2022 – Union Budget Highlights – JOLLY STEPHEN & ASSOCIATES

2022 – Union Budget Highlights

Economy

Capex target expanded by 35.4 per cent — from Rs 5.54 lakh crore to Rs 7.50 lakh crore. FY23 effective capex seen at Rs 10.7 lakh crore
India’s growth highest among all major economies; we are now in a strong position to withstand challenges
The goal is complementing macro-growth with micro-all-inclusive welfare, digital economy and fintech, tech-enabled development, energy transition and climate action

ECLGS cover expanded by Rs 50,000 to Rs 5 lakh crore
Top focus of the budget this year are: PM Gati Shakti, Inclusive Development, Productivity Enhancement, Sunrise Opportunities, Energy Transition, Climate Action, Financing of investments
Productivity-linked incentive schemes in 14 sectors have received excellent response; received investment intentions worth Rs 30 lakh crore
Economic recovery benefitting from public investment and capital spending. This Budget will provide impetus to growth
In 2022-23, states will be allowed fiscal deficit of up to 4 pc of GSDP

Expenditure and deficit & other key numbers

Proposed fiscal deficit of 4.5% of GDP by 2025/26
Projected fiscal deficit of 6.4% of GDP in 2022/23
Revised fiscal deficit for 2021/22 at 6.9% of GDP
50 year interest free loans over and above normal borrowing allowed for states
Scheme for financial assistance to states for capital investment outlay to be Rs 1 lakh crore for 2022/23
Public issue of Life Insurance Corporation expected shortly
Initiatives from last year’s budget have been provided adequate allocations in this budget
Receipt from disinvestment proceeds in next financial year pegged at Rs 65,000 crore, lower than the current year’s mobilisation of Rs 78,000 crore.

Taxes

Govt vows a stable and predictable tax regime
Govt to provide one-time window to correct omissions in ITRs filed, updated returns to be filed within 2 years
Any cess or surcharge on income not allowed as business expenditure
1 per cent TDS on transfer of virtual assets above a threshold, gifts to be taxed
Surcharge on long-term capital gains capped at 15 per cent

The government will tax income from digital asset transfers at 30%
No deduction allowed while computing income except cost of acquisition
Loss cannot be set off from any other income
Gift of cryptocurrencies to be taxed at receiver’s end
A new provision to allow taxpayers to file an updated return
Updated return can be filed within 2 years from the end of the relevant assessment year.

Alternate Minimum Tax for cooperative societies to be cut to 15%
Proposal will reduce surcharge on cooperative societies to 7%, for those whose income is between Rs 1 crore and Rs 10 crore
Tax deduction limit increased to 14% on employers contribution to NPS account of state govt employees

Duties on Industry

Import duty on certain chemicals being/to be cut
Customs duty exemption on steel scrap will be extended for another year for MSMEs
Will revoke customs duty on stainless steel, flat products, high steel bars
Beginning October 2022, unblended fuel to get additional duty of Rs 2/litre
Import duty on cut and polished diamonds and gemstones to be cut 5 per cent and on sawn diamond to nil

Customs duty concessions to be given to certain consumer electronic devices to promote manufacturing across wearables, hearables and specific mobile phone components

Jobs

ECLGS extended till March 2023, 60 lakh jobs eyed in next 5 years
Efforts of central, state governments leading to jobs, entrepreneurial opportunities
Digital ecosystem for skilling and livelihood to be launched.
This will aims to skill, reskill, upskill citizens through online training.
API based skill credentials, payment layers to find relevant jobs and opportunities

Infra & manufacturing

Desh stack e-portal to be launched to promote digital infra
Strategic transfer of ownership of Air India completed now
Four multi-modal national parks contracts will be awarded in FY23
PM Gatishakti masterplan for expressways will be formulated in next financial year
100 PM Gati Shakti terminals to be set up in next three years
Focus on public investment to modernise infrastructure over the medium term, leveraging tech platform of Gati Shakti via a multi-modal approach
PM Gati Shakti will pull forward the economy and will lead to more jobs and opportunities for the youth
Concessional corporate tax rate of 15 pc would be available for 1 more year till March 2024 for newly incorporated manufacturing companies

Steps on digital currency

Launch of blockchain-bassed digital rupee starting 2022-23
To launch scheme for taxation of virtual digital assets
Losses from sale of virtual digital assets cannot be offset against other income
Income from virtual digital assets to be taxed at 30%

Housing & urban planning

Rs 48, 000 crore is allotted for PM Awas Yojana
In 2022-23, 80 lakh houses will be completed for identified beneficiaries of PM Awas Yojana; 60,000 houses will be identified as beneficiaries for PM Awas Yojana in rural & urban areas
60,000 crore allocated for providing access to tap water to 3.8 crore households
In 2022-23, 80 lakh households will be identified for the affordable housing scheme
Rs 60,000 cr allocated to provide tap water connections to 3.8 crore households in 2022-23
A high-level committee for urban planners and economists to be formed for recommendations on urban capacity building, planning implementation, and governance
5 existing academic institutions for urban planning to be designated as Centre for Excellence with endowment fund of Rs 250 cr
Modern building by-laws will be introduced

A high-level panel to be set up for urban planning
Govt to promote use of public transport in urban areas
Proposal to reduce Minimum Alternative Tax to 15 pc for co-op societies, at par with corporate

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