3 Major Changes In Income Tax Rules: Applicable from July 1st 2022.

Income tax regulations: Three significant modifications to the income tax regulations that were outlined in the union budget of 2022 will take effect after the conclusion of Q1FY23. One of the guidelines is that the late fee for the PAN-Aadhaar connection would be doubled. The late fee will increase to 1,000 from 500 starting on July 1st, 2022.

In addition, starting on July 1st, 2022, all cryptocurrency transactions will be subject to a 1% Tax Deduction at Source (TDS) charge. The 10% TDS on financial gains earned from sales promotion to medical professionals and social media influencers will also be applicable starting tomorrow.

Here are 3 significant adjustments to income tax laws that take effect on July 1, 2022:

1] Double fee for PAN-Aadhaar linkage:

 The deadline for linking PAN and Aadhaar is June 30, 2022. According to CBDT regulations, if someone integrates their PAN with Aadhaar between March 31, 2022, and June 30, 2022, they must pay a late fee of  500. A twofold fine of 1,000 for PAN-Aadhaar seeding will be imposed starting on July 1st 2022 if a person fails to link their PAN with Aadhaar by June 30, 2022.

2] TDS on cryptocurrencies:

1. The GoI will levy an additional 1% TDS on cryptocurrency transactions, regardless of the gain or loss experienced by the investor, after imposing a flat 30% income tax on cryptocurrencies beginning on April 1, 2022. An investor could, however, request a refund of TDS that was imposed on transactions that resulted in losses. Therefore, if a bitcoin investor has engaged in cryptocurrency transactions, they should file an ITR.
2. Sujit Bangar, the founder of Taxbuddy.com, provided the following explanation of how TDS will be assessed on digital assets: “TDS at a rate of 1% has been recommended for transactions involving cryptocurrencies as of July 1, 2022.” It’s important to remember that whether we sell cryptocurrency for a profit or a loss, TDS of 1% will undoubtedly apply. We are entitled to a TDS refund for transactions that resulted in losses. Therefore, if you have engaged in cryptocurrency transactions, it would be advised that you file an income tax return.

3] I-T rule change for influencers and physicians:

The Government of India included a new section 194R to the Income Tax Act of 1961 in the Union Budget of 2022. The 10% TDS on advantages obtained from sales promotion on physicians and social media influencers is proposed in this new section. However, the TDS won’t be applied unless the benefit costs at least 20,000 in a single fiscal year.

Jitendra Solanki, a tax and investment specialist registered with SEBI, explained how Section 194R would operate as follows: “If a private doctor is receiving samples from a medication manufacturing firm and the cost of all such samples received exceeds 20,000 in one financial year, then it will attract 10% TDS.”

However, if the doctor works for a private hospital, the hospital will be charged 10% TDS in that situation. It is crucial to understand that Section 194R does not apply to government bodies. Therefore, a doctor working for a government institution who receives free medical samples is exempt from paying the 10% TDS.

What’s more?

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