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Moneylife » Personal Finance » Banking » TDS certificates should be sent to customers: RBI to banks

TDS certificates should be sent to customers: RBI to banks

Moneylife Digital Team | 06/09/2011 06:23 PM | 

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The banking regulator today announced 10 points that banks must work on to improve services for customers

The Reserve Bank of India (RBI) today announced that banks must issue certificates for tax deduction at source (TDS) duly completed, for account holders, and dispatch to their mailing addresses.

This was one of the decisions taken at its annual conference on banking ombudsman that was held on Monday. The RBI also listed nine other action points to improve bank customer services, which includes pre-payment charges on floating rate mortgages, providing customers a view of account using technology and creating awareness of the banking ombudsman scheme.

TDS has been a big harassment for customers and not too long ago Moneylife Foundation had sent a memorandum on the TDS matter to the finance ministry and the RBI on the issue. The memorandum to the RBI highlights the TDS problem for bank depositors and suggests that income from fixed deposits should be exempt from tax. It also proposes that banks found to be deficient in services, wrongful deduction of tax, not providing accurate tax certificates, or uploading inadequate or wrong information, should be awarded exemplary punishment either by the banking ombudsman or the RBI. (Read, ‘Moneylife Foundation sends memorandum on TDS to the FM, RBI’.)

Among the other issues that have been listed is the need to provide a long-term fixed rate housing loan, compensation for loss due to unauthorised transactions through ATM/Internet and proper monetary compensation for mental harassment suffered by the customer.

The RBI stated that "banks must not recover pre-payment charges in floating rate loans. Banks may offer long-term fixed rate housing loans to their customers and address their asset liability mismatch (ALM) issues by recourse to the interest rate swaps market.  Floating rate loans pass on the interest rate risk from banks which are much better placed to manage it, to borrowers and, thus, banks only substitute interest rate risk with potential credit risk. The bank will, however, be free to recover / charge appropriate pre-payment penalties in the case of fixed-rate loans."

The Indian Banks' Association (IBA) has been asked to standardise the most important terms and conditions of at least 10 important banking transactions and circulate among banks for adaptation. It also said that banks should initiate the process of providing one view of the bank account, including deposits, loans, etc, using technology such as core-banking solutions and complete this within a year.

The RBI said that "under the Banking Ombudsman Scheme, banking ombudsmen will annually share with the local media, information regarding complaints received and resolved, including important cases and awards given," towards creating awareness.

On disputes in ATM/Internet-based transactions, the RBI said, "In the event of any monetary dispute involving the customer and the bank, the onus should be on the bank to prove the customer's negligence or mistake. The customer must be compensated for losses arising out of customers' non-authorised transactions."

The action points lists the need for creating awareness of customer services in banks through a series of events to be conducted by the RBI, in which bank customers, bank officials and banking ombudsmen will participate.

The RBI also highlighted the issue of monetary compensation for mental harassment suffered by bank customers and it is examining the issue along with the IBA. "Issues that may receive attention in the analysis would be whether only actual loss should be considered for compensation, whether mental harassment issues can be codified for compensation, and whether compensation should be capped, or whether the policies of the banks' boards on compensation should include mental harassment as a ground for compensation," the RBI stated.

It has also asked banks to initiate steps to incorporate in their code of 'Fair Practices to Customers', insurance of some reasonable amount on their customers' credit and debit card transactions, providing periodical loan statements to small borrowers, and conveying to borrowers information on the annualised all-in cost (annual effective rate) on their loan accounts.

The RBI has also asked banks to give their views on the recommendations of the Damodaran Committee for immediate implementation.


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25 Comments
Sameer Thekedar

Sameer Thekedar 3 years ago

I have a cumulative FD with State Bank of Bikaner & Jaipur ,Pune Laxmi Road Br. The interest for Q1has crossed Rs.10000/- and inspite of reminding them to deduct tax, they are not doing so. They do not answers my numerous emails or phone calls.How can I resolve this issue.Please guide me.

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R Nandy

R Nandy 3 years ago in reply to Sameer Thekedar

I don't think it is an issue.You can pay the appropriate tax as Self Assesment Tax during the filing of IT return.It is much easier than following up with the bank.

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sameer

sameer 3 years ago in reply to R Nandy

Yes your point is valid. But my real worry is that the bank makes the deduction and due to their mistake it does'nt get reflected in TIN form 26AS. I have had many such experiences in the past and its a big hassle to follow up and get it rectified.

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a v moorthi

a v moorthi 3 years ago in reply to Sameer Thekedar

Normally Bank software is tailor made to recover TDS on interest half yearly in Sept/ March and other times as and when it matures for payment. So can wait till Sept end. If you are having PAN TDS will be @ 10% - ensure for your customer ID PAN is updated. If you are a senior citizen tender form 15G then Bank will not recover TDS, but then you can remit advance Tax say before Sept 15 or subsequently based on your own calculation of interest and other income if any.

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mukesh

mukesh 3 years ago

IT SHOULD ALSO BE ONUS OF BANKS & INCOME TAX DEPT. TO ENSURE THE CORRECTNESS, CORELATIONS & WHATEVER OTHER PARAMETERS IT SETS SUCH THAT THE ONUS OF MATCHING TDS TO TAX PAID/MISMATCH SHOULD NOT BE ON CRORES OF INVESTORS/CUSTOMERS - INCOME TAX'S POST-RETURN STUPID EXERCISE & MONSTEROUS HEADACHE/HASSLES WASTING ENTIRE COUNTRY'S TIME & MAKING PEOPLE SUFFER HELL DUE TO NEGLIGENCE BY BANKS/OTHERS

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a v moorthi

a v moorthi 3 years ago in reply to mukesh

Income Tax Dept is not to be blamed. Rather by allowing us to view AS26 they have ensured transparency. It is the Tax deductor who is to penalised, it is Deductor who is not updating TDS properly. Once a few of the affected persons make it an issue , deductors will fall in line. Money life should file a RTI query with I.T.Dept some time in January every year
1. No of persons who had filed e- returns and of these how many had refunds and how many refunds have been credited using ECS/NEFT. it should be made mandatory that IT Dept make refunds with 180 days from the date e-return is filed directly into Tax Payers bank account using ECS/NEFT etc. as this will be a big step in eliminating corruption of minor nature in I.Tax Dept as it is often observed Refund Order cheques are despatched more than 75 days after issuing cheque with RO's having a 3 months validity after the month of issue, where by more than 15% of ROs become stale and needs to get revalidated costing the Tax Payer. it is also wastage of Manpower and stationery for thr IT Dept.

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Ramesh B

Ramesh B 3 years ago

to: a v moorthy..incontinuation...the brnach wil hv to do,as u rightly said.but the problem is Punjab National Bank,
P Road,Baroda(Vadodara)is not interested to do it. I told them the method for rectification where theTDS data is not transmitted properly to IT deptt for missing details of PAN etc.I hv 30 yrs useful relationship with the Bank,ideally I was too cool till now.

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R Nandy

R Nandy 3 years ago in reply to Ramesh B

Please complain in writing using this form https://www.pnbindia.in/Upload/English/G... and submit it to the branch manager and get a photo copy sealed and signed from him. Most probably problem will be solved.In case problem is unsolved,send scanned copy of complaint form to zonal head with adequate proof of 26AS and 16A and the mismatch. You can approach Ombudsman with all the documentary evidence if this is still unsolved.

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Ramesh B

Ramesh B 3 years ago

MY bank-Punjab National Bank,has given me TDS certi.But the TDS details are on
available in AS26 of ITR.it shows NIL TDS.This is for FY 2007-08 and 2008-09 in two cases.I wrote to PNBank three times and personally complained,but nothing has happened.My Refund is held up by IT deptt since last three years.This is the quality and customer service standard of No.1 nationalized bank!

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a v moorthi

a v moorthi 3 years ago in reply to Ramesh B

actually error rectifications have to be carried out and software allows it.. once the same is carried out by the Bank, in the remark column of AS26, it is displayed "A" meaning rectification of error in challan uploaded by Bank. Complain over e-mail to customer service Dept of PNB at their Head Office, give subject line as misappropriation of Tax Deducted. When something is recovered but not reflected in your AS26 it means that only. it is very like your credits might have been accounted The PNB branch will have to do.

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a v moorthi

a v moorthi 3 years ago in reply to Ramesh B

actually error rectifications have to be carried out and software allows it.. once the same is carried out by the Bank, in the remark column of AS26, it is displayed "A" meaning rectification of error in challan uploaded by Bank. Complain over e-mail to customer service Dept of PNB at their Head Office, give subject line as misappropriation of Tax Deducted. When something is recovered but reflected in your AS26 it means that only. it is very like your credits might have been accounted The PNB branch will have to do.

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Dr Vaibhav Dhoka

Dr Vaibhav Dhoka 3 years ago

Improvement in banking service is need of hour though late RBI has taken step for investor as TDS certificate which is major loos to depositors.Banks have increased service charges to extreme levels but has never bothered to improve standard of service towards customer.

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