Union Budget-2022-23 Reactions

Taxation of virtual digital assets

Taxation of virtual digital assets - at 30%. No deduction other than cost of acquisition. No set off permitted against other income. Tax withholding to be triggered on sale at 1% beyond certain threshold. Deduction for employer contribution to NPS increased from 10 % to 14% for state govt employees on par with central govt employees. Not extended to non- govt employees

– Saraswathi Kasturirangan, Partner, Deloitte India

Long Term Capital Gains

Long term capital gains to be subject to surcharge only at 15% for all assets as against graded surcharge. Currently this is available only for listed shares and units of mutual funds

– Saraswathi Kasturirangan, Partner, Deloitte India

Role of DoP and India Post Payments

"The role of DoP and India Post Payments in increasing financial inclusion is undisputed. They have tremendous reach and a trusted brand name. We were fortunate to have played a role in setting up IPPB and it has been great to see the impact they've had over the years, particularly during the pandemic. Their customer base recently crossed 5 crore, most of it rural. It's great to see growing adoption of their services which are critical for financial inclusion. And the announcement in today's budget for further technology enablement of post offices is another good step in this direction

– Sanjoy Datta, partner & financial services industry leader, Deloitte India

Introduction of Central Digital Currency

Introduction of central digital currency using blockchain to be issued by RBI in 22-23. It is expected that the tax regulation of such currency is also made clear, as there are aspects of classification (capital asset or otherwise), rate of taxation, disclosure requirements that have to be addressed. Income from virtual digital asset to be taxed at 30%. No deduction other than cost of acquisition will be allowed. Transaction details to be captured by way of TDS on sale. Gift of VDA to be taxed in the hands of the recipient

– Tapati Ghose, Partner, Deloitte India

Public transportation using non-fossil

Focus on public transportation using non fossil fuels should help in pushing EV vehicles. This is in addition to a battery swapping policy that could drive faster adoption of Electric vehicles Battery swapping policy including interoperability could be a big booster for all the startups already working in this space. It could also help drive movement to the electrification of fleets especially for last-mile connectivity

– Rajeev Singh, Partner and Automotive Leader, Deloitte India

Defence Manufacturing

Through this Budget, the government has reiterated the significance of indigenized defense manufacturing by enhancing procurement budget allocation to the domestic industry. This is an important policy alignment with the Atmanirbhar goal in military procurements. Also, the proposal permitting private participation in Defense R&D and design & Development of military equipment and platforms will enable ushering in best-in-class technology with competitive pricing. One would need to be look at key conditions to be rolled out for this public-private participation to kick off without inordinate delay

– Sumit Singhania, Partner, Deloitte India

5G Rollout

Optical fibre to be in focus in a big way. Integrated with 5G roll out proposed in FY 22-23, the potential will go well beyond B2B. We will see significant B2C and G2C initiatives. This will spur domestic tech and telecom sector, create a host of edtech, healthtech and such another initiatives as also enable the Government to enhance capabilities in meeting its social objectives.

– PN Sudarshan, Partner and TMT Industry Leader, Deloitte India

Technology

Deep tech is an idea whose time has come. All our focus so far has been on the application layer which provided solutions to problems and business opportunities. A focus on deep tech will provide that strategic depth. Wish the government expands and extends this

– PN Sudarshan, Partner and TMT Industry Leader, Deloitte India

Continued emphasis on the importance of mobile connectivity and broadband for economic development, especially in rural India, will further boost the telecommunication and associated sectors. Inclusion of design led initiatives for 5G and other technologies in PLI is a good step forward. While an announcement on implementing Bharatnet optical fibre cable contracts through PPP has been made, an expeditious approach is needed to avoid delays given that the PPP model has witnessed mixed experience in other infrastructure sectors

– Jaideep Ghosh, COO, Shardul Amarchand Mangaldas & Co

Opening of defence R&D to private players could be an adjacent area of growth for Auto component players in the country

– Rajeev Singh, Partner and Automotive leader, Deloitte India

Sustainability and Green Energy

Significant focus on sustainability and green energy. Individuals can look forward to additional avenues of investment with Sovereign Green Bonds to mobilise funds for green infrastructure

– Tapati Ghose, Partner, Deloitte India

Battery Swapping Policy

Battery swapping policy including interoperability could be a big booster for all the start ups already working in this space. It could also help drive movement to electrification of fleets especially for last mile connectivity for both people & goods

– Rajeev Singh, Partner and Automotive leader, Deloitte India

SEZ Act

SEZ act to be replaced with new legislation to enable State partner with the Industry. This is a much-awaited announcement, in the backdrop of the Baba Kalyani report, the vision of the Ministry of Commerce on SEZ going forward and to address new ways of working from home, need for agility of activity in SEZs, etc

– Mahesh Jaising, Partner, Deloitte India

Overall Announcements

There is increased focus on employability, e-skilling, employment generation in the MSME sector and recruitment with a view to formalize entrepreneurial opportunities. This augurs well given the rise of unemployment in recent times. Minimum government and maximum governance, reduction of overlapping compliances will increase compliance - critical for ease of doing business in India. Trust-based governance is the planned theme during Amrit Kal of next 25 years – from India at 75 to India at 100. – Tapati Ghose, Partner, Deloitte India