The Union Budget 2022 presented by the Finance Minister Nirmala Sitharaman on 1st February 2022 primarily focuses on ‘digital technology and sectors like infrastructure, logistics, Fintech and provision of e-services to Indians. In her budget speech, she projected a growth of 9.27% for the coming year.
Offering relief to long-term capital gain investors in capital assets, the surcharge on the LTCG tax from equity funds and listed stocks have been capped at 15%. As a result, NRI investors and overseas funds will get benefits from the 15% cap on surcharge on LTCG tax.
Key takeaways from Union Budget 2022 for NRI taxpayers & investors
Income tax
- Income tax slabs for FY 2022-23 will remain the same as for FY 2021-22.
- Taxpayers can now update IT returns within 2 years from the end of the relevant assessment year.
- Tax incentives for startups have been extended by one year. Eligible startups incorporated under Section 80-IAC will stand to get tax benefits until 31 March 2023.
- Surcharge on long-term capital gains (LTCG) tax capped at 15%.
- Tax rate for cooperative societies reduced to 15%.
- Income earned from transfer of digital assets such as cryptocurrency will be taxed at 30% and TDS will be levied at 1% above the threshold.
- Gifts of cryptocurrency will also be taxable at the receiver’s end.
- Brought forward loss will not be set off against undisclosed income discovered during any survey.
- Corporate surcharge to be reduced from 12% to 7%.
Digital currency
- The Reserve Bank of India will launch a central digital currency in 2022-23.
Digital banking
- Boost for digital payments by setting up 75 digital units
- An online bill system to be launched to reduce the delay in payment.
Startups and investment: A mixed bag for startups
- Startup companies will be empowered to facilitate ‘Drone Shakti’ to promote drone usage.
- An expert committee will be set up to review regulatory for venture capital.
- In a move that will ease exits from startups and Unicorns, reduction of surcharge on unlisted shares from 28.5 % to 23 % has been announced.
Budget allocation
- The union government projects to peg the fiscal deficit at 6.4% of GDP for FY23.
- Effective capital expenditure of the central government is estimated at Rs. 10.68 lakh crore in FY 2022-23 i.e. about 4.1% of GDP.
- Public issue of LIC is expected shortly.
e-passport
- e-passports using embedded chips and futuristic passports will be rolled out.
- This type of passport will have thicker front and back covers.
- The design of the e-passport was tested in a US government recognized laboratory.
- A small silicon chip on the back cover of the passport will have 64 kilobytes of memory space.
- The chip will also contain the holder’s photograph and fingerprints, and store 30 visits.
After the budget announcements the sensex rose nearly 900 points.
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