#Budget2022: Taxpayers can file updated ITR within 2 years
During her Budget speech, Union Finance Minister Nirmala Sitharaman said on Tuesday that the newly updated provisions will be introduced for income tax returns. Taxpayers who have made errors while filing returns can file the updated return within two years of the assessment year. The government's policy is to have a stable and predictable tax regime, she said.
Why does this story matter?
Sitharaman said that allowing taxpayers to file updated returns will promote voluntary tax compliance and a reduction in ligation. The move will allow taxpayers to update tax returns with additional income that was missed out within two years of the assessment year. It will also place trust in the assessee to help them with voluntary compliance, she said.
What else did Sitharaman say?
Further, no changes were announced to income tax slabs this year, Sitharaman said during her Budget speech. Notably, income tax rates for the financial year 2022-23 were also not revised. The surcharge on corporate tax has been reduced from 12% to 7%. For state government employees, the tax deduction limit to National Pension Scheme (NPS) has been increased from 10% to 14%.
What are the tax slabs?
Annual income under Rs. 2.5 lakh is exempt from taxes under both regimes. New regime: Rs. 2.5-5 lakh (5% tax), followed by Rs. 5-7.5 lakh (10%), Rs. 7.5-10 lakh (15%), Rs. 10-12.5 lakh (20%), Rs. 12.5-15 (25%), and above Rs. 15 lakh (30%). Old regime: Rs. 2.5-5 lakh (5%), Rs. 5-7.5 lakh (15%), Rs. 7.5-10 lakh (20%), above Rs. 10 lakh (30%).
30% tax for virtual digital assets
Sitharaman said any income from the transfer of virtual digital assets (such as cryptocurrencies and non-fungible tokens or NFTs) will be taxed at a 30% rate. She said 1% TDS will be applicable on payments made through virtual digital assets to monitor transactions. There will be no deductions other than the cost of acquisition. Further, no set off shall be permitted against other income.
RBI to launch digital currency
A gift of virtual digital assets will be taxed in the hands of the recipient, Sitharaman said. She announced the intent to introduce digital currency in FY2022-23. Digital Rupee will be introduced by the Reserve Bank of India (RBI) using blockchain and other technology.
