Hon’ble Finance Minister Nirmala Sitharaman presented Union Budget for the Financial Year 2022-23 on 1st February 2022 which seeks to lay the foundation & provide impetus to steer the economy over the ‘Azadi ka Amrit Kaal’ of the next 25 years – from India at 75 years of independence to 100 years.
This year’s Union Budget rests on the following priorities:
- PM Gatishakti a transformative approach for economic growth & sustainable development, driven by 7 engines namely Roads, Railways, Airports, Ports, Mass Transport, Waterways & Logistics infrastructure
- Inclusive Development for sectors like Agriculture, Food Processing, MSME, Skill Development, Education, Mental Health, Women Empowerment, Water & Housing for All, Villages, North-Eastern India, Mobilization of Savings & Digital Banking
- Productivity Enhancement & Investment including Ease of Doing Business & Living, Green Clearances, e-Passports, Urban Development, Use of Public Transport, Information Technology based management of Land Records, Cross Border Insolvency resolution under IBC, Government Procurement, Animation, Gaming, Telecom, Export Promotion & Self-dependence in Defence matters
- Sunrise Opportunities such as Artificial Intelligence, Geospatial Systems & Drones, Semiconductor & its eco-system, Space Economy & Clean Mobility Systems
- Energy Transition & Climate Action such as Solar Power & Transition to Carbon Neutral Economy
- Financing of Investments including Public Capital investments, Effective Capital Expenditure, Green bonds, Impetus to GIFT city, Venture Capital & Private Equity Investment, Blended Finance, introduction of Digital Currency & Financial Assistance to States for Capital Investment
On Direct Taxes front, opportunity to taxpayers to file updated ITR for rectifying errors, tax relief to persons with disability, reduction in alternate minimum tax rate & surcharge for cooperative societies, extension of allowable period for incorporation for eligible startups by 1 more year to avail tax benefit, increase in tax-deduction limit on employer’s contribution to NPS account of State Government employees, newly incorporated manufacturing entities to be incentivized under concessional tax regime, income from transfer of virtual assets to be taxed at 30% & proposing better litigation management to avoid repetitive appeals, are some of the key proposals.
From an Indirect Taxes perspective, customs administration in SEZs to be fully technology driven, tariff rate @ 7.5% on capital goods & project imports, review of custom exemptions & tariff simplification with > 350 exemptions to be provided, custom duty rates to be calibrated to provide a graded structure to facilitate domestic electronics manufacturing, rationalization of exemptions on implements & tools for agriculture sector, extension of custom duty exemption on steel scrap & additional excise duty to be levied on fuel to promote fuel blending, are some of the key proposals.
In a nutshell, Government has smartly balanced expectations of the industry in the wake of economic recovery post the pandemic while maintaining public confidence viz-a-viz. its socio-economic-political responsibility.
Pease Click Here to read our analysis on the India Union Budget 2022.