Budget 2022 Highlights: No change in Income Tax Slabs, New Crypto Tax, 5G, Infra Push

Union finance minister Nirmala Sitharaman presented the Union Budget 2022 today. In its Union Budget 2022, the government has massively increased capital expenditure target to Rs 7.5 lakh crore from Rs 5.5 lakh crore in the last Budget for FY23. The hike in capital expenditure will be a huge boost for the economy and for crowding in private investment to spur job creation. In the last Budget, the government in the last Budget had significantly hiked the capital spending by 34.5 per cent to Rs 5.5 lakh crore. This will constitute 2.9 per cent of the GDP.

Economy

•  Capex target expanded by 35.4 per cent — from Rs 5.54 lakh crore to Rs 7.50 lakh crore. FY23 effective capex seen at Rs 10.7 lakh crore
•  India’s growth highest among all major economies; we are now in a strong position to withstand challenges
•  The goal is complementing macro-growth with micro-all-inclusive welfare, digital economy and fintech, tech-enabled development, energy transition and climate action
•  ECLGS cover expanded by Rs 50,000 to Rs 5 lakh crore
•  Top focus of the budget this year are: PM Gati Shakti, Inclusive Development, Productivity Enhancement, Sunrise Opportunities, Energy Transition, Climate Action, Financing of investments
•  Productivity-linked incentive schemes in 14 sectors have received excellent response; received investment intentions worth Rs 30 lakh crore
•  Economic recovery benefitting from public investment and capital spending. This Budget will provide impetus to growth

Taxes

•  The government will tax income from digital asset transfers at 30 per cent
•  No deduction allowed while computing income except cost of acquisition
•  Loss cannot be set off from any other income
•  Gift of cryptocurrencies to be taxed at receiver’s end
•  A new provision to allow taxpayers to file an updated return
•  Updated return can be filed within 2 years from the end of the relevant assessment year.
•  Alternate Minimum Tax for cooperative societies to be cut to 15 per cent
•  Proposal will reduce surcharge on cooperative societies to 7 per cent, for those whose income is between Rs 1 crore and Rs 10 crore
•  Tax deduction limit increased to 14 per cent on employers contribution to NPS account of state govt employees

Jobs

• ECLGS extended till March 2023, 60 lakh jobs eyed in next 5 years
• Efforts of central, state governments leading to jobs, entrepreneurial opportunities
•  Digital ecosystem for skilling and livelihood to be launched.
•  This will aims to skill, reskill, upskill citizens through online training.
•  API based skill credentials, payment layers to find relevant jobs and opportunities

Finance

• Emergency credit line guarantee scheme for small and medium sized businesses to be extended to March 2023
• Energy transition and climate action will be a major government priorityPublic issue of Life Insurance Corporation expected shortly
• Initiatives from last year’s budget have been provided adequate allocations in this budget

Digital Currency

• To launch digital rupee using blockchain technology starting 2022/23
• To launch scheme for taxation of virtual digital assets
• Losses from sale of virtual digital assets cannot be offset against other income
• Income from virtual digital assets to be taxed at 30 per cent

Infrastructure

• 5G spectrum auctions to be conducted in 2022
• Scheme for design-led manufacturing for 5G will be part of production-linked scheme
• To award contracts to lay optical fibre in rural areas, completion in 2025
• 480 billion rupees set aside for affordable housing in 2022/23
• To allocate additional 195 billion rupees for production-linked incentives towards solar equipment manufacturing

Agriculture

• Domestic scheme introduced to reduce dependence on oilseed imports
• Fund with blended capital raised under co-investment model to finance agriculture startups
• Railways to develop infrastructure for small farmers in 2022/23

Climate & Net Zero

• Risks of climate change are strongest externalities for the world
• Funds will be used for projects that will help reduce carbon intensity of the economy
•  Sovereign green bonds will be part of government’s borrowing programme in FY23
• Proceeds to be deployed in public sector projects
•  4 pilot projects for coal gasification to be set up
• Rs 19,500 cr additional allocation for PLI for manufacturing high efficiency solar modules has been made
• Low carbon development strategy opens up employment opportunity

Travel

• ePassports will be rolled out in 2022-23 for convenience in overseas travel
• E-passport with embedded chip will be rolled out

Transport

• 400 energy efficient trains to be manufactured over next three years
• National highways network to be expanded by 25,000km in 2022/23
• Highways expansion to cost 200 billion rupees in 2022/23
• India to bring out battery swapping policy

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