New Delhi Mar 25 PTI Finance Minister Nirmala Sitharaman on Friday said the retrospective amendments relating to claiming deduction for cess and surcharge is aimed at preventing misuse of the provision especially by those who have treated it as exemptions or business expendituresThe Finance Bill had proposed retrospective disallowance of deduction for surcharge or cess with effect from Assessment Year 2005-06 As per the amendment passed by the Lok Sabha on Friday any such deduction claimed would be treated as under reported income and will be subject to 50 per cent penaltyReplying to the debate on Finance Bill in the Lok Sabha Sitharaman said surcharge and cess on tax have been over the years misused and people have treated it as their exemptions or business expendituresThat has become a very very confusing point on which people have gone to courts also So that amendment with an retrospective effect has been brought for more clarity she said Emphasising that there will be no burden on the taxpayers she said that if taxpayers on their own approach the tax authority disclosing such amount claimed as deduction there will be no penalty The income of the taxpayer will be reassessed after which legitimate taxes can be paidThere is no penalty if you come on your own Sitharaman addedThe minister proposed 39 amendments to the Finance Bill which was passed by the Lok Sabha by voice vote The other important amendments relate to tightening the norms for taxation of cryptocurrencies by disallowing set off of any losses with gains from other virtual digital assets The 2022-23 Budget has brought in clarity concerning the levy of income tax on crypto assets From April 1 a 30 per cent I-T plus cess and surcharges will be levied on such transactions in the same manner as it treats winnings from horse races or other speculative transactions It has also proposed a 1 per cent TDS on payments towards virtual currencies beyond Rs 10000 in a year and taxation of such gifts in the hands of the recipient The threshold limit for TDS would be Rs 50000 a year for specified persons which include individualsHUFs who are required to get their accounts audited under the I-T ActThe provisions related to 1 per cent TDS will come into effect from July 1 2022 while the gains will be taxed effective April 1 Referring to the concerns raised on cryptocurrencies Sitharaman said that consultation is going on over regulation of virtual digital assets Meanwhile the government has decided to tax gains from transactions in virtual digital assets at 30 per centAs regards 1 per cent TDS she said it is more for tracking such transactions and can be reconciled at the time of payment of taxes The amendment also dilutes the penalty provision relating to publication of export-import dataThe Finance Bill had proposed to insert a new Section 135AA in the Customs ActIt was proposed that if a person publishes any information relating to the value or classification or quantity of goods entered for export from or import into India or the details of the exporter or importer of such goods under the Act the person could face a six-month imprisonment a penalty of Rs 50000 or bothNow the government has done away with the six-month imprisonment period and the penalty while such actions could attract a certain period of imprisonment PTI JD CS RAM

New Delhi Mar 24 PTI The government on Thursday proposed to tighten the norms for taxation of cryptocurrencies by disallowing set off of any losses with gains from other virtual digital assets As per the amendments to the Finance Bill 2022 circulated among the Lok Sabha members the ministry proposes to remove the word other from section relating to set off of losses from gains in virtual digital assets This would mean that loss from the transfer of virtual digital assets VDA will not be allowed to be set off against the income arising from the transfer of another VDA According to the Finance Bill 2022 a VDA could be a code or number or token which can be transferred stored or traded electronically The VDAs will include prevailing cryptocurrencies and non-fungible tokens NFTs which has gained fad over the past couple of years The 2022-23 Budget has brought in clarity concerning the levy of income tax on crypto assets From April 1 a 30 per cent I-T plus cess and surcharges will be levied on such transactions in the same manner as it treats winnings from horse races or other speculative transactions Also while computing the income from transfer of VDA no deduction in respect of any expenditure other than the cost of acquisition or allowance will be allowed The Budget 2022-23 also proposed a 1 per cent TDS on payments towards virtual currencies beyond Rs 10000 in a year and taxation of such gifts in the hands of the recipient The threshold limit for TDS would be Rs 50000 a year for specified persons which include individualsHUFs who are required to get their accounts audited under the I-T Act The provisions related to 1 per cent TDS will come into effect from July 1 2022 while the gains will be taxed effective April 1 Separately the government is working on legislation to regulate cryptocurrencies but no draft has yet been released publicly The amendments to the Finance Bill also propose to dilute the penalty provision relating to publication of export-import data The Finance Bill had proposed to insert a new Section 135AA in the Customs Act which stated if a person publishes any information relating to the value or classification or quantity of goods entered for export from India or import into India or the details of the exporter or importer of such goods under this Act unless required so to do under any law for the time being in force he shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to fifty thousand rupees or with both The amendments seeks to do away with six-month imprisonment and the Rs 50000 penalty The amendment now reads if a person publishes any information that is furnished to Customs by an exporter or importer under this Act relating to the value or classification or quantity of goods entered for export from India or import into India along with the identity of the persons involved or in a manner that leads to disclosure of such identity unless required so to do under any law for the time being in force or by specific authorisation of such exporter or importer he shall be punishable with imprisonment PTI JD CS JD MR MR