Key Highlights of the Budget 2022-23

Budget 2022-23

Nirmala Sitharaman presented the Union Budget 2022-23 laying down the blueprint for growth in the next fiscal year. The Budget saw a major focus on sustainability, paving way for sunrise opportunities as well as promoting the startup ecosystem. The key highlights of the budget are as under:

Sector	Key Highlights
1. Know your Tax	Personal income tax No change in income tax slabs. Increased window for ITR: Concept of ‘Updated Returns’ introduced. Taxpayers will be allowed to disclose the income they missed out in their original/revised return on payment of additional tax. The updated return can be filed within 2 years after the expiry of the relevant assessment year. Corporate tax – No change in Income Tax rate. However, time limit for commencement of production or manufacturing for availing the benefit of concessional rate of 15% under section 115BAB is extended by 1 year. Benefit to Co-operative Societies Tax rate for Alternate Minimum Tax is reduced from 18.50% to 15%. The rate for surcharge is reduced from 12% to 7% for those cooperative societies having a total income of more than Rs. 1 crore but less than Rs. 10 crores. Enhanced NPS deduction for State Government Employees State Government employees can claim deduction of up to 14% for contribution made by their employer.
2. Digital India Push	5G rollout – Spectrum auctions will be held in 2022 for private telecom providers. A scheme will be launched for design-led manufacturing to build a strong ecosystem for 5G. All the villages will be linked with optical fibre for faster broadband services by 2025. E-education ‘One class one TV channel’ programme of PM eVIDYA will be expanded from 12 to 200 TV channels. This will allow all the states to provide supplementary education for classes 1-12 in regional languages. E-passports with embedded chips From 2022-23, the issuance of e-Passports will be rolled out to enhance the convenience in overseas travel by the citizens. The passports will use embedded chips and futuristic technology. Paperless e-bill system Central ministries to go paperless with online e bill systems for their procurements. This system will allow the contractors and suppliers to submit their digitally signed bills and claims online and track their status from anywhere.
3. Digital Assets	Taxation of Virtual Digital Assets Income from transfer of digital assets will be taxed at the rate of 30%. No deduction other than the cost of acquisition will be allowed from such income. Loss arising from the transfer of any virtual digital asset will not be allowed to be set off against any other income. TDS @1% will be deducted if the transaction crosses a certain monetary threshold. Gifting the virtual asset will also be taxable in the hands of the recipient. Launch of Digital Rupee Digital Rupee will be issued by the RBI using the blockchain and other technologies that will lead to a cheaper and more efficient currency management system.
4. Electric Vehicle Policy	Battery swapping policy will be introduced to mitigate the constraint of space to set up the charging stations and to boost the use of electric vehicles. Private sector will be encouraged to set up innovative and sustainable business models for ‘Battery or Energy as a Service’.
5. Housing sector boost	Under the PM Awas Yojana, 80 lakh houses will be completed for identified beneficiaries in 2022-23 for both rural and urban areas. For this purpose, Rs. 48,000 crores will be allocated. The Central Government will work with the State Governments for reducing the time required for necessary approvals and with financial sector regulators to expand access to capital.
6. PM Gati Shakti Masterplan	PM Gatishakti Masterplan is driven by 7 engines of growth: Roads, Railways, Airports, Ports, Mass transport, Waterways, Logistics infrastructure The network of National Highways will be expanded by 25,000 kms. Mobilise Rs 20,000 crore will be mobilised through innovative ways to compliment the public resources. No change in Income Tax rate.
7. Atmanirbhar Jawan	The government earmarked 68% of the capital procurement budget for the domestic industry for 2022-23 (up from 58% in 2021-22). Defence R&D sector to be opened for start-ups, institutes, and academic outlets. 25% of the R & D budget is earmarked for this purpose. Private players will be encouraged to undertake the design and development of military platforms. This will be through the EPV model in collaboration with DRDO and other organisations.
8. Modernised Kisan	In the first stage, by focusing on farmer’s lands in the 5-km long corridor along river Ganga, chemical-free natural farming will be promoted throughout the country. For crop assessment, spraying of insecticides, nutrients, and digitization of land records, Kisan Drones will be used. 1208 lakh metric tonnes of wheat and paddy will be procured from 163 lakh farmers. Rs. 2.37 lakh crore MSP Value will be paid directly to their accounts.
9. Next Gen Indian Railways	2000 kms of the rail network will be brought under the Kavach, the indigenous world-class technology for safety and capacity augmentation in 2022-23. 400 new generation Vande Bharat trains will be manufactured and developed within 3 years for a smooth passenger riding experience and better efficiency. 100 PM GatiShakti Cargo Terminals will be developed during the next 3 years for multimodal logistics facilities.
10. Mental health programme	National Tele Mental Health Programme will be launched for providing people with access to quality mental health counselling and care services. This will include NIMHANS as the nodal health centre and a network of 23 tele-mental health centres of excellence. The technical support will be provided by the International Institute of Information Technology-Bangalore (IIITB).
11. Post Office banking boost	100% of the 1.50 lakh post offices will be brought under the Core Banking System (CBS) in 2022. This will enable financial inclusion and provide access to accounts through mobile banking, net banking, and ATMs along with the facility to transfer funds online between bank and post office accounts.
12. Special Economic Zone Act	The current Special Economic Zone Act will be replaced with new legislation that allows the states to become partners in ‘Development of Enterprise and Service Hubs’. This will cover all large existing as well as new industrial conclaves.
13. Fiscal Deficit Target	For the year 2022-23, with the recommendations of the 15th Finance Commission, the states are allowed a fiscal deficit of 4% of GSDP from which 0.5% shall be tied to the power sector reform. The government estimated the total expenditure of 39.45 lakh crore for FY 2022-23 Total receipts other than the borrowing are estimated to be Rs. 22.84 lakh crore. The Fiscal Deficit is estimated at 6.40% of the GDP.
14. Animation and Gaming	An AVGC promotion task force will be set up to promote the employment of youth in the animation, visual effects, gaming, and comics (AVGC) sector. The task force will give recommendations to build domestic capacity for serving domestic as well as global demands.
15. Hospitality	The cover under the Emergency Credit Line Guarantee Scheme has been expanded by Rs. 50,000 crores and the scheme has been extended by 1 year up to March 2023. This provides a total cover of Rs. 5 lakh crore benefitting 130 lakh MSMEs.
16. Solar Modules	An additional allocation of Rs. 19,500 crores for Production Linked Incentive is provided to facilitate the manufacture of high-efficiency solar modules. Priority will be given to fully integrated manufacturing units from polysilicon to solar PV modules.

Bottom Line

The Budget 2022-23 is in line with India’s vision of Atmanirbhar Bharat and fostering the Make in India initiative. Many other changes were brought, especially in the taxation sector to support the domestic industries and provide them a level playing field with the international industries.