From Our Bureau
NEW DELHI: People look forward to the Union Budget presentation for changes in the income tax they pay, but Finance Minister Nirmala Sitharaman on Tuesday skipped from tweaking it in what Congress chief spokesman Randeep Singh Surjewala described as “a betrayal of India’s Salaries Class and Middle Class, hoping for relief in times of pandemic.”
The finance minister has, however, introduced a couple of reliefs like one to persons with disability and steps to avoid repeat litigations with the taxpayers. She also reduced income tax on the cooperative societies from 18.5% to 15% and 7% instead of 12% surcharge on the cooperatives with annual income of Rs 1 crore to Rs 10 crore.
One of the major tweak in the income tax law is to allow the taxpauers to file updated income tax return within two years and file the additional tax from the end of the relevant assessment year. Sitharaman said this would give an opportunity to the taxpayers to correct any omissions or mistakes in correctly estimating their income for the tax payment.
It would save the department from a lengthy process if it finds out some income missed out by the assessee. “The new proposal would repose trust in the taxpayer. It is an affirmative step in the direction of voluntary tax compliance,” the finance minister said.
Another change she has proposed is 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.
She also enhanced the social security benefits to the state government employees by bringing them at par with the central staff by increasing the tax deduction limit from 10 to 14% on the employer’s (state govt’s) contribution to the NPS (pension) account.
Noting how a lot of time and resources are consumed in filing of appeals involving identical issues, the finance minister has sought to reduce the repeated litigations between taxpayers and the department. She offers to defer further appals by the department until the jurisdictional High Court or the Supreme Court rules on the pending appeals with the identical questions of law.
DIGITAL ASSETS: Referring to a phenomenal increase in the magnitude and frequency of transactions in virtual digital assets, Sitharaman slapped a tax of 30% on any income from transfer of any virtual digital assets and stressed not to allow any deduction in respect of any expenditure while computing income except the cost of acquisition.
Also, the loss from transfer of virtual digital asset 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 asset at the rate of 1% of such consideration above a monetary threshold. Gift of virtual digital asset is also proposed to be taxed in the hands of the recipient, she added.
