Personal finance: Changes that will impact you from April 2022

There are around five changes that might impact your personal finances from April 2022 onwards. Read on to find out more.

Provident Fund will be taxed

The interest on the contribution made by the employee towards provident fund would be taxed with effect from April 1, 2022, according to the notification of the Central Board of Direct Taxes. Said that, the tax would be subject to interest on the contribution above Rs 2.5 lakh.

Cryptocurrency is now taxable

Gains from all kinds of virtual digital assets (VDA) such as cryptocurrency, Non-Fungible Token (NFT), etc. will be taxed at 30 per cent. Moreover, whenever a crypto asset is sold, one per cent Tax Deducted at Source (TDS) will also be deducted with effect from April 1, 2022.

Buying a home might get expensive

The central government has decided to stop the tax benefit under section 80EEA which might make buying a home expensive for first-time buyers. Section 80EEA allowed first time home buyers to avail of deduction for interest payment of up to Rs 1.5 lakh and this is over and above the deduction of Rs 2 lakhs under Section 24(b) of the Income Tax Act.

Mutual funds would only be available digitally

From April 1, 2022, onwards if you wish to invest in mutual funds then investment via cheque, bank draft, or any other physical means is not allowed. Only UPI or net banking facility would be allowed to investors.

Payment of interest on post office schemes

The rules pertaining to investment in Post Office Monthly Income Scheme (MIS), Senior Citizen Saving Scheme (SCSS) or Post Office Term Deposit have been changed. From April 2022 onwards, the interest amount will no more be paid in cash, savings account would be mandatory for depositors. Moreover, it is now mandatory to link the existing bank account or post office account with the small savings account of the post office.