Union Budget Highlights For SMEs, MSMEs & Service Sector

  1. One Nation, One Product Programme to be in place to help local businesses and supply chains.
  2. Interlinking of portals for MSMEs such as Udhyam, e-shram, NCS & Aseem
  3. for B2B, B2C, etc to provide real-time data.
  4.  For MSMEs, the duty on umbrella is being raised to 20%
  5. Entrepreneurial opportunities will be introduced for SMEs and MSMEs
  6. Additional credit for MSME’s to mitigate the pandemic for procuring raw materials at lower rates. 
  7. Emergency credit line guarantee scheme for small and medium sized businesses to be extended to March 2023 to benefit business growth for MSME-focused banks and NBFC .   
  8. Railways will develop products and logistics services to provide efficiency to small farmers and SMEs, and also take the lead in integration of postal and railways networks to provide seamless solutions for movement of parcels. 
  9. Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will be revamped with required infusion of funds, which will facilitate additional credit of 2 lakh crore for Micro and Small Enterprises and expand employment opportunities. 
  10. The country is marking Azadi ka #AmritMahotsav, and entered into Amrit Kaal, the 25 year long lead up to India at 100, with the vision of complementing micro & macroeconomy, promoting digital economy, private & public investments

Budget Highlights For Start-ups

  1. Startups established before 31/3/2022 have been provided a tax incentive for three consecutive years out of the ten years from incorporation
  2. Keeping in mind the COVID scenario, proposing to increase the incorporation of the eligible startup by one more year, i.e. 31/3/2023 for providing such tax incentives. 
  3. A fund blended with capital to be raised under the co-investment model to be facilitated through NABARD. This is to provide finance to startups for agriculture and rural enterprises for farm produce value chain. 
  4. Efforts to be made to provide a conducive environment to start-ups with lesser turnover. 
  5. A concessional rate of 15 per cent tax for newly incorporated domestic companies was introduced recently
  6. Start-ups will be promoted to facilitate ‘Drone Shakti’ through various applications and Drone-As-A-Service(DrAAS).  

Budget highlights : Deficit/Expenditure

1. Proposes fiscal deficit of 4.5% of GDP by 2025/26

2. Projects fiscal deficit of 6.4% of GDP in 2022/23

3. Revised fiscal deficit for 2021/22 at 6.9% of GDP

4. Total expenditure in 2022/23 seen at 39.45 trillion rupees

5. States will be allowed 4% fiscal deficit to GDP in FY23

6. 50-year interest-free loans over and above normal borrowing allocated to states

7. Scheme for financial assistance to states for capital investment outlay to be 1 trillion rupees in 2022/23

Budget Higlights on Taxation

1. Import duty on certain chemicals are being reduced

2. Customs duty exemption on steel scrap to be extended for another year for small- and medium-sized businesses

3. Customs duty on stainless steel, flat products, high steel bars to be revoked

4. Unblended fuel to get an additional duty of 2 rupees per litre from October 2022

Budget Highlights: Direct Taxes

A provision for a New Updated Return System will provide an opportunity to file an updated return on payment of an additional amount within 2 years from the end of the relevant assessment year. 

Tax on virtual digital assets (cryptocurrency) introduced by the Budget 2022 rated at 30 per cent on any income by way of transfer of digital currency. No deduction for any expenditure will be allowed except the cost of acquisition. Loss arising on sale of digital currency shall not be allowed to be set off against any other income.  

A digital currency given as a gift will be taxable in the hands of the recipient.  

Surcharge on co-operative societies to be brought down to 12 per cent from 7 per cent for assessees having total income between INR One crore to INR Ten crore.

  1.  State government employees also allowed a deduction to the extent of 14% of salary in the case of contribution to NPS by employers. 
  2. A cap is put on surcharge for any Long Term Capital Gain on transfer of any asset at 15%  

Budget Highlights: Indirect taxes  

1.GST

1. Time-limit to avail the Input Tax Credit u/s 16(4) extended till 30th November instead of next year from 30th September.  

2. For Composition Tax Payer’s the registration can be cancelled automatically if they have not filed their GSTR-4 return beyond 3 months from the due date. 

3. Any rectification of error in GSTR-1/ GSTR-3B is now allowed to be made till 30th November of next financial year (currently allowed till 30th September). 

Budget Highlights: Finance

1. Emergency credit line guarantee scheme for small and medium-sized businesses to be extended to March 2023

2. Energy transition and climate action will be a major government priority

3. Public issue of Life Insurance Corporation expected shortly

4. Initiatives from last year’s budget have been provided adequate allocations in this budget

5. Special Economic Zones Act to be replaced with new legislation

6. To amend bankruptcy code to speed up the resolution process

7. Aims to lower winding up of companies to 6 months from 2 years currently8.

8. Long term capital gain surcharge to be capped at 15%

Budget Takeaways : Digital Currency

1. To  launch digital rupee using blockchain technology starting 2022/23

2. To launch scheme for taxation of virtual digital assets

3. Losses from sale of virtual digital assets cannot be offset against other income

4. Income from virtual digital assets to be taxed at 30%

Budget Takeaways : Defence

1. Govt committed to reducing defence imports

Budget Takeaways : Infrastructure

1. 5G spectrum auctions to be conducted in 2022

2. Scheme for design-led manufacturing for 5G will be part of the production-linked scheme

3. To award contracts to lay optical fibre in rural areas, completion in 2025

4. 480 billion rupees set aside for affordable housing in 2022/23

5. To allocate additional 195 billion rupees for production-linked incentives towards solar equipment manufacturing

Budget Takeaways : Agriculture

1. Domestic scheme introduced to reduce dependence on oilseed imports

2. Fund with blended capital raised under co-investment model to finance agriculture startups

3. Railways to develop infrastructure for small farmers in 2022/23

Budget Takeaways : Transport

1. 400 energy-efficient trains to be manufactured over next three years

2. National highways network to be expanded by 25,000km in 2022/23

3. Highways expansion to cost 200 billion rupees in 2022/23

4. India to bring out battery swapping policy (edited) 

Union Budget 2022 Expectations

  1. For the first time in the history of India, Budget to be presented in paperless form. 
  2. Finance Minister Nirmala Sitharaman will present the Union Budget for the Financial Year 2022-23 at 11 am on which will be aired on Lok Sabha TV and social media channels on Youtube and Twitter. 
  3. Post the live session, the details of the Union Budget will be available on the Union Budget App For Android – https://play.google.com/store/apps/details?id=com.nic.unionbudget&hl=en_IN&gl=US 
  4. For iOS – https://apps.apple.com/us/app/union-budget-app/id1548425364 
  5. The details of the Union Budget will also be available on the Union Budget Mobile App. 
  6. Budget focused on bringing relief to sectors affected by Covid-19. 
  7. Expected increase in the basic exemption limit in Income Tax. 
  8. Standard Deduction for Income from Salaries expected to be increased. 
  9. Schemes and benefits in the healthcare and medicine sectors. 
  10. Lower GST rates for procurement of raw materials to SMEs and MSMEs. 
  11. Benefits under Section 80-IAC. 
  12. Clarity between the Old Tax Regime and the New Tax Regime under Income Tax. 

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