Union Budget 2022 Finance minister Nirmala Sitharaman on February 1 pegged the government’s fiscal deficit for the financial year 2022-23.
Finance minister Nirmala Sitharaman fixed the fiscal deficit at 6.4% of gross domestic product (GDP) as budget 2022 recognized the need to boost growth.
Finance Minister Nirmala Sitharaman began her Budget speech by voicing empathy for those who suffered during the COVID-19 pandemic.
The Budget
Nirmala Sitharaman announces income tax slabs, rates 2022, no change in personal income tax slabs and rates. She makes big announcements on affordable housing.
The finance minister indicated that tax deduction will be allowed on employer’s contribution up to 14% for state government employees. For taxpayers, the FM said they will be able to file updated ITR for two years from the relevant assessment year in case they miss to report an income.
The Finance Minister also said in Budget Speech 2022 that this year all Post Offices in the country will be brought on the core banking system customers. With this, Post Office account holders will be able to make online transactions and even transfer money to other bank accounts through net banking.
Ahead of the Budget, taxpayers were expecting the announcement of changes in Income Tax Slabs and Rates. Some experts believed that big bang tax relief may not be announced in Budget 2022. However, Economic Survey 2021-22 tabled in the Parliament on Monday (January 31, 2022) raised hope for bigger tax reliefs for all types of taxpayers, including salaried individuals, senior citizens, NRIs, and pensioners.
The Economic Survey has listed several relief measures for taxpayers the Government has taken since the outbreak of the COVID-19 pandemic. Now that the economy is looking set to grow fast, one can hope the Government will improve upon last year’s tax-related announcements.
Finance Minister Nirmala Sitharaman was also expected to announce rules for the taxation of income from cryptocurrencies.
The Income Tax slabs had not been raised in a meaningful manner over the years and are not linked to inflation unlike in the case of taxation of gains from certain asset classes. As a result, over the years salaried individual’s net income and hence the purchasing power had reduced despite the cost of living has gone up significantly.
Experts expected that return filing should also be simplified for individuals whose salaries fall below this threshold. The Government had sought to reduce the tax burden on an individual taxpayer by introducing a new tax scheme without exemptions and with lower tax rates. However, data shows that it has not become popular and the salaried individuals are still choosing the earlier scheme because that is leading to lower taxes in most cases. Read Share Market Live Updates Here
‘Some relief to individuals with income above Rs 2 crore’ “The ongoing pandemic, coupled with the rising inflation, has adversely affected the household expenses of the common man for an elongated period now. However, with the higher capex and fiscal deficit target the Finance Minister has limited specific relief to individual taxpayers,” says Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax, KPMG in India.
“To provide impetus to trust-based governance as a concept, an updated tax return system has been introduced wherein a taxpayer can file a tax return upon payment of specified taxes within 2 years from the end of the relevant assessment year. Interestingly, some relief to individuals with income above 2 crores in the form of capping of surcharge at the rate of 15 percent on long-term capital gains (on specified assets) from existing graduated rates. It would be relevant to analyze the fine print of the finance bill for other announcements and tax sops if any on the personal tax front,” he adds.
Compliments For the Budget
The Prime Minister said, “This year’s Budget a ‘game changer’, focuses on jobs, infra & growth.”
He also said, “This budget brings in new hopes and opportunities for the people. It strengthens the economy; it’s full of ‘more infrastructure, more investment, more growth and more jobs’. There is also a new provision of green jobs; budget ensures a bright future for youth.”
I will speak in detail on the Budget at 11 am tomorrow: PM Modi
During COVID, we had taken several decisions to support and help MSMEs. Credit guarantee has been increased to a new record and several new initiatives have been announced in this Budget: PM
Budget has provisions to make farming profitable: PM Modi
I congratulate Finance Minister Nirmala Sitharaman for this ‘People Friendly and Progressive budget’: PM Modi
Criticism Raised On the Budget
Congress said, “Since 2014, the total debt of the GoI has nearly tripled. Modinomics has proven disastrous, increasing tremendously the debt burden on our nation.”
Since 2014, the total debt of the GoI has nearly tripled. Modinomics has proven disastrous, increasing tremendously the debt burden on our nation. pic.twitter.com/QsEDV2udJ0
— Congress (@INCIndia) February 1, 2022
Economic expert Prof. Gourav Vallabh from Congress tweeted, “Madam
@nsitharaman ji, No one can even think of what you had done in this budget.
The law on Cryptocurrency is not known. But the tax has been imposed.
Wow
#Budget2022
Madam @nsitharaman ji,
No one can even think of what you had done in this budget.
The law on Cryptocurrency is not known. But the tax has been imposed.
Wow#Budget2022
(7/7)— Prof. Gourav Vallabh (@GouravVallabh) February 1, 2022
खास आदमियों की सरकार ने आम आदमी को Income Tax में कोई राहत नही दी,
Mitron के लिए Corporate Tax में राहत का इंतजाम कर दिया गया है ।#BudgetSession2022
— Srinivas BV (@srinivasiyc) February 1, 2022
Srinivas BV Congress leader tweeted, “The government of special people did not give any relief to the common man in income tax.
Relief has been arranged for Mitron in Corporate Tax.
#BudgetSession2022″
Journalist Faye Dsouza tweeted, ” We haven’t been told what the budget outlay for Health, Education or agriculture is. Why not?”
We haven't been told what the budget outlay for Health, Education or agriculture is.
Why not?— Faye DSouza (@fayedsouza) February 1, 2022
Here’s the world champion of economy destroying race and here she presents to India the CRYPTO TAX, another public fooling and looting Tax.#defeatbjp #novoteforbjp #NirmalaSitharaman utter flop. pic.twitter.com/VFQoy9rgfZ
— Pragnya Gupta (@GuptaPragnya) February 1, 2022
A citizen tweeted, “Here’s the world champion of the economy destroying race and here she presents to India the CRYPTO TAX, another public fooling and looting Tax.” BJP has been criticized for selling India to private owners and limiting jobs and economy, building only a few favored lot.
Criticism is crackling that the middle class, salaried class, youth, women, farmers, and MSME have got nothing out of the budget.
Citizens quip sarcastically, “Nirmala Sitharaan knows that they have left people with no income hence, there ain’t no requirement of any announcement on #incometax in the #BudgetSession2022.”
#NirmalaSitharaman knows that they have left people with no income hence, there ain't no requirement of any announcement on #incometax in the #BudgetSession2022.
— Bharat Tiwari (@BharatTiwari) February 1, 2022
The middle class has been left wounded and empty again. The bottom line of the budget is Indian economy is deeply damaged because there is no purchasing, buying power, and no ability to produce and manufacture. In fact, imports have increased by India from China while the nation grapples with severe debt and the middle and poor are particularly severely hit while the poor economy is amplified by joblessness.