New Income Tax Rules Applicable From April 1, 2022: All You Need To Know

From April 1, 2022, a number of significant changes will take place that may affect your online transactions and expenses. Here are significant changes to be aware of.30% Tax Payable On Cryptocurrency Assets Sold At A Profit The Union Budget 2022-23 proposed a 30% tax on cryptocurrency assets. Beginning April 1, cryptocurrency gains will be taxed at 30%, which is the highest tax bracket, with a rate that is the same as lottery winnings. From Bitcoin to non-fungible tokens (NFTs), this tax rate would apply to all virtual digital assets (VDAs) and their earnings. For example, if an investor buys a cryptocurrency for Rs. 15,000 and sells it for Rs. 25,000 generating a Rs. 10,000 profit, they must pay a 30% tax of Rs. 3,000. The 1% TDS is set to go into effect on July 1, 2022. Regardless of whether an investor makes a profit or losses, the TDS will be taken from the total transaction value.Crypto Losses cannot be used for Set-off The government clarified in the Budget 2022 recommendations that investors will not be allowed to set-off losses in one crypto asset against losses in another, which is a major setback for the crypto business.Updated ITR To Correct Any Errors Or Omissions The government has proposed an "updated return" that taxpayers can use to correct any errors or omissions in their income tax returns on the payment of additional tax. Within two years of the conclusion of the relevant assessment year, the revised return can be filed.Tax Deduction Upto 14% In Employer's Contribution To NPS account Of the state government employees State government employees will now be allowed to deduct up to 14 percent of their basic pay and dearness allowance for NPS contributions made by their employers under Section 80CCD(2), which is the same as the deduction available to Central government employees under the same section. At present, the central government contributes 14 percent of the salary to the National Pension System (NPS), which is allowed as a tax deduction in the income of an employee. For the state government, the tax-free contribution by the employer is 10 percent.Tax on PF account From April 1, the Central Board of Direct Taxes (CBDT) will apply Income-tax (25th Amendment) Rule 2021. It means that in the Employee Provident Fund (EPF) account, a tax-free contribution limit of Rs 2.5 lakh has been imposed.If you contribute more than this, the interest you earn will be taxed.

New Income Tax Rules Applicable From April 1, 2022: All You Need To Know

Mariya Paliwala

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