With the start of the new financial year 2022-23 on April 1, several changes in income tax rules come into force. Here are six important changes:
Taxation on virtual digital assets
In Budget 2022, the government said it would tax income from the transfer of any virtual digital asset, including cryptocurrency. From April 1, income from cryptocurrency will be taxed at a flat 30 percent.
As per the proposed Section 115 BBH of the Income-Tax Act, 1961, a loss from transferring a virtual digital asset will not be allowed to be set off against income arising from the transfer of another virtual digital asset.
A 1 percent tax deductible at source under Section 194S of the Income Tax Act will apply to every single crypto transaction from July 1, 2022. TDS will be deducted at the time of redemption, whether one makes a profit or loss.
Higher tax benefit on NPS
From 2022-23, state government employees can claim tax breaks of up to 14 percent of their basic salary and dearness allowance on their employers’ contributions to their National Pension System accounts. Until now, the tax break was capped at 10 percent for state government and private sector employees – only Central government employees enjoyed the higher tax concession.
