From Friday, July 1, 2022, three major changes to income tax rules are going to be applicable to different taxpayers. The rules, as proposed by Union Finance Minister Nirmala Sitharaman in the Union Budget 2022 presented on February 1, pertain to double late fee on Permanent Account Number (PAN)-Aadhaar linking from Rs 500 to Rs 1,000, one per cent Tax Deduction at Source (TDS) on all cryptocurrency transactions, and TDS rule change for doctors and influencers who receive monetary benefits through sales promotion on social media.
Here are the three important changes in income tax rules that will come into effect from Friday, July 1, 2022:-
Double late fee for PAN-Aadhaar linking – The last date to link your PAN with your Aadhaar is June 30, 2022. According to the Central Board of Direct Taxes (CBDT) guidelines, if a citizen links his/her PAN with Aadhaar after March 31, 2022, to June 30th 2022, he/she will have to shell out a late fee of Rs 500. The said charge will double to Rs 1,000 from July 1, 2022, if a person fails to link his/her PAN with Aadhaar by June 30, 2022. Thus, if a person links his/her PAN and Aadhaar after June 30, 2022, they first have to pay a double late fee of Rs 1,000 and then request to link PAN and Aadhaar once the payment is done and it reflects in the e-filing site.
TDS On Cryptocurrencies – FM Sitharaman had earlier this year proposed a one per cent TDS on cryptocurrency sale transactions from July 1 onwards. The TDS deduction would be applicable to all virtual digital asset (VDA) transfers comprising cryptocurrencies, and non-fungible tokens (NFTs) worth more than Rs 10,000.
The deduction would be levied regardless of the gain or loss incurred by the investor, but the buyer can claim a refund of TDS imposed on transactions involving losses. Furthermore, at the time of transfer of VDS, the tax will be deducted at the rate of 20 per cent if the buyer’s (deductee) PAN is not readily available. In addition, the TDS will be retained at a higher rate of five per cent, contrary to the general rate of one per cent if the individual has not provided his/her income tax return. Thus, a cryptocurrency investor should file his/her income tax return if he/she has entered into crypto transactions.
TDS On Doctors, Social Media Influencers – FM Sitharaman had introduced a new section (194R) in the Income Tax Act 1961 in the Union Budget 2022, which proposes a 10 per cent TDS on monetary benefits received by doctors and social media influencers through sales promotion (on social media) beginning July 1, 2022. According to a notification by the Central Board of Direct Taxes (CBDT), the benefit or perquisite provider may directly deduct the tax under Section 194R, but the taxpayer must corroborate the recipient’s possession of any taxable amount.
However, there would be no TDS if the total value of benefits or perquisites received throughout the financial year is less than Rs 20,000. For instance, if a private doctor receives samples from a drug manufacturing company and the cost of all such specimens received exceeds Rs 20,000 in one financial year, then it will attract a 10 per cent TDS. But, if the doctor is working with a private hospital, the 10 per cent TDS will be imposed on the hospital. Section 194R is not applicable to government bodies.