The Union Budget of 2022 has been announced by our Finance Minister, Nirmala Sitharaman on the 1st of February, 2022. The budget has many measures to boost different sectors but it lacks what the middle-class taxpayers demanded. Let us take a quick look at the most important aspects of this union budget.
Economy
· The current GDP as announced is 9.2% which is the highest amongst all the economies around th world. It signifies that the nation is in a position to withstand the different challenges of the present world.
· Some of the government schemes to remain in the focus this year are PM Gati Shakti, Productivity Enhancement, Inclusive Development, Climate Action, Sunrise opportunities, etc.
· The fiscal deficit for the year 2021-2022 has been revised at 6.9% and the projected deficit for 2022-23 is 6.4%.
· The center has allowed the states to borrow 50-year interest-free loans over and above the usual borrowing.
· Rs. 1 lakh crore is the proposed amount for providing financial assistance to the state in capital investment.
Taxes
· There is no major change in the income tax regime as such. However, the government is going to provide a one-time window of 2-years to the tax filers for correcting any mistakes or omissions in their ITRs.
· TDS of 1% to be levied on the transfer of any digital or virtual asset (above a threshold) and gifts will also be taxed at the receivers’ end.
· The maximum surcharge to be levied on long-term capital gains is 15%.
· One of the biggest blows for the digital currency holders or those who trade or invest in cryptocurrencies or any form of the digital asset is that now their profits will be taxed. Moreover, the tax rate which has been implemented for digital assets is 30% which is the maximum. You cannot also set off your losses from other assets against the profit from cryptos. You can only deduct the cost of acquiring the coins/assets.
· The corporate societies have been benefited as the alternative minimum tax for them has been decreased to 15% which was earlier 18.5%.
Jobs
The pandemic has taken away lakhs of jobs and also thousands of NRIs have returned to the country due to losing their jobs abroad. As per the union budget, there are great opportunities for job creation in the nation.
· Both central and state governments work together to provide entrepreneurial opportunities as well as jobs as proposed in the budget.
· A digital ecosystem to be created/ launched for skilling people and better their lifestyle. This ecosystem will help people learn new skills, upgrade the skills they already know through online training.
· Extension of ECLGS until March 2023 can create around 60 lakhs of jobs in the upcoming five years as announced in the union budget.
Agriculture
· Agriculture sector to get Rs. 2.37 lakh crores for the procurement of paddy and wheat under the MSP operations.
· For the small farmers and the MSMEs, Indian railways will develop new products to help them sell their products easily.
· New technologies to be included to better the agricultural facilities in the country.
· E-bill system will be launched which will be completely paperless, by the ministries of procurement.
Infrastructure and Manufacture sector
· Contracts for 4 multi-modal national parks will be given in the FY 2022-23.
· In the next three years, there will be 100 PM Gati Shakti terminals as proposed.
· Desh Stack e-portal to promote the digital infra scheme will be launched
· For the newly incorporated manufacturing companies, the concessional corporate tax of 15% will be applicable for another year that is up to March 2024.
Housing & Urban Planning
· For PM Awas Yojana, Rs. 48000 crores are getting allotted as per this Union Budget.
· In this financial year 2022-23, 80 lakh houses will be accomplished for the beneficiaries of this scheme (identified beneficiaries) and 60000 houses for the rural and urban areas.
· 3.8 crore households to get water supply/ tap water. The government allocated Rs. 60000 crore for this project.
Startups and MSMEs
· For rating the MSMEs, a project of Rs. 6000 crores will be launched for the next five years
· The scope for MSMEs like Udyam, e-shram, Aseem portals, NCS will be linked.
· Startups will be promoted for Drone Shakti projects.
· Startups which has investment from any PE or VC of Rs. 5.5 lakh crore or above will get support from the government for attracting other investments by setting up an expert committee.
· Tax benefits on startups have been extended for another 1 year where the startups will get redemption of taxes.
Healthcare
Healthcare is one of the most important pillars of a nation and due to the pandemic, it has become the most important one at present. So, in the union budget, you can see
· A proposal for launching an open platform that will be for the national digital health ecosystem.
· Since the pandemic has increased the number of people with mental health conditions, a Tele mental health program will be rolled out.
Education
· The anganwadis to be upgraded for bettering the health of the children. There are 2 lakh anganwadis in India.
· To bridge the education gap created by this pandemic, NEP has proposed allocating 6% of the GDP towards the education sector. The launching of digital platforms for online classes needs to be done as early as possible.
Most talked about aspects of Union Budget 2022
There are mainly two positive aspects and one negative aspect which are on everyone’s mouth after the announcement of the union budget. The first positive aspect of the budget is lots of benefits, such as tax redemption for startups, reduction of MAT for corporate societies, and similar for the corporate sector which will help the economy to get the push it needs to recover from the effects of the pandemic. This push to the corporate sector will help in creating jobs which is another good thing about the budget. However, there is no change in the tax regime or change in the tax slabs to benefit the taxpayers, which is the negative aspect.
Another thing that has been the hot topic after the union budget is the digital currency and tax implication on digital assets. While a segment of people are quite relieved to see digital assets being recognized and will be taxed, others are not happy as they have to pay 30% of the profit they earned. So, it’s a mixed bag of emotions regarding the digital assets and their tax implications announcements.
Overall, the budget for 2022-23 has been particularly made for boosting the economy, assisting the infra and manufacturing sectors, and progressing towards a digital economy.
