The Union Budget 2022 - Analysed

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• Capping of surcharge on long term capital gains on sale of any
type of asset (from graded surcharge up to 37% to 15%) will
reduce the effective long term capital gains tax rate in the
hands of investors, founders and founding team members
• Provision to file ‘updated return’ through one-time window
within two years from the end of relevant assessment year by
payment of additional tax of 25% or 50% on the tax and
interest due on the additional income in case of omission of
income or error
• Income from transfer of digital assets to be taxed at 30% • Use digital assets judiciously as losses cannot be set off
without any provision for deductions except for the cost of
acquisition. Loss on sale of digital assets cannot be set off • Revision in taxes (due to omission or incorrect income
against any other income. TDS at 1% will be levied above calculation) can now be done without the fear of litigation
certain threshold. Gift of digital assets will also be taxed in
the hands of the recipient
• Provisions of dividend stripping now also applicable to units
of InvITs / REITs/ AIFs
• Provisions of bonus stripping now also applicable to units of

HNI • Filing of further appeal by the tax department shall be deferred

till such identical issues are sub-judice. This will avoid
repetitive appeals and lead to better litigation management
InvITs / REITs/ AIFs and securities

• Digital Rupee by the RBI will lead to more efficient and

cheaper currency management system

• To promote the International Financial Services Centre (IFSC),

income of non-residents from offshore derivative
instruments, or over the counter derivatives issued by an
offshore banking unit, income from royalty and interest on
account of lease of ship and income received from portfolio
management services in IFSC shall be exempt from tax,
subject to specified conditions

• Railways to develop new products and efficient logistics • Any surcharge or cess (like education or health) on income • Utilise benefits offered under the various government credit
services for Small and Medium Enterprises, taking the lead in and profits is not allowed as business expenditure extension and guarantee schemes
integration of Postal and Railways networks to provide
seamless solutions for movement of parcels • Leverage the skilling, reskilling, and upskilling initiatives
launched by the government
• Udyam, e-Shram, NCS and ASEEM portals will be interlinked to
serve as platforms with live, organic databases, providing the • Domestic options should be preferred where imported inputs
government to citizen (G2C), business to consumer (B2C) and have become expensive
business to business (B2B) services. These services will relate
to credit facilitation, skilling, and recruitment with an aim to
further formalise the economy and enhance entrepreneurial
opportunities for all

• Launch of the Digital Ecosystem for Skilling and Livelihood or

DESH-Stack e-portal to empower citizens to skill, reskill or
upskill through online training

SME • Emergency Credit Line Guarantee Scheme, which had helped

MSMEs cope with the pandemic, will be extended up to March
2023, and its guarantee cover will be expanded by Rs 50,000
owners crore to a total cover of Rs 5 lakh crore, with the additional
amount being earmarked exclusively for the hospitality and
related enterprises

• Credit Guarantee Trust for Micro and Small Enterprises scheme

to be revamped to facilitate additional credit of Rs 2 lakh crore
for Micro and Small Enterprises and expand employment
opportunities

• Raising and Accelerating MSME Performance programme with

outlay of Rs 6,000 crore over 5 years to help the MSME sector
become more resilient, competitive, and efficient

• Phasing out of concessional rates in capital goods and project

imports gradually and applying a moderate tariff of 7.5% will
support the domestic industry

• Reduced exemption on imported implements and tools for the

agri- sector, which are already being manufactured in India

• Duty exemption on inputs like specialised castings, ball screw

linear motion guide, and extending exemption on steel scrap

• Startups will be promoted to facilitate ‘Drone Shakti’ through

varied applications and for drone-as-a-service. In select ITIs, in
all states, required courses for skilling will be started

• Push to MSMEs operating in the electric vehicle space with the

introduction of a battery-swapping policy

• Increased ease of doing business in SEZs through reforms in

customs administration by making it fully IT driven on the
Customs National Portal

• One year extension of concessional tax rate of 15% for

domestic manufacturing companies commencing
manufacturing or production by March 31, 2024

• The eligibility period to claim tax exemption for start-ups

extended by a year to March 31, 2023
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• Increased tax deduction from 10% to 14% on employer’s • Income from transfer of digital assets to be taxed at 30% • Use digital assets judiciously as losses cannot be set off
contribution in NPS for state government employees without any provision for deductions except for the cost of
acquisition. Loss on sale of digital assets cannot be set off • Revision in taxes (due to omission or incorrect income
• Digital Rupee by the RBI will lead to more efficient and against any other income. TDS at 1% will be levied above calculation) can now be done without the fear of litigation
cheaper currency management system certain threshold. Gift of digital assets will also be taxed in
the hands of the recipient
• Provision to file ‘Updated Return’ through one-time window
Young within two years from the end of relevant assessment year by
payment of additional tax of 25% or 50% on the tax and
Salaried interest due on the additional income in case of omission of
income or error
Professionals
• 100% of post offices to come under core banking and enable
online transfer of funds between post offices and bank
accounts. This will enable inter-operability and financial
inclusion along with access to accounts through net banking,
mobile banking, ATMs, and also provide online transfer of
funds between post office accounts and bank accounts

• Capping of surcharge on long term capital gains on sale of any
type of asset (from graded surcharge up to 37% to 15%) will
reduce the effective long term capital gains tax rate in the
hands of investors, founders and founding team members
• Digital Rupee by the RBI will lead to more efficient and
cheaper currency management system
None • Parents/ guardians of differently abled dependents can look
in to buying insurance plans, which offer annuity or lumpsum
payment when they attain 60 years of age
• Post offices coming under the core banking system will
facilitate digital transactions, resulting in easy accessibility
and convenience

• Tax deduction on annuity and lump sum amount from

Retired insurance schemes taken for differently abled dependents
will be applicable during the lifetime of parents/guardians,
Individuals i.e., on parents/ guardians attaining the age of 60 years

• All post offices in the country will be brought on the core

banking system. With this, post office account holders will be
able to make online transactions and even transfer money to
bank accounts through net banking

• Customs duty on cut and polished diamonds and gemstones, • Rise in import duty for products such as umbrella, imitation • Post offices coming under the core banking system will
certain fruits, dry fruits, grains, seafood, etc, has been jewellery, electronic equipment, and solar products facilitate digital transaction, resulting in easy accessibility
reduced and convenience

• Allocation of Rs 48,000 crore for PM Awas Yojana – both rural • Parents/ guardians of differently abled dependents can look
and urban – to provide affordable housing in to buying insurance plans, which offer annuity or lumpsum
payment when they attain 60 years of age
• 100% of post offices to come under core banking and enable

Home online transfer of funds between post offices and bank

accounts. This will enable inter-operability and financial
inclusion along with access to accounts through net banking,
• Domestic options should be preferred where imported
products have become expensive

makers mobile banking, ATMs, and also provide online transfer of

funds between post office accounts and bank accounts

• Tax deduction on annuity and lump sum amount from

insurance schemes taken for differently abled dependents
will be applicable during the lifetime of parents/guardians,
i.e., on parents/ guardians attaining the age of 60 years

Source : Based on the Union Budget speech by the Hon’ble Finance Minister on 1st Feb 2022.

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