Key Highlights of Union Budget 2022-23: An Overview
Just like the last year (2021), today, the Finance Minister of India Nirmala Sitharaman delivered a paperless Union Budget 2022-23 and read out her budget speech from a tablet with the aim of fast-tracking the economy, providing opportunities to businesses and creating 6 million new jobs. Healthcare, Infrastructure, MSMEs, Agriculture, too, feature prominently in the minister’s scheme of things. The Finance Minister said that “This Union Budget seeks to lay the foundation and give a blueprint of the economy over “Amrit Kal” of next 25 years from Indian at 75 to India at 100”.
Union Budget 2022-23: An Introduction
India to post 9.2% GDP growth, highest among all economies. We are in the surge of the Omicron wave and the speed of the Government’s vaccination drive has helped dramatically. The Finance Minister of India Nirmala Sitharaman said she is very confident that “Sabka Prayaas” will continue with robust growth. The Union Budget 2022-23 has given a sharp increase in public investment & capital expenditure provision.
Financial Policy for the 3rd wave of pandemic. In the 3rd wave of the pandemic, Financial Policy must exit from short-term relief measures with phasing out of the pandemic era exceptional expenditure support. As such, the focus must continue to remain on pushing the durable engines of growth (Investment & Consumption), in a bid to achieve medium-te3rm growth sustainability.
Union Budget 2022-23: Highlights
- Govt. withdraws exemptions to Income of Individual assigned with Duties outside India for CTAP (C0-operative Technical Assistance Programmes): The Union Budget 2022-23 present by the Finance Minister has withdrawn certain exemptions given under Clause (8) of Section 10 of the IT Act, 1961 and this clause provides for exemption to the income of a person or an individual who is assigned.
- New Provision to get a Refund of TDS paid: This budget has proposed the new provision enabling to get a refund of TDS paid where it was not deductible. Section 248 of the IT Act provides that in a case where, under an agreement or other arrangement, an individual has deducted tax on any income paid to a non-resident.
- Changes in Customs Reforms and Duty Rate: The Finance Minister has proposed Changes in Customs Reforms and Duty Rate while giving the Union Budget 2022-23 Speech. The administration of Customs has reinvented itself over the years through opened procedures and infusion of technology. Faceless Customs has been fully set up. At the time of the pandemic, Customs formations have done exceptional frontline work against all odds showing quickness & purpose. The reforms of Customs have played an essential role in a domestic capacity, providing a level playing field to our MSMEs, easing the raw material supply-side constraints, boosting ease of running a business and being an enable to other policy advantages like PMPs (Phased Manufacturing Plans) and PLIs.
- CBDT provide relaxation to Individuals Facing Genuine Hardship: In Union Budget 2022-23, the Finance Minister proposed to allow CBDT or Central Board of Direct Taxes to give relaxations to the specified individuals facing genuine hardships in filing ITRs within the given time.
- Tax Deduction Limit for State Government: The Finance Minister Nirmala Sitharaman said ‘Both States & Centre Government employees’ tax deduction limit to be increased or raised from 10% to 14% to help the social security advantages of State Government Employees & being them at par with the Central Government’. She also announced that the corporate surcharge would be reduced from 12% to 7%.
- For startups, incorporated tax incentives are extended by one year until March 31, 2023.
- Long-term capital gains on listed equity shares united are subject to a maximum surcharge of 15%.
- Income Tax on Digital Assets: Income from transfer of digital assets like Crypto to be taxed at 30%. No deduction will be allowed except the acquisition cost of digital assets. TDS at 17% will be charged above the threshold and gifting of digital assets will also be taxable in the receiver’s hands.
- Digital Currency: The Finance Minister of India said that the Digital Current would be issued by the Reserve Bank of India (RBI) in 2022-23. Digital Currency will also lead to a more effective and cheaper currency management system, and therefore, it is recommended to introduce a digital rupee using blockchain-based technologies, to be issued by the RBI from 2022-23. Digital Rupee will be granted by the RBI in 2022-23, she also said that this Currency will boost the digital economy.
- ECLGS will help Small & Medium Firms: The ECLGS or Emergency Credit Line Guarantee Scheme will be extended to cover the next fiscal as well with an enlarged guarantee cover of Rs. 5 lakh crore and this extension will provide benefit to lending to the MSME sector.. Nearly 95% of ECLGS borrowers are MSMEs; this measure will ensure continued handholding of MSMEs and of which services sector.
- Sharp Jump in Capital Expenditure: The Finance Minister also announced that a sharp jump of 35.4% in Capital Expenditure top fund different infrastructure projects in 2022-23.
- Reduction of Surcharge on Unlisted Shares: In a move that will comfort exists from startups, the Finance Minister announced lessening of surcharge on unlisted shares from 28.4% to 23%.
- Startups: Startups will be encouraged to provide Drone Shakti for the promotion of drone usage. Defence Research & Development to be opened up for industry & startups.
- Digital Payment: To lessen the delay in payment, an online bill system will be launched, and it will be used by all Central Ministries. Credit growth will be increased by Rs. 5.4 lakh crore this year.
- Healthcare: An open platform for the NDHE (National Digital Health Ecosystem) will be launched. It will include digital registries of health providers & health facilities, distinctive healthy identity & universal access to health facilities.
Other Points in Union Budget 2022-23
Following are some other points in Union Budget 2022-23:
- E-passport: The Finance Minister said that India will begin issuing e-passports in 2022-23, and these e-passports will take only a few seconds to read and the back cover of the e-passport is expected to have a small silicon chip. The fingerprints and photographs of the holder will be stored in the chip. It will have the capacity to store 30 visits.
- Housing & Basic Facilities: In 2022-23, around 80 lakhs households will be recognised for the affordable household scheme. Through PM Gati Shakti Plan, the value of the increase in infra spend is not clear, unlike the clear 34.5% increase last year to Rs. 5.5 lakh crore.
- Employment: PLI or Production Linked Incentive Scheme for achieving Aatmanirbhar Bharat has received an outstanding response with the capability to create 6 million new jobs and additional production of 30 lakh crore during the next five years.
- Defense: Around 68% of the capital locating budget in defence will be allocated for the domestic industry in 2022-23.