Be ready to pay 50-70% tax on black money deposited in banks

MUMBAI: To ensure that people who disclosed their assets under the recent income declaration scheme are not disadvantaged as compared with those depositing black money in banks now, the government plans to increase tax rates on such deposits and cash expenses. 

"Many government officials have spoken of 200% penalty on black money but that may not be feasible under the current tax framework," a person close to the development said. 

"Given this, there was a proposal  .. 
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No plan to reintroduce Rs 1,000 note, Arun Jaitley says

NEW DELHI: "The government's decision to limit the exchange of banned Rs 500 and Rs 1,000 notes to Rs 2,000+ , from the existing cap of Rs 4,500+ , would stop misuse of funds," finance minister Arun Jaitley said on Thursday.

Jaitley also ruled the possibility of reintroduction of Rs 1,000 note in immediate future. "As of now, there is no plan to reintroduce Rs 1,000 note," he said.

The finance minister also said that 22,500 ATMs will be re-calibrated today.

Earlier in the day, the government eased restrictions on cash withdrawal by farmers and families with upcoming weddings+ .

Economic affairs secretary Shaktikanta Das said now families preparing for a wedding can withdraw up to Rs 2.50 lakh from bank account giving PAN details and self declaration.

However, with effect from tomorrow individuals can exchange invalid 500 and 1,000 rupee notes totalling Rs 2,000, as against Rs 4,500 earlier, only once till December 30.

Besides, farmers who have taken crop loan or have kisan credit card can withdraw Rs 25,000 per week. Also those who have got payments through RTGS or cheque deposit in KYC compliant bank account can withdraw an additional Rs 25,000 a week. This takes the total cash withdrawal limit for farmers from KYC complaint bank accounts to Rs 50,000 per week.

Das said ever since the demonetisation announcement was made, a lot of representations have come to Prime Minister and finance minister Arun Jaitley to ease withdrawal norms for wedding purposes.

"It has been decided that for wedding ceremonies which are going on, up to Rs 2.50 lakh will be permitted to be drawn from the bank account... and that has to be drawn one person per marriage and can be drawn either from the account of the father or the mother or the account of either of the boy or girl, who are getting married, and these accounts naturally will have to be KYC compliant," he said.

Das said PAN details would have to be mentioned for such withdrawals and a self declaration also will be obtained that the money has been drawn only from one account.
courtesy: http://timesofindia.indiatimes.com/

Don't panic, don't hoard currency, sufficient notes in supply: RBI

 

MUMBAI: The Reserve Bank on Thursday asked people not to hoard currency as there is sufficient supply of notes. This even as the banks struggled to manage the rush of people thronging branches across the country to exchange the scrapped high denomination 1,000 and 500 rupee notes.

The government meanwhile eased restrictions on cash withdrawal by farmers+and families in the middle of marriage and sowing season, and at the same time more than halved the limit for currency exchange to Rs 2,000.

"The Reserve Bank of India has once again clarified today that there is sufficient supply of notes consequent upon increased production which started nearly two months ago. Members of public are requested not to panic or hoard currency notes," the central bank said in a statement.

Despite ATMs being calibrated to dispense Rs 500 notes+ , such vending machines are running out of cash because of huge pressure of withdrawal.

Top Comment

First increase the supply of 100 and 500 rupees notes. Matter will be normalized.sudhansusonali sudhansusonali

Queues at some branches in the metros cities were seen slightly shorter for exchange of old currencies as the process of putting indelible ink+ started from Wednesday. As a result of this, those who have already exchanged old currency notes are unable to queue up again.

Prime Minister Narendra Modi had on November 8 surprised citizens by announcing demonetisation of 500 and 1000 rupee notes+ and since then a large number of seemingly unending queues before banks and post offices are seen as people throng to exchange the currency.

courtesy : http://timesofindia.indiatimes.com/

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SBI writes off Rs 7,016 crore loans owed by wilful defaulters, including Vijay Mallya’s defunct airlines

The clean-up saw SBI forgo almost Rs 1,201 crore in dues owed by Vijay Mallya's defunct Kingfisher Airlines, which heads the list of wilful defaulters.

The State Bank of India got non-performing assets worth Rs 7,016 crore off its books by writing off loans owed to it by 63 wilful defaulters, Daily News & Analysis reported Wednesday. The clean-up saw the bank forgo almost Rs 1,201 crore in dues owed by Vijay Mallya’s defunct Kingfisher Airlines, which heads the list of wilful defaulters. Documents accessed by DNA reveal that 63 accounts have been fully written off, 31 partially written off and six have been shown as NPAs. SBI adjusted its balance sheets by moving the Rs 7,016 crore to an Advance Under Collection Account (AUCA). The top wilful defaulters include KS Oil (Rs 596 crore), Surya Pharmaceuticals (Rs 526 crore), GET Power (Rs 400 crore) and SAI Info System (Rs 376 crore).

Mallya, who has been declared by ED as a proclaimed offender, has left the country after banks moved the Supreme Court to seize his assets. Kingfisher Airline owes a total of Rs 6,963 to 17 banks. In February, The Indian Express first reported that Twenty-nine state-owned banks wrote off a total of Rs 1.14 lakh crore of bad debts between financial years 2013 and 2015. SBI topped the list by writing of bad debts worth Rs 40,084 crore in the last three financial years.  The Supreme Court, taking suo motu cognizance of The Indian Express report, called the write off “a big fraud” and ordered the RBI to share with it names of the biggest defaulters. On Tuesday, the Parliamentary consultative committee, constituted to study non-performing assets (NPAs) in the banking sector, has suggested that the government should name all the defaulters whose loans have been written off by state-owned banks.

“Members (of the committee) suggested that there is need for bringing more transparency in the system, and list of all the defaulters whose loans have been written off by the PSBs be made public. They asked for exemplary action against the wilful defaulters so that others do not indulge in similar activities,” said a statement released by the Finance Ministry.

Courtesy: http://indianexpress.com/

Don't need ID copies to exchange old currency notes, says Reserve Bank of India

NEW DELHI: The Reserve Bank of India and head offices of most commercial banks have not asked banks to collect photocopies of customers' identities for exchange of old currency notes.

In an email to TOI , RBI said that its guidelines only require customers to present and show valid proof, the photocopies are not required. A senior official of the State Bank of India confirmed the same: "The bank only needs details and numbers on the requisition slip which the teller will match with entries in a document," he said.

Yet most bank branches, including several of SBI+ , have been insisting on photocopies, which has added to lengthening of queues at the branches. Some branches have offered to copy the document in the branch when customers turn up with only the original copy of their identity.

A few banks are having a dual approach. "While other banks might ask customers, coming to exchange money to submit photocopies, we are not doing so. For our bank customers we already have their KYC details, so there is no point in asking them for identification or proof again," said A Vidyasagar, COO, Lakshmi Vilas Bank. "For non-bank customers we do get photocopies, but we ask them to sign their names with date, purpose and bank branch," he added.

The gazette notification withdrawing the old high denomination notes from circulation issued on November 8 had said that people can exchange notes at any bank by submitting a requisition slip and proof of identity

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People across India queue up outside banks, fear ATMs may run dry

Thousands of people lined up outside banks and ATMs across India on Tuesday, a day after a bank holiday left people stranded with no way to access cash or exchange money.

The queues in front of ATMs were longer as people feared the machines will run out of money soon, a week after Prime Minister Narendra Modi announced the scrapping of Rs 1000 and Rs 500 notes to drain illegal cash from the economy.

“Why did they allow banks to stay shut when they know how people are struggling to even buy basic grocery items? How long are they going to take us for granted? I woke up at 4.30 am to rush to the ATM so as to avoid queues, but did not get cash anywhere,” Ankit Girdhar, a resident of south Delhi’s Lajpat Nagar, said.

In West Bengal and the Northeast, reports poured in that ATMs in many remote areas haven’t been restocked since November 9 -- a day after the demonitisation scheme was announced.

“You can’t depend on ATMs as they are running out of money in no time. But when I came at 7:30 am I was standing in a queue behind more than 50 people,” said Ashish Poddar a school teacher in south Kolkata.

Many traders and middlemen in Assam and other parts of Northeast resorted to earning commission to exchange 500 and 1000 rupee notes with those of smaller denomination.The Assam Tribune reported that small traders in eastern Mizoram resorted to using paper coupons to trade due to scarcity of currency notes of lower denominations.

In Hyderabad, many travellers said bus operaters were accepting devalued currency but not returning the change. Other passengers said they had to go hungry for hours as they had no change to buy even snacks and tea Suryapet. “Our business has come down by 70 per cent,” lamented Laxman, the supplier at a roadside restaurant.

In Allahabad, ATMs evacuated of old notes are still being loaded with the 100, and 500 and 2000 . So, the ATMs are not expected to function smoothly for one more week, said a senior bank officer Ashwini Tewari.

This bank holiday has clearly hit the government’s plans to ease the currency flow: It will take time to load notes in ATMs on Tuesday morning and the government’s easing of restrictions on small businesses and certain rural sectors will add to the rush of people at bank counters.

Finance minister Arun Jaitley had assured people that banks would operate at full capacity on November 14 in states where Guru Nanak’s birthday is not a holiday. But in more than half of the states and union territories, Monday was a bank holiday. Banks were open in some states, including Gujarat, Tripura, Mizoram, Goa and Kerala.

A few state-run bank branches operated with skeletal staff on Monday, said a banker with the State Bank of India.

“Our bank branches are operational in 18 states to serve the customers uninterrupted after the demonetisation was announced,” an Axis Bank spokesperson told Hindustan Times.

In New Delhi, people who had planned to queue up outside ATMs early in the morning, had to return disappointed as shutters at many locations were down.

ATMs inside metro stations in the national capital also disappointed those who made a dash for cash early morning.

Read| In course correction after demonetisation, govt eases cash withdrawal norms

People commuting to work were the most affected as they were hoping to withdraw some money before starting out for work.

In Mumbai, the cash crunch has hit autorickshaw and cab drivers. Drivers of black and yellow taxis, three-wheelers and taxi fleets complained of falling business as people are avoiding travel due to lack of liquid cash.

In Kolkata, authorities of most banks loaded cash in more vans than usual on Sunday so that they could pump the money into the ATMs on Monday. Still, it was enough to meet just a fraction of the demand.

In smaller towns such as Karnal, it was even worse with people scrambling to find ATMS which had cash in them.

With ATMs drying up, little children in many homes have turned out to be saviours, thanks to their piggy banks. The change they saved has helped their parents buy grocery.

If the chaos worsens on Tuesday, criticism that the government was underprepared to manage the demonetisation exercise will grow.

Courtesy: http://www.hindustantimes.com/

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