Page 33 - Union Budget, 2022

Union Budget, 2022

Relaxing and Stiffening of Procedural Compliances

Easing provisions relating to higher rate of TDS in case of non-furnishing of ROI
• Vide Finance Act 2021, new Sections 206AB and 206CCA provided that TDS/TCS shall be deducted at
higher rates for persons who have not filed return of income for AYs relevant to the two PYs immediately

prior to the PY of deduction, for which due date u/s 139(1) has expired and the aggregate of TDS and TCS
exceeds Rs.50,000 in each of those two relevant PYs.
• The provisions are now proposed to be amended by reducing the criteria of non-filing of return of income
from two preceding years to one AY relevant to the PY immediately preceding the PY of deduction, so as to
invoke higher rate of deduction.
• Further, non-applicability of Sec 206AB is proposed to be extended to transactions on which tax is to be
deducted under Sections 194-IA (on transfer of immovable property), 194-IB (payment of rent by certain
individuals or HUFs) and 194M (payment by certain individuals and HUFs relating to any works contract,
commission, brokerage or fees for professional services).

AY 2022-23 and subsequent years

The proposed amendment simplifies the compliance aspect and provides clarity on the intention of the lawmaker
for disciplinary actions against assesses who avoid filing return of income even though liable to do so.

Alignment of the provisions relating to Offences and Prosecutions under Chapter XXII of the Act
• Provision of Chapter XX-C (Purchase of immovable properties by CG in certain cases of transfer) are
not applicable to transfers made on or after 01.07.2002. It is proposed that no fresh prosecution
proceedings shall be initiated under Sec 276AB for failure in complying with the provisions of Chapter
st
XX-C, on or after 1 April 2022, since it would be beyond a reasonable period to initiate such proceedings.
Ongoing proceedings however would not be disrupted.
• Sec 278A and Sec 278AA relates to punishment with prosecution for failure to pay TDS to the credit of
the Government. It is proposed to amend the said Section to include TCS within its ambit.
AY 2022-23 and subsequent AYs

The proposed amendments clarify the intention of the lawmaker and strive to align the disciplinary proceedings
relating to TDS and TCS.

Increase in amount of penalty for certain violations u/s 272A(2)

It is proposed to increase the amount of penalty imposed on account of failure to furnish information or
statements, allow inspections, etc. under various provisions of the Act, as specified in Sec 272A(2), from Rs.
100 per day to Rs. 500 per day of continuing failure.

AY 2022-23 and subsequent AYs.

The proposed amendment attempts to enhance the penalty in view of Comptroller and Auditor General (CAG)
comments, on this issue, amongst others, in their 2019 Report of Performance Audit on Assessment of
Assessees in Entertainment sector.

Insights from NES

The number of start-ups in the space sector increased to 47 in 2021 from 7 in 2018, inferring the significance of Government
reforms towards improved public-private partnerships, propelling growth in the space sector

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