Short Overview of the changes done in the Finance Bill -2022 while moving from Loksabha
Short Overview of the changes done in the Finance Bill -2022 while moving from Loksabha
As expected, Lok Sabha has passed the Finance Bill 2022 on March 25, 2022.
However, the Bill has been passed with more than 35 changes in comparison to the proposal that was proposed along with Union Budget – 2022.
Though majority of the changes are there to plug the loopholes in drafting, there are amendemtn which will change the mode of interpretation of the law originally proposed. even some new amendments have been made whereas some proposed amendments have been removed or rectified significantly. Here is a short compilation of all the changes made in the Finance Bill, 2022 as passed by the Lok Sabha viz-a-viz the Finance Bill, 2022 which was presented on 01.02.2022.
Though there are 35 changes, here are the Top 14 changes that have been done while passing the bill from Loksabha. The same is as under:
1. Loss from one Virtual Digital Asset (VDA) cannot be set-off against income from another VDA. This was well announced in a reply to a question in the parliament as well and the same has found the respectable place in the Finanance Act as passed by the Loksabha.
2. Definition of ‘transfer’ shall apply even if VDA is not held as a capital asset. It means that even if VDA is held as stock in trade, it will be subject to the same tax treatment.
3. Section 115BBH to override all other provisions. In short, it will be taxable at 30%.
4. Computation provision of section 115BBH would not fail even if there is no cost of acquisition of VDA. The provision is incorporated to avoid any other stand that might be taken by the assessee at appellate stage following the Supreme Court ruling in the case of B.C. Srinivisant Shetty.
5. Restriction on filing of updated return in case of search, survey or requisition case has been placed.
6. Now, it has been provided that the return of loss filed under section 139(3) can also be updated.
7. Recomputation of income due to disallowance of surcharge/cess has been provided for earlier year. There was no mechanism with the assessee to revise the return without this mechanism as proposed by FA-2022.
8. The Clarificatory amendment has been done on taxation of long-term capital gains referred to in Section 112A for non-resident.
9. Cancellation provisions for charitable trust and institutions have now been extended for provisionally approved trust & institutions as well.
10. Similar to earlier restrictions for simultaneous availability of benefit u/s 11 & Section 10, a new restriction on the simultaneous benefit of Section 10(23C) and Section 10(46) has been done by FA-2022.
11. Clauses (VI) and (VII) of proviso to Section 56(2)(x) provide that the deemed income shall not arise under section 56(2)(x) if any sum of money or any property is received:
a) From any fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in Section 10(23C); or
b) From or by any trust or institution registered under section 12A/12AA/12AB.
It has been now provided that there shall not be any exemption if a person as referred to in section 13(3) receives gifts from trust.
12. Section 194R has been amended now. It has been provided that the provider of benefit or perquisite has to “ensure that tax required to be deducted has been deducted”. Earlier, the words used in section 194R were a little bit ambiguous and have been now simplified for better interpretation.
13.It has now been specifically provided that the books of accounts include books maintained/kept in electronic or digital form as well.
14. Modification in limitation period for completion of assessment as per Section 153:
At present, Section 153(1) provides the following time limit for completion of assessment under Section 143(3) and Section 144:
Assessment Year
Prescribed Time limit for Assessment
Assessment Year 2021-22 and
Onwards
Within 9 months from the end of the Assessment
Year in which income was first assessable
Assessment Year 2019-20 and 2020-21
Within 12 months from the end of the
Assessment Year in which income was first assessable
For Assessment Year 2018-19
Within 18 months from the end of the
Assessment Year in which income was first assessable
Up to Assessment Year 2017-18
Within 21 months from the end of the
Assessment Year in which income was first assessable
The Finance Act 2022 has increased the time limit for completion of assessment of assessment year 2020-21 from 12 months to 18 months.
The revised time limit for completion of assessment under Section 143(3) and Section 144 shall be as under:
Assessment Year
Prescribed Time limit for Assessment
Assessment Year 2021-22 and
Onwards
Within 9 months from the end of the Assessment
Year in which income was first assessable
Assessment Year 2020-21
Within 18 months from the end of
the Assessment Year in which income was first
assessable
Assessment Year 2019-20
Within 12 months from the end of
the Assessment Year in which income was first
assessable
For Assessment Year 2018-19
Within 18 months from the end of
the Assessment Year in which income was first
assessable
Up to Assessment Year 2017-18
Within 21 months from the end of
the Assessment Year in which income was first
assessable
In short, the new amendment has extended the time limit for completion of assessment for assessment year 2020-21, which is ending on 31-03-2022 [excluding the extension available under Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the notification issue therein, if any], to 30-09-2022.
One must carefully note that the extension is for the assessment year 2020-21 only. The time limit for completion of assessment for assessment years 2021-22 or 2019-20 has remained unchanged.
