From crypto tax to updated IT return, here are the personal finance highlights from Budget 2022

• Finance minister Nirmala Sitharaman today unveiled Budget 2022, including several announcements in income tax and personal finance.
• The announcements include crypto tax and a reduction in surcharge on long-term capital gains on other assets.
• Here are all the key highlights for taxpayers in Budget 2022.

Finance minister Nirmala Sitharaman announced several updates as far as personal finance is concerned, aiming at making things easier for individual taxpayers. While there were no big-bang announcements in Budget 2022, taxpayers have a few benefits to look out for.

Analysts had expected a slew of announcements, including a hike in standard deduction for salaried individuals, and enhancement in deductions for investments, among other things. Those were all missing from the Budget 2022, much to the dismay of the common man.

Here are the most notable announcements in income tax and personal finance in Budget 2022:

New updated return

Finance Minister Nirmala Sitharaman proposed a new clause that will allow taxpayers to file ‘updated’ returns to correct omissions and errors in their original tax returns, within two years from the end of the relevant assessment year.

This proposal allows taxpayers to avoid lengthy processes which are involved in assessing and taxing income that has not been disclosed or assessed.

It is worth noting that the updated return can only be filed if it results in the assessment of additional tax liability – that is, if the update reduces your tax outgo, or results in a return of loss, you cannot file it.

Further, if you file the updated return within 12 months of the end of the relevant assessment year, you will be liable to pay an additional amount equivalent to 25% of the total tax and interest payable. If you do it between 12 and 24 months of the end of the relevant assessment year, this will increase to 50%.

Tax on proceeds from cryptocurrency and other digital asset sales

Proceeds from sale of cryptocurrencies and other digital assets will attract a tax of 30%, with no deductions allowed other than the cost of acquisition.

Additionally, payments made to transfer these digital assets will attract a TDS of 1%.

The government also said that other losses will not be allowed to be set-off against income from the sale of crypto and other digital assets, but it is not clear yet if crypto losses can be set-off against other incomes. Even the experts are divided.

Tax relief for persons with disability

Tax relief for persons with disability will be allowed annuity/lump sum payments if the guardian is above the age of 60 years.

Earlier it was allowed only if the guardian was dead.

Surcharge on long-term capital gains capped at 15%, down from up to 37% earlier

Surcharge on long-term capital gains on transfer of any assets capped at 15%. Currently, the surcharge on any long-term gains from sale of stocks were capped at 15%.

This rate could go up to 37% for other assets, Sitharaman said, which has now been capped at 15%.

EPF contribution deduction

Deduction on EPF contribution was brought to parity at 14% for both central and state government employees, from the 10% rate for state government employees earlier.

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