Income tax rules: Here are the changes in rules from July 1, 2022

While the late fees for linking PAN-Aadhaar will shoot up, doctors and influencers will have to pay 10% TDS on the benefits they receive from sales promotions

The government, in the Union Budget 2022, had proposed three major changes in the income tax rules. They are now set to become a reality from July 1, 2022. While the late fee for linking PAN-Aadhaar will shoot up, doctors and influencers will have to pay 10 per cent TDS on their sales promotions' benefits.

 

Let's have a look at these three changes in detail

 

TDS on cryptocurrencies

 

TDS of 1 per cent will be levied on payments towards virtual digital assets or cryptocurrencies beyond Rs 10,000 in a year from July 1. The Finance Act 2022 had introduced Section 194S in the income tax (I-T) Act, which made the provision of 1 per cent TDS.

 

Also Read: PAN to become inoperative after March 2023 if not linked to Aadhaar

The income tax department said both buyer and seller would have to withhold taxes for transactions involving an exchange of one virtual digital asset (VDA) for another. The Central Board of Direct Taxes (CBDT) also said according to section 194S of the I-T Act; the buyer will have to deduct tax in a peer-to-peer transaction of VDA. "Thus, in a peer-to-peer (i.e. buyer to the seller without going through an Exchange) transaction, the buyer (i.e. person paying the consideration) is required to deduct tax under section 194S of the Act," the CBDT said. For example, the CBDT said in a situation where VDA "A" is being exchanged with another VDA "B", both the persons are a buyer and a seller. One is the buyer for "A" and seller for "B", and another is the buyer for "B" and seller for "A".

 

Influencers, music bands, and doctors liable to 10% TDS

 

TDS of 10 per cent must be deducted by any person who provides benefits or perquisites exceeding Rs 20,000 in a year to a resident, arising from the latter's business or profession. Doctors and influencers will have to be mindful of the benefits they receive.

 

Double fee for PAN-Aadhaar linking

 

The last date for Aadhaar-PAN linking is June 30 2022. According to the CBDT guidelines, those who link their PAN with Aadhaar between March 31, 2022, and June 30 2022, will have to pay a late fee of Rs 500. However, people who fail to link PAN with Aadhaar by June 30 2022, will have to pay Rs 1,000 as a fine whenever they link their PAN-Aadhaar.