Union Budget 2022-23 has not proposed any changes in the personal income slabs for the salaried class people.
Given the current economic milieu which has seen record high fuel prices and food inflation, the middle-income taxpayers were expecting relief in the income tax rates. Rationalization of tax slabs were expected to boost consumption to assist economic recovery. But the budget did not propose any changes in the tax rate.
Taxpayers were also expecting an expansion in the standard tax deduction from the current claim of ₹50,000 given the high rate of inflation and rising global crude prices. The government has however not proposed any increase in the budget.
The government has provided provisions for rectification of mistakes/omissions in income calculation for tax payment by individuals. “To provide an opportunity to correct such errors… taxpayers (can) file an Updated Return on payment of additional tax. This updated return can be filed within two years from the end of the relevant assessment year,” the budget said.
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The government has capped Long Term Capital Gains (LTCG) at 15%. The surcharge on LTCG is allowed for units of mutual funds and listed shares.
The Minimum Alternative Tax (MAT) for cooperative societies has been reduced from 18.5% to 15%, at par with corporates. The surcharge on cooperative societies from present 12% to 7% for the annual income between ₹1 crore and ₹10 crore. The budget has also proposed increase in tax deduction to 14% from 10% towards the National Pension Scheme by state government employees.
The government has provided relief for startups as well. “Eligible start-ups established before 31.3.2022 had been provide a tax incentive for three consecutive years out of ten years from incorporation…(proposal) to extend the period of incorporation of the eligible start-up by one more year, that is, up to 31.03.2023 for providing such tax incentive,” the budget said.
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