From Pan to Crypto: New income tax reforms that take effect on July 1
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Starting July 1, 2022, a number of changes will take effect that will have an impact on your income tax. In this regard, it is also crucial to keep in mind that July 1, 2022, also marks the beginning of the fiscal year’s second quarter. This includes changes to the laws governing income tax and TDS on cryptocurrency. These are some significant changes in income tax reform that will take effect on July 1, 2022.
TDS on Cryptocurrencies:
In January 2022, Finance Minister Nirmala Sitharaman suggested a 1% tax deducted at source (TDS) on any payment made in exchange for the transfer of virtual digital assets (VDAs), often known as cryptocurrencies and non-fungible tokens (NFTs). The TDS regulation will be in force beginning on Friday, July 01, 2022 for transactions with a value of more than Rs. 10,000.
A 20% tax deduction will be made at the time of transfer of the VDA if the deductee’s (buyers’) PAN is not immediately accessible. If the payer is not one of the people listed and they have not filed their income tax return, TDS will also be withheld at a higher rate of 5 percent (instead of the standard rate of 1 percent).
The PAN-Aadhaar Non-Linkage costs twice as much:
The final day for connecting Aadhaar and PAN was June 30, 2022. In line with CBDT regulations, if a person combines their PAN with Aadhaar between March 31, 2022, and June 30, 2022, they must pay a 500-rupee late fee. However, if someone fails to connect their PAN with their Aadhaar before June 30, 2022, they will be subject to a twofold fine of Rs. 1,000 starting on July 1st, 2022.
For doctors and social media influencers, the new income tax information is as follows:
Rewards received from businesses for sales promotion by doctors and social media influencers will be subject to a 10% tax deduction at source starting July 1, 2022. (TDS). In line with a notice from the Central Board of Direct Taxes (CBDT), the giver of the benefit or perquisite may immediately deduct the tax under Section 194R. However, the taxpayer must confirm the recipient’s possession of any taxable sums.
In line with Section 194R, taxes must be deducted from benefits and perks when their total worth exceeds Rs. 20,000.
Update on Income Tax (IT) Return Filing:
The new income tax regulations now include a new clause that enables taxpayers to file a revised return in the event that their income tax returns contain errors or inaccuracies. Taxpayers now have two years from the conclusion of the applicable assessment year to file an amended return.
Changes in Demat KYC Rules:
To prevent having your demat account frozen, you must complete your KYC before June 30. To update your KYC, you must provide your name, place of residence, PAN, active mobile phone number, active email address, and range of income. But starting on July 1, your demat account will likewise be inactive if you do not do this.
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