Finance Minister of India, Nirmala Sitharaman presented the Union Budget for 2022-23 in the parliament. In this article, we present to you a detailed description of the highlights of the Union Budget 2022-2021
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With presenting the 2022 union budget, the Finance Minister mentioned that India’sGDP is expected to grow at 9.27 percent in FY 22, which would be the highest of any big economy. And as the GDP increases, the Indian economy will also grow consequently.
Finance Minister Nirmala Sitharaman has mentioned in Budget 2022 that Production Linked Incentive (PIL) Scheme for achieving “Aatmanirbhar Bharat” has got a great response, with the ability to create 60 lakh new jobs and additional revenue of 30 lakh crore in the upcoming five years.
The new 2022 union budget is also promoting the digital economy and fintech. It is believed that RBI is also working on some monitoring framework to promote fintech and the digital economy. With the growth of fintech and digital economy debit cards, EMIs, both POS and Online, and BNPL will be accessible to more people easily.
As per the Union budget 2022, digital banking systems will be introduced in 75 districts of India as Nirmala Sitharaman announced introducing the Digital Rupee that RBI will introduce Digital Rupee starting 2022-23 with 75 digital banking systems in 75 districts by scheduled commercial banks.
In the recent 2022 union budget, the government has proposed for Insolvency & Bankruptcy Code (IBC) to be amended in order to ensure improved efficiency and quicker voluntary winding up of Companies, easy dispute resolution mechanism, and enabling effective cross border insolvency resolution framework favourable for enhancing the efficiency of the resolution process.
In budget 2022, the finance minister announced that we would be integrating around 1.5 lakh post offices with core banking services, and it will be a big push to the digital economy. It will enable accessing accounts via net banking, ATMs, and online fund transfers between bank and post office accounts.
In the recent Budget of FY 2022, Railways will develop new products and efficient logistics services for small Farmers, small & medium enterprises. The contracts for implementing multimodal logistics parks at 4 locations will be awarded in PPM mode.
Nirmala Sitharaman added in her budget speech of 2022 ECLGS (Emergency Credit Line Guarantee Scheme) will be extended till March 2023 with a budget of 50,000 crores. Furthermore, she added 5 lakh crores as an additional embarked for the hospitality sector.
In the union budget of FY 2022, finance minister Nirmala Sitharaman stated that the central government would tie up with the stated governments to reduce the time required to get approval for land and construction related to quickly completing 80 lakh new houses will be completed under PM Awas Yojana.
In her Budget Speech, Finance Minister Nirmala Sitharaman stated that the government would emphasize using drone cameras for crop assessment and finance startups in the agriculture sector and rural enterprises. Rs 2.37 lakh crores will directly pay MSP value to farmers’ accounts with paddy and wheat crops.
The Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) Scheme with a required infusion of funds will be restored as per the union budget of FY 2022 by finance minister Nirmala Sitharaman. And it will enable extra credit of Rs 2 trillion for Micro and Small Enterprises and expand employment opportunities. Moreover, these small Enterprises can use free billing and inventory software for small businesses to easily manage inventories and bills efficiently.
The government’s Union Budget stated by finance minister Nirmala Sitharaman proposed Rs 48,000 crore outlay to aid in building low-cost houses in both rural and urban regions all over India. It is expected to boost the affordable housing segment and auxiliary industries such as cement and steel. Also, it will help the government achieve its objective of the house for all.
The finance minister stated in the Budget of FY 2022 that this new move would calm trust in the taxpayers and enable them to declare the unreported income while filing Income Tax Return (ITR) earlier. Also, it will allow the Income Taxpayers to correct the errors in estimating their income for taxation purposes.
The union budget 2022 proposed to ease the Alternative Minimum Tax (AMT) for co-operative societies from 18.5% to 15%. That is, it will be equal to private companies. Furthermore, the surtax on co-operative societies with income between 1 to 10 crores will be reduced to 7% from 12%.
The tax deduction limit is now at balance with central government employees as benefits to NPS for state govt employees hiked from 10% to 14%. As the union budget of FY 2022, the tax deduction limit is now elevated from 10 percent to 14 percent as employers’ contribution to the NPS account for state government employees. This decision is taken to make a balance between central and state government employees and improve their social security benefits.
The income-tax rates for Assessment Year 2023-24 will be the same as Assessment Year 2022-23 as per the union budget 2022. On the other hand, a surcharge on long-term capital gain transfer and AOP tax is capped at 15%. Also, the rate of surcharge tax in the case of co-operative societies of income between 1 crore to 10 crores is eased from 12% to 7%, stated by the finance minister.
The finance minister in the union budget said that Startups have emerged as a growth driver for the Indian economy. She mentioned the Covid-19 pandemic and said that the tax encouragements for startups are enhanced from three to four years of incorporation. As per Budget 2022, eligible startups launched before March 31, 2022, will be given a tax incentive for three consecutive years out of ten years from incorporation. So, startup users can use the eZcom best accounting software to manage their accounts.
In the Budget speech of 2022-2023, finance minister Nirmala Sitharaman added that the Gross Goods and Services Tax or GST collections in January 2022 held at Rs 1.41 lakh crore, precisely Rs 1,40,986 crore, which is the maximum that ever before since the commencement of GST. Further, she added that despite the pandemic, GST revenues are cheerful and that although remarkable progress is seen in the GST regime. However, a few challenges remain in GST revenues.
Finance minister Nirmala Sitharaman did not say any significant change in income tax for the personal category slab In the Budget speech of the financial year 2022-2023. However, she announced that taxpayers could correct an error and update I-T returns within two years from the respective assessment year.
Finance Minister Nirmala Sitharaman announced in the Budget 2022 speech that the government will be rolling out a scheme for electric vehicle battery-swapping with interoperability standards. This electric vehicle policy will mainly focus on interoperability among various EV brands and is expected to boost India’s EV infrastructure in the coming future. The government will also encourage the private sector to develop efficient solutions for electric vehicle battery-swapping.
In the Budget for FY 2022, the finance minister has proposed to provide concessional rates in the import of capital goods and projects that gradually apply a moderate tariff of 7.5 percent. However, the current import duty structure allows exceptions and concessional rates to capital goods in various sectors like power, textiles, leather, footwear, food processing, and fertilizers.
In order to give improve the gems & jewellery sector, Finance Minister Nirmala Sitharaman stated that customs duty on cut and unpolished diamonds and gemstones is being reduced to only 5% percent. Furthermore, custom duty on imitation jewellery is being proposed that a duty of ₹400 per kg is paid on its import. So, small-scale diamond merchants use the eZcom accounting software for managing accounts.
In the recent Union budget of FY 2022, Nirmal Sitharaman, finance minister of India, proposed extending customs duty exceptions on steel scrap by one more year to provide some aid to secondary steel producers in the MSME sector. Furthermore, she added antidumping duty (ADD) and countervailing duty (CVD) would be withdrawn on stainless steel, coated steel flat products, alloy steel, and high-speed steel considering the high prices of the metal.
The finance minister announced that a tax of 30% will be applied to income from digital asset transfers. This tax will be known as “crypto tax,” and gifts received in the form of cryptocurrencies will be taxed at the same rate. Also, 1% TDS on payment made concerning the transfer of virtual digital assets, proposed by the finance minister as RBI-led digital rupee using blockchain.
In the budget, Union Finance Minister Nirmala Sitharaman proposed that 68% of the capital outlay will be set aside for the domestic defence industry and armed forces in 2022-23. This Capital refers to money spent by an entity for purchasing assets such as plants, machinery, and property, among other things.
Finance Minister Nirmala Sitharaman proposed in Union Budget 2022 that India’s fiscal deficit in the financial year 2021-22 is assessed to be 6.9 %. She added that the fiscal deficit for FY23 is estimated at 6.4%. Moreover, India’s fiscal deficits were funded through government and multilateral borrowings, Small Saving Funds, and short-term borrowings.
As per the union budget, 2022 Government unveils record borrowing plan through FY23 bond sales estimation of Rs 15 lakh crore. Also, according to budget 2022 documents, the government is planning to sell bonds worth about Rs 15 lakh crores, and the net borrowing is estimated to be 11.2 lakh crores.
Union finance minister Nirmala Sitharaman has announced the 75 digital banking units (DBUs) in the country by the commercial banks to lead to an efficient and cheaper currency management system.
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