The Government proposes to permit taxpayers to file an updated return on payment of additional tax within two years from the end of the relevant assessment year, Finance Minister Nirmala Sitharaman announced today while presenting the Union Budget 2022-23 in Parliament.
She said this would give taxpayers an opportunity to correct any omissions or mistakes incorrectly estimating their income for tax payment.
She pointed out that currently if the department finds out that some income has been missed out by the assessee, it goes through a lengthy process of adjudication. The new proposal would repose trust in the taxpayer. She said, “It is an affirmative step in the direction of voluntary tax compliance”.
On giving tax relief to persons with disability, Sitharaman said the law currently provides for a deduction to the parent or guardian when they take an insurance scheme for the differently-abled person only if the lump-sum payment or annuity is available to the differently-abled person on the death of the subscriber.
Pointing out that there could be situations where differently-abled dependants may need payment of annuity or lump sum amount even during the lifetime of their parents/guardians, she announced that the government proposes to allow the payment of annuity and lump sum amount to the differently-abled dependent during the lifetime of parents/guardians, on subscribers attaining the age of sixty years.
The minister said that to enhance the social security benefits of the state government employees and bring them at par with the central government employees, the government proposes to increase the tax deduction limit to 14 percent from 10 per cent on the employer’s contribution to the NPS account of state government employees.
Stating that the magnitude and frequency of transactions in virtual digital assets have increased phenomenally, Sitharaman announced that “any income from transfer of any virtual digital asset shall be taxed at the rate of 30 percent”.
She said that the scheme would not allow any deduction in respect of any expenditure or allowance while computing such income except the cost of acquisition. Further, she said, loss from the transfer of virtual digital assets cannot be set off against any other income.
The minister also added that in order to capture the transaction details, the government would also make a provision to provide for TDS on payment made in relation to transfer of virtual digital assets at the rate of 1 percent of such consideration above a monetary threshold. The gift of virtual digital assets is also proposed to be taxed in the hands of the recipient, she said.