India

Corporate - Significant developments

Last reviewed - 24 May 2022

Updated return

Finance Act 2022 has introduced provisions related to filing of the updated return within within 2 years from the end of relevant Assessment Year by payment of additional tax over and above the regular taxes and interest as applicable depending upon the delay in filing. Further, the updated return cannot be filed in certain cases including the following:

  • Updated return is a return of loss or has the effect of decreasing tax liability or increasing tax refund
  • Updated return has already been filed for the said year
  • Assessment or reassessment for the relevant year is completed.
  • Prosecution / search seizure proceedings have been initiated for the said year.

Virtual Digital Assets - Crypto taxation

The Finance Act, 2022 has introduced provisions to bring Virtual Digital Assets (VDA) (including crypto currencies, NFTs etc) into the tax ambit. The gains arising on transfer of VDA would be taxable at 30% without providing any deduction of expenses other than cost of acquisition. Further, any loss arising on transfer of VDA is not permitted to be set-off against any other income in the current year or subsequent years.

Tax is to be deducted @1% payment to a resident on transfer of VDA with effect from 1 July 2022.

Withholding tax provisions introduced on benefit or perquisite of a business or profession

The Finance Act, 2022 has introduced withholding tax provisions to be applied on benefit or perquisites arising to a resident from business or profession. It has been provided that any benefit or perquisite arising to a resident during the course of business or exercising a profession would now be subject to withholding tax of 10%, if the aggregate value of such benefit or perquisite exceeds the prescribed threshold. This provision is effective from 1 July 2022.