In What Ways Will Budget 2022 Impact Your Personal Finance?

This year, the Union Budget was presented on February 1. Although it has not brought any changes in the tax slabs, the Budget has come up with certain developments. So, here's a look at how Budget 2022 will impact your personal finance. 

Slashing Surcharge on LTCG 

The Union Budget 2022 has reduced the surcharge on long-term capital gains from 37% to 15% and has capped it at the new rate. This is good news to investors since they can now pay less tax on their long-term gains. 

You, too, can take advantage of this modification. If you're holding a residential property for three years or more, you can now sell it to avail reduced taxes on your capital gains. Before selling it, you can take an easy loan to make specific improvements or renovate the house since it's not brand new. This can help you to sell it at a higher price.

Extended Timeline to File Updated Tax Returns

Now, you can file updated income tax returns within two years from the end of a particular assessment year. So, if you forgot to report any additional income or any deductions, you can include them now and file the updated returns. 

Say you took a quick loan to invest in a small business. Then you're eligible to claim the interest paid on loan without any cap as a deduction. However, if you forgot to make a claim, you can do it now to update your tax returns and reduce your overall tax liability. 

India's Own Digital Currency 

Soon, the RBI will come up with its own digital currency, supported by blockchain technology. The currency may be available in the market by 2023. This is an initiative to improve currency management and make it cheaper. Digitisation of currency can help you get modern financial products like easy loans quickly on a loan app. 

Taxation of Digital Assets 

A 30% tax would now be levied on the acquisition, sale, or income of digital assets like cryptocurrency with an extra 1% TDS. Moreover, no offset of taxes is allowed for tax on withheld assets. 

Green Bonds Proposed for Green Infrastructure 

To benefit the climate of India, Sovereign Green Bonds will be issued to finance Green Infrastructure. The project aims at cutting the levels of carbon in the economy. The Government wants this project to be a part of its borrowing program in FY 2022-2023. 

An Incentive to NPS Subscribers for State Government Employees 

The tax deduction limit on employers' contribution to the National Pension System account of state government employees has been raised from 10% to 14%. This is to boost the social security benefits of central and state government employees and bring in parity between them. 

Budget 2022 has certain other proposals, including an exception on paying a lump sum and annuity to differently-abled citizens. So time to take advantage of the favorable changes brought about by the Budget relevant to you.