There are many changes in the income tax rules effective from the next financial year. Income tax on crypto assets, updated return filing, new tax rules on EPF interest, and tax relief on COVID-19 remedies are some of the major changes that are effective from 1st April 2022.
7 major changes in income tax with effect from 1st April 2022
1) Crypto Tax
crypto property tax The regime in India will come into force gradually in the financial year beginning April 1. The provisions on 30% tax will be effective at the beginning of the financial year, while the provisions relating to 1% TDS will come into effect from July 1, 2022. The 2022-23 budget has brought clarity with regard to the imposition of income tax on crypto assets. TDS limit will be 50,000 per annum for specified persons, including individuals/HUFs who are required to get their accounts audited under the IT Act.
2) Crypto losses cannot be set off against crypto gains or other assets
The Indian government has tightened the norms for crypto by setting off losses in a particular digital asset against income from the second tranche of crypto holdings. The government will not allow tax exemption on infrastructure cost while mining crypto assets as it will not be considered as cost of acquisition. For example, if you make a 1000 profit on bitcoin and a 700 loss on ethereum, you will have to pay tax 1000 and not on your net profit 300. Similarly, you cannot set off profit and loss on cryptocurrency against gains and losses in other assets such as stocks, mutual funds or real estate.
3) Filing of updated IT returns
A new provision has been inserted that allows taxpayers to file a update returns For errors or mistakes made in the income tax return. Taxpayers can now file an updated return within two years from the end of the relevant assessment year.
4) NPS deduction to state government employees
State government employees can now claim deduction under section 80CCD(2) NPS Contribution by the employer up to 14% of their basic pay and dearness allowance, which is in line with the deduction available to Central Government employees under the said section.
5) Tax on PF account
The Central Board of Direct Taxes (CBDT) has decided to implement the Income Tax (25th Amendment) Rules, 2021 from April 1. Two and a half lakh rupees are being invested in the Employees Provident Fund (EPF) account. If the contribution is made above this, the interest income will be taxed.
6) Tax relief on the cost of treatment of Kovid-19
As per the June 2021 press release, tax exemption has been provided to persons who have received funds for COVID medical treatment. Similarly, money received by family members on death of a person due to COVID will be exempted up to Rs. 10 lakh for family members if such payment is received within 12 months from the date of death. This amendment will come into force with retrospective effect from April 1, 2020.
7) Tax Relief to Persons with Disabilities
The parent or guardian of a disabled person can take an insurance plan for such a person
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