Top Highlights of Union Budget 2022 for Tech Sector

Announcement of the Union Budget, a time when everyone eyes on the document with a lot of hopes. A budget is a financial plan of a defined period that consists of estimates of expenditure and savings. With each passing year, it becomes more significant to know the add-ons in the Union Budget with advancements of technology.

Relaxation in income tax, new announcements of development projects, and allotment of money to different departments, the Union Budget 2022 announced by Union Finance Minister Nirmala Sitharaman, covers it all. This year technology sector has been an important highlight of the Union Budget keeping the important features and ongoing situations in mind.

The pandemic has already made most people opt for ways of education, work, or investments through digital modes. So, a perfect of 2022 should have this important feature of acknowledging this at the right place. So, here are the top highlights of Union Budget 2022 for the Tech Sector:

30% Tax on Digital Assets

Have you been thinking about investing in NFT or other virtual tokens that are based on blockchain or some gift some to near or dear ones? Here you need to pay a little more attention. According to the Union Budget 2022, virtual digital assets will be taxable at the rate of 30 percent.

Now the question is if you gift virtual digital assets to your friend, who will be liable to pay the tax, sender, recipient, or both? So, the answer is, the asset will be taxed in the hands of the recipient.

Digital Currency to be Rolled Out Based on Blockchain

The finance minister in her budget speech announced the introduction of Central Bank Digital Currency (CBDC) to give a boost to the digital economy. She said that the Reserve Bank of India will start issuing digital currency based on blockchain in 2022-23.

She stated that digital currency will be more efficient and lead to a cheaper currency management system.

5G Auction to Take Place

Are you planning to buy a phone? A 4G one? Well, you might want to consider buying the latest technology-based smartphone that supports 5G connectivity, after this announcement.

The finance minister in the budget speech announced that the 5G mobile service will be rollout within 2022-23 by private telecom providers. To facilitate the same, a spectrum auction will be conducted in 2022.

E-Passports with Embedded Chip to be Introduced

Currently, everything has an embedded chip from your banking card to the metro smartcard, of course, except from the rumored 500 or 2000 rupee notes. Indeed a bad one. So, here we are talking about the e-Passport that will now have an embedded chip.

It was announced that the issuance of such e-passports will be rolled out in 2022-23 which will be convenient for the people in their overseas travel.

Domestic Manufacturing Units to be promoted to boost Technology

In the Union Budget 2022, duty concessions are given to parts of the transformer of mobile phone chargers and camera lens of mobile camera module and certain other items. As per the speculation made by the finance minister, this step will help in the domestic manufacturing of high-growth electronic items.

Also, custom duty rates have been adjusted in order to facilitate the domestic manufacturing of wearable devices, hearables, and electronic smart meters.

Battery Swapping Policy

Not exactly the core tech sector news, but yes, it’s worth it to get mentioned here! While Electric Vehicle (EVs) is now a trend that is going to dominate the automobile market very soon, the budget of 2022 was made keeping this factor in mind. So, as per the announcement, the private sector will be encouraged to come up with sustainable and innovative business models for ‘Battery or Energy as a Service‘.

Also, setting up charging stations at scale, a battery swapping policy will be brought out, and interoperability standards will be formulated

Introduction of 75 Digital Banking Units in 75 Districts

After the demonetization, digital banking and the fintech sector have taken a speed. The Covid-19 Pandemic intensified the market of fintech.

Considering the presence and in order to make it easy for the people, the finance minister announced the setting up of 75 5 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks. The number 75 indicates the 75 years of independence of India.