Union Budget 2022: Here are the key takeaways
Union Finance Minister Nirmala Sitharaman on Tuesday (February 1) presented the Budget for the upcoming fiscal year, 2022-2023. This marked the 10th annual budget of Prime Minister Narendra Modi-led central government and the fourth by Sitharaman as in-charge of the Finance Ministry. The new budget has garnered both praise and criticism. Here are all the key takeaways from Budget 2022.
The central government's total expenditure has been increased by 4.8% to Rs. 39.5 lakh crore. The Gross Domestic Product (GDP) has been projected to grow by 9.2% in the current fiscal year. In the next year, the growth is expected to be between 8% and 8.5%. The fiscal deficit for FY 2022-2023 is projected at 6.4% of the GDP.
No change to Income Tax slabs were announced in the Budget speech. However, the tax deduction limit for state government employees on the employer's contribution to the National Pension System will be increased to 14% from 10%. Besides, taxpayers have now been allowed to correct errors and file updated Income Tax returns within two years of the concerned assessment year.
The surcharge on long-term capital gains will be capped at 15%. The process to wind up companies will be cut short to six months from the current period of two years. Meanwhile, the emergency credit line guarantee scheme for small and medium sized businesses has been extended to March 2023. The initial public offering (IPO) of Life Insurance Corporation (LIC) is also expected soon.
The capital procurement budget for the defense sector has been hiked by 10%, from 58% to 68%. This is aimed at reducing the country's dependence on import of defense goods. The government has also allocated Rs. 480 billion for affordable housing in FY 2022-2023. Meanwhile, 5G auctions will be conducted by the government in 2022.
As far as the transport sector is concerned, 400 energy-efficient Vande Bharat Express trains will be added over the next three years. National Highways will be expanded by 25,000 kilometers in FY 2022-2023. A total of 2,000 kilometers of rail network will be brought under the indigenous Kavach technology. The FM has also proposed a battery-swapping policy for electronic vehicles.
A digital currency will be introduced by the Reserve Bank of India (RBI) in FY 2022-2023. Sitharaman also announced a taxation scheme for digital assets. Under the scheme, a 30% tax will be levied on the sale or acquisition of virtual assets such as cryptocurrency. It was also clarified that losses on sale of virtual assets cannot be offset against other incomes.