The new financial year 2022-23 (FY23) is just around the corner and there are some key changes that may affect your budget in the next fiscal. There are some changes ranging from income tax to crypto which are set to take place from Friday, April 1, 2022.
Tax on crypto assets
Crypto assets will be taxed from the next financial year starting Friday. Union Finance Minister Nirmala Sitharaman in her Budget 2022 speech announced a 30 per cent tax on income from virtual digital assets such as cryptocurrencies including bitcoin and Ethereum and non-fungible tokens (NFTs). In her speech, the minister said there has been a phenomenal rise in such transactions and the magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime.
Apart from this, there will be a 1 per cent TDS and gift tax under certain conditions to be paid by the receiver of such digital asset as a gift.
Tax on PF account
The Central Board of Direct Taxes (CBDT) will implement Income-tax (25th Amendment) Rule 2021 from April 1. It means that interest accrued in the PF account on contributions over Rs 2.5 lakh a year will be taxable.
According to the new rule, for the purpose of calculation of taxable interest, separate accounts within the provident fund account shall be maintained during 2021-2022 and all subsequent years for taxable and non-taxable contributions made by a person.
Filing of updated ITRs
There is a new provision that allows income taxpayers to file updated returns within two years from the end of the relevant assessment year. This however cannot be done to report additional loss or fall in the tax liability.
No extra tax incentive for affordable homebuyers
From FY23, the government will stop the benefit of extra tax exemption under section 80EEA to first time home buyers. In the budget of the financial year 2018-19 (FY19), the government had announced an additional Rs 1.50 lakh income tax relief over and above the Rs 2 lakh Section 24(b) on home loans to first time home buyers who own a house of up to Rs 45 lakh. This facility was later extended in the subsequent budgets of FY20 and FY21.
Therefore, such homebuyers could claim a maximum deduction of Rs 3.5 lakh using Section 24(b) and Section 80EEa of the Income Tax Act.
But now, heading into the new fiscal, homebuyers who want to go for affordable housing will have to pay more tax from FY23.