India Union Budget 2022_Proposals For Banking, Financial Services And Insurance Sector

In the backdrop of economic revival, the Finance Minister presented a pro-growth Budget in the Parliament on 1 February 2022. In order that India becomes a truly Atma Nirbhar Bharat and achieves its goal of a 5tn economy, a focussed commitment from the Government along with the public is expected.

Considering the impacts of the pandemic, no major announcements on increasing the tax burden by way of cess or any additional tax were proposed. Although the BFSI sector was expecting many more announcements on tax incentives and increasing deductions, the Government has tried to balance out the budget allocation to mostly all sectors.

There are notable announcements with respect to the financial services sector including removing the tax parity by capping of surcharge on capital gains and dividend income, bringing virtual digital assets under the ambit of tax, extension of tax incentives on certain income earned in the IFSC, introduction of Sovereign Green Bonds and laying down a framework for Surety Bonds.

We have captured some of the key policy announcements and direct tax changes proposed in the Budget which would be of relevance to the Banking, Financial Services and Insurance Sector.

We hope you find them useful and insightful.