provides payment of annuity or lump sum amount to the differently abled dependent during the lifetime of parents/guardians,

48、 i.e., upon parents/guardians attaining the age of sixty years. Highlights2yearsFiling of updated returnCapping of LTCG surcharge Exemption for COVID related paymentsUnion Budget 2022Indirect Tax | Goods and Services TaxTime limit has been relaxed till 30th November, in the following cases:Claim of

49、input tax credit (ITC)Issuance of credit note Rectification of errors in statement of outward supply and returns Rectification of TCS returnGSTR-3B cannot be filed without filing GSTR-1. The Government may notify exceptions.Manner and condition for communication of details of inward supplies and ITC

50、 in auto generated statement has been prescribed. Two way communication process in return filing has been removed.Claim of provisional credit has been replaced with self-assessed credit.Late fee to be introduced on delayed filing of TCS return.For non-payment of tax by the supplier, ITC will need to