Three major changes to income tax rules, proposed in the EU budget for 2022, came into force on July 1. Every taxpayer should be aware of these latest updates.
The three significant changes are related to Aadhaar-PAN linking, crypto investments, and benefits received by social media influencers and doctors.
In line with changes to income tax rules, late fees for the Aadhaar-PAN link have been increased, and social media influencers, as well as doctors, will have to pay an additional 10% TDS on benefits from sales promotions. Cryptocurrency investments will also be subject to 1% TDS.
The government has set various limits on cash transactions to curb black money. Know the cash transactions that can result in serious penalties.
Let’s see the changes in detail.
PAN-Aadhaar Link Delay Charges:
The last date for the Aadhaar-PAN link was June 30. According to the Central Board of Direct Taxation (CBDT), those who failed to link Aadhaar to PAN will now have to pay a fine of Rs 1,000.
The increased late fees went into effect on July 1. Previously, the CBDT allowed the linking of Aadhaar and PAN between March 31 and June 30 with a late fee of Rs 500.
TDS on cryptocurrency:
Investments in Virtual Digital Assets (VDA) of more than Rs 10,000, including cryptocurrencies, will attract a withholding tax (TDS) of 1% from July 1. cent TDS on crypto investments.
The 1% TDS will come on top of the flat 30% tax on cryptocurrency transactions, as proposed in the Union budget.
TDS will also apply to NFT transactions over Rs 10,000. Section 47A of the Information Technology Act defines VDA as any information, code, number or token except currency Indian or any other foreign currency, generated by cryptographic or other means.
However, refunds can be claimed for TDS on trades involving losses. Thus, experts advise you to declare your investments in cryptocurrency in your ITR file.
Tax on benefits received by doctors and influencers:
As proposed in the Union Budget, Section 194R was inserted into the Computers Act 1961. In the Union Budget 2022, the government included a new Section 194R in the Income Tax Act 1961 on income.
According to the new section, 10% of TDS will be taken from the benefits of sales promotions by doctors and social media influencers. The TDS will be applicable for benefits of more than Rs 20,000 in a financial year.
Doctors who receive samples from drug manufacturers will be required to pay 10% TDS once the total amount exceeds Rs 20,000 in a fiscal year.
However, this will not apply to doctors in government positions.
Other Changes: For cash deposits over ₹20,000,000 in one year, rule change
Cash transactions have traditionally played an important role in the Indian economy and are a persistent cause of the accumulation of black money, so the government has set various limits.
Deadline for filing the IT declaration:
The tax return filing deadline is July 30 and is not likely to be extended.
Anyone whose annual income is above the exemption ceiling must pay the tax. Income tax (IR) is levied on a slab basis, which means that rates vary according to income levels. The tax rate changes as income increases.
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