Showing posts with label GOVTNEWS. Show all posts
Showing posts with label GOVTNEWS. Show all posts
Currency withdrawal: 50% tax, 4-year lock-in for unaccounted deposits
The government proposes to introduce amendments to the Income Tax Act in Parliament next week that will enable it to take penal action against those who made unaccounted cash deposits of scrapped high-denomination currency notes after November 8.
The change in tax law, a month after the government’s one-time compliance window under the Income Declaration Scheme came to an end, will empower tax officials to impose a minimum 50 per cent tax and a 4-year lock-in for half of the remaining amount of unaccounted or suspicious deposits, two persons familiar with the development said.
While this structure will apply to voluntary disclosures, a higher rate of tax and penalty of total 90 per cent tax will be imposed on those who do not disclose their unaccounted cash deposits voluntarily.
These I-T Act amendments were discussed in the Union Cabinet meeting, chaired by Prime Minister Narendra Modi, on Thursday night. “The government will introduce amendments to the Income Tax Act giving effect to this in the ongoing session of Parliament,” a source said, adding that these amendments are likely to be introduced on Monday or Tuesday after seeking the President’s nod.
After the government’s announcement of withdrawal of old Rs 500 and Rs 1,000 notes, the government had stated that cash deposits above the threshold of Rs 2.5 lakh until December 30 will be under the scanner of tax authorities. The tax authorities had said a peak rate of tax and 200 per cent penalty would be levied on such cash deposits originating from unaccounted income made during November 10-December 30, but many experts raised questions on the 200 per cent penalty lacking legal validity.
As per amendments to the Income Tax Act discussed by the Cabinet on Thursday night, the government proposes to impose a 50 per cent tax on voluntary declaration of such unaccounted cash deposits above a certain threshold, while half of the remaining deposits, or 25 per cent of the original deposit, will not be allowed to be withdrawn for four years, sources said.
The government is also contemplating issuing a bond in which the 25 per cent ‘lock-in’ money would be parked and can be withdrawn only after four years by the depositor. Out of the additional taxes on unexplained and undisclosed deposits, the government will create a fund to build rural infrastructure, sources said.
The proposed changes in the I-T Act come after the Ministry of Finance last week warned of strict action against
tax evaders using other people’s bank accounts to convert their black money into new denomination notes and those persons who allow their bank accounts to be used as a route for conversion of black money into white.
tax evaders using other people’s bank accounts to convert their black money into new denomination notes and those persons who allow their bank accounts to be used as a route for conversion of black money into white.
The Pradhan Mantri Jan Dhan Yojana accounts, which have seen a surge of Rs 21,000 crore in deposits since the demonetisation announcement, have been seen as the primary route for conversion of black money into white. As a step to prevent such routing of unaccounted funds, the government had stopped over-the-counter exchange of old currency notes in banks from Thursday midnight while allowing deposits to be made without any ceiling.
The government’s latest move is being seen as a measure to tax those who did not disclose their unaccounted income in the one-time compliance window under the Income Declaration Scheme which ended on September 30.
Source : Indian Express
Withdrawal of cash per week - RBI Instructions on 25.11.2016
RBI/2016-17/158
DCM (Plg) No.1424/10.27.00/2016-16
November 25, 2016
The Chairman / Managing Director/ Chief Executive Officer,
Public Sector Banks/ Private Sector Banks / Foreign Banks/ Regional Rural
Banks / Urban Cooperative Banks/ State Cooperative Banks/ District Central Cooperative Banks
Dear Sir,
Withdrawal of cash – Weekly limit
Please refer to our circulars DCM (Plg) Nos. 1272/10.27.00/2016-17 and 1273/10.27.00/2016-17 dated November 13 and November 14, 2016, respectively.
The banks are, hereby, advised that they may continue to allow their existing customers to withdraw cash from their accounts upto ₹ 24,000/- per week, till further instructions.
The said limit include withdrawals from ATMs as stipulated in our circular DCM (Plg) No.1304/10.27.00/2016-17 dated November 20, 2016.
2. Please acknowledge receipt.
Yours faithfully,
(Suman Ray)
General Manager
Source: www.rbi.org.in
Airtel starts India's first payments bank service, to pay 7.25% interest on deposits
Airtel has launched India's first live payments bank on Wednesday, which would provide an interest of 7.25% per annum on deposits.
Aimed at testing systems and processes ahead of a full-scale pan-Indian launch, Airtel Payments Bank has rolled out a pilot of its banking services in Rajasthan, a company statement said on Wednesday. Airtel Payments Bank is a subsidiary of Bharti Airtel.
It informs that account can be opened with Aadhaar based paperless e-KYC, with no extra documents required and customer's Airtel mobile number would be his/her bank account number. The company intends to give an interest rate of 7.25% per annum on deposits in savings accounts
"Customers in towns and villages across Rajasthan will now be able to open bank accounts at Airtel retail outlets, which will also act as Airtel banking points and offer a range of basic, convenient banking services. Airtel Bank will commence the pilot with banking points at 10,000 Airtel retail outlets," the statement added.
It adds that extra benefits like money transfer to any bank account in India (Free money transfer from Airtel to Airtel numbers within Airtel Bank), personal accidental insurance of Rs 1 lakh with every savings account, easy deposit and withdrawal facility across a wide network of Airtel retail outlets, will be availed to the customers.
It also claims that the company will have a network of over 100,000 merchants (shops) across Rajasthan accepting digital payments from Airtel Payments Bank, offering customers the convenience of cashless purchase of goods/services using their bank accounts/ wallets, contributing to the government’s initiative of financial inclusion and banking for all.
Source : www.business-standard.com
Centre-state stalemate over GST jurisdiction continues
Staleemate between the Centre and states over administrative control under the proposed goods and services tax (GST) regime continued on Sunday with an informal meet called by Finance Minister Arun Jaitley failing to break the deadlock. Jaitley’s informal meeting with state finance ministers failed to arrive at a common ground on how Centre and states will control assessees under the new regime that will subsume an array of taxes like excise duty and service tax as well as VAT, multiple ministers participating in the meeting said.
With states unrelenting on their position of being given right to control all assessees with up to Rs 1.5 crore annual turnover, it was decided that officials will meet again tomorrow before the meeting of the all powerful GST Council on November 25.
“The meeting has remained incomplete. Discussions will continue on November 25,” Finance Minister Arun Jaitley told reporters after the over three hour long meeting.
The issue has remained a contentious one during the previous two GST Council meetings and any disagreement at the next meet holds potential of derailing rollout of the GST from the targeted April 1, 2017.
Jaitley had earlier this month stated that the proposed GST needs to be rolled out by September 16, 2017 before the validity of the Constitutional Amendment brought in by Centre and ratified by states expires.
States like West Bengal, Kerala, Uttarakhand, Uttar Pradesh and Tamil Nadu have insisted on exclusive control over small taxpayers, who earn less than Rs 1.5 crore in annual revenue, for both goods and services.
Uttarakhand Finance Minister Indira Hridayesh said states demanded exclusive control for both goods and service tax assessees of Rs 1.5 crore and below.
“Centre is agreeable on goods, but is not yielding on services. States are looking at their interest to safeguard their revenue. Centre will have to yield to states to get the CGST and IGST bills passed. A middle ground on the issue has to be worked out politically,” she said.
Kerala Finance Minister Thomas Issac said it is a stalemate and his state is unwilling to compromise as it has virtually given up its taxation rights.
SOURCE : The Indian Express
SOURCE : The Indian Express
MORE CURRENCY NOTES WILL HAVE NEW DESIGN AND FEATURES
NEW DELHI: Even as banks opened around the country with reports of long lines and frayed tempers, Finance minister Arun Jaitley today assured people that demonetising high-denomination currency is beneficial to all in the long run, despite short-term problems. And there will be more currency notes - not just Rs 500 - that will be reintroduced with a new design and features, added economic affairs secretary Shaktikanta Das.
The economic affairs secretary didn't give a time-frame or details of which other notes will be redesigned, but he did say that in the coming months, the Rs 1,000 notes will also be brought in with a new design.
Minister Jaitley, Das and chief economic adviser Arvind Subramanian were all addressing an Economic Editors' conference in New Delhi today, where most, if not all, questions were about the scrapping of Rs 500 and Rs 1,000 notes.
About the sudden nature of the announcement to scrap these notes - a decision made to halt terror being funded by Pakistan, and to stem the rising tide of black money - Das said that the process had been under way for the last few months.
"Only 2-3 people in the RBI were involved in the designing of notes," said Das.
The demonetisation plan, the best kept secret in the power corridors of the national capital, was a tightly policed affair with only a handful of top officials privy to the move. Apart from ministers at the Cabinet meeting who had to remain in quarantine for a while, members of the Reserve Bank of India (RBI) board too left only after PM Narendra Modi's speech two days ago when he announced the ban.
Finance minister Jaitley also reiterated what Prime Minister Modi said two days ago about conspicuous consumption and how it relates to the scrapping of the 500 and 1,000 rupee notes.
"This decision will impact the spending habits of people," Jaitley said, likely referring to conspicuous consumption, as also to illegal, mostly-cash real estate deals.
Jaitley again assured the people that the RBI has taken all necessary steps to keep banks open to the extent necessary. It has already been decided to keep banks open on the weekend, he added.
""There will be an impact on small purchases for a few days, till there is adequacy of currency, but it is beneficial in long run," Jaitley said adding, "It is only those with large amounts of undisclosed money who will have to face the consequences under existing laws," Jaitley said
In fact, chief economic adviser Arvind Subramanian succinctly described the demonetization.
"Instead of seeing it as a reduction of wealth, it must be seen as transfer of unaccounted wealth...a transfer of this unaccounted wealth from the private sector to the government and public sectors, which will (then) boost the economy," Subramanian said.
Source : http://timesofindia.indiatimes.com/i
No electronic chip in Rs. 2000 notes: RBI
The rumour of the inclusion of a tracking chip in the notes went viral on social media and WhatsApp hours after Prime Minister Narendra Modi announced the demonetisation plan.
The Rs. 2,000 notes that will enter into circulation from November 10, 2016 will not have any electronic chip, the Reserve Bank of India clarified on Wednesday.
“The only security features of the Rs. 2,000 note are the ones we have mentioned in our releases regarding the note,” an official in the Reserve Bank of India told The Hindu. “The release is also on our Twitter account and it does not mention any chip.”
The rumour of the inclusion of a tracking chip in the notes went viral on social media and WhatsApp hours after Prime Minister Narendra Modi announced the demonetisation plan.
The security features of the Rs. 2,000 notes include latent images, coloured strip security threads, watermarks and several other features.
Source : The HIndu
Request form to give back your old Rs 500, Rs 1000 notes
The government on Wednesday released the form that will be used to exchange the old notes of Rs 500 and Rs 1000 denomination.
Prime Minister Narendra Modi on Tuesday shook the nation with his announcement of demonetising high value currency notes. Soon after all Rs 500 and Rs 1000 notes in circulation were “just paper with no value”, people across the country started queuing outside ATMs in panic. Even as the PM asked people to not panic, minutes after the announcement that notes were effectively invalid from midnight, people thronged their nearest ATMs.
Finance Secretary Ashok Lavasa also tweeted out an infographic explaining where to exchange currency notes. Anyone with a valid bank account or a post office savings account can deposit unlimited amounts of cash before December 30. After that, till March 31, RBI specified offices will accept cash with a valid ID proof, PAN card and declaration form.
There are no restrictions on card payment, cheque, demand draft, electronic funds transfer. However, there is a limit on daily and weekly withdrawals. ATM withdrawals will be restricted to Rs 2000 per day and withdrawals from bank accounts will be limited to Rs 10,000 a day and Rs 20,000 a week.
Earlier, the prime minister in his nationwide televised address also mentioned specific details about what to do with the currency notes. PM expressed confidence that political, other sections and media will help make the new measures successful
Request Form:click here to download
Source :Indian Express
Deposits of old notes in banks not to enjoy tax immunity: Arun Jaitley
Finance Minister Arun Jaitley on Wednesday said deposits of now-defunct old Rs. 500 and Rs. 1,000 currency notes in bank accounts will not enjoy immunity from tax and the law of the land will apply on source of such money.
A day after the government announced the withdrawal of Rs. 500 and Rs. 1,000 banknotes in the country’s biggest crack down against black money, corruption and counterfeit currency, Mr. Jaitley said old higher-denomination currency notes have to be deposited in bank accounts to get newer or smaller denomination currencies.
“But it should be clear that it is no immunity scheme. This (deposit) does not provide any relief from taxation. The law of land will apply (on source of fund),” he said.
“If the money is legitimate which had been previously withdrawn from bank or earned legally and saved and had been disclosed, there is nothing to worry about,” Mr. Jaitley said.
But if it is illegal money, source will have to be disclosed and if it is a crime money, or bribe money, then it is trouble, he told DD News.
The Finance Minister further said that housewives and farmers with genuine savings need not worry about depositing cash in their bank accounts.
“The small amounts that people will deposit like Rs. 25,000, 30,000 or 50,000 lying in house for expenses, whatever money could be there for meeting normal family expenses they need not worry. They can go to banks,” he said.
The Finance Minister said for first one or two weeks replacements may be less but after 2-3 weeks as more currency notes come in market then normal replacement will be available.
The move would help make more and more transactions become digital, he said, adding now people will disclose income and pay taxes. “India will become a more tax-compliant society,” he noted.
Mr. Jaitley said that people who have accumulated black money, crime money or bribe would suffer after this.
“Obviously there are some inconvenience for a couple of days or couple of weeks, but those inconvenience cannot be alibi that India continues to live (with black money and parallel economy),” he said.
The decision would bring more transactions under tax net and both direct and indirect taxes would move up. Reduction in parallel economy would increase the size of formal economy, Mr. Jaitley said.
Stating that the decision would have its ramifications on politics as well, Mr. Jaitley said some political funding has started by cheques and if this step can do some cleansing, it would be a great move.
Source : The Hindu
Government of India
Ministry of Finance
Department of Economic Affairs
*******
Press Release
With a view to curbing financing of terrorism through the proceeds of Fake Indian Currency Notes (FICN) and use of such funds for subversive activities such as espionage, smuggling of arms, drugs and other contrabands into India, and for eliminating Black Money which casts a long shadow of parallel economy on our real economy, it has been decided to cancel the legal tender character of the High Denomination bank notes of Rs.500 and Rs.1000 denominations issued by RBI till now. This will take effect from the expiry of the 8th November, 2016.
2. Fake Indian Currency Notes (FICN) in circulation in these denominations are comparatively larger as compared to those in other denominations. For a common person, the fake notes look similar to genuine notes. Use of FICN facilitates financing of terrorism and drug trafficking. Use of high denomination notes for storage of unaccounted wealth has been evident from cash recoveries made by law enforcement agencies from time to time. High denomination notes are known to facilitate generation of black money. In this connection, it may be noted that while the total number of bank notes in circulation rose by 40% between 2011 and 2016, the increase in number of notes of Rs.500/- denomination was 76% and for Rs.1,000/- denomination was 109% during this period. New Series bank notes of Rs.500/- and Rs.2,000/- denominations will be introduced for circulation from 10th November, 2016. Infusion of Rs.2,000/- bank notes will be monitored and regulated by RBI. Introduction of new series of banknotes which will be distinctly different from the current ones in terms of look, design, size and colour has been planned.
3. The World Bank in July, 2010 estimated the size of the shadow economy for India at 20.7% of the GDP in 1999 and rising to 23.2% in 2007. There are similar estimates made by other Indian and international agencies. A parallel shadow economy corrodes and eats into the vitals of the country’s economy. It generates inflation which adversely affects the poor and the middle classes more than others. It deprives Government of its legitimate revenues which could have been otherwise used for welfare and development activities.
4. In the last two years, the Government has taken a number of steps to curb the menace of black money in the economy including setting up of a Special Investigation Team (SIT); enacting a law regarding undisclosed foreign income and assets; amending the Double Taxation Avoidance Agreement between India and Mauritius and India and Cyprus; reaching an understanding with Switzerland for getting information on Bank accounts held by Indians with HSBC; encouraging the use of non-cash and digital payments; amending the Benami Transactions Act; and implementing the Income Declaration Scheme 2016.
5. In order to implement the above decisions of the Government and keeping in view the need to minimise inconvenience to the public, the following operational guidelines have been issued:-
(i) Old High Denomination Bank Notes may be deposited by individuals/persons into their bank accounts and/or exchanged in bank branches or Issue Offices of RBI till the close of business hours on 30th December, 2016.
(ii) Old High Denomination Bank Notes of aggregate value of Rs.4,000/- only or below held by a person can be exchanged by him/her at any bank branch or Issue Office of Reserve Bank of India for any denomination of bank notes having legal tender character, provided a Requisition Slip as per format to be specified by RBI is presented with proof of identity and along with the Old High Denomination Bank Notes. Similar facilities will also be made available in Post Offices.
(iii) The limit of Rs.4,000/- for exchanging Old High Denomination Bank Notes at bank branches or at issue offices of Reserve Bank of India will be reviewed after 15 days and appropriate notification issued, as may be necessary.
(iv) There will not be any limit on the quantity or value of Old High Denomination Bank Notes to be credited to the account of the tenderer maintained with the bank, where the Old High Denomination Bank Notes are tendered. However, in accounts where compliance with extant Know Your Customer (KYC) norms is not complete, a maximum value of Rs.50,000/- of Old High Denomination Bank Notes can be deposited.
(v) The equivalent value of the Old High Denomination Bank Notes tendered can be credited to an account maintained by the tenderer at any bank in accordance with standard banking procedure and on production of valid proof of Identity.
(vi) The equivalent value of the Old High Denomination Bank Notes tendered can be credited to a third party account, provided specific authorisation therefor accorded by the said account holder is presented to the bank, following standard banking procedure and on production of valid proof of Identity of the person actually tendering.
(vii) Cash withdrawal from a bank account, over the counter will be restricted to Rs.10,000/- subject to an overall limit of Rs. 20,000/- in a week for the first fortnight, i.e., until the end of business hours on November 24, 2016.
(viii) There will be no restriction on the use of any non-cash method of operating the account which will include cheques, demand drafts, credit/debit cards, mobile wallets and electronic fund transfer mechanisms.
(ix) Withdrawal from ATMs would be restricted to Rs.2,000 per day per card up to November 18, 2016. The limit will be raised to Rs.4,000 per day per card from November 19, 2016 onwards.
(x) For those who are unable to exchange their Old High Denomination Bank Notes or deposit the same in their bank accounts on or before December 30, 2016, an opportunity will be given to them to do so at specified offices of the RBI on later dates along with necessary documentation as may be specified by the Reserve Bank of India.
(xi) Instruction is also being issued for closure of banks and Government Treasuries, on 9th November, 2016.
(xii) In addition, all ATMs, Cash Deposit Machines, Cash Recyclers and any other machine used for receipt and payment of cash will remain shut on 9th and 10th November, 2016.
(xiii) The bank branches and Government Treasuries will function from 10th November, 2016.
(xiv) To avoid inconvenience to the public for the first 72 Hours, Old High Denomination Bank Notes will continue to be accepted at Government Hospitals and pharmacies in these hospitals/Railway ticketing counters/ticket counters of Government/Public Sector Undertaking buses and airline ticketing counters at airports; for purchases at consumer co-operative societies, at milk booths, at crematoria/burial grounds, at petrol/diesel/gas stations of Public Sector Oil Marketing Companies and for arriving and departing passengers at international airports and for foreign tourists to exchange foreign currency at airports up to a specified amount.
6. The relevant Notifications are available in the website of Finance Ministry (http://finmin.nic.in/). Further details including Frequently Asked Questions (FAQs) are available on the website of the Reserve Bank of India (https://www.rbi.org.in/).
Source : http://finmin.nic.in/
https://www.rbi.org.in/
The Rs 2000 currency is designed keeping in mind to eradicate the black money issues using state of the art indigenous nano technology, every Rs. 2000 currency note is embedded with a *NGC (Nano GPS Chip)*
*How the embeded NGC Technology Works?*
The unique feature of the NGC is it dosent need any power source. It only acts as a signal reflector. When a Satellite sends a signal requesting location the NGC reflects back the signal from the location, giving precise location coordinates, and the serial number of the currency back to the satellite, this way every NGC embedded currency can be easily tracked & located even if it is kept 120 meters below ground level. The NGC cant be tampered with or removed without damaging the currency note
The unique feature of the NGC is it dosent need any power source. It only acts as a signal reflector. When a Satellite sends a signal requesting location the NGC reflects back the signal from the location, giving precise location coordinates, and the serial number of the currency back to the satellite, this way every NGC embedded currency can be easily tracked & located even if it is kept 120 meters below ground level. The NGC cant be tampered with or removed without damaging the currency note
*How will this help eradicate black money menace?*
Since every NGC embeded currency can be tracked. The satellite can identify the exact amount of money stored at a certain location. If a relatively high concentration of currency is found a certain location for a longer period of time at suspicious locations other than banks & other financial institutions. The information will be passed on to the Income Tax Department for further investigation
Since every NGC embeded currency can be tracked. The satellite can identify the exact amount of money stored at a certain location. If a relatively high concentration of currency is found a certain location for a longer period of time at suspicious locations other than banks & other financial institutions. The information will be passed on to the Income Tax Department for further investigation
*Just a beginning of the end of black money in India*
Withdrawal of Legal Tender Status for ₹ 500 and ₹ 1000 Notes: RBI Notice
Government of India vide their Notification dated November 8, 2016 have withdrawn the Legal Tender status of ₹ 500 and ₹ 1,000 denominations of banknotes of the Mahatma Gandhi Series issued by the Reserve Bank till 8th November 2016.
This is necessitated to tackle counterfeiting Indian banknotes, to effectively nullify black money hoarded in cash and curb funding of terrorism with fake notes.
Starting from 10th November 2016, members of public/ corporates, business firms, societies, trusts etc holding these notes can tender them at any office of the Reserve Bank or any bank branch and obtain value thereof by credit into their respective bank accounts.
For their immediate cash needs, these notes of value upto ₹ 4,000 per person can be exchanged for cash over the counter of these bank branches.
Public are advised to present a valid proof of identity for availing this exchange facility.
Value credited to their bank accounts can be freely used by issue of cheques or by remitting through various electronic modes of transfer like NEFT, RTGS, IMPS, mobile banking, internet banking etc. Cash withdrawals from bank accounts, over the bank counters, will be restricted to a limited amount of ₹ 10,000 per week.
All ATMs and other cash machines will remain shut on 9th November 2016 to facilitate recalibration. When ready, they will be reactivated and cash drawals from ATM and other machines will be restricted to ₹ 2,000 per day.
For more details members of the public may visit RBI website www.rbi.org.in and Government web site gov.nic.in for further information and details.
Source : www.rbi.org.in
Source : www.rbi.org.in
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Demonetisation of Rs. 500 and Rs. 1000 notes: RBI explains
From midnight of November 8, 2016, Rs. 500 and Rs.1000 will cease to be legal tender. "These notes are just papers from tomorrow," says the prime minister.
Taking the nation by surprise, Prime Minister Narendra Modi on Tuesday night announced demonetisation of Rs. 1000 and Rs. 500 notes with effect from midnight, making these notes invalid in a major assault on black money, fake currency and corruption.
In his first televised address to the nation, Mr. Modi said people holding notes of Rs. 500 and Rs. 1000 can deposit the same in their bank and post office accounts from November 10 till December 30.
i) Missing information in approx 80,000 cases have been provided by PSAs. Further updates from PDAs are awaited.
ii) SBI alone has been supplied information in about 32000 cases for updation of missing information cases. Further feedback awaited.
iii) Out of 72,342 cases pending with PDAs, 23,517
ii) SBI alone has been supplied information in about 32000 cases for updation of missing information cases. Further feedback awaited.
iii) Out of 72,342 cases pending with PDAs, 23,517
Authority: http://www.desw.gov.in/
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