Budget 2022: List of key tax proposals - Updated Income Tax Returns filing, LTCG surcharge, Basic Customs Duty on EVs and more

Budget 2022 Tax Proposals: Finance Minister Nirmala Sitharaman had unveiled a bigger Rs 39.45 lakh crore Budget, with higher spending on highways to affordable housing with a view to fire up the key engines of the economy to sustain a world-beating recovery from the pandemic. 

While she primed up spending on infrastructure to create jobs and boost economic activity, Sitharaman did not tinker with income tax slabs or tax rates.  

IIFL Securities in its report titled 'Growth focus strengthens, despite fiscal constraints' post announcement of Union Budget 2022-2023, has cited key tax proposals. Here is the list:-

- New provision permitting taxpayers to file Updated Returns, on payment of additional tax, within 2 years from end of relevant assessment year.

- For concessional corporate tax rate of 15% on new manufacturing companies, the commissioning date extended by one year to 31-March-2023.

- Surcharge ─ on LTCG arising on transfer of any type of assets ─ capped at 15%. Surcharge ─ on works contract members’ income tax ─ reduced, from 37% to 15%.

- MAT % of Co-op societies reduced from 18.5% to 15%, on par with companies; plus, surcharge reduced from 12% to 7% for income range of Rs10m to Rs100m.

- Concessional rates in capital goods and project imports in sectors like power, fertilisers, textiles, leather, footwear, food processing, coal mining projects, power generation, T&D projects, railway and metro projects to be gradually phased out and a moderate tariff of 7.5% to be applied.

- Certain exemptions for advanced machineries that are not manufactured within the country shall continue. A few exemptions introduced on inputs like specialised castings, ball screw and linear motion guide.

- Customs rate and tariff structure, particularly for sectors like chemicals, textiles and metals, to be simplified.

- Customs duty on cut &polished diamonds and gemstones reduced to 5%. Simply-sawn diamond would attract nil customs duty.

- Additional differential excise duty of Rs2/litre on Unblended (ethanol) fuel, from 1-October-2022.

- Basic Customs Duty on EVs cut, from current 125%. For cars priced at less than USD40,000, BCD has been cut to 60%. Total duties including IGST and compensation cess would be 103%. For cars priced at more than USD40,000, BCD has been cut to 100%. Total duties including IGST and compensation cess would be 154%.