Page 16 - Union Budget, 2022

Union Budget, 2022

Extension of date to commence manufacturing to opt reduced tax rates u/s 115BAB
Sec 115BAB has been proposed to be amended to extend the last date of commencement of manufacturing
operations from 31st March 2023 to 31st March 2024, for adopting the option of concessional tax rate @ 15%
on satisfaction of certain conditions.

AY 2022-23 and subsequent AYs

The intent of introduction of Sec 115BAB was to attract investments, create jobs and trigger overall economic
growth; however, delay in setting up of companies due to impact of COVID-19 has resulted in the proposed
amendment for extending the last date to commence the business operations.

Extension of date of incorporation for eligible start up for exemption
• For the purpose of enjoying tax holiday u/s 80-IAC, the cut-off date for an eligible start-up to be incorporated is
proposed to be extended to 31.03.2023.

AY 2022-23 and subsequent assessment years.

The proposed amendment factors in delays in setting up of eligible start-ups on account of COVID-19 pandemic.

Comparison of Macroeconomic Indicators during Global Financial Crisis, Taper
Tantrum and COVID-19

Studies

Inference • CPI inflation moderated to 5.2% in 2021-22 (April-December) as against 6.6% in 2020-
21. The decline in retail inflation in 2021-22 was led by easing of food inflation.
• India’s salient external sector sustainability indicators are strong and much improved as
compared to what they were during the global financial crisis or taper tantrum episode of
2013 (i.e. the 2013 collective reactionary panic that triggered a spike in U.S. treasury yields).
• As at end-November 2021, India was the fourth largest forex reserves holder in the world
after China, Japan and Switzerland.

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