Several income tax proposals, including 30 per cent tax on income from trade in cryptocurrencies will come into effect from Friday.
Also, the revised norms for levy of 1 per cent TDS (tax deducted at source) on sale of immovable property exceeding ₹50 lakh will come into effect from April 1, the beginning of the new financial year.
As per the revised norms, TDS of 1 per cent shall be deducted on consideration or stamp duty value, which ever is higher, as against the earlier provision of consideration.
Beginning next fiscal year, assesses will have the option to update their income tax returns in case there is any omission in original ITR. It would also provide opportunity to voluntarily disclose such income by filing an updated tax return with additional tax calculated based on the delay.
Taxpayers will be allowed to file such an updated return only once per financial year.
From April 1, 2022, income from transfer of virtual digital assets or cryptocurrencies is taxable at 30 per cent. Such income will be taxable even if taxpayers’ total income is below the threshold limit of ₹2.50 lakh. Further, no deduction other than cost of acquisition is allowed while computing the taxable amount.
Nangia Andersen LLP Partner Neeraj Agarwala said that disallowance of expenses under Section 14A would come into effect from April 1, 2022.
From Friday, expenses incurred for earning exempt income will not be allowed as a deduction.
The tax treatment of first time homebuyers as per Finance Act 2022 will come into effect from Friday.
According to Anita Basrur – Partner, Direct Tax – Sudit K Parekh & Co. LLP, in order to enable homebuyers have affordable and low cost funds at their disposal, a deduction of up to ₹1,50,000 in respect of interest on loan, taken for residential house, was allowed subject to meeting certain conditions i.e. loan should be sanctioned during 2019-20, stamp value of the house should not exceed ₹45,00,000 and the taxpayer should not own any other residential house on the date of sanction of the loan.
The period of sanction of the loan was extended from March 31, 2020 to March 31, 2021 and finally March 31, 2022 in the subsequent Finance Bills. There is no extension granted now.
“With the sunset of this section, homebuyers can still avail deduction for interest on loans taken for purchase of house property but the rate of interest will not be concessional but as per market. This would surely not make it feasible for people to afford houses due to the higher interest rates,” Basrur said.