From Digital Rupee To 5G Rollout To Tax On NFTs: Here Are Key Highlights From Budget 2022
Finance Minister Nirmala Sitharaman presented the Union Budget 2022-23 in Parliament. In five big infrastructure projects, the government has proposed expanding highways in the country by 25,000 kilometres, allocating Rs 60,000 crore to the Nal se Jal scheme, five river link projects across various states, an additional Rs 48,000 crore in the PM housing scheme, and boosting infrastructure development in the North East.
The Finance Minister also announced the auction of 5G spectrum in 2022; proposed setting up 75 digital banking units in 75 districts; announced a national programme for mental health, worsened by the Covid-19 pandemic; and brought virtual currencies like cryptocurrency and non-fungible tokens under the tax net.
Just like the last year, the finance minister delivered a paperless budget, reading out her speech from a tablet. Here are the key highlights.
Key highlights
-Fiscal deficit target: Country's total expenditure is estimated at ?39.45 lakh crore while receipts are estimated at Rs 22.84 lakh crore. FY'23 fiscal deficit target projected at 6.4 percent of GDP.
-I-T returns within 2 years: To provide an opportunity to correct an error, taxpayers can now file an updated return within 2 years from the relevant assessment year.
-Tax deduction limit: Both Centre and States govt employees' tax deduction limit to be increased from 10 percent to 14 percent to help the social security benefits of state govt employees and bring them at par with the Central government employees.
-Digital assets: Income from transfer of any virtual digital asset shall be taxed at the rate of 30%. TDS of 1 percent on payment made for transfer, above a monetary threshold.
- LTCG: Income from Long Term Capital Gains will be taxed at 15%.
-Digital rupee: Digital rupee to be issued using blockchain and other technologies and will be issued by RBI starting 2022-23. "This will give a big boost to the economy," said the finance minister.
-SEZ Act: Special Economic Zones Act will be replaced with new legislation for the development of enterprise and hubs. It will cover the existing industrial enclaves and enhance the competitiveness of exports.
-Rs 1 lakh crore allocated to states: For 2022-23, allocation of Rs 1 lakh crore has been made to assist the states in catalysing overall investments in the economy. These 50-year interest-free loans are over and above normal borrowings allowed to states. It'll be used for PM Gati Shakti-related and other productive capital investments of states.
- 2,000 km of rail network: 2,000 km of rail network to be brought under the indigenous world-class technology KAWACH, for safety and capacity augmentation.
- Vande Bharat trains: 400 new-generation Vande Bharat trains to be built over the next three years.
-Gati Shakti Master Plan PM Gati Shakti is driven by 7 engines: roads, railways, airports, ports, mass transport, waterways and logistics infra. All 7 engines will pull forward the Economy in unison. Gati Shakti Master Plan for expressways to be drawn up this financial year. 100 new cargo terminals to be built over the next three years. The National Highway network will be expanded by 25,000 kms in 2022-23.
- Battery Swapping Policy: Sitharaman also announced setting electric vehicle (EV) sharing stations during her presentation. She also said that the private sector would be encouraged to develop sustainable business models for the battery as a service and battery swapping policy.
- 5G rollout: Required spectrum auctions will be conducted in 2022, to facilitate roll-out of 5G mobile services by private telecom players, announced the government.
- Natural farming and Kisan drones: Chemical-free natural farming to be promoted across the country. Farm procurement value for FY23 to be Rs 2.37 trillion. Use of Kisan Drones to be promoted for crop assessment, digitization of land records, spraying of insecticides and nutrients.
- Mental Health program: The pandemic has brought mental health problems in people of all ages to the fore. To better the access to quality mental health counseling and care services, a National Tele Mental Health program will be launched, said the finance minister.
-Digital education: 'One class, one TV channel' program of PM eVIDYA will be expanded from 12 to 200 TV channels. According to the government this will enable all states to provide supplementary education in regional languages for classes 1 to 12. A digital university will be developed to provide access to students for world-class quality education with ISTE Standards.
- Crypto, NFT comes under tax net: The Budget has proposed taxing virtual assets at 30%. Finance Minister Nirmala Sitharaman said that it cannot be mentioned as a replacement of any other income and 1% TDS to be charged further on payments made using digital assets to keep a track on transactions.
- Paperless e-bill system: A completely paperless, e-bill system will be launched by ministries for procurement.
- E-passports: The issuance of E passports using embedded ship and futuristic technology will be rolled out in 2022-23.
-PM Awas Yojna: Government announces Rs 48,000 crore is allotted for PM Awas Yojana and 60,000 houses will be identified as beneficiaries in rural and urban areas.
-Defense: 68% of capital procurement budget to be earmarked for domestic Defense industry. Private domestic industry to be encouraged to manufacture in collaboration with DRDO.
-Affordable housing: In 2022-23, 80 lakh households will be identified for the affordable housing scheme.
-Animation and Gaming: Animation, visual effects, gaming and comics sector offers immense potential to employ youth. 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.
- All 1.5 lakh post offices to connected: 100 percent of post offices to come under core banking system allowing online transfer between post offices and bank accounts. This will be helpful especially for farmers and senior citizens in rural areas, enabling inter operability, and financial inclusion, said Sitharaman.
-Hospitality: Hospitality services by the small & medium sector are yet to bounce back, therefore, the government has decided to extend the ECGL service for this sector by March 2023 with an increased cover of Rs 50,000.
- Solar modules: To facilitate domestic manufacturing of 280 gigawatt of installed solar capacity by 2030, additional allocation of Rs 19,500 crore for PLI for manufacturing of high-efficiency modules with priority to fully integrate manufacturing units to solar PV modules will be made by the government.
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