May 162017
 

The Income-tax Department had recently made linking of Aadhaar & PAN madatory for assessees. A facility for the same was also introduced in the income tax efiling website www.incometaxindiaefiling.gov.in.

Now the Income-tax Department vide its Notification No S O 1513(E) dtd 11th May 2017 has exempted the following assessees :-

  1. Persons residing in the States of Assam, Jammu and Kashmir and Meghalaya;
  2. A person who is a non-resident as per the Income-tax Act, 1961;
  3. persons of the age of eighty years or more at any time during the previous year;
  4. a person who is not a citizen of India.

The relevant notification is attached below :-

Download (PDF, Unknown)

Sep 062016
 
Know Your Customer Guidelines

(Updated up to September 02, 2016)

(This is a summarised and simplified version of the Reserve Bank of India’s Know Your Customer guidelines.)

Q1. What is KYC? Why is it required?

Response: KYC means “Know Your Customer”. It is a process by which banks obtain information about the identity and address of the customers. This process helps to ensure that banks’ services are not misused. The KYC procedure is to be completed by the banks while opening accounts. Banks are also required to periodically update their customers’ KYC details.

Q2. What are the KYC requirements for opening a bank account?

Response: To open a bank account, one needs to submit a ‘proof of identity and proof of address’ together with a recent photograph.

Q3. What are the documents to be given as ‘proof of identity’ and ‘proof of address’?

Response: The Government of India has notified six documents as ‘Officially Valid Documents’ (OVDs) for the purpose of producing proof of identity. These six documents are Passport, Driving Licence, Voters’ Identity Card, PAN Card, Aadhaar Card issued by UIDAI and NREGA Job Card. You need to submit any one of these documents as proof of identity. If these documents also contain your address details, then it would also be accepted as ‘proof of address’. If the document submitted by you for proof of identity does not contain address details, then you will have to submit another officially valid document which contains address details.

Q4. If I do not have any of the documents listed above to show my ‘proof of identity’, can I still open a bank account?

Response: Yes. You can still open a bank account known as ‘Small Account’ by submitting your recent photograph and putting your signature or thumb impression in the presence of the bank official.

Q5. Is there any difference between such ‘small accounts’ and other accounts

Response: Yes. The ‘Small Accounts’ have certain limitations such as:

  • balance in such accounts at any point of time should not exceed Rs.50,000
  • total credits in one year should not exceed Rs.1,00,000
  • total withdrawal and transfers in a month should not exceed Rs.10,000
  • Foreign remittances cannot be credited to such accounts.

Such accounts remain operational initially for a period of twelve months and thereafter, for a further period of twelve months if the holder of such an account provides evidence to the bank of having applied for any of the officially valid documents within twelve months of the opening of such account.

Q6. Would it be possible, if I do not have any of the officially valid documents, to have a bank account, which is not subjected to any limitations as in the case of ‘small accounts’?

Response: A normal account can be opened by submitting a copy of any one of the following documents as Proof of Identity (PoI):

(i) Identity card with person’s photograph issued by Central/State Government Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial Institutions;

or

(ii) letter issued by a gazetted officer, with a duly attested photograph of the person.

For Proof of Address (PoA), you may submit the following documents:

  1. Utility bill, which is not more than two months old, of any service provider (electricity, telephone, post-paid mobile phone, piped gas, water bill);
  2. Property or Municipal Tax receipt;
  3. Bank account or Post Office savings bank account statement;
  4. Pension or family Pension Payment Orders (PPOs) issued to retired employees by Government Departments or Public Sector Undertakings, if they contain the address;
  5. Letter of allotment of accommodation from employer issued by State or Central Government departments, statutory or regulatory bodies, public sector undertakings, scheduled commercial banks, financial institutions and listed companies. Similarly, leave and license agreements with such employers allotting official accommodation; and
  6. Documents issued by Government departments of foreign jurisdictions or letter issued by Foreign Embassy or Mission in India.

This, however, is not a general rule and it is left to the judgement of the banks to decide whether this simplified procedure can be adopted in respect of any customer.

Q7. If my name has been changed and I do not have any OVD in the new name, how can I open an account?

Response: A copy of the marriage certificate issued by the State Government or Gazette notification indicating change in name together with a certified copy of the ‘Officially Valid Documents’ in the prior name of the person is to be furnished for opening of account in cases of persons who change their names on account of marriage or otherwise.

Q8. Are banks required to categorise their customers based on risk assessment?

Response: Yes, banks are required to classify their customers into ‘low’, ‘medium’ and ‘high’ risk categories depending on their AML risk assessment.

Q9. Do banks inform customers about this risk categorisation?

Response: No

Q10. If I refuse to provide requested documents for KYC to my bank for opening an account, what may be the result?

Response: If you do not provide the required documents for KYC, the bank will not be able to open your account.

Q11. Can I open a bank account with only an Aadhaar card?

Response: Yes, Aadhaar card is accepted as a proof of both identity and address.

Q12. Is it compulsory to furnish Aadhaar Card for opening an account?

Response: No. you may furnish Aadhaar card or any of the other five OVDs for opening an account.

Q13. What is e-KYC? How does e-KYC work?

Response: e-KYC refers to electronic KYC.

e-KYC is possible only for those who have Aadhaar numbers. While using e-KYC service, you have to authorise the Unique Identification Authority of India (UIDAI), by explicit consent, to release your identity/address through biometric authentication to the bank branches/business correspondent (BC). The UIDAI then transfers your data comprising your name, age, gender, and photograph electronically to the bank. Information thus provided through e-KYC process is permitted to be treated as an ‘Officially Valid Document’ under PML Rules and is a valid process for KYC verification.

Q14. Is introduction necessary while opening a bank account?

Response: No, introduction is not required.

Q15. If I am staying in Chennai but if my proof of address shows my address of New Delhi, can I still open an account in Chennai?

Response: Yes. You can open a bank account in Chennai even if the address in the “Officially Valid Document” is that of New Delhi and you do not have a proof of address for your Chennai address. In such case, you can submit the officially valid document having your New Delhi address, together with a declaration about your Chennai address for communication purposes.

Q16. Can I transfer my existing bank account from one place to another? Do I need to undergo full KYC again?

Response: It is possible to transfer an account from one branch to another branch of the same bank. There is no need to undergo KYC exercise again for such transfer. However, if there is a change of address, then you will have to submit a declaration about the current address. If the address appearing in the ‘Officially Valid Documents’ (OVDs) submitted for proof of address is no longer your valid address (i.e. neither your permanent address nor your current address), you need to get an Officially Valid Document for Proof of Address containing the current or the permanent address and furnish the same within six months. In case of opening an account in another bank, however, you will have to undergo KYC exercise afresh.

Q17. Do I have to furnish KYC documents for each account I open in a bank even though I have furnished the documents of proof of identity and address?

Response: No, if you have opened a KYC compliant account with a bank, other than a ‘small account’, then for opening another account with the same bank, furnishing of documents is not necessary.

Q18. For which banking transactions do I need to quote my PAN number?

Response: PAN number needs to be quoted for transactions such as account opening, transactions above Rs.50,000 (whether in cash or non-cash), etc. A full list of transactions where PAN number needs to be quoted can be accessed from website of Income Tax Department at the following URL:
http://www.incometaxindia.gov.in/_layouts/15/dit/pages/viewer.aspx?grp=rule&cname=CMSID&cval=103120000000007541&searchFilter=&k=114b&IsDlg=0

Q19. Whether KYC is applicable for Credit/Debit cards?

Response: Yes. KYC exercise is necessary for Credit/ Smart Cards and also in respect of add-on/ supplementary cards. Since debit cards are issued only to account holders and accounts are opened only after the KYC procedure is completed, there is no need for separate KYC for issuing debit card.

Q20. I do not have a bank account. But I need to make a remittance. Is KYC applicable to me?

Response: Yes. KYC exercise needs to be done for all those who want to make domestic remittances of Rs. 50,000 and above and all foreign remittances.

Q21. Can I purchase a Demand Draft/Payment Order/Travellers Cheque against cash?

Response: Yes, Demand Draft/Payment Order/Travellers Cheques for below Rs.50,000/- can be purchased against cash and such instruments for Rs. 50000/- and above can be issued only by way of debiting the customer’s account or against cheques.

Q22. Do I need to submit KYC documents to the bank while purchasing third party products (like insurance or mutual fund products) from banks?

Response: Yes, all customers who do not have accounts with the bank (known as walk-in customers) have to produce proof of identity and address while purchasing third party products from banks if the transaction is for Rs.50,000 and above. KYC exercise will not be necessary for bank’s own customers for purchasing third party products. However, instructions to make payment by debit to customers’ accounts or against cheques for remittance of funds/issue of travellers’ cheques, sale of gold/silver/platinum and the requirement of quoting PAN number for transactions of Rs.50,000 and above will be applicable to purchase of third party products from bank by its customers as also to walk-in customers.

Q23. My KYC was completed when I opened the account. Why does my bank insist on doing KYC again?

Response: Banks are required to periodically update KYC records. This is a part of their ongoing due diligence on bank accounts. The periodicity of such updation varies from account to account depending on its risk categorisation by the bank. Periodic updation of records also helps prevent frauds in customer accounts.

Q24. What are the rules regarding periodic updation of KYC?

Response: Different periodicities have been prescribed for updation of KYC records depending on the risk perception of the bank. KYC is required to be done at least once in two years for high risk customers, once in eight years for medium risk customers and once in ten years for low risk customers. This exercise would involve all formalities for KYC normally taken at the time of opening the account.

While periodic updation of KYC has to be carried out in respect of customer categorised as ‘low risk’ also, if there is no change in status with respect to the identity (change in name, etc.) and/or address of such customers the banks may ask such customers to submit only a self-certification about ‘no-change in status’ at the time of periodic updation. Banks may not ask such customers to submit copies of ‘Officially Valid Documents’ for periodic updation.

In case of change of address of such ‘low risk’ customers, they could merely forward a certified copy of the document (proof of address) by mail/post, etc. Physical presence of such low risk customer is not required at the time of periodic updation.

Customers who are minors have to submit fresh photograph on becoming major.

Q25. What if I do not provide the KYC documents at the time of periodic updation?

Response: If you do not provide your KYC documents at the time of periodic updation, bank has the option to close your account. Before closing the account, the bank may, however, impose ‘partial freezing’ (i.e. initially allowing all credits and disallowing all debits while giving an option to you to close the account and take your money back). Later, even credits also would not be allowed. The ‘partial freezing’ however, would be exercised by the bank after giving you due notice.

Q26. How is partial freezing imposed?

Response: Partial freezing is imposed in the following ways:

  • Banks have to give due notice of three months initially to the customers before exercising the option of ‘partial freezing’.
  • After that a reminder for further period of three months will be issued.
  • Thereafter, banks shall impose ‘partial freezing’ by allowing all credits and disallowing all debits with the freedom to close the accounts.
  • If the accounts are still KYC non-compliant after six months of imposing initial ‘partial freezing’ banks shall disallow all debits and credits from/to the accounts, classifying them inoperative.

Meanwhile, the account holders can revive accounts by submitting the KYC documents.

Source :- www.rbi.org.in

Dec 092015
 

The Central Board of Excise and Customs vide its press release dtd 5th Dec 2015 has extended the due date for payment of Central Excise duty & Service tax for the month of Nov 2015, to 20th December 2015. This will be applicable in respect of Central Excise and Service Tax assessees in the State of Tamilnadu.

Apart from the above, the due date for filing the Central Excise return for the month of Nov 2015 has also been extended upto 31st December 2015.

The relevant press release of the CBEC is reproduced below:-

Download (PDF, Unknown)

 

Nov 152015
 

Swachh Bharat Cess (SBC) is effective from today (Nov 15, 2015).

Please Note the following :-

  1. SBC to be shown and charged Separately in the Service Invoice.
  2. Service Tax will be @ 14% & SBC  will @ 0.5%. Both needs to be shown separately in the Invoice. Do not show the Service Tax as 14.5%.
  3. As of now, there is no amendment passed in the CENVAT Credit rules. Hence, SBC Cannot be taken credit for payment of Service tax using CENVAT Credit.
  4. The Accounting Codes Notified are are follows in respect of SBC

i) Swacch Bharat Cess  – 0044-00-506 (Minor Head)

ii) Tax Collection – 00441493

iii) Other Receipts – 00441494

iv) Penalties – 00441496

 

Nov 062015
 

As per the Budget Proposals, Swacch Bharat Cess is leviable on Value of Services from the date of notification.

The Central Government vide its Notification No 22/2015 dtd 6th Nov 2015 has notified that Swacch Bharat cess will be leviable on taxable value of all services @ 0.5%.

This is w.e.f 15.11.2015.

It has to be noted that unlike the earlier cess (ie.,) Educational Cess & Secondary Higher Educational Cess , which were leviable on Service Tax, Swacch Bharat Cess is leviable on Value of Taxable Services.

Hence effectively, the Service Tax Payable on Services w.e.f. 15th Nov 2015 will be 14.5%

The relevant notification is reproduced below :-

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)

New Delhi, the 6th November, 2015

 

Notification No. 22/2015-Service Tax

G.S.R. —(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) read with sub-section (5) of section 119 of the Finance Act, 2015 (20 of 2015), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all taxable services from payment of such amount of the Swachh Bharat Cess leviable under sub-section (2) of section 119 of the said Act, which is in excess of Swachh Bharat Cess calculated at the rate of 0.5 percent. of the value of taxable services:

Provided that Swachh Bharat Cess shall not be leviable on services which are exempt from service tax by a notification issued under sub-section (1) of section 93 of the Finance Act, 1994 or otherwise not leviable to service tax under section 66B of the Finance Act, 1994.

This notification shall come into force from the 15th day of November, 2015.

 [F.No. 354/129/2015 – TRU]

 

(K. Kalimuthu)
Under Secretary to the Government of India

 

 

Nov 052015
 

The Reserve Bank of India (RBI) in consultation with Government of India (GOI) has announced about the issue of “Sovereign Gold Bonds” .

The highlights and features of this Sovereign Gold bonds (2015-16) is as follows :-

Sl NoItem/FeatureDetails
1Date of Issue of BondsThese bonds will be issued on Nov 26 2015
2Application PeriodApplication will be accepted from 5th Nov 2015 to 20th Nov 2015
3Place of SalesThese bonds will be sold through banks and designated post offices, as may be notified
4Name of the BondSovereign Gold Bond
5IssuanceTo be issued by Reserve Bank India on behalf of the Government of India
6Who can apply?Resident Indian entities including Individuals, HUFs, Trusts, Universities, Charitable Institutions
7DenominationMultiples of Grams of Gold. Minimum 2 Grams and maximum 500 grams per person per financial year
8Tenor of the BondThe Tenor of the bond will be 8 years, but there will be an exit option at the end of 5 years.
9Issue PriceThe present issue is priced at 2684/- at present and the further issues to be priced at rates to be notified based on the prevailing market rate.
10Payment optionFund Transfer/Cash/Cheque/Demand Draft.
11Form of CertificateThe investors will be issued a Stock/Holding Certificate. These can be converted into demat form also.
12Redemption PriceThe redemption price will be in Indian Rupees based on previous week’s (Monday-Friday) simple average of closing price of gold of 999 purity published by IBJA.
13Rate of InterestThe investors will be compensated at a fixed rate of 2.75 per cent per annum payable semi-annually on the initial value of investment.
14CollateralBonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
15KYC RequirementsKnow-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required.
16Tax TreatmentThe interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961) and the capital gains tax shall also remain same as in the case of physical gold.
17TradeabilityBonds will be tradable on exchanges/NDS-OM from a date to be notified by RBI.

Source :- www.rbi.org.in

 

Jul 302015
 

The Central Board of Direct Taxes (CBDT) has notified the Cost Inflation Index (CII) for use in Indexation for computing the Capital Gains during the year 2015-16. The Cost Inflation Index has been notified as

“1081”

The relevant Notification is reproduced below :-

SECTION 48, EXPLANATION (v) OF THE INCOME-TAX ACT, 1961 – CAPITAL GAINS – COMPUTATION OF – NOTIFIED COST INFLATION INDEX FOR FINANCIAL YEAR 2015-16

In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (42 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes published in the Gazette of India, Extraordinary, vide number S.O. 709(E), dated the 20th August, 1998, namely:—

2. In the said notification, in the Table, after serial number 34 and the entries relating thereto, the following serial number and entries shall be inserted, namely:—

Sl. No.          Financial Year                 Cost Inflation Index

(1)                         (2)                                     (3)

“35                   2014-15                              1081”

 

The Cost Inflation Index from the year 1981-82 to 2015-16 is provided in the below link :

Cost Inflation Index from 1981-82 to 2015-16

 

 

Jul 012015
 

The following are the Various Statutory Obligations for the month of July 2015.

Payment of Service Tax

The last date for Payment of Service tax pertaining to the month of June  2015 (Corporate Assessees) , Apr-June 2015 (For other assessees) is 5th of July 2015. In case of e-payment, the due date is 6th of July 2015.

In case of payment by Challan GAR 7, click here to download the Challan

In case of e-payment of Service Tax, Click here to make the payment online.

Remittance of Tax Deduction at source

The due date for remitting Tax Deducted at Source (TDS) on Salary & Non-salary payments during the month of June 2015 is 7th of July 2015.

Click here to pay the TDS online.

Quarterly return in respect of Tax Deducted at Source for the Quarter 1 (2015-16)

The Quarterly Return in respect of Tax Deducted at Source in respect of Salaries / Non-Salary Payments has to be filed on or before 15th of July 2015.

Monthly Return and Payment of Tax under TNVAT

The monthly returns filing and the payment of TNVAT has to be complied on or before 20th of July for the month of June 2015.

Click here to send your enquiries/suggestions , if any.

Jun 292015
 

The Income-tax Department vide Order under Section 119 of the Income-tax act,1961 dtd 10th June 2015 (F.No.225/154/2015/ITA.II) has extended the due date for filing the return of income in respect of assessees whose accounts are not required to be audited (including assessees having only salaried income). As per the said order, the last date of filing the return of income in respect of these assessees has been extended from 31st July 2015 to 31st August 2015 in respect of the year 2014-15 (Assessment year 2015-16).

The relevant order of the Income-tax department is reproduced below :-

Download (PDF, Unknown)

May 202015
 

The following are few of the important changes will be applicable from 1st June 2015 in respect of Service Tax :-

1) Rate of Service tax has been changed from 12% to 14%

2) Education Cess & Secondary Education Cess removed

3) The definition of ‘chit’ has been omitted from the abatement notification 26/2012

4) Negative List – Process amounting to manufacture or production of goods excludes alcoholic liquor for human consumption withdrawn.

5) Admission to exhibition of cinematograpic film, circus, dance, theartical performance, including drama or ballet, recognised sporting event exempted.

6) Award function, concert, pagent, musical performance, sporting event other than recognised sporting event exempted provided consideration is not more than Rs. 500/-

 

 

Contact us @ 91-44-45540180 / 91-91505 75680. For Quick Response email :- sridharca@gmail.com

Subscribe to our email alerts and get updates on taxation,company law,VAT,RBI Guidelines, Service Tax, etc., instantly in your mail box..
LinkedIn Auto Publish Powered By : XYZScripts.com

Subscribe to our Email alerts for getting regular updates on Income-tax, Corporate Law, Tax Planning, VAT , Service Tax,Investments, RBI Guidelines, VAT Laws , etc.,

Enter your email address: Delivered by FeedBurner   
%d bloggers like this: