June 2023 / India

27 Giugno 2023

India Sets Cost Inflation Index for FY 2023-24 for Capital Gains Purposes

On 12 June 2023, the Central Board of Direct Taxes (CBDT) issued notification 39/2023 determining the cost inflation index at 348 for the financial year (FY) 2023-24. The notification will come into force from 1 April 2024. The cost inflation index for FY 2022-23 is 331.

The cost inflation index is used to calculate capital gains on sales of long-term capital assets to account for inflation between the year of acquisition of the asset and its sale. Certain assets or taxpayers may not be eligible for the benefit of the cost inflation index.

28 Giugno 2023

Extension for submission of TDS returns

Due date to file TDS returns for 1st quarter of F.Y. 2023-24 for Form 26Q and 27Q has been extended from 31st July 2023 to 30th September 2023 and for Form 27EQ due date has been extended from 15th July 2023 to 30th September 2023 vide Circular no. 09/2023 dated 28th June 2023.

The full circular can be read here

22 Giugno 2023

Digital India is a global success story

Embracing the Digital Era

In recent years, India has witnessed a remarkable transformation in its digital landscape. Government services have gradually been integrated into digital platforms, allowing for quick and efficient delivery at the grassroots level. Today, citizens can access these services with a simple click, receiving the assistance they need within seconds. As part of the Government of India's vision to digitize the financial sector and economy, there has been consistent growth in digital payment transactions. Additionally, significant efforts have been made to prioritize financial inclusion as a crucial national goal, ensuring that every individual has access to financial services.

Digital India has set a significant goal of attaining a status characterized by "Presence-less, Paperless, Cashless, backed with Consent" transactions. The Government of India has placed utmost importance on promoting digital payments, aiming to include every segment of the country's population within the formal framework of digital payment services. The ultimate vision is to ensure that all Indian citizens can access seamless digital payment facilities conveniently, affordably, quickly, and securely.

Why transition to a Digital Economy

Digital payments offer a faster and more convenient alternative to traditional methods. By using digital mediums, individuals can avoid the inconvenience of long queues at banks or ATMs to withdraw cash. It also reduces the need to carry physical currency, minimizing the risks associated with handling cash. With just a smartphone and a stable internet connection, transactions can be completed with a single click, making it a convenient option for users.

Moreover, digital transactions help in controlling the circulation of black money by allowing the government to track and monitor all financial activities. This enables the elimination of counterfeit notes and facilitates better regulation of income taxes.

Digital payments have emerged as a significant advantage during the pandemic. They enable contactless and safe transactions, eliminating the need for physical contact during monetary exchanges.

Rise of Digital Transactions

Over the past few years, India has witnessed an unprecedented surge in digital payment transactions. User-friendly and convenient digital payment methods such as Bharat Interface for Money-Unified Payments Interface (BHIM-UPI), Immediate Payment Service (IMPS), pre-paid payment instruments (PPIs), NACH, AePS and National Electronic Toll Collection (NETC) have experienced substantial growth, revolutionizing the digital payment landscape by facilitating both Person-to-Person (P2P) and Person-to-Merchant (P2M) payments.

Simultaneously, traditional payment modes such as debit cards, credit cards, NEFT, and RTGS have also experienced rapid expansion.

India ranks #1 for Real-time payments globally, with 89.5 Bn payment transactions in 2022 (76.8% YoY growth (2021-2022)). India accounted for 46% of all real-time transactions worldwide in 2022

BHIM-UPI has emerged as the preferred payment method among users. UPI has set a new record of processing over 9 Bn transactions (worth $ 179 Bn) in May’23 . UPI accounts for 75% of the total retail digital payments in India.

Government initiatives promoting financial inclusion

At the core of India's revolutionized digital payment landscape is the JAM Trinity - Jan Dhan, Aadhaar, and Mobile. Launched in August 2014, the Pradhan Mantri Jan-Dhan Yojana (PMJDY), the world’s largest financial inclusion initiative, was rolled out helping in new bank account enrolment of over 490 Mn beneficiaries till date for direct benefits transfer and accessibility to a host of financial services applications. Aadhaar, a flagship product of the Unique Identification Authority of India, serves as a straightforward yet effective means of verifying individuals and beneficiaries through their biometric information. Till date, 1.3+ Bn Aadhaar cards have been issued and 15 Bn Aadhaar based E-KYC verification has been done. Jan Dhan accounts, Aadhaar, and Mobile connections have laid the foundation for a Digital India, where a wide range of government services are directly accessible to citizens, greatly enhancing convenience and eliminating intermediaries.  In order to enhance accessibility, approximately 8.50 lakh Bank Mitras have been deployed to deliver banking services in a branchless manner, ensuring convenience for account holders.

In 2021, the Indian government introduced e-RUPI to enhance the effectiveness of Direct Benefit Transfer (DBT) through digital transactions and revolutionize digital governance. This innovative system facilitates a seamless and secure two-step redemption process, eliminating the need for sharing personal information. Notably, e-Rupi can be utilized on basic mobile phones, enabling individuals without smartphones or in areas with limited internet connectivity to avail its benefits. 27,652 e-RUPI vouchers  were created in December 2021 and it is intended to enhance the efficiency of Direct Benefit Transfer (DBT) in the country.

In 2022, the government launched UPI 123Pay, a quick and secure instant payment system designed specifically for feature phone users, enabling them to utilize UPI payment services effectively. UPI Lite, which was launched in the same year, on the other hand, is an on-device wallet feature that facilitates real-time, small-value payments for users and recorded 6.62 lakh transactions until 12th December 2022.

Paving the Way to Global Leadership

India has witnessed a significant transformation in its digital payment landscape. The government's initiatives have been well-received by the people, who have shown a remarkable willingness to embrace emerging technologies.

With relentless efforts, the Government of India is dedicated to establishing the country as a global leader in the realm of digital payment systems. The aim is to position India as one of the most efficient and advanced payment markets worldwide and ensure widespread and affordable internet and digital accessibility for all its citizens, including those currently lacking access or underserved.

By achieving this goal, India seeks to foster new digital ecosystems capable of addressing various economic and social challenges across different sectors. This endeavour holds the potential to establish a thriving digital economy, generating economic value of up to $ 1 Tn by 2025, and positioning India as a global hub for digital innovation and production.

Source: investindia.gov.in