BUDGET AT A GLANCE

EAT HEALTHY & EXOTIC

Add Protein to Your Diet

Prices of imported food items such as fruits dry fruits, dates, asafetida, millets, frozen mussels and squid will come down due to reduction in import duties. The duty cut is steep in some products – from 30% to 2.5% for cashew nuts, and from 70% to 30% for pepper and cloves.

ROUGH WEATHER

Umbrella to Cost More

Prices of imported umbrellas, including lower priced ones from China, will go up by 7-8% as basic custom duty is doubled to 20%.

MEATY DELIGHT FOR PAWS

Pet Food to Pinch Less

Buying imported pack of food for your dogs and cats will pinch less as duties are cuts to 20% from 30%.

CHOOSE YOUR GADGETS

Imported Ones Pricey

Prices of imported wireless headphones, earphones and portable Bluetooth speakers will go up by 3-4% while those made India will cost less. The custom duty on components for smartwatch and wireless headphones like printed circuit board assembly, speakers assembly, battery, charging cable will be zero as against 10-15% now. This will lower price of made in India products.

REDO HOME DÉCOR

Furnishing Gets Cheaper

Imported carpets and other textile floor coverings will cost 2-3% less with duties down from 25% to 20%. Custom duties on a wide variety of bed linen, curtains and other furnishing articles are down from 25% to 10%.

PHONES STAY SMART

Prices Remain Unchanged

Mobile phones prices will remain the same despite a duty cut on components since the impact on cost is marginal.

TOY STORY

No Child’s Play

Electronic toys made in India may cost more as customs duties on their parts go up from 15% to 25%.

NPS DEDUTION

Parity for State Government Staff

State government employee will be able to claim a tax benefit of 14% on NPS contribution from FY 2022-23, bringing them on par with central government employees. Until now, the tax benefit was capped at 10% for state government and private sector employees.

WITHHOLDING TAX

Higher TDS for non- filers

Taxpayers who haven’t filed returns for the previous assessment year will be subjected to higher TDS. 10-30% TDS is applicable on interest income from deposits, dividends, sale of property, NRI payments and rental income. It will be higher if returns have not been filed.

TAX EXEMPTION FOR NRIs

Promoting GIFT City

Income of NRIs from offshore derivative instruments, royalty and interest on leasing Ship, and portfolio management services based out of International Financial Services Centres or GIFT city will be exempt from tax.

This exemption is subject to conditions, the finance minister said.

INSURANCE

Tax Benefit for Disabled

For insurance policies bought by parents/ guardians of disable children, the payout can now be given to the dependant even if the parents is alive, if he is over 60 year. So the premium will qualify for deduction under Section 80DD even if the parent is alive and over 60. Earlier, the death of policyholder.

“Another point, which needs further clarity, is that the payout will no longer be taxable,” says Sanjay Datta, Chief, Underwriting, ICICI Lombard General Insurance.

LOOPHOLE PLUGGED

No Bonus Stripping

Bonus stripping in share and securities (previously allowed only in mutual funds) will not be permitted from April 1, 2022.

ALTRNATE MINIMUM TAX

Coop Societies Can Rejoice

The budget reduced alternate minimum tax on cooperative societies from 18.5% to 15%, at par with companies, while reducing surcharge to 7%. This will help rural and farmer communities, who are members of such societies.

LITIGATION MANAGEMENT

No Repetitive Appeals

Litigation management system has been introduced to a avoid repetitive appeals involving identical issues. The revenue department shall avoid filling appeal against an assessee until the substantial question of law is decided by a high court or the SC.

IN TAX NET

Carrying Value of Goodwill

Any carrying value of goodwill which was reduced from the block of assets would be deemed as a transfer which means that the same has to be offered for tax in FY21 and could have implications for future sale.

GOING RETRO

Cess Non-deductible

Cess and surcharge cannot be claimed as expenses while claiming deductions for income from business and profession, which is expected to bring an end to many long-pending disputes. The provision of this section would be retrospectively applicable from 2005.

TRANSFER PRICING

Taxman Gets More Powers

Companies are likely to face greater scrutiny under transfer pricing as scope of tax official’s powers has been widened. Principal commissioners have been allowed to call for and examine the record of any proceeding, if an order passed by a transfer pricing officer is seen erroneous and prejudicial to the interest of revenue.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *