Nov 30, 2016

RBI Revised Limit of Withdrawl Under PMJDY to Rs. 10000 per Month

2:14 PM 0
RBI Revised Limit of Withdrawl Under PMJDY to Rs. 10000 per Month
Reserve Bank of India revised maximum limit of withdrawl under Pradhan Mantri Jan Dhan Yojana accounts to Rs. 10000 per month. Full notification is  as under.

Please refer to our circular DCM (Plg) No.1424/10.27.00/2016-16 dated November 25, 2016 on “Withdrawal of cash – Weekly limit”. With a view to protect the innocent farmers and rural account holders of PMJDY from activities of money launders and legal consequences under the Benami Property Transaction & Money Laundering laws, it has been decided to place certain limits, as a matter of precaution, on the operations in the PMJDY accounts funded through deposits of Specified Bank Notes (SBNs) after November 09, 2016. As a temporary measure, the banks are advised to observe the following in respect of the PMJDY accounts:

(1) Fully KYC compliant account holders may be allowed to withdraw Rs. 10,000/- from their account, in a month. The branch managers may allow further withdrawals beyond Rs. 10,000 within the current applicable limits only after ascertaining the genuineness of such withdrawals and duly documenting the same on bank’s record.

Limited or Non KYC compliant account holders may be allowed to withdraw Rs. 5,000 per month from the amount deposited through SBNs after November 09, 2016 within the overall ceiling of Rs. 10,000.

Yours faithfully,
(P Vijaya Kumar)
Chief General Manager

Nov 29, 2016

11 Things to Know about Declaration of Black Money under 50% Scheme

2:24 PM 0
11 Things to Know about Declaration of Black Money under 50% Scheme
The Government announced demonetization of existing currency of Rs 500/1000 as a step forward to curb black money with effect from the 9th November, 2016. However, concerns have been raised that some of the existing provisions of the Income-tax Act, 1961 ('Act') could possibly be used for concealing black money. It is, therefore, important to plug these loopholes within Act so as to prevent misuse of the provisions. Thus, the Govt. has introduced Taxation Laws (Second Amendment) Bill, 2016 in the Lok Sabha which proposes to make some changes in the Act to ensure that defaulting assessees are subjected to tax at a higher rate with stringent penalty provision.

Disclosure of black money held in banks or cash
1.Black money deposited in banks or held in cash can be offered for taxation at concessional rate under Pradhan Mantri Garib Kalyan Yojna, 2016 ('PMGKY'). This income would be taxed at 49.9% (i.e., 30% tax, 9.9% surcharge and 10% penalty).

2. The persons making declaration under PMGKY will be required to deposit 25% of black money. This amount should be deposited before filing of declaration. This deposit will have lock-in-period of 4 years and they shall bear zero interest.

3. Declarants under PMGKY shall be required to pay tax, surcharge and penalty before filing of declaration. Such undisclosed income declared in PMGKY shall not affect finality of completed assessments. In other words, the declarant shall not be entitled to reopen any assessment made under the Act.

4. Such declaration scheme shall not be applicable in relation to prosecution for any offence punishable under the Prevention of corruption Act, Benami Act and Prevention of money laundering Act. Such scheme shall not apply for undisclosed foreign income and assets to which Black Money (Undisclosed foreign income and assets) and Imposition of Tax Act, 2015 applies.

5. Person making declaration under PMGKY are required to file declarations in the specified format and such income shall not be included in the total income of declaration for any AY under Income-Tax Act.

6. Such PMGKY scheme will be applicable for certain period as notified by the Government.
Disclosure of black money in return of income

7. Disclosure of undisclosed income in return of income would be taxable at 77.25% (i.e., 60% tax, 15% surcharge and 2.25% Cess). Thus, no penalty will be levied under Section 271AAC (newly proposed) if undisclosed income has been disclosed in return of income and tax has been paid on or before end of previous year.

8. Such option is available for those taxpayers who are not eligible for PMGKY Scheme or those who wanted to declare black money in the form of gold, bullion or immovable property, etc.

9. Further, for such disclosure of black money, no penalty will be levied for under-reporting and misreporting of income under Section 270A.

Detection of black money by the AO
10. If any undisclosed income is determined by AO then it would be taxable at 83.25% (i.e., 60% tax, 15% surcharge, 6% penalty* and 2.25% Cess).

11. Further, no penalty will be levied for under-reporting and misreporting of income under Section 270A.

* Penalty is computed on tax amount excluding surcharge and Cess.

RBI Relaxes on Withdraw of Cash from Bank Deposit Account

2:17 PM 0
RBI Relaxes on Withdraw of Cash from Bank Deposit Account
Reserve Bank of India makes relaxation on withdraw of Cash at any limit from bank deposit account. RBI issued a notification on this relaxation on 28 November 2016. Full notification is as under.

It has been reported that certain depositors are hesitating to deposit their monies into bank accounts in view of the current limits on cash withdrawals from accounts.

2. As it is impeding active circulation of currency notes, it has been decided, on careful consideration, to allow withdrawals of deposits made in current legal tender notes on or after November 29, 2016 beyond the current limits; preferably, available higher denominations bank notes of  Rs. 2000 and Rs. 500 are to be issued for such withdrawals.

Yours faithfully,
(P Vijaya Kumar)
Chief General Manager