Finance Minister Nirmala Sitharaman on Tuesday proposed that the tax deduction limit of state government employees should be increased from 10% to 14%.
While presenting the Union Budget for 2022-’23 in Parliament, Sitharaman said the proposal would help the social security benefits of state government employees and bring them at par with central government staff.
The finance minister did not announce any change in personal income tax slabs despite the elevated inflation levels and impact of the Covid-19 pandemic on the middle class.
Sitharaman said that the government proposes to reduce the minimum alternative tax for cooperatives from 18.5% to 15% and reduce co-operative surcharge from 12% to 7%.
She also announced that digital assets will be taxed 30% without any deduction. “No deduction in respect of any expenditure or allowance shall be allowed while computing such income, except the cost of acquisition,” Sitharaman added.
Sitharaman proposed that in order to capture the transaction details of virtual assets, a TDS (tax deducted at source) will be levied.
“I also propose to provide for TDS on payment made in relation to the virtual digital asset at the rate of 1% of such consideration above a monetary threshold,” Sitharaman said during the Budget speech.
Surcharge on the transfer of any long-term capital gains will be capped at 15%, the finance minister said. She mentioned that gifts of virtual assets will be taxed at the receiver’s end.
During the Budget speech, the finance minister said that startups have emerged as a “growth driver” for the economy and extended tax benefits for the segments by a year until 2023.
Sitharaman also announced a reduction of surcharge on unlisted shares from 28.5% to 23%.
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