India Union Budget 2022 - Live Updates

With no deduction for cost, tax rate at 30%, tax on mining/gifting and no offset of loss against income from other sources, the FM has announced the much-needed clarity on crypto transactions. However, tracking such transactions in the absence of a central regulator may be challenging. - Pranay Bhatia, Partner and Leader - Tax and Regulatory Services, BDO India

With a clear focus on education and announcement of dedicated TV channels, EdTech and content development will see higher demand. E-registrations and E-administration under several schemes and regulations will definitely ease and speed governance. However, its implementation would be the key towards ease of doing business. - Pranay Bhatia, Partner and Leader - Tax and Regulatory Services, BDO India

Announcement of the Digital Rupee is one of the most awaited announcements. It is important to understand how other Crypto assets will be taxed and whether there will be any specific benefit given to the Digital Rupee. - Pranay Bhatia, Partner and Leader - Tax and Regulatory Services, BDO India

Introduction of taxation on transfer of Virtual digital asset is a welcome move and will give upfront clarity to the investors on how their income would be taxed - Anish Shah, Partner - M&A Tax and Regulatory, BDO India 

Thrust on financial inclusion initiatives will help banking and NBFC’s only when the infrastructure for the same is made robust. Digital Banking and Fintech focus, if coupled with measures for ease of doing business should help give the much needed thrust to already growing start-ups in the Fintech sector.- Pranay Bhatia, Partner and Leader - Tax and Regulatory Services, BDO India

Digital currency seems to have finally caught governments attention. Introduction of digital rupee using blockchain technology will help in reducing financial and physical efforts required for money management. - Gunjan Prabhakaran, Partner & Leader, Indirect Tax,  BDO India

Outlining taxation of Crypto assets is expected to throw some light on how the regulations may pan out. Proposals should clarify taxation of currency mining and dealing and all the proposals should be prospective and not retrospective. - Pranay Bhatia - Partner & Leader, Tax & Regulatory Services, BDO India 

While the economic survey details steps taken by the government to help MSMEs tide over the impact of the pandemic, these steps are largely on the supply side. It needs to be seen in the budget what steps the government will take to enhance the demand side. Also, over the last few months, MSMEs have been affected by increasing raw material and fuel prices. These businesses are usually not in a strong position to pass on these price rises to their customers, and this could severely affect their profitability. - Samir Sheth, Partner and Head – Deal Advisory Services, BDO India

A nonchalant introduction of taxation on digital currency coupled with a withholding tax on every transaction could give rise to a lot of compliance issues for crypto businesses- Harry Parikh, Associate Partner - M&A Tax and Regulatory Services, BDO India

Budget 2022 has proposed to cap the surcharge rate on long term capital gains arising on transfer of any capital assets at 15% from the existing highest surcharge rate of 37%. This will benefit the investors of Category I and Category II AIFs where majority of the investments is under long-term securities -  Manoj Purohit, Partner & Leader - Financial Services Tax, BDO India.

"The government should incentivise ed-tech initiatives by offering tax breaks and incentives- Gunjan Prabhakaran, Partner and Leader of Indirect Tax, BDO India

There will be practical issues in complying with tax provisions on transactions where the identity of the buyer is unknown.- Harry Parikh, associate partner– M&A tax and regulatory services at BDO India.

Proposal to allow the setting up of world-class financial institutions and universities free from domestic regulations under IFSCA will give a boost to human resources development and expansion in GIFT IFSC. The International Financial Services Centres Authority (IFSCA) is a unified authority for the development and regulation of financial products, financial services and financial institutions in the IFSC in India.- Manoj Purohit, Partner & Leader – Financial Services Tax, BDO India

Tracking such transactions in the absence of a central regulator might be challenging - Pranay Bhatia, partner and leader for tax and regulatory services at the consultancy firm BDO India

The right way to look at it is that the government has the right to tax unaccounted money, the same way it has the right to tax gains from crypto - be it legal or illegal -Harry Parikh, Associate partner, BDO India.

Introduction of taxation on transfer of Virtual digital asset is a welcome move and will give upfront clarity to the investors on how their income would be taxed - Anish Shah, BDO India LLP

With an announcement of taxing virtual digital assets at 30% without allowance of any expenses (except cost of acquisition) coupled with non-allowance of carry forward of loss from sale of such assets and making withholding tax applicable, the government has provided a clear view enabling the elimination of uncertainty around the same.-  Deepa Suresh, partner – Tax and Regulatory Services, BDO India

However, what the FM did not mention in her speech is that the same would come with an additional tax at 25 per cent/50 per cent on the tax and interest due on the additional income furnished would be required to be paid. While this does provide one more opportunity to taxpayers to ensure comprehensive reporting, is the additional tax fair and whether it would encourage voluntary tax compliance would remain to be seen.- Pranay Bhatia, partner and leader-tax and regulatory services, BDO India