Income Tax Rules: Three Changes Starting Today — Explained


Tax rules: Following the introduction of T2FY23, three major changes to the income tax rules proposed in the 2022 union budget became a reality. One of the rules being the doubling of late fees on the PAN-Aadhaar route. As of today, the late fee for PAN-Aadhaar seeding has increased from 500 to 1,000.

Apart from this, a 1% withholding tax deduction (TDS) on all cryptocurrency transactions will be taken from T2FY23, i.e. from today. Meanwhile, from today, 10% TDS on monetary benefits received through sales promotion on social media influencers and doctors also became applicable.

Here we list 3 significant changes to the income tax rules starting today:

1]Double charges for the PAN-Aadhaar link: The last date for Aadhaar-PAN linking expired on June 30, 20222. As per CBDT guidelines, if a person links their PAN to Aadhaar after March 31, 2022 to June 30, 2022, they will be required to pay a late fee of 500. However, if a person fails to link PAN to Aadhaar by June 30, 2022, then they will have to pay a double fine of 1,000 for PAN-Aadhaar seeding from July 1, 2022. As we are now in T2FY22, so will have to pay 1,000 for PAN-Aadhaar seeding.

2]TDS on crypto-currencies: After the imposition of a 30% flat income tax on cryptocurrencies from April 1, 2022, the Indian government had proposed a 1% TDS surcharge on cryptocurrency transactions in the budget of union 2022, regardless of the gain or loss suffered by the investor. The budget proposal entered into force as of today. However, an investor could claim reimbursement of TDS levied on transactions involving losses. Thus, a cryptocurrency investor is advised to file an ITR if he has entered into cryptocurrency transactions.

On how TDS will be levied on digital assets, Sujit Bangar, founder of explained: “As of July 1, 20222, 1% TDS has been offered for transactions involving crypto . An important point to note is that, we can sell cryptocurrency with profit or loss, but TDS at 1% rate would definitely happen. We may request reimbursement of TDS made on a transaction involving a loss. Therefore, it would be recommended to file a tax return if you have entered into cryptocurrency transactions.”

3]IT rule change for doctors, influencers: In the Union Budget 2022, the Government of India inserted a new Section 194R in the Income Tax Act 1961. This new section offers 10% TDS on benefits received via sales promotion on doctors and social media influencers. This budget proposal became applicable from July 1, 2022, i.e. today. However, the EAT will only be applicable when the cost of the service is 20,000 or more in a single fiscal year.

On how Section 194R works, SEBI-registered tax and investment expert Jitendra Solanki said, “If a private doctor receives samples from a drug manufacturer and the cost of all those samples received exceeds 20,000 in a fiscal year, then it will attract 10% TDS. However, if the doctor is employed in a private hospital, then 10% TDS will be levied on the hospital. It is important to know that section 194R is not applicable to government entities. Thus, if a doctor employed in a public hospital receives free medical samples, he or she does not need to pay 10% TDS.”

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