New Income Tax Rule Changes From 1 April 2022

Ravi Gupta
Ravi Gupta at May 19, 2022

4 Main Income Tax Rules for PF Account To Change From 1st April 2022

From April 1st, 2022, taxpayers are required to follow new changes in the tax rules as per the latest guidelines. In this article, you will learn about 4 new tax regulations on Taxation on Provident Fund accounts, Tax on virtual digital assets, changes in GST, and linking of PAN and Aadhaar.

(Note- these tax reforms are applicable to all taxpayers, including senior citizens.)

1. Employee’s PF Contributions Above Rs 2.5 Lakh Will Be Taxed

EPF contributions of more than Rs 2.5 Lakh annually will be taxed. This limit has been set for government officials at a higher end of Rs 5 Lakh. With new tax rules, the government aims to

avoid high-earning men from taking benefit of government welfare schemes. Check key changes in tax related to EPF:

  • PF accounts will be separated into taxable (> Rs 2.5 lakhs) and non-taxable (< Rs. 2.5 lakhs) accounts. 
  • Contributions until 31st March 2021 will be considered non-taxable. 

2. New GST Reform

In its circular CBIC said, “Businesses with a yearly income of Rs 20 crore will have to make electronic invoices for Business to Business transactions from April 1st, 2022.”

  • Previously, businesses with 50 crores or more were generating e-invoices, this is now being applied to businesses with turnovers of Rs. 20 crore. 
  • More suppliers will be needed to generate e-challans. 
  • For invalid e-challans, a tax credit cannot be availed by the recipient besides certain penalties. 

3. 30% Tax on Virtual Digital Assets

Money earned from virtual digital asset transactions will be charged 30% tax. Sources for a long time considered ‘cryptocurrency’ as a digital asset, this appeared to be confirmed by Nirmala Sitharaman in her budget speech. 

Finance Minister Nirmala Sitharaman said, “the level of transactions made on digital assets has made it vital to offer for a certain tax rule.” And then she proposed that any income from transactions of any virtual digital belonging shall be taxed at 30%.

  • Losses from virtual assets transactions cannot be offset against any other income. 
  • Tax will be paid by the recipient of cryptocurrencies taken as gifts.

4. Fees Imposed on Linking of PAN-Aadhaar

From April 1, 2022, linking to PAN Aadhaar will cost you a fee. It was announced by the CBDT (Central Board of Direct Taxes) through a notification on March 29, 2022.

  • Taxpayers are needed to pay a fee of Rs 500, on getting their PAN and Aadhaar linked in between April, May, and June. After that, Rs 1000 will be charged for the same. 
  • However, unlinked PAN will remain functional till March 2023 for procedures like furnishing of return of income, refunds processing, etc.
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