5 big income tax rule changes effective from today, 1 April 2022

 


From today, April 1, several rules related to personal taxation is going to change. 

New Delhi: New fiscal, new rules! With the new fiscal year FY 22-23 kicking in today (April 01), new and reformed Income Tax rules will also kick in.

From April 1, several rules pertaining to personal taxation is going to change. Here’s looking at 5 major Income Tax rules changing from the new fiscal.

30 PERCENT TAX ON VIRTUAL DIGITAL ASSETS

Income from transactions in virtual digital assets will attract a tax of 30 percent From April 1. (Also read: Crypto Tax: How to report it while filing ITR, what will be taxed and what not?)

Finance Minister Nirmala Sitharaman in her Budget speech in February said, “There has been a phenomenal increase in transactions in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime. Accordingly, for the taxation of virtual digital assets, I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent.”

UPDATED ITR FILING WINDOW

The Finance Minister also gave respite to people filing their revised Income Tax Return (ITR) from next fiscal. FM has announced that the revised tax filing window will remain open for two years from the year of assessment in case of less filing of tax. The rule will be applicable from April 1.

Finance Minister Nirmala Sitharaman proposed in her budget address for 2021-22 that PF payments of more beyond Rs 2.5 lakh per year be taxed. The Central Board of Direct Taxes (CBDT) has issued new guidelines that outline how the interest on an employee’s provident fund contribution that exceeds a specific level is taxed.

VDA LOSSES CANNOT BE SET OFF AGAINST VDA GAINS

As per the amendments to the Finance Bill, 2022, circulated among the Lok Sabha members, the government has proposed to remove the word ‘other’ from section relating to set off of losses from gains in virtual digital assets. This would mean that loss from the transfer of virtual digital assets (VDA) will not be allowed to be set off against the income arising from the transfer of another VDA. For eg you make a gain of Rs 100 on Bitcoin while you incur a loss of Rs 70 on Dogecoin –your tax liability will be on the earning of Rs 100 and not on your net profit of Rs 30 (after eliminating your loss).

STATE GOVERNMENT EMPLOYEES NPS DEDUCTION

State government employees will now be able to claim tax benefit of 14 percent on the National Pension System (NPS) under Section 80CCD(2) made by their employer up to 14% of their basic salary and dearness allowance. The deduction will be similar to that of Central government employees under the said section.

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