GST and income tax changes from April 1, 2022


Various changes come into effect in the GST and income tax regimes, starting in fiscal year 2022-23. Some of these changes stem directly from the 2022 budget while others stem from various circulars and notifications. Some of the key changes effective April 1, 2022 are:

GST – Companies with turnover above INR 20 crore to generate B2B e-Invoices:

  • Businesses (except some specified ones) with turnover above INR 20 crore will be required to generate e-invoice for B2B transactions. The threshold was INR 50 crore till March 31, 2022. Notification No. 1/2022-Central Tax dated February 24, 2022 was issued for this purpose.
  • As a result, more companies would have to issue electronic invoices and invoices issued otherwise would not be valid. It should be noted that the input tax credit (“ICC‘) cannot be used by recipients on invalid invoices.

Virtual digital asset income tax:

  • Section 115BBH is inserted into the Income Tax Act 1961 for the taxation of virtual digital assets.
  • Earnings from various virtual digital assets such as Bitcoin, Ethereum, etc. will be taxed at a fixed rate of 30%.
  • With the exception of the acquisition cost, no deduction relating to any expense will be authorized. No compensation for loss of purchase/sale of virtual digital assets from other income will be permitted. Profits from one virtual digital asset cannot be offset by losses from other virtual digital assets.
  • In addition, in accordance with the new Section 194-S, 1% TDS for each virtual digital asset transaction will come into effect on July 1, 2022. The threshold limit for TDS would be INR 50,000/year for specified persons ( individuals/HUF).

Period for filing the updated tax return

  • Subsection 139(8A) has been inserted into the Income Tax Act. Taxpayers will have an additional chance to update their tax returns.
  • Updated returns can be filed by taxpayers within 24 months of the end of the relevant tax year. The provision also provides for instances where updated tax returns cannot be filed.
  • Section 140B has been inserted to provide that in addition to tax and interest due in connection with the updated tax return, the taxpayer will be required to pay “additional tax”.

TDS on the sale of real estate

  • The provisions of the TDS have been brought into line with the calculation provisions, Section 194-IA has been amended to provide that the tax must be deducted on the greater of the value of the sales consideration or the stamp duty.
  • Tax will not be withheld when the stamp duty value of the property and the consideration paid is less than INR 50 lakh.

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