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      Union Budget 2022-23 : Everything Which You Need To Know

      Finance Minister Nirmala Sitharaman on Tuesday presented the Union Budget 2022 in Parliament. While presenting the Budget, Nirmala Sitharaman announce that the country’s economic growth is expected to be at around 9.2% in the current financial year.

      The Union Budget of 39.45 trillion rupees for the coming fiscal year focus on stepping up investment on infrastructure and digitalisation to put growth on a firmer footing as the economy recovers from the Covid-19 pandemic.

      Creation of jobs, a push for digital education, focus on mental health wellbeing, and preparations for new-age technologies such as blockchain and 5G services were among the highlights of Budget 2022.

      In what was her shortest Budget speech ever, FM Nirmala Sitharaman did not have gifts in store for taxpayers as she announce no changes in the income tax slabs or hikes in exemptions.

      The other areas that Budget 2022 focus on was a push towards a greener economy and a boost for made-in-India initiatives via a higher defence spending on domestically produce equipment.

      Highlights of Union Budget 2022

      Income Tax

      There was no change the income tax slabs in the personal income tax category in the Budget 2022-23.

      FM Sitharaman did not raise the standard deduction limit.

      The standard deduction currently stands at Rs 50,000 and raising the limit would have added some cash in the hands of taxpayers.

      FM Nirmala Sitharaman has propose a new provision permitting taxpayers to file an updated return on payment of additional tax.

      This update return can be file within two years from the end of the relevant assessment year.

      Corporate Tax

      In Budget 2022, the corporate tax rate too was kept at the same level.

      The concessional rate of 15% has been extended by one year for newly incorporated manufacturing units.

      GST

      FM Sitharaman said there has been a remarkable progress made in the Goods and Services Tax (GST) regime, but still a few challenges remain.

      Finance Minister Said :

      “Gross GST collection in January at record Rs 1,40,986 crores; this has been possible due to rapid economic recovery,”.

      Jobs

      Finance Minister said the next target of the government is to create 60 lakh jobs in 5 years.

      The productivity link incentive in 14 sectors for achieving the vision of “AtmaNirbhar Bharat” has received excellent response, with potential to create 60 lakh new jobs, and additional production of 30 lakh crore during the next 5 years, FM Sitharaman said.

      Pension

      To provide equal treatment to both central and government employees, the tax deduction limit on employer’s contribution to the National Pension System (NPS) account of the state government employees will be increased from 10% to 14%.

      Agriculture

      The Centre will promote Kisan Drones, chemical-free natural farming, public-private partnerships for the delivery of digital and high-tech services to farmers across the country during the financial year 2022-23, FM Nirmala Sitharaman said while presenting Union Budget 2022.

      The government will also facilitate a fund with blend capital raise under the co-investment model through Nabard to finance agri start-ups and rural enterprises, she said.

      The FM said the government’s procurement of wheat and paddy at the minimum support price (MSP) during 2021-22 will cover 1,208 lakh tonnes from 163 lakh farmers.

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      Finance Minister Said :

      “Rs 2.37 lakh crore will be the direct payment of MSP value to their accounts,”.

      PM Gati Shakti

      FM Sitharaman said the PM Gati Shakti National Master Plan is a transformative approach for economic growth and sustainable development and is driven by seven engines, roads, railways, airports, ports, mass transport, waterways and logistics infrastructure.

      All seven engines will pull forward the economy in unison.

      Taxation on Cryptocurrencies and Virtual Assets

      Giving clarity on taxation of cryptocurrencies and other virtual assets, Finance Minister Nirmala Sitharaman propose a 30% tax on income from transactions in such assets.

      Also, to bring such assets under the tax net, she proposed a 1% TDS (tax deducted at source) on transactions in such asset classes above a certain threshold.

      Gifts in crypto and digital assets will also be tax.

      5G

      India is gearing up for the roll out of 5G technology.

      FM Sitharaman said spectrum auction will be conduct to roll out 5G mobile services within the financial year 2022-23 by private firms.

      She also said voluntary exit for corporates will be cut down to 6 months from 2 years.

      Digital Rupee

      Meeting demands from large sections of industry, FM Sitharaman said the Reserve Bank of India (RBI) will launch a ‘Digital Rupee’ base on blockchain technology in 2022-23.

      Digital Bank

      Schedule commercial banks will set up 75 digital banks in 75 districts to encourage digital payments, FM Sitharaman said.

      E-Passports

      Presenting the Union Budget 2022-23, she also said e-passports with the embedd chip will be roll out.

      Housing

      80 lakh houses will be complete under PM Awas Yojana with an outlay of Rs 48,000 crore.

      Rs 60,000 crore has been allocate for ‘Har Ghar, Nal Se Jal’ scheme under which 3.8 crore households will be cover.

      Rail Budget

      Around 2,000 km of rail network will be brought under indigenous technology, KAWACH for safety and capacity augmentation, FM Sitharaman also said 400 new generation Vande Bharat trains will be manufacture in the next three years.

      Emergency Credit Boost

      The Emergency Credit Line Guarantee Scheme (ECLGS) that provide much need additional credit to over 1.3 crore MSMEs will be extend till March 2023.

      Its guarantee cover has been expand by Rs 50,000 crore to Rs 5 lakh crore, FM Sitharaman said.

      Borrowing

      The government will borrow about Rs 11.6 lakh crore from the market in 2022-23 to meet its expenditure requirement.

      This is nearly Rs 2 lakh crore higher than the current year’s Budget estimate of Rs 9.7 lakh crore.

      Green Economy

      Stressing on the transition to carbon neutral economy, FM Sitharaman has announce an allocation of Rs 19,500 crore propose for production link incentives for manufacturing of high-efficiency modules.

      In her budget speech, she has note risks of climate change are the strongest negative externalities that affect India and other countries.

      ‘Sovereign Green Bonds’ will be issue for mobilizing resources for investment in green infrastructure.

      Defence

      To boost self-reliance and reduce reliance on imports of defence equipment, 68% of capital procurement budget for defence has been earmark for domestic industry.

      The Defence Research and Development was open up for industry and startups.

      Health

      For better access to quality mental health counselling and care services, a ‘National Tele Mental Health Programme’ will be launch.

      Apart from this, an open platform for the National Digital Health Ecosystem will be roll out.

      It will consist of digital registries of health providers and health facilities, unique health identity and universal access to health facilities.

      Details of Union Budget 2022

      Customs Duty Rates Being Calibrated to Strengthen Domestic Manufacturing of Wearables

      Finance Minister Nirmala Sitharaman said customs duty rates are being calibrate to provide a grade rate structure to facilitate domestic manufacturing of products like wearables and electronic smart meters.

      Presenting the Union Budget 2022-23, Nirmala Sitharaman said duty concessions are also being given on certain items to enable domestic manufacturing of high-growth electronic goods.

      Finance minister note that electronic manufacturing has been growing rapidly.

      Nirmala Sitharaman Said :

      “Customs duty rates are being calibrated to provide a graded rate structure to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart meters,”.

      She said duty concessions are also being given to parts of transformer of mobile phone chargers, camera lens of mobile camera module, and certain other items.

      Nirmala Sitharaman said :

      “This will enable domestic manufacturing of high-growth electronic items,”. 

      India Introduces Cryptocurrency Tax of 30 Percent

      Finance Minister Nirmala Sitharaman announce during her Budget speech that moving forward cryptocurrencies will fall under a tax net, highlighting a 30% tax on any income from the transfer of virtual digital assets.

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      She also point out that no deductions and exemptions will be allow on the same.

      Gifts in the form of virtual digital assets are also to be tax on the hands of the recipient, she said, adding that there will be an additional 1% tax deducted at source (TDS) on the payments made for the transfer of digital assets.

      Niramala Sitharaman Said :

      “There has been a phenomenal increase in transactions in virtual digital assets. The magnitude and frequency of these transactions are made it imperative to provide for a specified tax regime accordingly, for the taxation of virtual digital assets, I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30% “.

      “No deduction in respect of any expenditure or elements shall be allowed while computing such income except the cost of acquisition for loss from the transfer of virtual digital assets cannot be set off against any other income,”.

      The finance minister did not provide further clarification on what this means for crypto exchanges including GST implications, but the news could be seen as a blow for potential investors looking to diversify their financial portfolio.

      Niramala Sitharaman Said :

      “In order to capture the transaction details, I also propose to provide for TDS on payment made in relation to transfer virtual digital assets at a rate of one percent of such considerations about a monetary threshold gift the virtual digital asset is also proposed to be taxed in the hands of the recipient,”.

      The Reserve Bank of India, the country’s central bank will also introduce a digital currency in the next financial year, she said.

      The nation’s central bank has been piloting its Central Bank Digital Currency (CBDC) for many months.

      Niramala Sitharaman Said :

      “Introduction of a central bank digital currency will give a big boost to the digital economy. Digital currency will also lead to a more efficient and cheaper currency management system,”.

      Customs Duty Concessions Announced to Boost Domestic Manufacturing of Mobiles, Other Electronics

      Finance Minister Nirmala Sitharaman in her Union Budget 2022 speech has announce concessions on the customs duty levied on mobile phone parts and other electronics to boost domestic manufacturing.

      Niramala Sitharaman Said :

      “Electronic manufacturing has been growing rapidly. Customs duty rates are being calibrated to provide a graded rate structure to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart meters. Duty concessions are also being given to parts of transformer of mobile phone chargers and camera lens of mobile camera module and certain other items. This will enable domestic manufacturing of high growth electronic items,”.

      Tax Incentive Period Increase for Startups by One More Year

      Minister of Finance Nirmala Sitharaman said that eligible startups establish before 31st March, 2022, have been provide tax incentive for three consequent two years, out of the 10-year period starting with incorporation, in view of the coronavirus-induced pandemic.

      Nirmala Sitharaman Said :

      “I propose to extend the period of incorporation of the eligible startups by one more year. That is up to March 31, 2023, for providing such tax incentives.” She added, “Incentives for startups have emerged as drivers of growth for our economy over the past few years. The country has seen a manifold increase in successful startups.”

      Post Office Accounts Will Be Accessible Through Netbanking, Mobile Banking

      Minister of Finance Nirmala Sitharaman said that in this year, 1.5 lakh post offices in the country will come under a core banking system, enabling financial inclusion and access to accounts through netbanking, mobile banking, ATMs, and provide online transfer of funds between post office accounts and bank accounts.

      Nirmala Sitharaman Said :

      “This will be especially helpful for farmers and senior citizens in rural areas,”.

      AVGC Promotion Task Force to Be Set Up for Animation, Gaming

      Government announce setting up of a task force to recommend steps for promotion of animation, visual effects, gaming, and comic (AVGC) sector.

      The sector offers immense potential to employ youth, Finance Minister Nirmala Sitharaman said in her Budget speech.

      Nirmala Sitharaman Said :

      “An AVGC promotion task force with all stakeholders will be set up to recommend ways to realise this and build domestic capacity for serving our markets and the global demand,”.

      Battery-Swapping Policy to Be Introduced to Promote Electric Vehicles

      Finance Minister Nirmala Sitharaman announce that the government will bring a battery swapping policy to boost use of electric vehicles in the country in view of space constraints for setting up charging stations.

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      Nirmala Sitharaman Said :

      “Considering the constraint space in urban areas for setting up (electric vehicles) charging stations, a battery swapping policy will be brought out and interoperability standards will be formulated,”.

      She said that the private sector will be encourage to set up sustainable business models for battery or energy service and this will improve efficiency in EV (electric vehicle) ecosystem.

      Nirmala Sitharaman Said :

      “We will promote a shift to use public transport in urban areas. This will be complemented by clean tech and governance solutions, special mobility zones with zero fossil fuel policy and EV vehicles,”.

      The policy will facilitate faster rollout of battery swapping centres where EV owners would be able to refuel their EV by replacing exhaust batteries with charge ones.

      This will also save time taken in charging the embedd batteries in EVs.

      At present, a few such options are available in the country and EV owners have to spend hours for charging their vehicles at charging stations especially in cities.

      There is space constrain for setting up new charging stations in urban areas also. 

      Startups to Be Facilitated to Promote ‘Drone Shakti’, Required Skill Courses to Be Started

      Drone Shakti, a new initiative that will commercialise the use of drones in different industries, will be promote with the help of startups, Finance Minister Nirmala Sitharaman announce in her Budget 2022 speech.

      She stress that the initiative will also help establish Drones-As-A-Service. Nirmala Sitharaman also said that the require courses need to upskill people on the use of drone technology will be start.

      Nirmala Sitharaman Said :

      “Artificial Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system, Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility Systems have immense potential to assist sustainable development at scale and modernise the country. They provide employment opportunities for youth, and make Indian industry more efficient and competitive”

      While talking about agricultural development, Nirmala Sitharaman also said that the use of ‘kisan drones’ will be promote for crop assessment, digitisation of land records, spraying of insecticides, and nutrients.

      Spectrum Auctions to Be Conducted This Year to Facilitate Rollout of 5G Services

      The government will conduct a spectrum auction this year, which will facilitate the roll-out of 5G services by private telecom operators during the financial year 2022-23, Finance Minister Nirmala Sitharaman said.

      Nirmala Sitharaman Said :

      “Spectrum auctions will be conducted in 2022 to facilitate the roll-out of 5G mobile services within 2022-23 by private telecom providers,”.

      She said the telecommunications sector in general and 5G, in particular, can enable growth and offer job opportunities.

      Nirmala Sitharaman Said :

      “A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the production-linked incentive scheme,”.

      She said that to enable affordable broadband and mobile service proliferation in rural and remote areas, 5% of annual collections under the universal service obligation fund will be allocate.

      Nirmala Sitharaman Said :

      “This will promote R&D and commercialisation of technologies and solutions. Our mission is that all villages and their residents should have the same access to e-services, communication facilities and digital resources as urban areas and their residents,”.

      She said that the contract for laying optical fibre in all villages, including remote areas, will be awarded through the BharatNet project through PPP in 2022-23.

      Nirmala Sitharaman Said :

      “Completion is expect in 2025. Measures will be taken to enable better and more efficient use of the optical fibre,”.

      Digital Banking Units to Be Set Up in 75 Districts by Scheduled Commercial Banks

      Union Finance Minister Nirmala Sitharaman announce the introduction of Digital Rupee which will be issue by the Reserve Bank of India starting 2022-23, with the setting up of 75 digital banking units in 75 districts by scheduled commercial banks.

      Nirmala Sitharaman, as per a release of Union Finance Ministry, said that in recent years, digital banking, digital payments, and fintech innovations have grown at a rapid pace in the country, and the government has been continuously encouraging them to ensure that the benefits of digital banking reach every nook and corner of the country in a consumer-friendly manner.

      Taking forward this agenda, and to mark 75 years of our independence, the Finance Minister announce that it is propose to set up 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks.

      The Finance Minister said that the Central Bank Digital Currency (CBDC) will give a big boost to the digital economy.

      Nirmala Sitharaman Said :

      “Digital currency will also lead to a more efficient and cheaper currency management system,”.

      Nirmala Sitharaman announce that in 2022, 100% of 1.5 lakh post offices will come on the core banking system enabling financial inclusion and access to accounts through net banking, mobile banking, ATMs, and will also provide online transfer of funds between post office accounts and bank accounts.

      Nirmala Sitharaman Said :

      “This will be helpful, especially for farmers and senior citizens in rural areas, enabling interoperability and financial inclusion,”.

      As for the Digital Payments, the Finance Minister assure that the financial support for its ecosystem announce in the previous Budget will continue in 2022-23.

      Nirmala Sitharaman Said :

      “This will encourage further adoption of digital payments. There will also be a focus to promote the use of payment platforms that are economical and user friendly,”.

      Crypto Ban Proposal Not on Lok Sabha Agenda, Lecture on Cryptocurrency Slated

      A lecture on “Understanding Cryptocurrency and Its Impact on Indian Economy” has been add to the agenda for the Lok Sabha or the Lower House of the Parliament at a time when India is making plans to regulate the crypto sector.

      The Lok Sabha agenda misses out on proposals suggesting a ban on crypto activities in the country during Budget Session 2022.

      India’s stance on the crypto sector has been a node of anticipation for the past couple of years now, during which millions of Indians entered the sector to experiment with this unregulated digital finance avenue.

      The lecture has been slate by the Parliamentary Research and Training Institute for Democracies department for 2nd February 2022 in both online as well as offline modes.

      “Hon’ble Members are request to kindly make it convenient to attend the programme either in person or online,” the agenda publish on 31st January 2022 says.

      It may come as a relief for Indian investors that the crypto bill calling for a ban on private cryptocurrencies did not make it as one of the 15 bills up for government’s consideration for the time being.

      The bill was suppose to be table before the Parliament during its winter session in November last year, but that did not happen.

      Finance Minister Nirmala Sitharaman had reveal at the time that the bill was awaiting an approval from the Cabinet, the status of which has not change since.

      The crypto bill draft by the Finance Ministry had also note that the government wishes to bring an official digital currency or a Central Bank Digital Currency (CBDC) for India.

      Now that India’s decision around regulating the crypto space looks delay, the government does seem interest in educating its lawmakers about the overall sector.

      In 2018, discussions around modulating the crypto sector spark in the nation after the Reserve Bank of India (RBI) impose a ban on crypto transactions facilitate by other lenders.

      At the time, the RBI had said that the unregulate and untraceable nature of cryptocurrencies pose serious risks to the financial functioning of this country.

      Later in 2021, the RBI lift this ban back by Supreme Court’s judgment that did not favour a clampdown on crypto activities.

      Crypto transactions being untraceable and prone to be exploit for illicit activities like terror funding and money laundering has been a matter of concern for many governments around the world.

      In addition, the disruptive high-energy requirements of crypto mining as well as its negative environmental impacts have also emerge as concern-worthy issues for world authorities.

      With all these reasons lining up, China impose a blanket ban on crypto activities last year, making them punishable offenses.

      Research reports claim that India has the highest number of crypto investors in the world, around 100 million.

      E-Passports With Embedded Chip to Be Rolled Out in 2022-23

      Minister of Finance Nirmala Sitharaman said that e-passports with embedded chip and futuristic technology will be roll out in 2022-23 to help citizens in their overseas travel.

      Digital University Announced to Provide World-Class Universal Education Across Country

      Minister of Finance Nirmala Sitharaman announce the establishment of a Digital University.

      It will provide access to world-class universal education with personalised learning experience at students’ doorsteps across the country.

      This will be made available in different Indian languages and ICT formats.

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