Bandhan Bank reduces microfinance loan rate

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Bandhan Bank on Monday reduced its lending rate for micro loans by 0.6 per cent, bringing down the interest to 19.9 from 20.5 per cent.

This is the third time the bank has reduced its interest rate for such consumers. Immediately after the microfinance institution transformed itself into a bank last August, it had slashed the rate by 1.4 percentage points or 140 basis points (bps), effectively reducing the rate to 21 per cent. In April this year, the rate was reduced by another 0.5 per cent or 50 bps for micro-small-scale sectors, making it 20.5 per cent.

With the latest round of lending rate reduction, Bandhan Bank has pared is micro loan rate by 2.5 percentage points or 250 bps in three stages in less than 11 months since it started operations as a universal bank.

Chandra Shekhar Ghosh, the bank’s chairman and managing director, said: “With the transformation of the micro-lending institution into a bank, the cost of funds has come down so we can afford to lower the interest rates. This reduction will benefit the micro-small scale industry who finds it tough to arrange for their funds.”

Since its launch, the bank has mobilised close to Rs 15,000 crore of deposits.

According to Ghosh, this will not only help attract more people opting for loans, but it will ease their financial burden as well. The cost impact on the bank is stated to be favourable with this decision.

Micro loans are generally granted for 1-2 years.

Currently, Bandhan Bank operates across 29 states and Union Territories through a network of 688 branches, 2,022 doorstep service centres and 237 ATMs with more than 8.77 million customers being served by a team of 21,000 employees. The Kolkata-headquartered bank’s savings bank account interest rate is six per cent for balances above Rs 1 lakh and 4.25 per cent for balances up to Rs 1 lakh. For term deposits, the maximum interest rate offered is 8.25 per cent for one to three years, with an additional 0.5 per cent for senior citizens.

Source: http://www.business-standard.com/article/finance/bandhan-bank-reduces-microfinance-loan-rate-116071800513_1.html

ADB trims developing Asia growth forecast; India on track

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ADB today marginally cut economic growth projection for Asia and Pacific region for 2016, though India is likely to meet 7.4 per cent and 7.8 per cent growth forecast for this and the following year.

Asian Development Bank said it has cut its 2016 growth projection for developing economies in Asia and the Pacific to 5.6 per cent from earlier forecast of 5.7 per cent.

“South Asia, meanwhile is expected to be the fastest growing subregion, led by India, whose economy has shrugged off global headwinds and is on track to meet ADB’s March fiscal year 2016 (year to March 2017) projected growth target of 7.4 per cent, supported by brisk consumer spending and an uptick in the rural economy”, ADB said in a supplement to its Asian Development Outlook 2016 report.

“Although the Brexit vote has affected developing Asia’s currency and stock markets, its impact on the real economy in the short term is expected to be small,” said Shang-Jin Wei, ADB’s Chief Economist.

However, in light of the tepid growth prospects in the major industrial economies, policy makers should remain vigilant and be prepared to respond to external shocks to ensure growth in the region remains robust,” Wei said.

ADB said it now forecasts 2016 growth for the developing economies at 5.6 per cent, below its previous projection of 5.7 per cent. For 2017, growth is seen unchanged at 5.7 per cent.

Growth in 2016 and 2017 is led by South Asia, and India in particular, which continues to expand strongly, while China is on track to meet earlier growth projections, it said.

In Southeast Asia, growth projections for the subregion in the 2016 and 2017 remain unchanged at 4.5 per cent and 4.8 per cent, respectively with solid performances by most economies in the first half of 2016 driven by private consumption.

The exception was Vietnam where the economy came under pressure from a worsening drought that caused a contraction in the agriculture sector, it added.

ADB said growth in Asia and the Pacific’s developing economies for 2016 and 2017 will remain solid as firm performances from South Asia, East Asia and Southeast Asia help offset softness from the US economy, and near-term market shocks from the Brexit vote.

It has projected inflation for developing Asia at 2.8 per cent for 2016 and 3 per cent or 2017- a 0.3 percentage point rise for each year from the previous forecasts.

“The rise is largely due to a recovery in oil and food prices,” it added.

The Manila headquartered ADB is owned by 67 members – 48 from the region. In 2015, ADB assistance totalled $27.2 billion, including co-financing of $10.7 billion.

Source :
http://economictimes.indiatimes.com/articleshow/53263953.cms

CBDT tightens scrutiny rules for assessing officers

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If you have received an income-tax scrutiny notice, there’s no need to be unduly fearful as the government has sought to protect you against possible harassment.

That’s in line with Prime Minister Narendra Modi’s recent message to the tax department that people should not fear such persecution.

The Central Board of Direct Taxes (CBDT) has made it more difficult for assessing officers to expand the scope of a ‘limited’ scrutiny to a complete one.

They will also have to substantiate any contention of possible under-reporting of income and loss of taxes, apart from requiring approval of senior officers.

The guidelines issued recently by the apex direct taxes body call for assessing officers to form a “reasonable view” that there is a possibility of income under-assessment, said an official aware of the move.

Besides, when manually selecting cases for scrutiny in the current financial year, the threshold for metros has been raised to Rs 25 lakh from Rs 10 lakh for instances involving additions in the earlier year.

That is, if an assessing officer finds that some income should have been added to the declaration, the return can’t be opened for scrutiny if the incremental amount is less than Rs 25 lakh.

In the past two years, the government has sought to make the department’s revenue collection efforts less aggressive and move away from what’s been dubbed by some as tax terrorism.

Modi delivered much the same message to tax officials at a meeting last month. Processes are being made less discretionary and increased reliance is being placed on information technology.

E-scrutiny, which allows payees to reply to scrutiny questions over email in metros, has also been started. These latest directives add to measures aimed at ensuring that tax officers don’t embark on fishing expedition even in cases of limited scrutiny under the Computer Aided Scrutiny Selection (CASS) where the perceived risk area is limited to only that particular transaction.

Tax experts welcomed the move. Together with the new scrutiny formats, this will lead to greater accountability of the tax department, said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP, chartered accountants.

“This would help save precious resources of the department, lead to early closure of assessments and prevent unnecessary harassment,” he said.

Source :  http://economictimes.indiatimes.com/articleshow/53257731.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

 

Central Board of Direct Taxes (CBDT) signs seven Unilateral Advance Pricing Agreements (APAs)

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The Central Board of Direct Taxes (CBDT) entered into seven (7) Unilateral Advance Pricing Agreements (APAs) today, i.e., 18th July, 2016, with Indian taxpayers. Some of these agreements also have a Rollback” provision in them.

 

The APA Scheme was introduced in the Income-tax Act in 2012 and the Rollback” provisions were introduced in 2014. The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance. Since its inception, the APA scheme has attracted tremendous interest and that has resulted in more than 700 applications (both unilateral and bilateral) having been filed in just four years.

 

The 7 APAs signed today pertain to various sectors of the economy like banking, Information Technology and Automotives. The international transactions covered in these agreements include software development Services, IT enabled Services (BPOs), Engineering Design Services and Administrative & Business Support Services.

 

With todays signings, the total number of APAs entered into by the CBDT has reached 77. This includes 3 bilateral APAs and 74 Unilateral APAs. In the current financial year, a total of 13 Unilateral APAs have been entered into so far.

 

The progress of the APA Scheme strengthens the Governments mission of fostering a non-adversarial tax regime. The CBDT expects more APAs to be concluded and signed in the near future.

Source: http://www.business-standard.com/article/government-press-release/central-board-of-direct-taxes-cbdt-signs-seven-unilateral-advance-pricing-116071800966_1.html

Black money: No cut in tax, warns CBDT

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The government on Thursday clarified that tax paid under the ongoing amnesty scheme for persons with undisclosed domestic assets can’t be reduced to an effective 31% from 45% prescribed by enjoying immunity not only for such income declared but also for the other undisclosed income from which the tax is paid.

The Income Disclosure Scheme (IDS) 2016 is the latest in a series of such windows opened by governments to address the scourge of black money and the second by the Modi government.

The government on Thursday clarified that tax paid under the ongoing amnesty scheme for persons with undisclosed domestic assets can’t be reduced to an effective 31% from 45% prescribed by enjoying immunity not only for such income declared but also for the other undisclosed income from which the tax is paid.

The tax department said its earlier answer to a query in this regard, where it said after a valid declaration is made under the scheme, it won’t make any “enquiry in respect of sources of income, payment of tax, surcharge and penalty”, was “limited to the conduct of enquiry by the department”; the clarification, the department said, was in no way intended to modify the tax rate.

The Income Disclosure Scheme (IDS) 2016 is the latest in a series of such windows opened by governments to address the scourge of black money and the second by the Modi government.

The government had found response to an earlier amnesty scheme for Indians with undisclosed assets overseas tepid. The IDS, under which declarations can be made between June 1 and September 30, 2016, provides persons with hidden income a chance to declare such income/assets and pay tax, surcharge and penalty totalling 45% and enjoy immunity.

What necessitated the latest clarification by the I-T department is an interpretation by sections of analysts that its assurance that no enquiry will be made into “the sources of income, payment of tax” allowed one to pay the 45% tax on the fair market value of the declared asset (immovable property) and claim immunity with respect to not only this asset but an additional one equivalent to 45% of the declared asset as “the source of payment of tax”.

Effectively, this would have reduced the tax rate (including surcharge and penalty) on the assets declared plus the source of income for tax payment to 31%. However, the department has now said this has never been the intention.

Giving the example of a person declaring Rs 100 lakh as undisclosed income (as fair market value of immovable property as on June 1, 2016) under the scheme and paying the stipulated 45% tax on it from her “other undisclosed income”, the department has said:

“To get immunity under the scheme in respect of the entire undisclosed income of R145 lakh, the declarant has to declare undisclosed income of R145 lakh (R100 lakh being the undisclosed income represented by the immovable property and R45 lakh being the payment made from undisclosed income), and pay tax, surcharge, penalty under the scheme amounting to R65.25 lakh, ie, 45% of R145 lakh.”

Meanwhile, in recognition of the concerns raised by many quarters that the initial deadline (November 30, 2016) for making payments under the scheme was very tight and force people to make distress sale of assets, the government has revised the schedule for payments:

As per the new schedule, a minimum amount of 25% of the tax, surcharge and penalty will have to be paid by November 30, 2016; a further amount of 25% of the tax, surcharge and penalty by March 31, 2017; and the balance on or before August 30, 2017.

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 Source: http://www.financialexpress.com/economy/tax-outgo-amnesty-scheme-cant-reduced-31per-cent-cbdt/317162/

Cisco readies plan to set up manufacturing plant in India

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Technology major Cisco is working on a plan to establish a manufacturing facility in India and is in talks with the government for the same, a top official of the company has said.

Terming India as one of its “best bases”, Cisco CEO Chuck Robbins said the company is “very actively involved in India across the board” and working on a broader base from digitisation to smart cities in the country.

He was interacting with reporters at the Cisco Live 2016 annual conference here.

On expansion plans in India, Robbins said, “… Prime Minister Narendra Modi is very committed to manufacturing. We worked through a business case and… presented to him that… That was fantastic and we have been moving forward.”

He added that the company is moving forward on various healthcare and security initiatives, with a lot happening on the digital cities front.

Cisco is engaged in over 15 smart cities projects in the country. The company is also working with Andhra Pradesh government for rolling out Bharat Net.

The company views India as one of the best bases and is focusing a lot on education as well, Robbins added.

The country is home to Cisco’s second-largest site, which has about 11,000 employees. It is offering education to 24,000 students spread across 47 schools.

Source : http://economictimes.indiatimes.com/articleshow/53187492.cms

 

E-filing: ATM-based Income Tax Return (ITR) validation facility enhanced

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The Income Tax department has widened the ATM-based validation system for filing e-ITRs by taxpayers with the inclusion of Axis Bank, after SBI, as part of its measure to enhance the paperless regime of filing the annual I-T returns.

“Now, Electronic Verification Code (EVC) can also be generated by pre-validating Automated Teller Machine (ATM) provided by Axis Bank. SBI had activated the facility last month. Other banks are also expected to join soon,” a senior I-T department official said.

In May this year, the department had launched the bank account-based validation facility in this regard for those who have not availed the internet banking facility.

 

The new facility is available on the official e-filing portal of the department- http://incometaxindiaefiling.gov.in/ and will work by using the One Time Password (OTP) verification system as activated by the department last year by using the Aadhaar number.

These measures are used to validate the e-ITR so that the taxpayer does not take the trouble of sending the paper-based ITR-V by post to the Bengaluru-based Central Processing Centre (CPC) for final resolution and processing.

The new ITRs have been notified early this year and taxpayers can e-file their ITRs till July 31.

ITR-1 can be filed by individuals having income from salaries, one house property and from other sources including interest.

ITR-2 is filed by Individuals and Hindu Undivided Families (HUFs) not having income from business or profession.

ITR-2A is filed by those individuals and HUFs who do not have income from business or profession and capital gains and who do not hold foreign assets.