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Hello,
Dear Professional Colleagues
Welcome to the new Financial Year. I wish you all a very happy and prosperous Financial Year ahead.
While the New Year brings new opportunities, challenges, and hopes there are several regulatory changes that will take effect on 1st April 2022. In fact, there are numerous regulatory changes happening out there. Of these, I have listed the most significant ones.
1. INCOME
TAX ON VIRTUAL DIGITAL ASSETS
Gains on the transfer of Virtual Digital Assets (VDAs) are
taxable at a 30% flat rate. Losses from VDAs cannot be set off against any other
head(s) of income. Losses from VDAs cannot be set off against gains from the transfer of another VDA. Furthermore, the losses arising from VDA’s cannot be
carried forward to future years. TDS @ 1% shall be deducted from the total sale
consideration.
2. IMPLEMENTATION
OF AUDIT TRAIL
Companies Act, 2013 mandates using of only such
software programs that provide the AUDIT TRAIL for the maintenance of
books of account. Corporates are required to use only those software programs capable
of providing the audit trail of entries made, alterations, deletions,
cancellations, etc.
3.
INVESTMENT IN MUTUAL FUND SCHEMES.
Until 31-03-2022, investors were making the payment to
their Brokers (Zerodha, Groww, Upstock, etc.) to invest in Mutual Fund Schemes.
Brokers, in turn, were making the payment to Mutual Fund houses on behalf of
the investors.
Now, from 01-04-2022 onwards (which is later extended
to 01-07-2022), the amount lying in the broker’s account cannot be used for
investment in the Mutual Fund schemes, instead, the amount shall be deducted from the investor’s bank account directly via UPI or Net Banking.
4. DEDUCTION
U/S 80EEA OF INCOME TAX ACT, 1961 TO FIRST-TIME HOME BUYERS.
From 1st April 2022 the additional benefit
of Rs. 1.50 Lakhs to the first-time home buyers with respect to interest paid
shall not be available. However, the benefit would continue for assesses who purchased
their first home on or before 31-03-2022.
5. TURNOVER
LIMIT FOR E-INVOICE APPLICABILITY
Now, all taxpayers having aggregate turnover exceeding
Rs. 20 Crores in the preceding financial year are required to comply with the
provisions of E-invoice. Previously, the limit was set at Rs. 50 Crores.
6. NO
MORE TAX EXEMPTIONS FOR INTEREST EARNED ON PF ACCOUNTS
Interest on Provident Fund contributions in excess of
Rs. 2.5 Lakhs per annum is no longer a tax-free income. Such interest is
included in the total income and shall be taxed at the slab rate as applicable.
7. UPDATED
INCOME TAX RETURN
The concept of the Updated Return has been introduced
in Budget 2022 which is operative from the FY 2022-23.
Here, an opportunity is given to assesses to file their
return of income within 2 years from the end of the respective financial years.
The opportunity to file the return is extended to non-filers as well.
8.
CHANGES IN POST OFFICE SAVING SCHEMES IN RELATION TO
INTEREST CREDIT.
Interest on Post Office Saving Schemes like MIS, FDs,
SCSS will no longer be paid in cash w.e.f. 01-04-2022. The depositors are
required to link their deposit accounts with their Savings Bank (SB) account
opened in Post Office. Any interest earned shall be credited directly to the depositor’s
SB account without having to visit the Post Office.
9. TDS
APPLICABILITY ON PERQUISITES PAID IN THE COURSE OF BUSINESS AND PROFESSION.
Any perquisite paid in relation to business and profession
attracts TDS at the rate of 10% u/s 194R of the Income Tax Act, 1961.
10.
TAX DEDUCTION OF NPS CONTRIBUTION TO STATE GOVERNMENT
EMPLOYEES.
Employees of State Government are eligible to claim
the NPS contributions to the extent of 14% of their salary u/s 80CCD(2) in line
with the Central Government employees.
✍
CA Sanjay R Shetty
Very good piece of Information
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