Union Budget 2022: Important takeaways for common man, taxpayers

Finance Minister Nirmala Sitharaman presented the Union Budget for the financial year 2022-23 in the Parliament today, February 1. While presenting the budget, Sitharaman lauded the contributions of the salary class and taxpayers towards “strengthening the hands of the government.”

While presenting the direct taxes part of the Budget 2022, Nirmala Sitharaman said, “I take this opportunity to thank all the taxpayers of our country who have contributed immensely and strengthened the hands of the government in helping their fellow citizens in this hour of need.”

Further, there is not much that has changed from last year’s Union Budget for the salaried class and common man in the country, though revisions have been made in the income tax return window, with no new taxes introduced in this financial year.

Here are the key takeaways from the Union Budget 2022 for the common man-

Updates ITR filing window for taxpayers

While presenting the budget, Nirmala Sitharaman said, “The Income Tax Department has established a robust framework of reporting of taxpayers' transactions. In this context, some taxpayers may realize that they have committed omissions or mistakes in correctly estimating their income for tax payment.”

Now, taxpayers will be able to 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. Further, if the person misses out on reporting any form of income, there is a window to correct this mistake.

The FM said, “Full details of the proposal are given in the Finance Bill. It is an affirmative step in the direction of voluntary tax compliance.”

Relief in taxes for Covid-related transactions

Though there is not much in the section of personal taxes for the common man when it comes to the Union Budget 2022, there has been a little relief in taxes provided to those who received money for the treatment or expenses incurred during the Covid-19 treatment.

Persons with disabilities to get tax relief

The Finance Minister said that the parent or the guardian of a person with a disability can take up an insurance scheme. The present law provides for a deduction to the parent or guardian only if the lump-sum payment or annuity is available to the differently-abled person on the death of the subscriber i.e. parent or guardian.

Nirmala Sitharaman further said, “I propose to thus allow the payment of annuity and lump sum amount to the differently-abled dependent during the lifetime of parents/guardians, i.e., on parents/ guardians attaining the age of sixty years.”

Tax implemented on cryptocurrency

According to the Union Budget 2022-23, there will be a specific tax implemented on any income from the transfer of any virtual digital asset or cryptocurrency. This income shall be taxed at 30 percent, as per the budget while no deduction in respect of any expenditure or allowance shall be allowed while computing such income except the cost of acquisition.

Implementation of TDS on transfer of virtual digital assets

The FM proposed to implement TDS on the payment made in relation to the transfer of virtual digital assets at the rate of 1 percent in order to capture the transaction details. The gift of virtual digital assets is also set to be taxed in the hands of the recipient.

Equality between State and Central government employees

The FM said, “To provide equal treatment to both Central and State government employees, I propose to increase the tax deduction limit from 10 percent to 14 percent on employer’s contribution to the NPS account of State Government employees as well. This would help in enhancing the social security benefits of the state government employees and bring them at par with central government employees.”