Banking Awareness 29th November 2016 | Financial Affairs 29th November 2016

IBA asks banks to accept tax payment due under Income Declaration Scheme in old 500 notes

Proposal on old notes to be payable for tax.

• With the last date for paying the first installment of due taxes and penalty under the one-time black money window IDS nearing, banks have been asked to accept the old 500 rupee notes from the declarants under the scheme and not seek the source of funds from them.
• The Indian Banks’ Association (IBA) has written a letter to all its members that RBI guidelines clearly sets out that banks can accept old 500 rupee denomination notes for payment of taxes and penalties.

IBA

Formed on 26 September 1946.

RBI relaxes withdrawal limits for deposits made in legal tender

RBI has relaxed weekly withdrawal limits

RBI has relaxed weekly withdrawal limits in cases where deposits are made in current legal tender notes and said, the decision has been taken as certain depositors are hesitating to deposit money in view of current limits on cash withdrawals.

50,000 rupees

The withdrawal limit for current account.

CRR hurdle for lending rate cut

 

Banks scramble to manage liquidity, want compensation

• Upset by the Reserve Bank of India’s (RBI) decision to charge the entire deposits that banks collected between September 16 and November 11 as a reserve requirement, bankers have said they would not be able to cut lending rates as much as was expected of them.
• RBI had said an incremental cash reserve ratio (CRR) of 100% would need to be maintained on deposits collected during the period mentioned above.

8 lakh crore

CRR requirements for Banks.

Banks reissuing soiled notes to beat cash crunch

 

Most banks hold soiled notes in their lockers/chests for remitting to RBI

• In order to tide over the currency shortage at branch level in urban and rural pockets, public and private sector banks have started issuing soiled but issuable legal tender to their customers.
• The RBI had directed all banks to exchange a maximum of 20 pieces of soiled notes with a limit up to ₹5,000 per day.

Soiled currency notes

₹50, ₹20 and ₹10 denomination back into circulation.

Customs clearance made easy with no paper documents

Importers and exporters will not have to submit paper documents

• Importers and exporters will not have to submit paper documents for customs clearance from December this year, as part of the government efforts to improve the ease of doing business.
• Finance Ministry said that this will help the importers and exporters to move towards electronic messaging and paper–free environment.

GAR7

Challan document for payment of service tax.

IT capital Bengaluru plans to set up re-skilling workshops for engineers

Karnataka to encourage 20,000 start-ups in next 5 years

• The IT capital of the country plans to set up re-skilling workshops for engineers because of increase in automation and changing technology requirements from companies.
• Karnataka industries minister, RV Deshpande told that Creation of jobs is getting difficult and in this light setting up of an incubator in tier II cities where we feel that the talent can be at par with metros

Rs.50 lakh

Amount of funding to be given to new Ideas.

Excise duty exemption for PoS devices

Benefit to be available only till March 31

• In what is seen as yet another big push of the Modi-led government towards digital economy, the Centre has provided excise duty exemption on Point-of-Sale (PoS) devices manufactured in the country.
• As on date, the total PoS machines in use is only about 1.2 million. There has been very tepid growth in the PoS universe.

AP Hota

Managing Director & CEO, National Payments Corporation of India

Come clean, pay 50%; caught hiding, lose 85%

Proposed tax laws impose harsh penalties

• Three weeks into the dramatic demonetisation move, the Narendra Modi government is pulling out yet more big guns in the battle against black money
• Finance Minister Arun Jaitley introduced a Taxation Laws (Second Amendment) Bill in Lok Sabha, which proposes a new voluntary disclosure and investment scheme, named Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016

PMGKY

Pradhan Mantri Garib Kalyan Yojana

Indian IT firms to up campus hiring in US

Fearing tighter visa regime

• Anticipating a more protectionist US technology visa programme under a Donald Trump administration, India’s $150-billion IT services sector will speed up acquisitions in the US and recruit heavily from college campuses there.
• Indian companies, including Tata Consultancy Services, Infosys and Wipro, have long used H-1B visas to fly computer engineers to the US, their largest overseas market, temporarily to service clients.

500-700

Infosys typically recruits 500-700 people each quarter in the US and Europe

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