Finance Act
2022 introduced a tax on virtual digital assets (VDA).
Ø Section 2(47A) provided a definition of
VDA.
A. An Asset satisfying all the below conditions
Sunday, 6 February 2022
Taxation of Virtual digital assets.
Tuesday, 1 February 2022
Key-highlights of GST Proposals in Finance Bill 2022
1. Time-limit to avail ITC u/s 16(4) extended till 30th November of next year from 30th September.
2. Additional
Condition for availment of ITC u/s 16(2)- ITC can be availed only if the same
is not restricted in GSTR-2B.
3. Composition
Tax Payer’s Registration can be cancelled suo-moto if they have not filed their
GSTR-4 return beyond 3 months from the due date.
4. Credit
Notes in respect of supply made in a financial year can be issued by 30th
November of next financial year (currently allowed till 30th September)
5. Any
rectification of error in GSTR-1/ GSTR-3B is now permitted till 30th November
of next financial year (currently allowed till 30th September).
6. The
two-way communication process in filing GST returns is scrapped.
7. The
due date for filing return by non-resident taxable person is prescribed as 13th
day of next month
8. Section
41 of the CGST Act is being substituted so as to do away with the concept of
“claim” of ITC on a “provisional” basis.
9. Section
47 of the CGST Act is being amended so as to provide for levy of late fee for
delayed filing of TCS returns.
10. Section
49 of the CGST Act is being amended so as to provide for restrictions for
utilizing the amount available in the electronic credit ledger.
11. Section
49 of the CGST Act is being amended so as to allow transfer of amount available
in E- cash ledger of a registered person to the E- cash ledger of a distinct
person;
12. Section
49 of the CGST Act is being amended so as to provide for prescribing the
maximum proportion of output tax liability which may be discharged through the
electronic credit ledger
13. Section
50(3) of the CGST Act is being substituted retrospectively, with effect from
the 1st July, 2017, so as to provide for levy of interest on input tax credit
wrongly availed and utilized. (Meaning
thereby Interest will not be levied if ITC is not utilized)
14. Refund
claim of any balance in the electronic cash ledger shall be made available.
15. Rate
of Interest u/s 50(3) prescribed as 18% in all cases.
Budget 2022 - Tax Impact First Cut.
01. There is no change in the tax rates.
02.
In
order to report any income which has not been offered to tax, a new updated tax
return has been introduced which can be filed within 2 years from the end of
the relevant assessment year subject to payment of an additional 25% of the total tax
& interest liability.
03. When
for a particular matter, which has been decided in favour of the assessee by
the Tribunal or Jurisdictional high court and revenue has challenged the same
in case of the same assessee or another assessee before the High Court or Supreme
court, then revenue can defer filing of appeal before ITAT and High court in
case of other taxpayers for same question of law subject to prior approval of
PCIT. (w.e.f. 1.4.22)
04. In order to remove doubts, it has been expressly stated that Cess is not
allowable as business expenditure with retrospective
effect from 2005.
05.
Rule
8D is applicable even in case when no exempt income is earned & hence disallowance
u/s 14A is mandatory.
06. Penalty for offences under foreign law is not allowable as deduction u/s
37(1).
07.
Conversion
of interest liability into debenture is not an allowable expenditure u/s 43B.
08.
Extension
of following dates.
(i)
Section
115BAB - New manufacturing unit - Date of commencement of operation extended
from March 2023 to March 2024.
(ii)
Section
80-IAC - Registered start up unit - Date of Incorporation extended from March
2022 to March 2023.
09.
AMT
on co-operative society reduced to 15% from 18.5%.
10.
Amount
received from employer towards Covid treatment during FY 2020-21 & FY
2021-22 is not taxable as gift or perquisite.
11. The definition of specified person has been amended to reduce the period
of non-filing from 2 years to 1 year. Thus if vendor has not filed return for 1
year then TDS is to be deducted at double rate.
12.
Introduction
of section 194R where TDS required to be deducted @ 10% on benefit or
perquisite of a business or profession.
13. Removal of concessional rate of tax on foreign dividend. It is taxable
at normal rate now.
14.
Introduction
of maintenance of books of accounts by Charitable Institution. Further, Penalty
for passing on unreasonable benefit to Trustee or specified person.
15.
Introduction
of process of converting charitable institution to non-charitable.
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