Various changes are coming into force in the GST and Income Tax regimes, effective from the financial year 2022-23. Some of these changes flow directly from the Budget 2022 while others come from various circulars and notifications. Some of the major changes effective from 1 April 2022 are as follows:
GST – Companies having a turnover above INR 20 crore to generate B2B e-invoices:
- Businesses (except certain specified) with a turnover of over INR 20 crore will have to generate an electronic invoice for B2B transactions. The threshold was INR 50 crore till 31 March 2022. Notification No. 1/2022-Central Tax dated 24 February 2022 has been issued for the purpose.
- Resultantly, more businesses would have to raise e-invoices and invoices issued otherwise would not be valid. It may be noted that input tax credit (‘ITC’) cannot be availed by the recipients on invalid invoices.
Income tax on virtual digital assets:
- Section 115BBH is being inserted into the Income-tax Act, 1961 for taxation of virtual digital assets.
- Gains from various virtual digital assets such as Bitcoin, Ethereum, etc. will be taxed at a flat 30% rate.
- Except for the cost of acquisition, no deduction in respect of any expenditure will be allowed. No set-off of losses of buying /selling of virtual digital assets from other incomes will be allowed. Profits from one virtual digital asset will not be allowed to be set off against losses from other virtual digital assets.
- Further, as per new Section 194-S, 1% TDS for every transaction of virtual digital assets to be effective from 1 July 2022. The threshold limit for TDS would be INR 50,000/year for specified persons (Individuals/HUFs).
Window for filing updated return of income
- Subsection 139(8A) has been inserted in the Income-tax Act. Taxpayers will get an additional chance for updating their income tax returns.
- Updated returns can be filed by taxpayers within a time frame of 24 months from the end of the relevant assessment year. Provision also provides cases where updated returns of income cannot be filed.
- Section 140B has been inserted to provide that apart from tax and interest due in relation to updated return of income, the taxpayer will be required to pay an ‘additional tax’.
TDS on sale of immovable property
- TDS provisions have been aligned with the computation provisions, Section 194-IA has been amended to provide that the tax has to be deducted on higher of sales consideration or stamp duty value.
- Tax shall not be withheld where both the stamp duty value of property and consideration paid is less than INR 50 lakh.