Banks can accept tax dues in cash under IDS: RBI

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The Reserve bank of India (RBI) on Thursday directed banks to accept tax dues in cash under the domestic black money declaration scheme which closes on September 30. Under the Income Declaration Scheme, 2016, which came into effect on June 1, one can come clean by paying tax, penalty and cess totalling 45 per cent of the undisclosed income.

It was brought to RBI’s notice by the government that “banks are hesitant” in allowing deposit of large amounts of cash by declarants under the scheme.


“We advise that banks must invariably accept cash, irrespective of amount, over the counters from all declarants who desire to deposit cash at the counters, including deposits under the above Scheme through challan ITNS- 286,” the central bank said.

The banks, however, have to comply with the Know Your Customer requirements.

Source: http://www.business-standard.com/article/pti-stories/banks-can-accept-tax-dues-in-cash-under-ids-rbi-116090801067_1.html

CBDT extends due date for filing of Income Tax Returns

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The Central Board of Direct Taxes (CBDT) has announced extension for the due date for filing of Income tax returns by tax payers whose accounts are required to be audited under the Income Tax Act is the 30th September of the following year.

The tax payers whose business receipts exceed by Rs 1 crore or professional receipts exceed Rs 25 lakh during the previous year 2015-16 are required to file an Income Tax return accompanied by an audit report by the above mentioned due date.

However, taking into consideration that the last date for making declarations under the Income Declaration Scheme 2016 is also 30th September, 2016, the Central Board of Direct Taxes has decided to extend the last date for such returns which were due on  September 30, 2016 to October 17, 2016 in order to remove inconvenience and to facilitate ease of compliance.

The Order of CBDT vide F.No.225/195/2016-ITA-H dated 9 th September, 2016, under Section 119 of the Income Tax Act,1961and the Press release from the Ministry of Finance extending the due date to 17 October, 2016 is as below.

 

F.No.225/195/2016-ITA-H
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

North Block, ITA.II Division New Delhi, the 9th September, 2016

Order under Section 119 of the Income-tax Act, 1961

The last date for making declarations under the Income Declaration Scheme 2016 is 30th September, 2016 which coincides with the last date of filing Income-tax returns by the tax payers whose accounts are audited and who are required to furnish the returns of income for Assessment Year 2016-17 by 30th September, 2016 as per provisions of section 139 (1) of Income tax Act, 1961.

In order to remove inconvenience and to facilitate ease of compliance, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income-tax Act, 1961, hereby extends the ‘due-date’ for furnishing such returns of Income from 30th September, 2016 to 17th October, 2016, in case of tax payers throughout India, who are liable to furnish their Income-tax return by the said ‘due-date’.

(Deepshikha Sharma)

Director to the Government of India

============================================

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

 

New Delhi, 9th September, 2016

 

Press Release

 

Sub :- CBDT Extends due date for filing of Income Tax Returns – reg

 

The due date for filing of Income tax returns by tax payers whose accounts are required to be audited under the Income Tax Act is the 30th September of the following year. The tax payers whose business receipts exceed Rupees One Crore or professional receipts exceed Rupees twenty-five Lakh during the previous year 2015-16 are required to file an Income Tax return accompanied by an audit report by the above mentioned due date.

 

However, taking into consideration that the last date for making declarations under the Income Declaration Scheme 2016 is also 30th September, 2016, the Central Board of Direct Taxes has decided to extend the last date for such returns which were due on 30th September, 2016 to 17th October, 2016 in order to remove inconvenience and to facilitate ease of compliance.

 

(Meenakshi J Goswami)

Commissioner of Income Tax

(Media and Technical Policy)

Official Spokesperson, CBDT.

Source: Central Board of Direct Taxes, Government of India

SEBI seeks major changes to new KYC process

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The Securities and Exchange Board of India (Sebi) has sought major changes in the newly implemented central Know Your Customer (KYC) process. The regulator has written that several market intermediaries such as mutual funds (MFs), brokerages and even banks were facing issues adhering to the new central KYC process.

Starting August 1, the government has shifted to the central KYC process, to enable common and one-time KYC for all financial market intermediaries. Central KYC is being implemented through the Central Registry of Secularisation and Asset Reconstruction and Security Interest of India (CERSAI), an online registry promoted by the central government.

In a recent letter, the capital market regulator has demanded a slew of changes, including more time between opening a new account and making an electronic entry with the central KYC registry.

KEY SEBI DEMANDS FROM FINMIN ON KYC
Extend time-period for compliance

Make Sebi-registered know your customer (KYC) agencies a pass-through link between market intermediaries and CERSAI

Exempt existing individual clients from fresh KYC process

Use UIDAI to enable e-KYC

Allow KRAs to do KYC on behalf of mutual funds

According to the norms, every financial institution needs to file an electronic copy of a client’s KYC records with the central registry within three days of an account being opened.

In a circular in July, Sebi had mandated all market intermediaries, including brokers and MFs, to make new KYC submissions to CERSAI. Several market players made representations to Sebi, highlighting the operational difficulties under the new system.

“It is a cumbersome job, right from disclosure to verification. We have sought extension in the timeline as deadline is not sufficient to meet the requirements,” said Nilesh Shah, managing director, Kotak AMC.

To sync the new system with the earlier common KYC, Sebi has also suggested to accept KYC Registration Agencies (KRAs) as a pass-through entity between registered intermediaries and CERSAI. Under the previous KYC regime, KRAs were the most important part of the system.

To avoid duplication of work, Sebi also wants to exempt individual clients whose accounts are opened before August 1 from undergoing KYC process all again. According to Sebi, KYC details of these clients are already with the KRAs and can be used even when they approach other registered intermediary for entering into account-based relationship, Sebi said in a letter to ministry.

Sebi had allowed interportability among KRAs, to enable sharing of information among them based on client’s permanent account number (PAN). To enable online KYC, Sebi has recognition of the Unique Identification Authority of India (UIDAI). The same would leverage the Aadhaar database and ease the process of doing business, said Sebi.

Apart from this, the regulator has also asked the ministry to allow share transfer agents to do KYC on behalf of mutual funds. However, the responsibility of KYC will continue to remain with the mutual fund on whose behalf the registrar carries out the KYC, noted Sebi.

 

Source: http://www.business-standard.com/article/markets/sebi-seeks-major-changes-to-new-kyc-process-116090300579_1.html

Tax dept not to take action on cash deposits made after declaring income under IDS

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The government has said no adverse action will be taken by Financial Intelligence Unit or the income-tax department solely on the basis of the information regarding cash deposit made consequent to the declaration under the black money scheme.

 

Credit for unclaimed tax deducted at source made on declared income shall be allowed and no capital gains tax or TDS (tax deducted at source) shall be levied on transfer of declared benami property from benamidar to the declarant without consideration.

 

To reassure people about the Income Declaration Scheme, 2016, which will close on September 30, the Central Board of Direct Taxes has come out with sixth set of clarifications in form of frequently asked questions.

 

It has again assured those wanting to declare unaccounted assets or income that information in respect of a valid declaration would be confidential and not be shared with any law enforcement agency nor shall be enquired into by the income-tax department itself.

 

The scheme provides an opportunity to persons who have not paid full taxes in the past to come forward and declare their undisclosed income and assets. The scheme came into effect on June 1, 2016 and is open for declarations up to September 30, 2016.

 

A total tax of 45 per cent including surcharge and penalty has to be paid.

 

The amount payable under the scheme can be deposited in instalments. As per the latest clarification, assets declared under the scheme are to be valued at cost of acquisition or at fair market price as on June 1, 2016 as determined by the registered valuer, whichever is higher.

 

However, an option for valuation of registered immovable property on the basis of stamp duty value of acquisition adjusted with the Cost Inflation Index has also been provided.

 

The amount of fictitious liabilities recorded in audited balance sheet and not linked to acquisition of an asset can be disclosed under the scheme as such. The period of holding of declared registered immovable assets shall be taken on the basis of the actual date of registration.

 

The valuation report obtained by the declarant from a registered valuer shall not be questioned by the department. However, the valuer’s accountability will remain, it said.

Source: http://economictimes.indiatimes.com/wealth/tax/tax-dept-not-to-take-action-on-cash-deposits-made-after-declaring-income-under-ids/articleshow/54022802.cms

British Columbia first foreign govt to issue masala bond

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Canada’s Province of British Columbia has become the first foreign government entity to issue a masala bond by floating Rs 500 crore rupee denominated overseas bonds on the London Stock Exchange.

The bond raised $75 million (about Rs 500 crore) with 6.62 per cent semi-annual yield, securing high-quality investor support from across Europe, Asia and America. It is a AAA rated bond by the three major rating agencies and will mature on January 9, 2020, The Province of British Columbia said in a statement on Friday.

Masala Bonds are rupee-denominated bonds issued to overseas buyers, aimed at investments into India’s infra needs.

The proceeds of the bond were immediately reinvested in HDFC’s second masala bond listing on the exchange.

India’s mortgage lender Housing Development Finance Corporation (HDFC) had on Friday said The Province of British Columbia has subscribed the entire of its second tranche of Rs 500 crore rupee denominated overseas bonds.

“This transaction is a landmark deal as it opens up a new market for sovereign issuers and investors,” HDFC Ltd Chairman Deepak Parekh said in a statement on Friday.

“The pioneering simultaneous transactions on the LSE confirm RBI Governor Rajan’s recent statement that Masala bond issuances reflect ‘a coming of age of Indian debt’,” said Nikhil Rathi, CEO of London Stock Exchange.

The latest issuances bring the total number of masala bonds listed on the LSE to 33, raising the equivalent to about $3.86 billion for Indian infrastructure.

British Columbia Minister of Finance Michael de Jong said: “The international reputation and platform provided by the LSE sets the stage for more Masala bond issuances from around the world and will be most welcome for sustaining the Masala bond market’s success.”

HDFC Ltd, one of India’s leading banking and financial services companies, had listed the world’s first masala bond by an Indian corporate in July.

Source: http://www.business-standard.com/article/markets/british-columbia-first-foreign-govt-to-issue-masala-bond-116090200652_1.html

Second instalment of FDI reforms cleared

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The Union Cabinet today approved the second instalment FDI of reforms, which the Centre has announced in June covering diverse sectors including Defence, food-processing, single brand retail and broadcasting.

The ex-post-facto approval for the reforms in the Foreign Direct Investment regime was given by the Cabinet in its meeting on Wednesday.

Under the amended rules, 100 per cent FDI with government approval is permitted for trading, including through e-commerce, in respect of food products manufactured and/or produced in India.

In Defence, foreign investment beyond 49 per cent is permitted through the approval route wherever it is likely to result in access to modern technology or for other reasons to be recorded. The state-of-the-art technology condition has been dropped.

In the broadcasting sector, the amendments allow 100 per cent FDI via the automatic route, up from 49 per cent.

To encourage investments in pharmaceuticals, the amendments allow 74 per cent FDI under the automatic route in the brownfield (existing projects) segment. Earlier, all FDI in brownfield projects had to come in through the government approval route.

Similarly, in the civil aviation sector, 100 per cent FDI under the automatic route has been allowed in brownfield projects as against 49 per cent earlier.

Local sourcing norms have been relaxed up to three years, with government approval for entities undertaking single brand retail trading of products having state-of-the-art and cutting edge technology. Thereafter, sourcing norms would be applicable.

Source: http://www.thehindubusinessline.com/todays-paper/tp-news/second-instalment-of-fdi-reforms-cleared/article9057070.ece