Several income tax proposals, including a 30% tax on income from cryptocurrency trading, will take effect from Friday.
Also, the revised standards of levying 1% TDS (withholding tax) on the sale of immovable property exceeding Rs 50 lakh will come into effect from April 1, the start of the new financial year.
In accordance with the revised standards, a TDS of 1% will be deducted from the consideration or the value of the stamp duty, whichever is greater, in relation to the previous disposition of consideration.
Beginning next fiscal year, assessees will have the ability to update their tax returns if there is an omission in the original ITR. It would also provide the option of voluntarily disclosing that income by filing an updated tax return with additional tax calculated based on the delay.
Taxpayers will only be permitted to file such an updated return once per fiscal year.
Since April 1, 2022, income from the transfer of virtual digital assets or cryptocurrencies is taxable at 30%. Such income will be taxable even if the taxpayers’ total income is below the threshold of Rs 2.50 lakh. In addition, no deduction other than the cost of acquisition is allowed when calculating the taxable amount.
Nangia Andersen LLP partner Neeraj Agarwala said the denial of expenses under Section 14A will come into effect on April 1, 2022.
From Friday, expenses incurred to earn exempt income will no longer be allowed as a deduction.
The tax regime for first-time buyers provided for by the 2022 finance law will come into force on Friday.
According to Anita Basrur – Partner, Direct Tax – Sudit K Parekh & Co. LLP, in order to provide buyers with affordable and low cost funds, a deduction of up to Rs 1,50,000 towards interest on the loan, taken for a dwelling house, was authorized subject to meeting certain conditions, i.e. the loan must be sanctioned in 2019-20, the stamp value of the house must not exceed Rs 45,00,000 and the taxpayer must not own another dwelling house on the date of the sanction to lend it.
The sanction period for the loan was extended from March 31, 2020 to March 31, 2021 and finally to March 31, 2022 in subsequent finance bills. There is no extension granted now.
“With the sunset of this section, home buyers can still benefit from a deduction for interest on loans taken out for the purchase of real estate, but the interest rate will not be concessional but in accordance market. Surely that would not allow people to buy houses due to the higher interest rates,” Basrur said.
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