• In FY22, GDP increased by 9.2 percent.
  • For FY23, a growth rate of 88.5 percent is expected (Growth is measured on a year over year basis on real values)
  • Since May 2020, the RBI has kept the repo rate at 4% and has maintained its accommodative monetary policy.
  • Because of a growing trade deficit, the current account posted a 0.2 percent deficit in GDP in H1 FY22; foreign reserves peaked at US$ 633.6 billion in December 2021.
  • In April–November 2021, net FDI inflows was $24.7 billion, decreased 29.5% from April–November 2020.
  • In FY22, the fiscal deficit is expected to be 6.9%, down from 9.3% in FY21, and 6.4 percent in FY23.
  • In April to December 2021, the CPI averaged 5.2 percent, owing mostly to food inflation and high fuel prices.
  • In April–December 2021, the INR averaged 74.28, compared to 74.63 in April–December 2020.
  • In April–December 2021, merchandise exports increased by 49.7% to US$ 301.4 billion, surpassing pre-pandemic levels.

Most Important Policy Points

  • Enhance multi-modal connectivity by expanding roadways by 25,000 kilometres and including a 2,000-kilometer rail network using indigenous technology eight ropeway projects and 100 cargo terminals are being developed.
  • Amendments to the Insolvency and Bankruptcy Code to improve the resolution process, notably for cross-border insolvency; creation of a centre to speed up the voluntary winding up of businesses to six months.
  • Foreign universities would be allowed to operate in GIFT City, and an International Arbitration Centre will be established.
  • In FY22-23, a digital rupee will be launched using block chain and other technologies; 75 digital banking units will be established by Scheduled Commercial Banks; and the core banking system will be extended to post offices.
  • A committee or task force will be formed to address urban planning, the expansion of the Animation, Visual Effects, Gaming, and Comics industry, and the examination of the regulatory framework controlling venture capital and private equity investments.
  • Contracts to lay optical fibre in remote areas will be awarded through Public-Private Partnerships in FY22, 5G spectrum auction proposed along with the start of a design-led manufacturing plan (as part of the PLI scheme).
  • Data centres and energy storage systems are given infrastructure status to make finance easier.
  • A battery swapping strategy and interoperability standards will be developed, and PLI will be given an additional INR 195 billion to manufacture solar PV modules.
  • Issuing sovereign green bonds to assist reduce carbon intensity; establishing government-backed funds for climate action, technology-based, and agricultural activities; opening up defence R&D to private companies under an SPV model.
  • The MSMEs' Emergency Credit Line Guarantee Scheme has been extended through March 2023, with a new guarantee cover of INR 500 billion for hospitality and allied businesses.
  • There will be no changes to company or personal income tax rates; a 15 percent levy on particular AOPs and long-term capital asset transfers will be imposed.
  • The tax vacation has been extended for new manufacturing enterprises that begin operations by March 31, 2024, and for start-ups that have been incorporated until March 31, 2023.
  • Gains on virtual digital assets (VDA) will be taxed at 30%; deductions will be limited to the cost of acquisition; set-off and carry-forward of losses will be unavailable; considered gift tax provisions will apply; and a 1% tax deduction at source (TDS) will be implemented.
  • Retrospective change to prevent any surcharge or cess from being deducted from income and profits.
  • Expenditure to offer any advantage or perquisite to any person is prohibited if the acceptance of the benefit or perquisite violates any legislation.
  • Revenue tax exemption widened to include, among other things, specified non-resident income from the leasing of a ship to IFSC units and non-resident income from the transfer of specified derivative instruments.
  • From FY22, a tax break on dividends from foreign sources would be phased out.
  • On payment of additional taxes, you have the option of filing an updated income tax return.
  • The Special Economic Zone Act will be replaced by new law to allow states to collaborate in the establishment of enterprise and service hubs, maximise the use of existing infrastructure, and improve export competitiveness.
  • To assist the expansion of the domestic capital goods sector, a concessional customs tariff on capital goods and project imports would be gradually phased out.



To continue the policy of a stable and predictable tax system:

A vision to create a trustworthy tax regime, as well as to streamline the tax system and eliminate litigation.


'Updated return' is a new feature.

  • On payment of additional tax, the assessee will be allowed to file an Updated Return, which will allow the assessee to state income that was previously unreported.
  • Can be filed within two years of the conclusion of the relevent assessment year.


Societies that work together

  • To ensure a level playing field for cooperative societies and corporations, the Alternative Minimum Tax paid by cooperatives was reduced from 18.5 percent to 15 percent.
  • For cooperative societies with a total income of more than Rs 1 crore but less than Rs 10 crores, the surcharge has been decreased from 12% to 7%.

Tax Relief for disable Person

Payment of annuity and lump sum amount from an insurance plan should be allowed to differently abled dependents during the lifetime of parents/guardians, i.e., on parents/guardians reaching the age of 60 years.

Contributions to the National Pension Scheme.

  • The employer's contribution to the NPS account of State Government employees is now eligible for a tax deduction of up to 14 percent.
  • It Would help to improve social security benefits by bringing them up to level with central government employees.

Incentives for New Startups

  • For qualifying start-ups, the period of incorporation has been extended by one year, until 31 March 2023.
  • Previously, the incorporation period was valid until 31.03.2022.

Incentives under the concessionary tax regime 

  • The deadline for beginning manufacture or production under section 115BAB has been extended by one year, from March 31, 2023 to March 31, 2024.

Virtual digital assets are subject to a taxation scheme.

  • A new tax regime for virtual digital assets has been established, with any income derived from the transfer of any virtual digital asset being taxed at a rate of 30%.
  • There will be no deductions for any expenditures or allowances while calculating such income, except for the cost of purchase.
  • Losses incurred as a result of the transfer of a virtual digital asset cannot be offset against other sources of income.

Litigation Management 

  • In cases where the question of law is identical to one pending in the High Court or Supreme Court, the department's filing of an appeal will be postponed until the court has resolved on the question of law.
  • To significantly reduce the number of times taxpayers and the department have to go to court.

Tax breaks for IFSCs

  • Subject to certain criteria, the following will be tax-free:
    • A non-income resident's from offshore derivative products. -Income from an offshore banking unit's over-the-counter derivatives.
    • Income from royalties and interest on the ship's lease.
    • Income from portfolio management services provided by the IFSC.

Surcharge Rationalization

  • AOPs (a consortium created to carry out a contract) are subject to a 15% surcharge.
  • This was done to lessen the surcharge discrepancy between individual enterprises and AOPs.
  • To give a boost to the start-up community, a 15% surcharge on long-term capital gains accruing on the transfer of any sort of asset will be imposed.

Health and Education Cess

  • Any surcharge or cess on earnings or profits that is not deductible as a business expense.

Deterrence of tax evasion

  • There will be no set-off of any loss against hidden income discovered during search and survey operations.

TDS Provisions Rationalization

  • Benefits distributed to agents as part of a business promotion campaign are taxable in the agents' hands.
  • If the total value of the benefits supplied during the financial year exceeds Rs 20,000, the person providing the benefits is eligible for a tax deduction.


  • GST revenues are bouncing back despite the pandemic — Taxpayers should be applauded for their hard work.
  • Customs Administration of SEZs should be totally IT driven and function on the Customs National Portal – to be implemented by September 30th, 2022.
  • Changes to duty rates and customs reforms
    • Faceless Customs is now fully operational. Customs formations have done outstanding frontline work despite all odds during the Covid-19 pandemic, demonstrating agility and purpose.
  • Imports for projects and capital items
    • Phasing out concessional rates on capital goods and project imports over time, and replacing them with a moderate tariff of 7.5 percent, which is beneficial to domestic sector growth and 'Make in India.'
    • Certain exclusions for modern machinery that isn't made in the country will be maintained.
    • To stimulate local capital goods manufacturing, a few exemptions were introduced on inputs such as specialised castings, ball screws, and linear motion guides.
  • Customs exemptions are being reviewed, and tariffs are being simplified.
    • More than 350 exemption items, such as exemptions on some agricultural produce, chemicals, fabrics, medical devices, and medications and medicines for which sufficient domestic capacity exists, are scheduled to be phased down progressively.
    • Simplifying the Customs rate and tariff structure, particularly for sectors like chemicals, textiles, and metals, to reduce disputes; removing exemptions on items that are or can be manufactured in India, and providing concessional duties on raw materials used in the manufacture of intermediate products – all in line with the 'Make in India' and 'Atmanirbhar Bharat' objectives.