3 major changes to income tax laws that were included in the 2022 union budget came into effect with the start of Q2FY23. One of the guidelines is that the delay cost for the PAN-Aadhaar connection would be doubled. The late fee for PAN-Aadhaar seeding has been reduced from 500 to 1000 as of today. A 1% withholding tax deduction (TDS) will also be applied to all bitcoin transactions from T2FY23 onwards. Meanwhile, starting today, the 10% TDS also applies to financial benefits gained through sales promotion to healthcare professionals and social media influencers.
Here are 3 important changes to income tax laws right now:
Double fee for PAN Aadhaar link: The deadline for the PAN-Aadhaar link has passed on June 30, 20222, so there is a double charge. According to CBDT regulations, if someone links his PAN to Aadhaar between March 31, 2022 and June 30, 2022, he must pay a late fee of Rs 500. A double fine of Rs 1,000 for sowing PAN-Aadhaar will be imposed from July 1, 2022 if a person fails to link their PAN to Aadhaar by June 30, 2022. Rs 1,000 will be charged for PAN-Aadhaar seeding as we are now in Q2FY22.
TDS on cryptocurrency: The Government of India (GoI) had suggested an additional 1% TDS on cryptocurrency transactions in the 2022 union budget, regardless of the gain or loss suffered by the investor, as a result of applying d 30% flat income tax on cryptocurrencies from April 1, 2022 The proposed budget is now effective as of today. Investors, however, would be eligible to seek a refund of the TDS imposed on trades that resulted in losses. A cryptocurrency investor is therefore encouraged to file an ITR if he has engaged in cryptocurrency transactions.
Sujit Bangar, the founder of Taxbuddy.com, provided the following explanation on how TDS will be valued on digital assets: “TDS at a rate of 1% has been recommended for transactions involving cryptocurrencies at effective July 1, 20222. It is important to remember that if we sell cryptocurrency for profit or loss, 1% TDS will undoubtedly apply.We are entitled to a TDS refund for trades that resulted in losses. Therefore, if you have engaged in cryptocurrency transactions, it would be advisable that you file a tax return.”
Changes to IT rules for doctors and influencers: The Government of India has included a new Section 194R of the Income Tax Act 1961 in the Union Budget 2022. The 10% TDS on benefits obtained through sales promotion on doctors and social media influencers is proposed in this new section. This budget plan is now operational as of today, July 1, 2022. However, TDS will only be applied if the benefit costs at least 20,000 in a single fiscal year.
Jitendra Solanki, a tax and investment expert registered with SEBI, explained how Section 194R would work as follows: “If a private physician receives samples from a drug manufacturer and the cost of all such samples received exceeds 20,000 in a fiscal year, then it will attract 10% TDS.
However, if the doctor works for a private hospital, the hospital will be charged 10% TDS in this situation. It is crucial to understand that Section 194R does not apply to government agencies. Thus, a doctor working for a government institution who receives free medical samples is exempt from paying the 10% TDS.
First published: July 01, 2022, 10:52 a.m. IST