Kotak Assured Savings Plan
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Ref. No. KLI/22-23/E-BB/492
Ref. No. KLI/22-23/E-BB/490
In accordance with Budget 2022, this requirement may change in some unique circumstances. Understanding the changes that may affect annual financial planning is crucial. According to Budget 2022, an individual will only have to pay tax when the taxable in
Tax Changes in Budget 2022 that may Impact Your Personal Financial Planning:
1.No tax on taxable earnings till ₹5 lakh
2.Standard deduction increased to ₹50,000
3.No income tax on notional rent from the second self-occupied property
4.Tax deducted at source threshold increased to ₹40,000
5.External benchmark to decide the interest rate on loans
6.No transfer of physical shares from April 1, 2019
7.New goods and services tax rates and rules for the housing sector
8.Investment of capital in two residential houses
9.Change in equity long-term capital gain
10.Digital assets are to be taxed at 30%
11.Income-tax return filing extended
12.Surcharge on LTCG slashed
Remember these important changes in the financial year for effective financial planning.
No individual will be required to pay tax if the annual income for the financial year 2022-23 does not surpass ₹5 lakh, and individuals will get a complete tax rebate. The rebate under Section 87A has been hiked to ₹12,500 with effect from the financial year 2022-23. It is important to note that individuals will still be required to file their income tax return as per the laws if the total annual earnings cross the minimum tax-exempted amount.
The Budget has raised the standard deduction from salary from ₹40,000 to ₹50,000. It is available to pensioners and salaried individuals.
Individuals who own a vacant second home will not have to pay any income tax on the notional rent from the house. Earlier, individuals with an empty second house had to pay notional rent and a tax for that property.
Earlier, individuals with earnings lower than the taxable limit needed to provide Form 15G to avoid paying the TDS on interest from the bank. With this Budget, the TDS limit has increased from ₹10,000 to ₹40,000.
This is one of the most important tax changes in Budget 2022. The Reserve Bank of India (RBI) announced that a new floating rate for personal and retail loans would be linked to an external benchmark. Until now, they were linked to an internal benchmark.
This tax change will have a budget impact analysis on individuals who invest in shares. From April 1, 2019, no individual can transfer shares physically.
There will be new GST rates for builders and developers. They can choose to charge GST at the rate of 12% with credit and 5% without an input tax credit for under-construction projects. The rates would be 8% along with input tax credit and 1% without input tax credit in case of affordable housing.
Individuals who have sold a property now have the option to invest the capital gain in two houses rather than one to avoid paying capital gain tax. This facility can only be availed once in a lifetime if the capital profits do not surpass ₹2 crores.
The long-term capital gain would attract a tax of 10% without any indexation benefit if the returns exceeded ₹1 lakh.
A 30% tax on the income, sale or purchase of digital assets like cryptocurrencies and NFTs was announced in the budget. On certain transactions, there is also an additional 1% TDS. Many young individuals who invest in rapidly expanding cryptocurrencies have called these tax rates exorbitant and see them as a detrimental effect of Budget 2022 on personal finance budget.
However, a lot of experts think that this is a good step. Despite originally wanting to outlaw cryptocurrencies, the Indian government is now allowing for the use of digital assets.
This year’s Union Budget’s provision of some tax filing freedom was among its most well-liked features. Within two years following the conclusion of the assessment year, you may now file your updated tax returns. Additionally, you may file any unfiled income now if you haven’t already.
Long-term capital gains (LTCG) surcharges are currently only allowed to be applied to 15% of all assets, per the Union Budget. Investors should breathe easier because this ceiling was previously 37% for assets other than stocks.
The government intends to implement fresh reforms and programmes for the benefit of the taxpayers with the Union Budget 2022. The effects of these actions in the long run, however, remain to be seen.
Meanwhile, you can take out a loan with low personal loan interest rates if you need money for urgent expenses but don’t want to spend all of your cash. When making personal financial plans, keep these changes in mind and submit your income tax return on time.
Ref. No. KLI/22-23/E-BB/999
Ref. No. KLI/22-23/E-BB/490
