As always, there have been mixed responses from the industry and people with respect to the changes brought in the 2022 budget. Following are the highlights from the Union budget of 2022. Highlights from the Union budget 2022-23 Direct Taxes The 2022 budget has brought a new provision which allows the tax payer to update the past return and include the omitted income on payment of additional tax. This updated return can be filed by the assessee within the two years from the end of relevant assessment year.The start-ups who will get incorporated by the end of 31st march, 2023 will get an extension of tax incentive for one more year from the current three consecutive years.For the cooperative having total income between 1 crores to 10 crores, surcharge has been reduced from 12 percent to 7 percent.The Alternate Minimum tax imposed on the cooperatives has been brought on par with the companies at the rate of 15 percent.The 2022 budget has limited the maximum surcharge till 15 percent on long term capital gains made on transfer of any type of assets.The budget suggests that any income made on the transfer of virtual digital assets shall be taxed at the rate of 30 percent with no deductions except the cost of acquiring of the asset. The loss made on the digital assets cannot be made on the set-off from any other income. TDS at the rate of 1 percent has been imposed on the monetary threshold. Gift of virtual asset shall be taxed at the hands of the receiver.The assessee will not be able to show any surcharge or cess on income and profits as business expenditure.As a measure to increase deterrence among tax evaders, no set off of any loss shall be provided against undisclosed income which is detected during search and survey operations. Indirect taxes and Customs The minister highlighted that record collection of Rupees 1,18,398 crores has been received from the revenues of GST. The collection is highest since its inception.To provide a level playing field for the domestic player and businesses, the budget aims to phase out concessional rates in the capital goods and project imports in a phased and gradual manner and keep a moderate tariff of 7.5 percent.Similarly, 2022 budget aims to phase out exemptions on 350 products such agricultural produce, drugs, chemicals, fabrics etc. where the capacity of the domestic players exist.Concessions on import duty have been imposed for the parts of phone chargers, wearable devices etc so that high quality material is available with the domestic manufacturers.However, the 2022 budget has increased the customs duty on imitation jewellery to the tune of rupees 400 per kg of imports in order to discourage their imports. On the other hand, in order to give boost to the gems and jewellery industry, customs duty has been decreased to 5 ‘percent and a simplified framework for export of jewellery through e-commerce shall come into force from June this year.The 2022 budget has levied additional excise duty at Rupees 2 per litre on unblended fuel in order to encourage people to use blended fuel. On the other hand customs duty has been increased on methanol.To facilitate exports, duty has been reduced on the specialised leather and packaging boxes.The budget has continued exemption on customs duty for steel scrap. MSMEs Interlinking of Udyam, e-Shram, NCS and ASEEM portals will be done to increase their scope to make them live portal providing G2C, B2C and B2B services. These services will provide credit facilitation, skilling and recruitment which will further formalise the economy and enhancing entrepreneurial opportunities for everyone.The 2022 Budget has increased the scope of Emergency Credit Line Guarantee Scheme (ECLGS) to more than 130 lakh MSMEs to mitigate the adverse effects of pandemic. The ECLGS has been extended to March 2023 along with its cover from 50,000 crores to 5 lakh crore with additional sum earmarked for the hospitality industry.The 2022 budget also infuses funds in the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) to provide additional credit of 2 lakh crore for Micro and Small enterprises.To make MSMEs more resilient, competitive and efficient the 2022 Budget has rolled out Raising and Accelerating MSME Performance (RAMP) programme with an outlay of 6,000 crores. Telecom sector The 2022 budget announces 5G spectrum auction in the year 2022-23The government will hand over contract for optical fibre networks for the Bharatnet project in the PPP modelThe aim is to provide same access to digital sources to the rural areas as they are available in the urban areas. Self-dependence in Defence and Research and Development 25% budget of defence budget has been allocated for the development of industry, start-ups and academia in the 2022 budgetStart-ups will be promoted to develop ‘ Drone Shakti’ through applications and facilitation will be given for Drone as a Service for which appropriate skilling programmes will be initiated in the select ITIs.A pooled fund will be established under co-investment model which will be facilitated through NABARD to lend to the start-ups for agriculture and rural enterprises. Introduction of Digital Rupee The Central bank Digital Currency shall be launched by the RBI will give a big boost to Indian economy leading to an efficient and cheaper currency management. Digital Rupee will be introduced based on Blockchain technology by the RBI. Clean Energy and e-vehicle The 2022 budget has proposed battery swapping policy and interoperability standards keeping in mind the lack of urban spaces for setting up of charging stations.Production linked incentives (PLIs) for production of highly efficient solar modules have been announced worth 19,000 crores.The government will promote shift towards public transport using clean technology, governance solutions, building special mobility zones with zero fossil fuel policy, e-vehicles in the urban areas. Employment Benefits The PLI scheme having received a great response from the industry has the potential to create 60 lakh new jobs and production of 30 lakh crores in the upcoming years.PLI schemes across 14 sectors have already shown results with 60 lakh new hob opportunities. Digital Banking and Digital Payments Having seen the efficiency and effectiveness in concluding online financial transactions, the government wants to take its benefits to every part of the country by establishing 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks.In order to give a fillip to the digital payment ecosystem in India, the government will provide the financial support to the digital payment platforms as was done the precious year which will be economical and user friendly for the customers. Housing for everyone and related amenities The 2022 budget has allocated a sum of 48,000 crores for the completion of 80 lakh houses by the end of 2022-23 for the beneficiaries of PM Awas Yojana in both urban and rural areas.The 2022 Budget targets to achieve the target of bringing safe drinking water to the taps of 3.8 crore beneficiariesA humungous allocation of 44,000 crores have been made for the Ken-Betwa river linking project to bring irrigation benefits to 9 lakh farmers and drinking water to 62 lakh people.DPRs have been made for another 5 river linking projects on whom approval from states is still pending. Conclusion The 2022 budget is presented in the backdrop of pandemic with highest recorded GST collection of 1.38 lakh crores in the government coffers. The budget has mainly concentrated in providing liquidity to the MSMEs, with incentives for PLI schemes, impetus to the R&D sector, taxation of virtual assets, digital banking. The indirect taxes have been introduced to boost domestic manufacturing.