The Union Budget presented on Tuesday did not change the income tax rates for the fiscal year 2022-23.
While there was no change to the income tax slabs, the standard deduction was also not raised amid some anticipation among people that these could be changed.
To further ease compliances for taxpayers and what may be seen as an impetus to trust-based governance as a concept, an updated tax return system has been introduced in which a taxpayer can file a tax return upon payment of specified taxes within two years from the end of the relevant assessment year.
According to Naveen Aggarwal, Partner, Tax, KPMG in India, tax measures in Budget 2022 are built on pillars of stability and predictability, building trust, voluntary compliance, simplification, and dispute minimization.
"With several measures to clarify revenue positions and reduce uncertainty, dispute management efforts are likely to get a filip with a collegium of senior revenue officials to decide filing of appeals by revenue, where the identical question of law is pending adjudication in courts," Aggarwal said.
The budget has extended the time limit for concessional income tax facility of 15 per cent to new domestic manufacturing units commencing production till March 31, 2024, which is expected to attract investment particularly in various sectors of exports given the anticipation of an increase in domestic investment and flow of global investment into the country.
The capping of surcharge at 15 per cent on Long-Term Capital Gains (LTCG) tax for all listed and unlisted corporations is a response to a long-standing demand for new-age businesses.
The reduction of surcharge is also expected to help investors in startups to reduce their overall cost of exit.
The budget introduced major indirect tax proposals such as phasing out of customs duty concessions on finished products for specified industries, customs duty concessions for import of inputs and raw materials for specified sectors, and levy of interest on net cash liability under GST.
According to Rajeev Dimri, Partner and National Head of Tax, KPMG in India, various changes are proposed to be carried out in the customs duty rates with the object of improving indigenous manufacturing.
"While the details would need to be analyzed, the same should ideally be in line with the comprehensive rationalized rate structure," said Dimri.
The Finance Minister also announced the gross GST collections for the month of January 2022 at Rs 1,40,986 crore, which, according to Sitharaman, is the highest since the inception of GST.
"This has been possible due to rapid economic growth recovery post-Covid as well as policies undertaken by central and state tax administrations," she added.
According to Aditi Nayar, Chief Economist, ICRA, buoyant GST revenues in spite of pandemic offer evidence of anti-evasion efforts of the Government as well as the K-shaped recovery, with the large and formal players gaining at the cost of the rest.