Money & Banking
Withdrawal from Jan Dhan accounts cut to Rs 10,000 a month
In view of reports of Jan Dhan accounts being used to hoard unaccounted money, the Reserve Bank of India has curtailed the withdrawal limit from such accounts to Rs10,000 per month.
 
"Fully KYC compliant account holders may be allowed to withdraw Rs10,000 from their account, in a month," RBI said on Wednesday.
 
"The branch managers may allow further withdrawals beyond Rs10,000 within the current applicable limits only after ascertaining the genuineness of such withdrawals and duly documenting the same on bank's record," it said.
 
For non-KYC compliant accounts, the withdrawal limit has been fixed at Rs5,000 per month from the amount deposited after November 9, with an overall ceiling of Rs10,000.
 
"The decision has been taken to protect the farmers and rural account holders of Pradhan Mantri Jan Dhan Yojana from activities of money launderers and legal consequences under the benami property transaction and money laundering laws," it said.
 
Earlier, the government had warned people from letting their Jan Dhan accounts being used by people to park their unaccounted cash.
 
The Finance Ministry had set an upper limit of Rs50,000 for deposits into Jan Dhan accounts.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

tikku

2 days ago

Tikku, is a common ex soldier, can only think on what is happening on the ground to the common people. Cannot think like learned people and the financial experts. As they say, only 6% of black money is involved in this demonetization drive, and most part of which may be the money hard earned and not Black, is not worth the action to cause the death of 70 people., let alone the pains suffered by the common mass. We must not think that others life is cheap except yours own. Rickshaw puller standing in queue for Rs 2000/- instead of pulling his rickshaw to earn for another day to feed his family and yet saying, we are doing it for the betterment of tomorrow, must not be taken on face value. Why only poor people must suffer as they are even after 69 years from our independence? Why are those on the Governing seat are not ashamed of it instead of blaming each other and getting fatter themselves everyday? Now since the move is on, reversal will be foolish and very damaging. Govt now on is requested to spare the common man and go after the real big fishes instead, even though they have already made their ill gotten wealth very legal in shape of Land, Resorts, Big schools, and other real states. Also the money stashed away by them in other countries,--as promised by Modiji during his election campaigns.

Ashok m Rane

5 days ago

It appears that All d decisions r being taken on trial and error basis on various problems created by Demonetisation.

Bank employees under pressure due to cash crunch, customers refusing dirty, soiled Rs100 notes, say unions
There is not enough supply of fresh currency notes by the Reserve Bank of India (RBI) and customers are refusing to accept old, dirty and soiled Rs100 notes, which were remitted to RBI as non-issuable. Under this situation, bank employees are under tremendous pressure and sometime even facing abuses from customers and need to be provided police protection, demand bank employee and officer unions.
 
All India Bank Employees' Association (AIBEA) and All India Bank Officers' Association (AIBOA) in a letter to Rajeev Rishi, Chairman of Indian Banks' Association (IBA) says, "When customers are reluctant to accept Rs2,000 notes and in the absence of supply of Rs500 notes and coupled with shortage of Rs100 notes, the branches of the banks are finding it difficult to face the wrath, rage and resentment of the customers. We are getting reports of abusive language from the customers on the staff for not being able to give them required cash due to reasons beyond their control. There would be lot of undue pressures, tensions, conflicts and clashes in the Branches and Branch managers, officers and other staff would face a big ordeal.  We seek the intervention of IBA to advice the Banks to ask for proper police protection in branches to provide proper security to the staff."
 
According to the unions, there is an acute shortage of Rs100 currency notes and hence even the recalibrated automatic teller machines (ATMs) are not able to dispense cash to the customers. "Even whatever Rs100 notes are being supplied by RBI are found to be very very soiled ones earlier remitted to RBI as non-issuable. Customers are refusing to accept these dirty and soiled notes and in fact it is found to be health hazard for the cash counter staff who handle these soiled notes," it says.
 
The letter points out that some branches are displaying boards like 'No Cash', 'Cash No stock', which the bank employees feel would seriously erode the reputation of the bank in the eye of the common people. 
 
It says, "We have reports that that irritated customers are creating tension inside branches and sometimes locking the branch premises from outside and staff had to call police to come and break open the lock."
 
"The next one week to 10 days are going to be much more tense because, huge number of employees, workers and retirees/pensioners would throng the bank branches to draw from their salary credit and non-availability of enough cash may lead to serious issues of law and order also. Adding to the problems, still majority of the ATMs are non-functional and this would add to the crowd and congestion inside the branch premises."
 
The bank employee and officers' union also pointed towards new instructions being issued by the RBI. It says, "(the) RBI is issuing umpteen number of instructions every day and branch staff are unable to cope up with these instructions instantly until they are duly intimated about it from their respective head offices. Sometimes these instructions of RBI create more problems than solutions."
 
Both AIBEA and AIBOA have requested the IBA to take up the issue with the central bank. "...take up the issue with RBI to ensure adequate supply of currency notes to all banks without any discrimination. There is also an allegation doing the rounds that some private banks get more supply of notes from RBI at the cost of public sector banks," the unions stated in the letter.
 

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COMMENTS

tikku

2 days ago

Height of mismanagement, unprecedented in India's history--may be the world's

Ashok m Rane

5 days ago

Bank Unions have become very weak because of which d Bank employees and officers r suffering tremendously.

B. Yerram Raju

5 days ago

Even in this stressful situation, I have seen that bank branches did not stop cross-sell of insurance products! In fact I noticed that the SBI-ULIP applications are found more welcome than opening new SB accounts for the account-less. Bank branches shall be ordered rigidly not to sell any other service than banking to optimise on time and resources of banks. The best way is to deprive of any commission on sale of products unrelated to banking like insurance and mutual funds at all levels. Let the Finance Ministry wake up to reality and take stiff measures. Unions do not cry foul on this because there is a bait in additional earning!!

REPLY

Govinda Warrier

In Reply to B. Yerram Raju 5 days ago

Very true. The spirit behind the original Banking Regulation Act which had taken care to list the do's and don'ts for banks has long been forgotten. Now the trend is to make banking a "franchisee" business and unfortunately such ideas are being marketed by those who held high positions in banks and regulatory organizations

Vishy S

5 days ago

A bitter man airing his cynical take. No sight like hindsight. Nevertheless babu's should read this. Some useful long term action plan is here. For now somebody in Fin ministry get up and get some 500 rs notes printed abroad please .

Sisir

6 days ago

When bank customers have been abused verbally & physically for all wrong reasons in the name of recovery by reps of banks, thereby taking law into their hands, no such letters have been sent by AIBEA or AIBOA to IBA or RBI about how bank managements have been pressurizing them to resort to illegal tactics. In fact, IBA didn't even reply to my email on this very subject. Some lives might be more valuable than others!

REPLY

Prashant Rane

In Reply to Sisir 6 days ago

Totally agree, they mis-sell policies don't reduce interest rate due to their fault of mismanagement of funds leading NPAs they also deserve to face music

pritamcnaik

In Reply to Prashant Rane 6 days ago

Totally agree with both of you let them face the music

Decoding the new Tax Amendment Bill
In the wake of the recent demonetisation of Rs500 and Rs1,000 denomination currency notes, the Narendra Modi Government has now proposed several far-reaching amendments to the Income-tax Act, 1961 by way of the Taxation Laws (Second Amendment) Bill, 2016 that has been presented before the Parliament on 28 November 2016. The Lok Sabha, on 29th November passed the Bill by voice vote amid a ruckus created by the opposition parties over demonetization.
 
Here are the salient features of the Bill and its possible impact, as described by Manohar Chowdhry & Associates…
 
1. The amendments proposed in the said Bill affect the existing Sections 115BBE and 271AAB apart from bringing in a new Section 271AAC. Contrary to popular belief, there are no amendments proposed to Section 270A.
 
2. The primary reason for introducing the Bill is to prevent black money hoarders from finding illegal ways of converting their black money into white and simultaneously giving an opportunity to such persons to pay taxes laced with a heavy penalty and allow them to come clean. Hence, the Government has come up with a new Scheme called ‘Pradhan Mantri Garib Kalyana Yojana, 2016’ (PMGKY).
 
3. The Scheme allows the black money holders to declare their undisclosed income and avoid vigorous procedures under the Income-tax Act (ITA). The proposed structure of the Scheme is as under :
a. Any declarant under this Scheme can make a declaration of income only by way of cash or a deposit in any account maintained by the declarant with any banking company, post office or such other institutions notified by the Government.
b. Any income declared under the Scheme would attract a tax of 30% of the undisclosed income, a surcharge (to be known as the Pradhan Mantri Garib Kalyan Cess) @ 33% of the tax. Thus, the total tax on such income would be approximately 40%. In addition to this, a penalty @ 10% of the income would also be payable. Thus, the effective tax would amount to approximately 50% of the income.
c. In addition to the tax, surcharge and penalty paid under this Scheme, an additional amount which shall not be less than 25% of the income needs to be deposited under the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. The amount deposited under such Scheme can be withdrawn only after four years from the date of deposit and would not earn any interest.
d. The period of the Scheme and the manner of the declaration is yet to be notified by the Government.
 
4. A person who has not opted for this Scheme, and is subsequently found to be holding such undisclosed income would be charged with a tax (under Section 115BBE) @60% of the income and a surcharge of 25% of the tax. The total tax payable in such cases would be 75% of the income. Also, a penalty under a new section proposed to be inserted with effect from assessment year (AY) 2017-18 - Section 271AAC @10% of the tax and surcharge would also be payable. The penalty would work out to 10% of 75% i.e. 7.5% of the income. Thus, in such cases, the total tax outgo would be 82.5%, as opposed to 50% under PMGKY.
 
5. In the case of any undisclosed income unearthed by way of search, certain amendments are proposed in Section 271AAB whereby two scenarios are possible:
 
a) Where the concerned tax payer admits and offers to tax the undisclosed income in his return of income and pays the taxes voluntarily and
b) Any other case
 
In the first scenario, penalty on such undisclosed income would be levied @30% of the income whereas, in the second scenario, penalty would be levied @60% of the undisclosed income. 
 
6. This Scheme does not apply:
a. in relation to any person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (popularly known as COFEPOSA):
b. in relation to prosecution for any offence punishable under Chapter IX or Chapter XVII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, the Prevention of Corruption Act, 1988, the Prohibition of Benami Property Transactions Act, 1988 and the Prevention of Money-Laundering Act, 2002;
c. to any person notified under section 3 of the Special Court (Trial of Offenses Relating to Transactions in Securities) Act, 1992;
d. in relation to any undisclosed foreign income and asset which is chargeable to tax under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
 
7. Any declaration made under this Scheme would not be admissible in evidence against the declarant for the purpose of any proceeding under any Act (except to the extent mentioned in para 7 above.
 
8. The income that is offered to tax under this Scheme would be the gross income and no deductions for any expenses or set off would be allowed from the same.
 
9. The amount of tax, penalty etc. payable under the Scheme has to be paid before submission of the declaration under the Scheme and no portion thereof would be refundable to the tax payer.
 
The Chartered Accountancy firm says, “The past few days have seen a lot of action on the part of the Government in its attempt at unearthing black money, bringing to book tax evaders and in channelizing the massive amounts of unaccounted funds into the official economy. The latest tax amendments proposed are in line with this concerted effort.” 
 
The summary of the various amendments can be noted from the table below, which shows the tax outgo in various situations:
 
 
As can be seen from the above, the penalties prescribed and the total tax outgo that a tax evader would face are very stiff. 
 
“We welcome the government’s move to punish those who have brazenly evaded taxes and stayed away from contributing towards the nation building process for decades,” the CA firm added.

 

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COMMENTS

vinod sharma p

4 days ago

As a responsible citizen, I fully support the PM on his efforts to unearth the black-money and dutifully follow the guidelines issued. BUT... all this is worth only when there is a tangible benefit to the common-man in terms of lower inflation or better infrastructure or reduced tax rates for the diligent tax payers etc. I am eagerly looking forward to the upcoming budget.

Mehernosh Dordi

4 days ago

All honest citizens should welcome these measures by the government. But the government should also immediately speed up the cases against tax evaders who have been caught and give them exemplary punishment.

PRADEEP Bhat

4 days ago

good decision. Only 2% of people pay tax. Rest dont pay. Good decision.

Krishna Kumar

6 days ago

In England there is a campaign for plain english. There doesn't seems to be any consistency in how a penalty is interpreted. In one case the penalty is a proportion of the income. In another instance the penalty is a proportion of the tax. Plain english would be the first step in any reform we expect in future.

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