Many Rules changing from 1st April’22, Burden on Taxpayers Pocket will Increase; Check Details

The financial year 2022-23 will begin on April 1, 2022. Along with this, numerous rules will change, which will have a direct influence on the lives of ordinary people as well as their wallets. Many rules will change as a result of this, including the tax on PF interest, the costs of automobiles, and the requirement for many businesses to use E-invoices under the GST law.

Changes to the rules will take effect on April 1st 2022

E-invoice will be mandatory for these companies

From April 1, 2022, the Goods and Services Tax (GST) Act will undergo significant changes. Companies having a turnover of more than Rs 20 crore will now be required to issue electronic invoices (E-Invoices) for B2B transactions, as per the Notification issued by the Government. The Central Board of Indirect Taxes and Customs has shared this information (CBIC). E-invoices become mandatory for business-to-business (B2B) transactions on October 1, 2020, for enterprises with a turnover of more than Rs 500 crore, which would be increased to Rs 100 crore on January 1, 2021, under the GST law.

Companies with a turnover of more than Rs.50 crore were the first to implement it, and from April 1, 2021, companies with a turnover of more than Rs.50 crore began to generate B to B invoices, and it is now applicable to companies with a turnover of Rs.20 crore as well from 1st April 2022.

Increase in the cost of Third-party Auto Insurance

Purchasing a new automobile or motorcycle can be costly beginning in April 2022. The Ministry of Road Transport, in collaboration with the Insurance Regulatory and Development Authority of India (IRDAI), has released the recommended Third Party Motor Insurance tariff for financial year 2022-23. Customers will have to pay an additional 17 to 23 percent for third-party insurance when purchasing new vehicles and motorcycles beginning April 1. The increased tariffs could go into effect on April 1, 2022.

Customers purchasing a vehicle up to 1500 cc will have to pay up to Rs 1200 extra for third-party insurance, while those purchasing a two-wheeler up to 150 cc will have to pay Rs 600 more. Every vehicle on the road must carry third-party insurance, according to the Motor Vehicle Act. According to the Supreme Court’s judgement, starting September 2018, every new four-wheeler sold must have three years of third-party insurance, and two-wheelers must have five years.

Interest on a PF account will be taxed

As a result of the Modi government’s decision, tax will have to be paid on the EPFO‘s PF account beginning from April 2022. The threshold limit had been increased to ₹5 lakhs per annum in the General Provident Fund (GPF). If the employee has taken a deduction, the interest income will be considered income and subject to taxation. It will be mentioned in Form 16 as well. Interest earned by government employees who deduct PF in excess of Rs 5 lakh would be taxed under this scheme. In a given year, the employee can deposit up to 500000 in his Provident Fund account.

Existing PF accounts will be split into taxable and non-taxable contribution accounts as a result of this. The CBDT has inserted Rule 9D vide Notification no. 95/2021 dated 31st August 2021 to impose a new tax on PF income from employee contributions exceeding 2.5 lakh per year. As of March 31, 2021, their closing account will be placed in the non-taxable accounts. If someone has a Rs 5 lakh contribution in their EPF account, the new rule states that the amount deposited until March 31, 2021 will be tax-free. The majority of PF users will benefit from the Rs 2.5 lakh ceiling after the new regulation is implemented. The new rule will have no impact on small and middle-income taxpayers.

Example:

Mr ABC has a Provident Fund balance of Rs. 5,50,000 (including interest) as on 31 March 2021. He works with a company and has contributed Rs. 4,50,000 (total contribution) into the P.F. account in Financial Year 2021-22. Assuming an interest of 8.5% will be received on the contribution made.

What will be his taxable as well as a non-taxable contribution for F.Y. 2021-22?

Answer : 

Let us separate the contribution into taxable as well as non-taxable.

*Assuming deposit is made at the start of the financial year

MCA Audit Trail to be implemented from 1st April 2022

As per Ministry of Corporate Affairs (MCA) notification number G.S.R. 205(E) dated 24th March 2021 Companies are required to use software with an audit trail of each transaction. This requirement was deferred to 1st April 2022 by notification number G.S.R. 247(E) dated 1st April 2021.

As the date is coming near, Bussiness should be ready to face this new challenge that is going to hit the business from 1st April 2022. The Accounting software like Tally, SAP, etc. being used by businesses are now required to be updated in compliance with this requirement.

Audi pricing increase

Audi India, the Indian subsidiary of the German luxury car manufacturer Audi, announced today that the company will raise the prices of its entire model range by up to 3% beginning April 1, 2022. The primary reason for this price increase, according to the carmaker, is rising input costs. This will be Audi’s second price increase in 2022, as the company raised the prices of its products in January as well. Audi India’s current model lineup includes the petrol-powered Audi A4, Audi A6, Audi A8 L, Audi Q2, Audi Q5, and the recently announced Audi Q7, Audi Q8. Audi S5 Sportback, Audi RS5 Sportback, Audi RS7 Sportback, and the luxury Audi RS Q8 are also available.

Tobacco sales in Jharkhand require a licence

Tobacco products will not be distributed without a licence in Jharkhand’s urban regions beginning April 1, 2022. Following the directives of CM Hemant Soren, the process of vendor licencing for tobacco vendors has been made mandatory in all of the state’s metropolitan local bodies. The selling of toffee, sweets, chips, biscuits, beverages, or food items will be prohibited in businesses that hold a licence to sell tobacco goods. The violators will face severe penalties. If anyone under the age of 18 is detected selling tobacco products, they can face up to 7 years in prison and a fine of up to Rs 1 lakh.

The Jharkhand government has enacted new regulations under the Jharkhand Municipal Act of 2011, the Cigarettes and Other Tobacco Products Act of 2003, the Food Preservation Act of 2008, and the Juvenile Justice Child Care and Protection Act of 2015. Under this, a push is also underway to grant licences to cigarette merchants in various municipal corporations and municipalities. Along with the licence, merchants will be required to fill out an affidavit verifying their compliance with the guidelines, and the promotion of tobacco goods will be prohibited. Tobacco products are not permitted to be sold within 100 yards of any school institution.