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  • Writer's pictureCS Joseph Sequeira

Tax planning 2022-23

The new financial year (FY) 2022-23 (i.e. April 1, 2022 to March 31, 2023) has started.

Hence you need to take charge of your finances and start planning your taxes from the start of the year.

Some of the provisions under the Income-tax Act, 1961 (the Act) applicable to an individual taxpayer are outlined below:

Tax rates

The tax slab rates for FY 2022-23 have remained same as the last year and the highest slab rate remains at 30 percent. In addition, the surcharge, health and education cess (at 4 percent of basic tax and surcharge) will be applicable. Thus, the maximum marginal tax rate is 42.744 percent.

Permissible Deductions 1. Contribution /investments in Provident fund, Public Provident fund, Unit-linked Insurance plan, Equity-linked savings scheme (ELSS), Sukanya Samriddhi Scheme,

2. 5-year tax-saving fixed deposit schemes, other specified investments, are eligible for a deduction up to Rs 150,000 under section 80C of the Act

3. Individuals may also invest in the National Pension Scheme (NPS) and can claim a deduction upto Rs 50,000 under section 80CCD(1B) of the Act.

4. Payment towards medical insurance premiums up to Rs 25,000 for self, spouse and dependent children and up to Rs 25,000 for parents is allowed as a deduction. In the case of senior citizens, the limit is higher at Rs 50,000.

5. Deduction is also allowed towards interest paid on education loans taken for higher education subject to stipulated conditions for 8 years or till the interest is repaid, whichever is earlier.

6. Deductions also available to donations to notified organisations/funds of upto 50 -100 percent of the donations made depending on the type of organisations/funds.

7. Interest payments on loans taken for the purchase of an immovable property are allowed up to Rs. 200,000 for self-occupied property. There is no limit for deduction in case of let-out properties. However, a loss of only upto Rs 200,000 is available for set-off in the case of let-out properties, in the same year and the balance may be carried forward for set-off against income from house property upto the next 8 years.

Exemption on long-term capital gains (LTCG): In case LTCG on sale of land/building is invested in the Capital Gains Bonds of National Highway Authority of India ir Rural Electrification Corporation or other notified bonds (up to Rs 50 lakh) within a duration of 6 months of the sale, such gains can be exempt. The interest rate on these bonds is 5.75% p.a and payable annually.

An exemption can also be claimed for LTCG on the transfer of a residential house property reinvested to purchase/construct another residential house property, subject to stipulated conditions.

Similarly, where sale proceeds of long-term capital assets (other than a house property) are reinvested to purchase/ construct a house property, an exemption is available subject to stipulated conditions

Rent paid House rental allowance (HRA) received by an individual, is exempted towards the rent paid which is least of the following: (a) actual HRA received; (b) actual rent paid as reduced by 10 percent of basic pay; or (c) 40 percent/ 50 percent of the basic pay (depending on the location of accommodation). For individuals who do not receive HRA, a deduction is allowed being the least of the following (subject to conditions): (a) Rs 60,000; (b) actual rent paid as reduced by 10 percent of total income; or (c) 25 percent of the total income

COVID-19 related expenses proposed in Budget 2022 Any sum received by an individual, from any person (including an employer), which is used towards COVID-19 medical treatment for self and/or the family is proposed to be exempted, subject to the stipulated conditions.

In addition, any sum received by the family of a deceased person, within 12 months from the date of death is proposed to be exempted without any limit, if received from the employer. If received from any other person other than their employer, thec amount is restricted to Rs 10,00,000. This amendment is proposed to be effective retrospectively from FY 2019–20.

Financial planning Advance tax liability is required to be paid where the total tax payable after reducing taxes withheld (i.e., TDS) is in excess of Rs 10,000. A taxpayer should therefore estimate his or her tax liability at the beginning of the FY and make requisite advance tax payments in time.

The Writer is a Practicing Company Secretary with more than 30 years in project consultancy. He can be contacted for queries or assistance at the following address:

CS Joseph Sequeira B.Com, LL.B, FCS, MICA Practicing Company Secretary Delfina Apts, Opp. Rosary Church, Caranzalem, Panaji, Goa - 403004 Email : Phone: +91 8380087153. Website:

Disclaimer The information given in this document has been made on the basis of the Budget notification 2022 and provisions stated in the Income Tax Act, 1961. The information in this blog is for general information purposes only and is not a legal advice or a legal opinion. We are not responsible for any loss, claim, liability, damage(s) resulting from the use, omission or inability to use the information provided in this blog.

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