RBI-NBFCs: Medium Term Prospects (Shri R. Gandhi, Deputy Governor – December 21, 2015 – Summit organized by Confederation of Indian Industry, Mumbai)

I am happy to be addressing this first ever CII Summit on Non-Banking Financial Companies (NBFCs) to deliberate on “Regulatory Paradigm & Contours of Growth – Vision 2020”. The context in which such a Summit has been organised is also very apt. World over, there is an awakening, post the great financial crisis of 2008, about the existence, contribution, magnitude, significance and risks of non-banking financial sector. From a benign neglect of or indifference to this sector, either by default or by deliberate choice, the world has now become anxious and seriously concerned about it. This awakening has resulted in enhanced attention, monitoring and regulation of this sector. Therefore, it is very apt that the sector has also noticed it and desires to seriously discuss its prospects in the changed scenario and realign itself with a renewed vision.

Global Shadow Banking Monitoring Report of FSB – 2015

2. The Financial Stability Board (FSB), came into existence post financial crisis, when the Leaders of the G20 countries decided to convert the then existing Financial Stability Forum into FSB to address vulnerabilities and to develop and implement strong regulatory, supervisory and other policies in the interest of financial stability. The FSB has been monitoring the shadow banking sector closely for the past five years and publishing its monitoring report. I will like to highlight some of the key findings from its latest report, as they will provide a worthwhile background setting for your deliberations today.

3. The 2015 Report of the FSB presents the results of the fifth annual monitoring exercise using data as of end 2014 for 26 jurisdictions, which together account for about 80% of global GDP and 90% of global financial system assets. The report includes the results of the macro-mapping, including size and growth trends of the Monitoring Universe of Non-banking Financial Institutions (MUNFI) estimate, cross-jurisdiction analysis, trends in sub-sectors and interconnectedness with the banking system. It also discusses a narrower measure of shadow banking, which is constructed by filtering out non-bank financial activities that have no direct relation to credit intermediation (e.g. Equity Investment Funds) or that are already prudentially consolidated into banking groups. As a result, it is believed that this narrower measure more accurately reflects the size and composition of the shadow banking sector, subject to the caveats and FSB’s resolve to further refine the narrower measure. Another change that has been brought in this time around is a new activity-based “economic function” measure of shadow banking, each of which involves non-bank credit intermediation that may pose shadow banking risks (e.g. maturity / liquidity transformation and leverage). The five economic functions are certain entities that are susceptible to runs (EF1), lending dependent on short-term funding (EF2), market intermediation dependent on short-term funding or secured funding of client assets (EF3), facilitating credit creation (EF4), and securitisation-based intermediation (EF5).

4. The main findings from the latest exercise are as follows:

The Narrow Measure

  1. The narrow measure of global shadow banking that may pose financial stability risks amounted to $36 trillion in 2014 for the 26 participating jurisdictions. This is equivalent to 12% of financial system assets, and has grown moderately over the past several years.
  2. More than 80% of global shadow banking assets reside in a subset of advanced economies in North America, Asia and northern Europe.
  3. The new classification by economic functions shows that credit intermediation associated with collective investment vehicles with features that make them susceptible to runs (e.g. money market funds (MMFs), hedge funds and other investment funds) represents 60% of the narrow measure of shadow banking. It has grown more than 10% on average over the past four years. By contrast, the level of securitisation-based credit intermediation – among the key contributors to the financial crisis – has fallen in recent years.
  4. At the aggregate level, interconnectedness between the banking and the non-bank financial system continues to decrease from its pre-crisis peak.

The Broad Measure

  1. An aggregate “MUNFI” measure of the assets of other financial intermediaries (OFIs), pension funds and insurance companies grew by 9% to $137 trillion over the past year, and now represents about 40% of total financial system assets in 20 jurisdictions and the euro area.
  2. In aggregate, the insurance company, pension fund and OFI sectors all grew in 2014, while banking system assets fell slightly in US dollar terms.
  3. While non-bank financial intermediation shrank somewhat immediately following the financial crisis, it has been rising over the past several years. OFI assets in the 20 jurisdictions and the euro area reached 128% of GDP in 2014, up 6 percentage points from 2013 and 15 percentage points from 2011. It is nearing the previous high-point of 130% prior to the financial crisis.
  4. Emerging Market Economies (EMEs) showed the most rapid increases in OFI assets. In 2014, 8 EMEs had OFI growth rates above 10%, including two that grew over 30%. However, this rapid growth is generally from a relatively small base.
  5. Among OFI sub-sectors that showed the most rapid growth in 2014 are trust companies, MMFs, and fixed income and other funds. Trust companies (mostly based in China) continued to experience growth of 26%, similar to the past several years. Perhaps more surprisingly, MMFs experienced 20% growth in 2014 (largely driven by some euro area jurisdictions and China), following low or negative growth in the prior three year period. Fixed income funds and other funds grew approximately 15% in 2014.
  6. It should be noted that hedge funds remain underestimated in the FSB’s exercise due to the fact that a portion of international financial centres (IFCs), where a number of hedge funds are domiciled, are currently not within the scope of the exercise.

Shadow Banking in India

5. While the world generally refers to this sector as ‘shadow banking sector’, we have been calling it as the ‘non-banking financial sector’. Further, while the world has, as I said, now sat up and perked its collar to look at this sector intensely, India had understood the sector’s relevance and the risks that it may pose, way back in early 1960s itself, when, in 1963, Chapter III B dealing with regulation of the Non-Banking Financial Institutions was added to the Reserve Bank of India Act 1934. It recognised that non-banking financial activity is an integral part of the financial system and complements commercial banking; only that appropriate vigilance and due-diligence will be needed to regulate this sector.

NBFC Regulation

6. In a free economy, economic agents are primarily free to undertake any economic activity. In their normal course, they will be aspiring for continuous growth. However, certain economic activities have, as we all know, greater externalities and financial sector is one where the externalities are such that it warrants close regulation and supervision in the interests of systemic stability, safety and soundness of banks and other financial institutions and to protect the consumers. The objective of NBFC regulations during the twentieth century was predominantly to protect the interests of the depositors. However, as the NBFCs grew in size and their interconnectedness with the banking system became visible and raised concerns about their capacity to disturb systemic stability, the NBFCs were brought under prudential regulatory framework from 2006 onwards.

7. While the overall approach followed the contours as described above, the Reserve Bank, as the regulator of NBFCs has kept the sector’s potential to contribute to the development of identified segments of the economy and accordingly has been following a developmental bias in its regulatory framework relating to the NBFCs. The NBFCs focus on niche areas of business addressing specific needs of customers. Therefore, the Reserve Bank has classified varieties of specific types of NBFCs separately and regulates each such type differently. As on date such types include asset financing, core investment, loan, investment, micro-financing, factoring, infrastructure financing, mortgage guarantee, etc. activities. Further, the housing finance, insurance and collective investment activities, though statutorily defined as NBFI activities, their regulations have been left in the hands of other sectoral regulators like the National Housing Bank (NHB), the Insurance Regulatory and Development Authority (IRDA), the Pension Fund Regulatory and Development Authority (PFRDA) and the Securities and Exchange Board of India (SEBI).

8. This approach reflected the position that non-bank financial system may contribute to financial deepening in these identified segments. The NBFCs can be advantageous due to their ability to lower transaction costs, quick decision making capabilities, customer orientation and prompt provision of services. In terms of products and services offered, the NBFCs complement the banks.

9. Nevertheless, the business model of NBFCs is inherently risk-prone. Weaker underwriting standards, enhanced risk taking capabilities and increased complexity of their activities cause concerns.

10. Besides riskiness pertaining to business model, NBFCs are exposed to key risks emanating from regulatory gaps, arbitrage and contagion effect. NBFCs are more prone to systemic risks on account of concentration of exposure to specific sectors. Also, since these entities are more dependent on bank funding, both directly and indirectly, the interconnectedness risk tends to be higher. Their asset-liability mismatches accentuate liquidity risks. All told, these risks can quickly escalate as solvency risks and lead to systemic risk as well.

11. Therefore, careful and continuous monitoring is still required to detect any increases in systemic risk factors (e.g. maturity and liquidity transformation, and leverage) that could arise from the rapid expansion of credit provided by the non-bank sector. Reserve Bank has been dynamically making the regulatory framework suitable for the day. Certain changes in the framework brought in the last year or so deserve some recollection.

Recent NBFC Regulations

12. Changes to the regulations concerning NBFC sector over the last decade and a half had largely been incremental. However, in November 2014, a detailed review of the entire regulatory framework for the NBFC sector was undertaken with a view to transitioning, over time, to an activity based regulation of NBFCs as opposed to the current approach of entity-based regulation. The Bank has been mindful of the fact that the revisions should not impede the dynamism displayed by NBFCs in delivering innovation and last mile connectivity for meeting the credit needs of the productive sectors of the economy. The broad principles followed in framing the revised guidelines was to review the regulations from the perspective of the mandate of the Reserve Bank, viz., financial stability, depositor protection and customer protection. Hence, a) the focus has been on addressing risks where they exist, b) address gaps in regulation, c) reduce complexities and make regulations simple and easy to follow, d) harmonise regulations within the sector and with that of banks to a limited extent, e) acknowledge that there may be pockets within the sector that do not require to be stringently regulated and f) give adequate time to the NBFCs to adjust to the revised regulatory framework so that there are no disruptions in business.

13. Consequently, the revised regulatory framework for NBFCs was introduced and the threshold for systemic significance has been revised to total asset size of ₹ 500 crore. Now, there are two broad categories of NBFCs requiring closer attention of regulators and supervisors. These are a) non – deposit accepting NBFCs with asset size of less than ₹ 500 crore (NBFCs-ND) and b) non – deposit accepting NBFCs with assets of ₹ 500 crore and above (NBFCs-ND-SI) and deposit accepting NBFCs (NBFCs-D). Reporting and regulatory provisions are accordingly applied to have better focus on systemically important entities and efficient allocation of supervisory resources.

14. Minimal prudential regulations have been prescribed for non-deposit accepting NBFCs with asset size of less than ₹ 500 crore. For these non-deposit accepting companies (NBFCs-ND) below the threshold of systemic significance, prudential regulations, other than capital adequacy and credit concentration norms, are applicable only where public funds are accepted and conduct of business regulations (FPC, KYC) where there is customer interface. A simple leverage ratio of 7 has been put in place so that their asset growth is in sync with the capital they hold. Further, reporting by such NBFCs will be through asimplified annual return. However, registration under Section 45 IA of the RBI Act is mandatory and they are subjected to a simplified reporting system along with minimum net owned funds (NOF) of ₹ 2 crore.

15. For those non-deposit accepting companies (NBFCs-ND-SI) above the threshold of systemic significance and for all NBFC-D, prudential regulations are applicable and conduct of business regulations wherever customer interface exists. In line with international best practices, core capital requirement has been strengthened (existing 7.5%; raised to 10% to be phased over 2 years). Asset classification norms have been aligned with that of banks (from the current 180 day and 360 day norm for loan and HP / Leased assets respectively to a 90 day norm phased in over 3 years). Higher standard asset provisioning has been put in place (0.4% against the existing 0.25% phased in over 3 years). Further, credit concentration norms have been harmonised between the various categories of NBFCs by removing the dispensation given to AFCs to exceed the defined norms by 5%. (Dispensation given to IFCs and IDFs has been retained as infra loans are high value loans) and corporate governance standards, viz., fit and proper criteria for directors, disclosure and transparency have been strengthened so that they are professionally managed and develop a sound compliance culture.

16. In order to harmonise the deposit acceptance regulations across all deposit taking NBFCs (NBFCs-D) and move over to a regimen of only credit rated NBFCs-D accessing public deposits, existing unrated Asset Finance Companies (AFCs), which were permitted to accept deposits, shall have to get themselves rated by March 31, 2016. Further, the limit for acceptance of deposits has been reduced for rated AFCs from 4 times earlier to 1.5 times of NOF.

17. The Principal Business Criteria (PBC) for NBFC-Factors has been revised to 50:50 from the existing 75:75, thereby aligning it with the provisions of the Factoring Regulation Act, 2011. Consequently, an NBFC whose factoring assets and factoring income are 50 percent of the total assets and total income respectively are now classified as NBFC-Factors. This is expected to provide a boost to factoring activities in the country.

18. In the case of NBFC- MFIs , based on recommendations of the Committee on Comprehensive Financial Services for Small Businesses and Low Income Households (Chairman: Dr. Nachiket Mor), the limit on the total indebtedness of a borrower was raised to ₹ 1,00,000/- from ₹ 50,000/-. Income criteria of borrowers for loans to be included as qualifying assets of these NBFCs was changed: for borrowers with a rural household annual income not exceeding ₹ 1,00,000/- against ₹ 60,000/- earlier and urban and semi-urban household income not exceeding ₹ 1,60,000/- against ₹ 1,20,000/- earlier; ceiling on the amount of loan that can be disbursed was revised to ₹ 60,000/- from ₹ 35,000/- earlier in the first cycle and ₹1,00,000/- from ₹ 50,000/- earlier in subsequent cycles. The income generating loan component has been reduced from 70% to 50%. Further, the Bank has also raised the loan limit, requiring a mandatory tenure of 24 months, to ₹ 30,000/- from ₹ 15,000.

Growth of the NBFC Sector

19. Total number of NBFCs have come down from 51,929 in 1997 to 11,769 as on September 30, 2015 whereas the asset size has grown from ₹ 75913 crore as at end March 1998 to ₹ 16,10,729 crore at end September 2015. Share of NBFC assets as a percentage of scheduled commercial banks’ assets has increased from 7% in 1998 to 14.8% in March 2015. There are 202 NBFCs-ND-SI (assets size ₹ 500 crore and above) with a total asset size of ₹14126 billion. The number of deposit taking NBFCs, including Residuary Non-Banking Finance Companies (RNBCs), decreased from 1,420 in 1997-98 to 209 in September 2015. Share of NBFC deposits as a percentage of scheduled commercial banks’ deposits has come down from 3.34% in March 1997 to 0.30% in March 2015.

20. Sources and Uses of Funds of NBFC Sector–

Position As on September 30, 2015

21. Loans and advances extended by NBFCs-ND-SI posted strong double-digit growth of 15.5% during 2014-15, in contrast to the slowdown in commercial bank’s non-food credit during the same period (Chart 4.6). Strong growth in credit extended by the infrastructure finance companies, microfinance companies and loan companies contributed to sturdy growth in the loan portfolio of NBFCs-ND-SI. Among the sectors, infrastructure, medium and large-scale industries, and the transport sectors contributed to strong growth in credit off-take of the NBFCs-ND-SI. During 2014-15, NBFCs-ND-SI raised funds mainly through debentures and commercial papers. Borrowings from banks, which earlier constituted to be the main source of funding, has been progressively reduced. A notable feature is the rising exposure of mutual funds to the financial instruments floated mainly by the NBFC-Infrastructure Finance Companies (IFCs), Loan Companies (LCs) and NBFC-Micro Finance Institution (NBFC-MFIs).

22. In recent years, asset quality of NBFC sector has gone through the vicissitudes of overall deterioration spreading across the financial system as the economy slowed. Gross NPAs as per cent of credit deployed rose to 4.1 per cent by end-March 2015.

Prospects

23. In my opinion, the prospects for the sector in the medium term are not going to be uniform. Different segments of the sector are poised for different prospects and challenges.

24. For example, the NBFC-MFI segment is going to shrink heavily as the big ten of them convert themselves into Small Finance Banks in the next one year or so. I will hasten to add that this can yet bring higher impetus for the other NBFC-MFIs to grow, not just because of the availability of space vacated by the big ten, but also because the capital that will be released when many of the converting NBFC-MFIs pay off the current investors as a part of capital restructuring, and because of renewed interests by such venture capital aiming growth prospects in such conversions in the future.

25. The infrastructure NBFCs will have greater scope in the coming years, both because the economic growth will bring forth new projects and banks, having learnt lessons in the recent past, will have a restrained approach towards such projects. If the Infra-NBFCs will have their structuring these projects in a careful way, they will have good prospects.

26. As the large exposure regime for the banks will apply by 2018, NBFCs will have space for market funding or loan funding of big corporate financing in the medium term.

27. Loan companies will face enhanced consumer protection measures. They will be required to appropriately educate their workforce in selling right.

28. Investment companies will have bright prospects, as the equity and corporate bond markets expand, along with economic growth and careful recalibration of bank finance in the wake of Basle III.

Regulation – The Way Forward

29. At present, there are several categories of NBFCs and regulations vary across these NBFCs. The Committee on Comprehensive Financial Services for Small Businesses and Low Income Households (Chairman: Dr. Nachiket Mor) had recommended merger of various categories of NBFCs, into two viz., NBFCs and Core Investment Companies (CICs) and moving towards activity based regulation. The regulatory framework, put in place in November 2014, is a first step in this direction. Going forward, we will work towards greater harmonisation of the regulations with a view to reducing the number of NBFC categories.

30. However, the Reserve Bank is alive to the developmental needs of the economy and therefore will continue to approve of new types of NBFCs if the economy will need them. One such is NBFC-Account Aggregator (NBFC-AA) about which the Reserve Bank announced on July 02, 2015. The NBFC-AA will provide a technology enabled solution to a person to view at one place the position of his financial assets across institutions under different sectoral regulators. The guidelines for the same are under preparations.

31. Also, the Reserve Bank is actively studying the Peer-To-Peer lending arrangements that are slowly gaining traction. While recognising the need for innovative products and services, we should be conscious about the risks that may emanate out of such innovations. Based on the detailed study, we intend to bring out a Discussion Paper for public consultation.

32. There are demands that the regulations relating to the Core Investment Companies need revisiting. This is a work-in-process.

Conclusion

33. To conclude, I can only quote what the FSB concluded in its 2015 Report.

“Intermediating credit through non-bank channels can have important advantages and contributes to the financing of the real economy, but such channels can also become a source of systemic risk, especially when they are structured to perform bank-like functions (e.g. maturity and liquidity transformation, and leverage) and when their interconnectedness with the regular banking system is strong. Appropriate monitoring of shadow banking and the application of appropriate policy responses, where necessary, helps to mitigate the build-up of such systemic risks”. The Reserve Bank remains committed to such an approach.


Speech delivered by Shri R. Gandhi, Deputy Governor at the 1st Non-Banking Financial Companies (NBFCs) Summit organized by Confederation of Indian Industry on Dec 21, 2015 at Hotel Vivanta by Taj – President, Mumbai. Assistance provided by Shri C D Srinivasan and Shri Anuj Sharma is gratefully acknowledged.

Exim Bank’s GoI supported Line of Credit of USD 109.942 million to the Government of the Democratic Republic of Congo

RBI/2015-16/272
A.P. (DIR Series) Circular No. 38

December 17, 2015

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Exim Bank’s GoI supported Line of Credit of USD 109.942 million to the Government of the Democratic Republic of Congo

Export-Import Bank of India (Exim Bank) has entered into an Agreement dated May 28, 2015 with the Government of the Democratic Republic of Congo, for making available to the latter, a Government of India supported Line of Credit (LOC) of USD 109.942 million (USD One hundred nine million and nine hundred forty two thousand) for financing a power transmission and distribution project for the Katende Hydroelectricity power project in Kasai Province in the Democratic Republic of Congo. The goods, machinery, equipment and services including consultancy services from India for exports under this agreement are those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement. Out of the total credit by Exim Bank under this agreement, the goods and services including consultancy services of the value of at least 75% of the contract price shall be supplied by the seller from India and the remaining 25% goods and services (other than consultancy services) may be procured by the seller for the purpose of the eligible contract from outside India.

2. The credit agreement under the LOC is effective from November 27, 2015. The last date for opening of letters of credit and disbursement will be 48 months from the scheduled completion date of contract in the case of project exports and 72 months from the execution date of the credit agreement in the case of other supply contracts.

3. Shipments under the LOC will have to be declared on EDF/ SDF Forms as per instructions issued by the Reserve Bank from time to time.

4. No agency commission is payable under the above LOC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- l (AD Category-l) banks may allow such remittance after realization of full payment of contract value subject to compliance with the prevailing instructions for payment of agency commission.

5. AD Category-I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain full details of the Line of Credit from the Exim Bank’s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or log on to www.eximbankindia.in.

6. The Directions contained in this circular have been issued under section 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(B. P. Kanungo)
Principal Chief General Manager

Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Proposed amendments to IFRS 4)

Exposure Draft issued by IASB on Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Proposed amendments to IFRS 4) is for comment only. Comments on the Exposure Draft need to be received by January 8, 2016.

The International Accounting Standards Board (the Board) published for public comment proposals to amend the existing insurance contracts Standard, IFRS 4. This is to address the temporary consequences of the different effective dates of IFRS 9, Financial Instruments and the new insurance contracts Standard.

Both IFRS 9 (which was issued in July 2014 and has an effective date of 1 January 2018) and the new Insurance Contracts Standard (which will replace IFRS 4 and have a later effective date) are relevant to companies that issue insurance contracts. Some of those companies have expressed concerns about the need to implement two significant changes in accounting on different dates. They have also highlighted that potential increased accounting volatility could arise in profit or loss if the new requirements for financial instruments were to be applied before the new requirements for insurance contracts.

In order to balance meeting the needs of those stakeholders with the needs of users of financial statements, the Board has proposed the following amendments to IFRS 4. These proposals supplement existing options within IFRS 4 that could be used to address any accounting volatility that may arise:

  • the overlay approach: an option for a company that issues insurance contracts to remove from profit or loss the incremental volatility in profit or loss caused by changes in the measurement of financial assets upon application of IFRS 9. This approach would be in place until the new Insurance Contracts Standard comes into force; and
  • the deferral approach: an optional temporary exemption from applying IFRS 9 that would be available to companies whose predominant activity is to issue insurance contracts. Such a deferral would be available until the new Insurance Contracts Standard comes into effect (but it could not be used after 1 January 2021).

Invitation to comment

ASB invites comments on the Exposure Draft from the public. The downloadable version of the draft is available at: http://www.ifrs.org/Current-Projects/IASB-Projects/Insurance-Contracts/Exposure-Draft-December-2015/Documents/ED_Applying-IFRS-9-with-IFRS-4_DEC%202015.pdf

How to comment

Comments should be submitted using one of the following methods:

1. Electronically: Click on the below mentioned option to submit a comment letter or visit at the following link (Preferred method):
http://www.icai.org/comments/asb/
2. Email: Comments can be sent to: commentsasb@icai.in
3. Postal: Secretary, Accounting Standards Board,
The Institute of Chartered Accountants of India,
ICAI Bhawan, Post Box No. 7100,
Indraprastha Marg,
New Delhi 110 002

Further clarifications on this Exposure Draft may be sought by e-mail to geetanshu.bansal@icai.in

Income-tax (21st Amendment) Rules, 2015

[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)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION

New Delhi, the 16th December, 2015

INCOME-TAX
G.S.R. 978(E).— In exercise of the powers conferred by sub-section (6) of section 195 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (21st Amendment) Rules, 2015.
(2) They shall come into force on the 1st day of April, 2016.
2. In the Income-tax Rules, 1962 (hereafter referred to as the said rules), for rule 37BB, the following rule shall be substituted, namely:-
“37BB. Furnishing of information for payment to a non-resident, not being a company, or to a foreign company.— (1) The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum chargeable under the provisions of the Act, shall furnish the following, namely:-
(i) the information in Part A of Form No.15CA, if the amount of payment or the aggregate of such payments, as the case may be, made during the financial year does not exceed five lakh rupees;
(ii) for payments other than the payments referred in clause (i), the information,—
(a) in Part B of Form No.15CA after obtaining,—
(I) a certificate from the Assessing Officer under section 197; or
(II) an order from the Assessing Officer under sub-section (2) or sub-section (3) of section 195;
(b) in Part C of Form No.15CA after obtaining a certificate in Form No. 15CB from an accountant as defined in the Explanation below sub-section (2) of section 288.
(2) The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum which is not chargeable under the provisions of the Act, shall furnish the information in Part D of Form No.15CA.
(3) Notwithstanding anything contained in sub-rule (2), no information is required to be furnished for any sum which is not chargeable under the provisions of the Act, if,—
(i) the remittance is made by an individual and it does not require prior approval of Reserve Bank of India as per the provisions of section 5 of the Foreign Exchange Management Act, 1999 (42 of 1999) read with Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000; or
(ii) the remittance is of the nature specified in column (3) of the specified list below:
SPECIFIED LIST Sl. No. Purpose code as per RBI Nature of payment (1) (2) (3) 1 S0001 Indian investment abroad-in equity capital (shares) 2 S0002 Indian investment abroad-in debt securities 3 S0003 Indian investment abroad-in branches and wholly owned subsidiaries 4 S0004 Indian investment abroad-in subsidiaries and associates 5 S0005 Indian investment abroad-in real estate 6 S0011 Loans extended to Non-Residents 7 S0101 Advance payment against imports 8 S0102 Payment towards imports-settlement of invoice 9 S0103 Imports by diplomatic missions 10 S0104 Intermediary trade 11 S0190 Imports below Rs.5,00,000-(For use by ECD offices) 12 S0202 Payment for operating expenses of Indian shipping companies operating abroad. 13 S0208 Operating expenses of Indian Airlines companies operating abroad 14 S0212 Booking of passages abroad – Airlines companies
15 S0301 Remittance towards business travel. 16 S0302 Travel under basic travel quota (BTQ) 17 S0303 Travel for pilgrimage 18 S0304 Travel for medical treatment 19 S0305 Travel for education (including fees, hostel expenses etc.) 20 S0401 Postal services 21 S0501 Construction of projects abroad by Indian companies including import of goods at project site 22 S0602 Freight insurance – relating to import and export of goods 23 S1011 Payments for maintenance of offices abroad 24 S1201 Maintenance of Indian embassies abroad 25 S1202 Remittances by foreign embassies in India 26 S1301 Remittance by non-residents towards family maintenance and savings 27 S1302 Remittance towards personal gifts and donations 28 S1303 Remittance towards donations to religious and charitable institutions abroad 29 S1304 Remittance towards grants and donations to other Governments and charitable institutions established by the Governments 30 S1305 Contributions or donations by the Government to international institutions 31 S1306 Remittance towards payment or refund of taxes 32 S1501 Refunds or rebates or reduction in invoice value on account of exports 33 S1503 Payments by residents for international bidding.
(4) The information in Form No. 15CA shall be furnished,—
(i) electronically under digital signature in accordance with the procedures, formats and standards specified by the Principal Director General of Income-tax (Systems) under sub-rule (8) and thereafter printout of the said form shall be submitted to the authorised dealer, prior to remitting the payment; or
(ii) electronically in accordance with the procedures, formats and standards specified by the Principal Director General of Income-tax (Systems) under sub-rule (8) and thereafter signed printout of the said form shall be submitted to the authorised dealer, prior to remitting the payment.
(5) An income-tax authority may require the authorised dealer to furnish the signed printout of Form No.15CA referred to in clause (ii) of sub-rule (4) for the purposes of any proceedings under the Act.
(6) The certificate in Form No. 15CB shall be furnished and verified electronically in accordance with the procedures, formats and standards specified by the Principal Director-General of Income-tax (Systems) under sub-rule (8).
(7) The authorised dealer shall furnish a quarterly statement for each quarter of the financial year in Form No.15CC to the Principal Director General of Income-tax (Systems) or the person authorised by the Principal Director General of Income-tax (Systems) electronically under digital signature within fifteen days from the end of the quarter of the financial year to which such statement relates in accordance with the procedures, formats and standards specified by the Principal Director General of Income-tax (Systems) under sub-rule (8).
(8) The Principal Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes of furnishing and verification of Form 15CA, Form 15CB and Form 15CC and shall be responsible for the day-to-day administration in relation to the furnishing and verification of information, certificate and quarterly statement in accordance with the provisions of sub-rules (4), (6) and (7).
Explanation.— For the purposes of this rule ‘authorised dealer’ means a person authorised as an authorised dealer under sub-section (1) of section 10 of the Foreign Exchange Management Act, 1999 (42 of 1999).”.
3. In the said rules, in Appendix-II, for Form No.15CA and Form No. 15CB, the following Forms shall be substituted, namely:-
Income-Tax Department
“FORM NO. 15CA (See rule 37BB) Information to be furnished for payments to a non-resident not being a company, or to a foreign company
Ack. No.
Part A
(To be filled up if the remittance is chargeable to tax under the provisions of the Income-tax Act,1961 and the remittance or the aggregate of such remittances, as the case may be, does not exceed five lakh rupees during the financial year)
REMITTER
Name of remitter
PAN of the remitter (if available)
TAN of the remitter (if available)
Complete address, email and phone number of the remitter
Status of remitter1
Residential status of remitter2
REMITTEE
Name of recipient of remittance
PAN of the recipient of remittance, if available3
Complete address, email4 and phone number5 of the recipient of remittance
Country to which remittance is made
REMITTANCE
Amount payable before TDS (In Indian Currency)
Aggregate amount of remittances made during the financial year including this proposed remittance
Name of bank
Name of the branch of the bank
Proposed date of remittance
Nature of remittance
Please furnish the relevant purpose code as per RBI
Amount of TDS
Rate of TDS
Date of deduction
VERIFICATION
I/We*, __________________________ (full name in block letters), son/daughter of __________________in the capacity of________(designation) solemnly declare that the information given above is true to the best of my knowledge and belief and no relevant information has been concealed. I/We* further undertake to submit the requisite documents for enabling the income-tax authorities to determine the nature and amount of income of the recipient of the above remittance as well as documents required for determining my liability under the Income-tax Act as a person responsible for deduction of tax at source.
………………………………………………………………….
Place: Signature of the person responsible for paying to non-resident
………………………………………………………………………………..
Date: Name and Designation of the person responsible for paying to non-resident
* Delete whichever is not applicable.
1 Write 1 if company, write 2 if firm, write 3 if individual and write 4 if others.
2 In case of company, write 1 if domestic company, write 2 if foreign company, in case of person other than company, write 3 if resident, write 4 if non-resident
3 In case of non-availability of PAN, provisions of section206AA shall be applicable
4. If available
5. If available
Part B
(To be filled up if the remittance is chargeable to tax under the provisions of the Income-tax Act,1961 and the remittance or the aggregate of such remittances, as the case may be, does not exceed five lakh rupees during the financial year and an order/ certificate u/s 195(2)/ 195(3)/ 197 of Income-tax Act has been obtained from the Assessing Officer.)
REMITTER
Name of remitter
PAN of the remitter
TAN of the remitter1
Complete address, email and phone number of the remitter
Status of remitter2
Residential status of remitter3
REMITTEE
Name of recipient of remittance
PAN of the recipient of remittance, if available4
Complete address, email5 and phone number6 of the recipient of remittance
A.O. ORDER
Section under which order/certificate has been obtained
Name and designation of the Assessing Officer who issued the order/certificate
Date of order/certificate
Order/ certificate number
REMITTANCE
Country to which remittance is made
Country:
Currency:
Amount payable
In foreign currency:
In Indian Rs.
Name of the Bank
Branch of the Bank
BSR Code of the bank branch (7 digit)
Proposed date of remittance
(DD/MM/YYYY)
Nature of remittance as per agreement/ document
Please furnish the relevant purpose code as per RBI
Amount of TDS
Rate of TDS
Date of deduction
VERIFICATION
I/We*, __________________________ (full name in block letters), son/daughter of __________________in the capacity of________(designation) solemnly declare that the information given above is true to the best of my knowledge and belief and no relevant information has been concealed. I/We* certify that a certificate/order under section 195(2)/195(3)/197 of the Income-tax Act, 1961 has been obtained, particulars of which are given in this Form. I/We* further undertake to submit the requisite documents for enabling the income-tax authorities to determine the nature and amount of income of the recipient of the above remittance as well as documents required for determining my liability under the Income-tax Act as a person responsible for deduction of tax at source.
………………………………………………………………….
Place: Signature of the person responsible for paying to non-resident
………………………………………………………………………………..
Date: Name and Designation of the person responsible for paying to non-resident
* Delete whichever is not applicable.
1In case TAN is applied for, please furnish acknowledgement number of the application.
2 Write 1 if company, write 2 if firm, write 3 if individual and write 4 if others.
3 In case of company, write 1 if domestic company, write 2 if foreign company, in case of person other than company, write 3 if resident, write 4 if non-resident
4In case of non-availability of PAN, provisions of section206AA shall be applicable
5If available
6If available
Part C
(To be filled up if the remittance is chargeable to tax under the provisions of Income-tax Act, 1961 and the remittance or the aggregate of such remittances, as the case may be, exceeds five lakh rupees during the financial year and a certificate in Form No. 15CB from an accountant as defined in the Explanation below sub-section (2) of section 288 has been obtained)
Section A
GENERAL INFORMATION
Name of the remitter
REMITTER
PAN of remitter
Area Code
AO Type
Range Code
AO No
Principal Place of Business
TAN of remitter1
Complete address, email and phone number of the remitter
Status2
Residential status of remitter3
REMITTEE
Name of recipient of remittance
PAN of recipient of remittance4
Status5
Address
Country to which remittance is made:
Principal place of business
Email address
(ISD code)-Phone Number
( )
ACCOUNTANT
(a)
Name of the Accountant6 signing the certificate
(b)
Name of the proprietorship/firm of the accountant
(c)
Address
(d)
Registration no. of the accountant
(e)
Date of certificate (DD/MM/YYYY)
Certificate No.7
A.O. ORDER
(a)
Whether any order/ certificate u/s 195(2)/ 195(3)/ 197 of Income-tax Act has been obtained from the Assessing Officer.
(Tick) Yes No
(b)
Section under which order/certificate has been obtained
(c)
Name and designation of the Assessing Officer who issued the order/certificate
(d)
Date of order/certificate
(e)
Order/ certificate number
Section B
PARTICULARS OF REMITTANCE AND TDS ( as per certificate of the accountant)
REMITTANCE
1.
Country to which remittance is made
Country:
Currency:
2.
Amount payable
In foreign currency:
In Indian Rs.
3.
Name of the Bank
Branch of the Bank
4.
BSR Code of the bank branch (7 digit)
5.
Proposed date of remittance
(DD/MM/YYYY)
6
Nature of remittance as per agreement/ document
7.
Relevant purpose code as per RBI
8.
In case the remittance is net of taxes, whether tax payable has been grossed up?
(Tick) Yes No
I.T.AC T
9.
Taxability under the provisions of the Income-tax Act (without considering DTAA)
(a) the relevant section of the Act under which the remittance is covered
(b) the amount of income chargeable to
tax
(c) the tax liability
(d)basis of determining taxable income and tax liability
DTAA
10.
If any relief is claimed under DTAA-
(i) whether tax residency certificate is obtained from the recipient of remittance
(Tick) Yes No
(ii) please specify relevant DTAA
(iii) please specify relevant article of DTAA
Nature of payment as per DTAA
(iv) taxable income as per DTAA
In Indian Rs.
(v) tax liability as per DTAA
In Indian Rs.
A. If the remittance is for royalties, fee for technical services, interest, dividend, etc,(not connected with permanent establishment) please indicate:-
(Tick) Yes No
(a) Article of DTAA
(b) Rate of TDS required to be deducted in terms of such article of the applicable DTAA
As per DTAA (%)
B. In case the remittance is on account of business income, please indicate:-
(Tick) Yes No
(a) The amount of income liable to tax in India
(b) The basis of arriving at the rate of deduction of tax.
C. In case the remittance is on account of capital gains, please indicate:-
(Tick) Yes No
(a) amount of long term capital gains
(b) amount of short-term capital gains
(c) basis of arriving at taxable income
D. In case of other remittance not covered by sub-items A,B and C
(Tick) Yes No
(a) Please specify nature of remittance
(b) Whether taxable in India as per DTAA
(c) If yes, rate of TDS required to be deducted in terms of such article of the applicable DTAA
(d) if not, please furnish brief reasons thereof specifying relevant article of DTAA
TDS
11.
Amount of tax deducted at source
In foreign currency
In Indian Rs.
12.
Rate of TDS
As per Income-tax Act (%)
or
As per DTAA (%)
13.
Actual amount of remittance after TDS
In foreign currency
14.
Date of deduction of tax at source, if any
(DD/MM/YYYY)
VERIFICATION
1. I/We*, ___________________________ (full name in block letters), son/daughter of __________________in the capacity of_________________(designation) solemnly declare that the information given above is true to the best of my/our* knowledge and belief and no relevant information has been concealed. I/We* certify that a certificate has been obtained from an accountant, particulars of which are given in this Form, certifying the amount, nature and correctness of deduction of tax at source. In case where it is found that the tax actually deductible on the amount of remittance has not been deducted or after deduction has not been paid or not paid in full, I/We* undertake to pay the amount of tax not deducted or not paid, as the case may be, along with interest due. I/We* shall also be subject to the provisions of penalty for the said default as per the provisions of the Income-tax Act, 1961. I/We* further undertake to submit the requisite documents for enabling the income-tax authorities to determine the nature and amount of income of the recipient of the above remittance as well as documents required for determining my/our liability under the Income-tax Act, 1961 as a person responsible for deduction of tax at source.
………………………………………………………………….
Place: Signature of the person responsible for paying to non-resident
………………………………………………………………………………..
Date: Name and Designation of the person responsible for paying to non-resident
* Delete whichever is not applicable.
1In case TAN is applied for, please furnish acknowledgement number of the application.
2 Write 1 if company, write 2 if firm, write 3 if individual and write 4 if others.
3 In case of company, write 1 if domestic company, write 2 if foreign company, in case of person other than company, write 3 if resident, write 4 if non-resident
4In case of non-availability of PAN, provisions of section206AA shall be applicable
5 Write 1 if company, write 2 if firm, write 3 if individual and write 4 if others.
6Accountant shall have the meaning as defined in Explanation below sub-section (2) of section 288 of the Income-tax Act, 1961.
7Please fill the serial number as mentioned in the certificate of the accountant.
Part D
[To be filled up if the remittance is not chargeable to tax under the provisions of the Income-tax Act,1961 {other than payments referred to in rule 37BB(3)} by the person referred to in rule 37BB(2)]
REMITTER
Name of the remitter
PAN of the remitter, if available
TAN of the remitter, if available
Complete address, email and phone number of the remitter
Status of remitter1
Residential status of the remitter2
REMITTEE
Name of recipient of remittance
PAN of the recipient of remittance, if available
Complete address, email3 and phone number4 of the recipient of remittance
Country to which remittance is made
Country:
Currency:
Country of which the recipient of remittance is resident, if available
REMITTANCE
Amount payable
In foreign currency:
In Indian Rs.
Name of the bank
Name of the branch of the bank
BSR code of the bank branch (7 digit)
Proposed date of remittance
(DD/MM/YYYY)
Nature of remittance
Please furnish the relevant purpose code as per RBI
2. I certify that I have reason to believe that the remittance as above is not chargeable under the provision of Income-tax Act 1961 and is not liable for deduction of tax at source.
VERIFICATION
I/We*, ___________________________ (full name in block letters), son/daughter of __________________in the capacity of_________________(designation) solemnly declare that the information given above is true to the best of my/our* knowledge and belief and no relevant information has been concealed. In a case where it is found that the tax actually deductible on the amount of remittance has not been deducted or after deduction has not been paid or not paid in full, I/We* undertake to pay the amount of tax not deducted or not paid, as the case may be, along with interest due. I/We* shall also be subject to the provisions of penalty for the said default as per the provisions of the Income-tax Act, 1961. I/We* further undertake to submit the requisite documents for enabling the income-tax authorities to determine the nature and amount of income of the recipient of the above remittance as well as documents required for determining my/our* liability under the Income-tax Act as a person responsible for deduction of tax at source.
………………………………………………………………….
Place: Signature of the person responsible for paying to non-resident
………………………………………………………………………………..
Date: Name and Designation of the person responsible for paying to non-resident
* Delete whichever is not applicable.
1 Write 1 if company, write 2 if firm, write 3 if individual and write 4 if others.
2 In case of company, write 1 if domestic company, write 2 if foreign company, in case of person other than company, write 3 if resident, write 4 if non-resident
3 If available
4 If available
For Office Use only
For Office Use Only
Receipt No.
Date
Seal and Signature of receiving official
Form No. 15CB
(See rule 37BB)
Certificate of an accountant1
I/We* have examined the agreement (wherever applicable) between Mr./Ms./M/s*………………………………. and Mr./Ms./M/s*…………………………………..
(Remitters) (Beneficiary)
requiring the above remittance as well as the relevant documents and books of account required for ascertaining the nature of remittance and for determining the rate of deduction of tax at source as per provisions of Chapter- XVII-B.
We hereby certify the following :-
A
Name and address of the beneficiary of the remittance
B
1.
Country to which remittance is made
Country:
Currency:
2.
Amount payable
In foreign currency:
In Indian Rs.
3.
Name of the bank
Branch of the bank
4.
BSR Code of the bank branch (7 digit)
5.
Proposed date of remittance
(DD/MM/YYYY)
6
Nature of remittance as per agreement/ document
7.
In case the remittance is net of taxes, whether tax payable has been grossed up?
(Tick) Yes No
8.
Taxability under the provisions of the Income-tax Act (without considering DTAA)
(i) is remittance chargeable to tax in India
(Tick) Yes No
(ii) if not reasons thereof
(iii) if yes,
(a) the relevant section of the Act under which the remittance is covered
(b) the amount of income chargeable to tax
(c) the tax liability
(d)basis of determining taxable income and tax liability
9.
If income is chargeable to tax in India and any relief is claimed under DTAA-
(i) whether tax residency certificate is obtained from the recipient of remittance
(Tick) Yes No
(ii) please specify relevant DTAA
(ii) please specify relevant article of DTAA
Nature of payment as per
DTAA
(iii) taxable income as per DTAA
In Indian Rs.
(iv) tax liability as per DTAA
In Indian Rs.
A.If the remittance is for royalties, fee for technical services, interest, dividend, etc,(not connected with permanent establishment) please indicate:-
(Tick) Yes No
(a) Article of DTAA
(b) Rate of TDS required to be deducted in terms of such article of the applicable DTAA
As per DTAA (%)
B. In case the remittance is on account of business income, please indicate:-
(Tick) Yes No
(a) Whether such income is liable to tax in India
(Tick) Yes No
(b) If so, the basis of arriving at the rate of deduction of tax.
(c) If not, please furnish brief reasons thereof, specifying relevant article of DTAA
C. In case the remittance is on account of capital gains, please indicate:-
(Tick) Yes No
(a) amount of long term capital gains
(b) amount of short-term capital gains
(c) basis of arriving at taxable income
D. In case of other remittance not covered by sub-items A,B and C
(Tick) Yes No
(a) Please specify nature of remittance
(b) Whether taxable in India as per DTAA
(c) If yes, rate of TDS required to be deducted in terms of such article of the applicable DTAA
(d) if not , please furnish brief reasons thereof, specifying relevant article of DTAA
10.
Amount of TDS
In foreign currency
In Indian Rs.
11
Rate of TDS
As per Income-tax Act (%)
or
As per DTAA (%)
12
Actual amount of remittance after TDS
In foreign currency
13.
Date of deduction of tax at source, if any
(DD/MM/YYYY)
Certificate No.2
Signature :
Name:
Name of the proprietorship/ firm:
Address:
Registration No.:
1. To be signed and verified by an accountant (other than employee) as defined in the Explanation below sub-section (2) of section 288 of the Income-tax Act,1961.
2. Certificate number is an internal number to be given by the Accountant.
* Delete whichever is not applicable. .
Form No.15CC
(See rule 37BB)
Quarterly statement to be furnished by an authorised dealer in respect of remittances made for the quarter of ………….. of ……… . (Financial Year)
1. Name and address of the authorised dealer: ……………………………………………….
2. Permanent Account Number: ………………………………………………………………
3. Details of remittances made:
Sl. No.
Name of the remitter
PAN of the remitter
Name of the remittee
PAN of the remittee, if available
Amount of remittance
Date of remittance
Country to which remittance is made
Purpose Code as per RBI
Verification
I ………………………..(full name in block letters), son/daughter of ………………. solemnly declare that to the best of my knowledge and belief, the information given above are correct and complete.
Place ………… Signature …….……………………………………….
Date …………. Name and Designation ……………………………”.
[Notification No. 93/2015, F.No.133/41/2015-TPL]
(PITAMBAR DAS)
DIRECTOR (TAX POLICY AND LEGISLATION)
Note.— The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide notification number S.O. 969(E), dated the 26th March, 1962 and last amended vide notification number S.O.3357 (E), dated the 11th December,2015 .

RBI announces Marginal Cost of Funds Methodology for Interest Rate on Advances

The Reserve Bank of India today released the final guidelines on computing interest rates on advances based on the marginal cost of funds. The guidelines come into effect from April 1, 2016. Apart from helping improve the transmission of policy rates into the lending rates of banks, these measures are expected to improve transparency in the methodology followed by banks for determining interest rates on advances. The guidelines are also expected to ensure availability of bank credit at interest rates which are fair to the borrowers as well as the banks. Further, marginal cost pricing of loans will help the banks become more competitive and enhance their long run value and contribution to economic growth.

The highlights of the guidelines are as under :

  1. All rupee loans sanctioned and credit limits renewed w.e.f. April 1, 2016 will be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will be the internal benchmark for such purposes.
  2. The MCLR will be a tenor linked internal benchmark.
  3. Actual lending rates will be determined by adding the components of spread to the MCLR.
  4. Banks will review and publish their MCLR of different maturities every month on a pre-announced date.
  5. Banks may specify interest reset dates on their floating rate loans. They will have the option to offer loans with reset dates linked either to the date of sanction of the loan/credit limits or to the date of review of MCLR.
  6. The periodicity of reset shall be one year or lower.
  7. The MCLR prevailing on the day the loan is sanctioned will be applicable till the next reset date, irrespective of the changes in the benchmark during the interim period.
  8. Existing loans and credit limits linked to the Base Rate may continue till repayment or renewal, as the case may be. Existing borrowers will also have the option to move to the Marginal Cost of Funds based Lending Rate (MCLR) linked loan at mutually acceptable terms.
  9. Banks will continue to review and publish Base Rate as hitherto.

Background

The Reserve Bank of India had stated in its First Bi-monthly Monetary Policy Statement 2015-16 announced on April 7, 2015 that ‘for monetary transmission to occur, lending rates have to be sensitive to the policy rate. With the introduction of the Base Rate on July 1, 2010 banks could set their actual lending rates on loans and advances with reference to the Base Rate. At present, banks are following different methodologies in computing their Base Rate – on the basis of average cost of funds, marginal cost of funds or blended cost of funds (liabilities). Base Rates based on marginal cost of funds should be more sensitive to changes in the policy rates. In order to improve the efficiency of monetary policy transmission, the Reserve Bank will encourage banks to move in a time-bound manner to marginal-cost-of-funds-based determination of their Base Rate’.

Accordingly, the Reserve Bank of India had brought out the draft guidelines on banks adopting marginal cost of funds methodology for calculating Base Rates on September 1, 2015. Based on the feedback received from all stakeholders, as well as extensive discussions held with banks, the final guidelines have now been released.

Sangeeta Das
Director

Press Release : 2015-2016/1432

Extension of last date for December 2015 installment of advance tax for taxpayers in Tamil Nadu and Puducherry

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
New Delhi, 15th December, 2015

Subject: Extension of last date for December 2015 installment of advance tax for taxpayers in Tamil Nadu and Puducherry -reg-.
The last date of payment of December 2015 installment of advance tax for both corporate and non-corporate taxpayers in the State of Tamil Nadu and Union territory of Puducherry has been extended from 15.12.2015 to 31.12.2015 in view of unprecedented rainfall and floods in these areas.

{ad}
The Central Board of Direct Taxes has issued an Order under section 119 (2)(a) of the Income-tax Act, 1961 in this regard.
As a result of this extension, advance tax deposited in the Government account on or before 31.12.2015 will be treated as payment within the statutory time for payment of December 2015 installment.
A copy of the Order dated 15.12.2015 is available on the website of the Department www.incometaxinfia.gov.in.
(Shefali Shah)

Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT

​Furnishing of information in respect of payments made to the non-resident

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
Dated: 17th December, 2015
Sub: Furnishing of information in respect of payments made to the non-resident-regarding.
Section 195 of the Income-tax Act (‘the Act’)empowers the Central Board of Direct Taxes to capture information in respect of payments made to non-residents, whether chargeable to tax or not. Rule 37 BB of the Income-tax Rules has been amended to strike a balance between reducing the burden of compliance and collection of information under section 195 of the Act.

{ad}
The significant changes under the amended Rules are: No Form 15CA and 15CB will be required to be furnished by an individual for remittance which do not requiring RBI approval under its Liberalised Remmittace Scheme (LRS) Further the list of payments of specified nature mentioned in Rule 37 BB which do not require submission of Forms 15CA and 15CB has been expanded from 28 to 33 including payments for imports. A CA certificate in Form No. 15CB will be required to be furnished only in respect of such payments made to non-residents which are chargeable to tax and the amount of payment during the year exceeds Rs. 5 lakh.

{ad}
The amended Rules will become applicable from 01.04.2016.
Notification No. G.S.R. 978(E) dated 16th December, 2015 is available on the website of the Department at www.incometax.gov.in.
(Shefali Shah)
Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT

Section 24 and Section 56 of the Banking Regulation Act, 1949 – Maintenance of Statutory Liquidity Ratio (SLR)

RBI/2015-16/262
DBR.No.Ret.BC.64/12.01.001/2015-16

December 10, 2015

All Commercial Banks, Primary (Urban) Co-operative Banks (UCBs),
State and Central Co-operative Banks (StCBs/CCBs)

Dear Sir,

Section 24 and Section 56 of the Banking Regulation Act, 1949 – Maintenance of Statutory Liquidity Ratio (SLR)

Please refer to circulars DBR.Ret.BC.70/12.02.001/2014-15 and DCBR.BPD.(PCB/RCB).Cir.No.14/16.26.000/2014-15 dated February 03, 2015, on maintenance of Statutory Liquidity Ratio under Section 24 and Section 56 of the Banking Regulation Act, 1949.

2. As announced in the fourth Bi-Monthly Monetary Policy Statement 2015-16 by the Reserve Bank of India on September 29, 2015, it has been decided to reduce the Statutory Liquidity Ratio (SLR) of scheduled commercial banks, local area banks, primary (Urban) co-operative banks (UCBs), state co-operative banks and central co-operative banks from 21.5 per cent of their Net Demand and Time Liabilities (NDTL) to:

(i) 21.25 per cent from April 2, 2016;

(ii) 21.00 per cent from July 9, 2016;

(iii) 20.75 per cent from October 1, 2016; and

(iv) 20.50 per cent from January 7, 2017

3. We have moved to issuing a single regulation for the commercial banks, Primary (Urban) Co-operative Banks and State and Central Co-operative Banks. A copy of the relative notification DBR.No.Ret.BC. 63/12.02.001/2015-16 dated December 10, 2015, applicable to all these banks is enclosed.

4. Please acknowledge receipt.

Yours faithfully,

(Sudarshan Sen)
Principal Chief General Manager

Encl: As above


DBR.No.Ret.BC.63 /12.01.001/2015-16

December 10, 2015

NOTIFICATION

In exercise of the powers conferred by sub-section (2A) of Section 24 read with Section 51 and Section 56 of the Banking Regulation Act, 1949 (10 of 1949) and in partial modification of the Notifications Ref.DBR.No.Ret.BC.69/12.02.001/2014-15 dated February 03, 2015 and DCBR.BPD.(PCB/RCB).Not.No.2/16.26.000/2014-15 dated February 03, 2015, the Reserve Bank hereby specifies that:

(i) with effect from the dates given below, every scheduled commercial bank, local area bank, primary co-operative bank, state co-operative bank and central co-operative bank shall maintain in India assets (hereinafter referred to as ‘SLR assets’) the value of which shall not, at the close of business on any day, be less than:

(a) 21.25 per cent from April 2, 2016;

(b) 21.00 per cent from July 9, 2016;

(c) 20.75 per cent from October 1, 2016; and

(d) 20.50 per cent from January 7, 2017

of their total net demand and time liabilities in India as on the last Friday of the second preceding fortnight, valued in accordance with the method of valuation specified by the Reserve Bank from time to time; and

(ii) such SLR assets shall be maintained by:

A. Scheduled commercial banks and local area banks, as -

(a) cash; or

(b) gold valued at a price not exceeding the current market price: or

(c) unencumbered investment in any of the following instruments [hereinafter referred to as Statutory Liquidity Ratio securities (“SLR securities”)], namely:-

(1) Dated securities of the Government of India issued from time to time under the market borrowing programme and the Market Stabilization Scheme ; or

(2) Treasury Bills of the Government of India; or

(3) State Development Loans (SDLs) of the State Governments issued from time to time under the market borrowing programme:

(d) the deposit and unencumbered approved securities required, under sub-section (2) of section 11 of the Banking Regulation Act, 1949(10 of 1949), to be made with the Reserve Bank by a banking company incorporated outside India;

(e) any balance maintained by a scheduled bank with the Reserve Bank in excess of the balance required to be maintained by it under section 42 of the Reserve Bank of India Act,1934 (2 of 1934);

Provided that the instruments referred to in items (1) to (3) above that have been acquired from the Reserve Bank under the Liquidity Adjustment Facility (LAF), shall not be included as SLR securities for the purpose of maintenance of SLR assets;

Provided further that the following securities shall not be treated as encumbered for the purpose of maintenance of SLR assets, namely:-

(a) securities lodged with another institutionfor an advance or any other credit arrangement to the extent to which such securities have not been drawn against or availed of;

(b) securities offered as collateral to the Reserve Bank for availing liquidity assistance from Marginal Standing Facility (MSF) up to the permissible percentage of the total NDTL in India, carved out of the required SLR portfolio of the bank concerned; and

(c) securities offered as collateral to the Reserve Bank for availing liquidity assistance under Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) .

B. Primary (Urban) co-operative banks, as–

(a) Cash, or

(b) Gold valued at a price not exceeding the current market price, or

(c) Unencumbered investment in approved securities as defined in section 5(a) of the Banking Regulation Act, 1949 (10 of 1949) read with section 56 thereof:

Provided that the instruments acquired from the Reserve Bank under the Liquidity Adjustment Facility (LAF) shall not be included as SLR securities for the purpose of maintenance of SLR assets;

Provided further that the following securities shall not be treated as encumbered for the purpose of maintenance of SLR assets, namely:-

The securities lodged with another institutionfor an advance or any other credit arrangement to the extent to which such securities have not been drawn against or availed of;

C. State co-operative bank (StCB) and Central co-operative bank (CCB), as -

(a) Cash, or

(b) Gold valued at a price not exceeding the current market price, or

(c) Unencumbered investment in approved securities as defined in Section 5(a) of the Banking Regulation Act, 1949 (10 of 1949) read with Section 56 thereof.

Provided that the following securities shall not be treated as encumbered for the purpose of maintenance of SLR assets, namely:-

The securities lodged with another institutionfor an advance or any other credit arrangement to the extent to which such securities have not been drawn against or availed of.

Notwithstanding anything contained hereinabove,

i. Unencumbered balances maintained by a Central co-operative bank with the State co-operative bank of the State concerned, in excess of the balance required to be maintained by it under Section 18 of the Banking Regulation Act, 1949 (10 of 1949) read with section 56 thereof;

ii. Any unencumbered term deposits maintained by a Central cooperative bank with the State co-operative bank of the State concerned; and

iii. Unencumbered term deposits held by a State co-operative bank or a central co-operative bank with State Bank of India or a subsidiary bank or a corresponding new bank or IDBI Bank Ltd.

shall also be deemed to be assets for the purpose of calculating the percentage specified under this notification, till March 31, 2017. However, SLR on incremental NDTL over the level as on July 25, 2014 shall be maintained by StCBs / CCBs in the form of approved assets. Maintenance of SLR in the form of approved assets on NDTL as on July 25, 2014 shall be as per the roadmap advised as under.

Date Investment in approved assets
March 31, 2016 10% of NDTL as on July 25, 2014 to be maintained in assets as mentioned at (c) above
From April 1, 2017 Entire SLR as prescribed by RBI as on that date in assets as mentioned in (a) to (c) above
RPCD circular RPCD.RCB.BC.No.16/07.51.020/2014-15 dated July 21, 2014

(N.S.Vishwanathan)
Executive Director


Annex

Explanation- For the purpose of this notification,

(a) “cash” to be maintained by

i) Scheduled commercial banks and local area banks shall include, in addition to cash in hand, the net balance in current accounts with other scheduled commercial banks in India.

ii) Primary (urban) co-operative banks shall include :

  • Any balances maintained by a primary co-operative bank, which is a scheduled bank, with the Reserve Bank in excess of the balance required to be maintained by it under section 42 of the Reserve Bank of India Act, 1934 (2 of 1934);
  • Any balances maintained by a primary co-operative bank, not being a scheduled bank, with the Reserve Bank in excess of the balance required to be maintained by it under Section 18 of the Banking Regulation Act, 1949 (10 of 1949) read with Section 56 thereof; and
  • “Net balances in current accounts” as defined in the Explanation to sub-section (1) of Section 18 of the Banking Regulation Act, 1949 (10 of 1949) read with Section 56 thereof, in excess of the balance required to be maintained by it under the said section.

iii) State co-operative bank or a Central co-operative bank shall include –

  • Any balances maintained by a State co-operative bank, which is a scheduled bank, with the Reserve Bank in excess of the balance required to be maintained by it under Section 42 of the Reserve Bank of India Act, 1934 (2 of 1934);
  • Any balances maintained by a State co-operative bank or Central co-operative bank, not being a scheduled bank, with the Reserve Bank in excess of the balance required to be maintained by it under Section 18 of the Banking Regulation Act, 1949 (10 of 1949) read with Section 56 thereof; and
  • “Net balances in current accounts” as defined in the Explanation to sub-section (1) of section 18 of the Banking Regulation Act, 1949 (10 of 1949) read with section 56 thereof, in excess of the balance required to be maintained by it under the said Section.

(b) “Facility to Avail Liquidity for Liquidity Coverage Ratio” shall mean facility whereby banks will be permitted to reckon government securities held by them up to a certain per cent of their NDTL within the mandatory SLR requirement as level 1 HQLA for the purpose of computing their Liquidity Coverage Ratio (LCR).

(c) “Liquidity Adjustment Facility” shall mean Repo auctions (for injection of liquidity) and reverse repo auctions (for absorption of liquidity) conducted by the Reserve Bank of India.

(d) “Local area bank” shall mean a banking company licensed as such under Section 22 of the Banking Regulation Act, 1949 (10 of 1949).

(e) “Marginal standing facility” shall mean the facility under which the eligible entities can avail liquidity support from the Reserve Bank against SLR securities, up to a certain per cent of their respective NDTL outstanding at the last Friday of the second preceding fortnight.

(f) “Market borrowing programme” shall mean the domestic rupee loans raised by the Government of India and the State Governments from the public and managed by the Reserve Bank through issue of marketable securities, governed by the provisions of the Government Securities Act, 2006, Public Debt Act, 1944 and the Regulations framed under those Acts, through an auction or any other method, as specified in the notification issued in this regard.

(g) “Scheduled commercial bank” shall mean a banking company included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934) and includes the State Bank of India, subsidiary bank, corresponding new bank and Regional Rural Bank.

(h) “State Co-operative Bank” shall mean the Principal Co-operative Society in a State, the primary object of which is the financing of other Co-operative Societies in the State:

Provided that in addition to such Principal Society in a State, or where there is no such Principal Society in a State, the State Government may declare any one or more Co-operative Societies carrying on business in that State to be also or to be a State Co-operative Bank or State Co-operative Banks within the meaning of this definition;

(i) “Central Co-operative Bank” shall mean the Principal Co-operative Society in a district in a State, the primary object of which is the financing of other Co-operative Societies in that district:

Provided that in addition to such Principal Society in a district, or where there is no such Principal Society in a district, the State Government may declare any one or more Co-operative Societies carrying on the business of financing other Co-operative Societies in that district to be also or to be a Central Co-operative Bank or Central Co-operative Banks within the meaning of this definition.

(j) “Primary Co-operative Bank” shall mean a co-operative society, other than a primary agricultural credit society,-

  1. the primary object or principal business of which is the transaction of banking business;
  2. the paid-up share capital and reserves of which are not less than one lakh of rupees; and
  3. the bye-laws of which do not permit admission of any other co-operative society as a member :

Provided that this sub clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State Government for the purpose.

Filing of reconciliation return for the year 2014-15.

              GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI
DEPARTMENT OF TRADE AND TAXES
(
, (POLICY BRANCH)
VYAPAR BHAWAN, LP.ESTATE, NEW DELHI-110 002
No.F.3(589)jPolicYNATj2015j[l6~-           c~
CIRCULAR NO.         2;2.   of 2015-16
Sub: FiLing of reconciliation   return for the year 2014-15.
In partial modification to this department's Circular No.28 of 2015-16 on
the subject cited, above and in exercise of the powers conferred under Rule 49A of '
the Delhi Value Added Tax Rules, 2005 read with section 9(2) of Central Sales Tax'
Act, 1956, I, S.S.Yadav, Commissioner, Value Added Tax, do hereby extend the last
date of filing of online return in Form 9 for the year 2014-15, prescribed under
Rule 4 of Central Sales Tax (Delhi) Rules, 2005 to 15/01/2016.
The return is to be filed by dealers who have made interstate sale at
concessional rates against statutory forms 'C' or stock transferred against 'F' forms
or sold the goods against 'H'forms to dealers (other than Delhi) or claimed
deduction from taxable turnover against E-I/EIIforms or I/J forms etc.
The dealers who have not made the sale as mentioned above' need not
file reconciliation return in Form 9.                                ~
(S.S.      av)
Commissioner, VaLue Add d Tax
No.F.3(589)jPolicy/V ATj2015j \\ 6~ ~,b'6               Dated: \5 \ \~ \ c;2.QJ lS
Copy forwarded for information and necessary action to:
1. All Spl./Addl./Joint Commissioners, Department of Trade and Taxes, GNCT of
Delhi, Vyapar Bhawan I.P.Estate, New Delhi-02.                   '
2. Dy. Director (Policy), Department of Trade. and Taxes, GNCT of Delhi, Vyapar
, Bhawan, I.P.Estate, New Delhi-02.
3. Joint Director(IT), bepartment of Trade and Taxes, GNCT of, Delhi, Vyapar
Bhawan, I.P.Estate, New Delhi-02 for uploading the circular on the website of
the department.'
4. The President/General Secretary, Sales Tax Bar Association (Regd.), Vyapar
Bhawan, I.P.Estate, New Delhi.
5. All Assistant CommissionersjAVATOs, Department of Trade and Taxes, GNCT of
Delhi, Vyapar Bhawan, LP.Estate New Delhi-02 through Zonal In charge.
t
6. PS tothe Commissioner, VAT Department of Trade and Taxes, GNCT of Delhi,
t
Vyapar Bhawan, I.P.Estate New Delhi-02.
t
7. Guard File.
~~
\'5\r4   I~
(Rajesh BhatLCi)
Assistant Commissioner (Policy)

Guidelines on trading of Currency Futures and Exchange Traded Currency Options in Recognized Stock Exchanges – Introduction of Cross-Currency Futures and Exchange Traded Option Contracts

RBI/2015-16/267
A.P. (DIR Series) Circular No. 35

December 10, 2015

To

All Authorised Dealer Category – I Banks

Madam / Sir,

Guidelines on trading of Currency Futures and Exchange Traded Currency Options in Recognized Stock Exchanges – Introduction of Cross-Currency Futures and Exchange Traded Option Contracts

Attention of Authorized Dealers Category – I (AD Category – I) banks is invited to the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 dated May 3, 2000 (Notification No. FEMA. 25/RB-2000 dated May 3, 2000), as amended from time to time, the Currency Futures (Reserve Bank) Directions, 2008 dated August 6, 2008 and Exchange Traded Currency Options (Reserve Bank) Directions, 2010 dated July 30, 2010 as amended from time to time and also A.P. (DIR Series) circular No. 147 and circular no. 148 both dated June 20, 2014, as amended from time to time, in terms of which persons resident in India and persons resident outside India viz., foreign portfolio investors (FPIs) are permitted to participate in the currency futures and exchange traded currency options market in India subject to the terms and conditions mentioned in the aforementioned notifications and guidelines, ibid.

2. Currently market participants, i.e., residents and eligible non-resident market participants are permitted to trade in US Dollar (USD) – Indian Rupee (INR), Euro (EUR)-INR, Pound Sterling (GBP)-INR and Japanese Yen (JPY)-INR currency futures contracts and USD-INR currency option contract in recognized stock exchanges. In order to enable direct hedging of exposures in foreign currencies and facilitate execution of cross-currency strategies by market participants, it has been decided, as announced in the Fourth Bi-monthly Monetary Policy Statement 2015-16 (Para 38), to permit the recognized stock exchanges to offer cross-currency futures contracts and exchange traded option contracts in the currency pairs of EUR-USD, GBP-USD and USD-JPY. Recognised stock exchanges are also permitted to offer exchange traded currency option contracts in EUR-INR, GBP-INR and JPY-INR in addition to the existing USD-INR option contract, with immediate effect.

3. Accordingly, the Notifications No.FMRD.1 / ED (CS) – 2015 dated December 10, 2015 and No. FMRD. 2/ ED (CS) – 2015 dated December 10, 2015 viz. Currency Futures (Reserve Bank) (Amendment) Directions, 2015 and Exchange Traded Currency Options (Reserve Bank) (Amendment) Directions, 2015 amending the Directions notified vide Notification No.FED.1/DG (SG) – 2008 dated August 6, 2008 and Notification No. FED.1 / ED (HRK) – 2010 dated July 30, 2010 respectively have been issued. Copies of the Directions are enclosed (Annexes I & II).

4. Market Participants, i.e., residents and FPIs, are allowed to take positions in the cross-currency futures and exchange traded cross-currency option contracts without having to establish underlying exposure subject to the position limits as prescribed by the exchanges.

5. The existing position limits of USD 15 million for USD-INR contracts and USD 5 million for non USD-INR contracts, all put together, per exchange, for residents and FPIs, without having to establish underlying exposure, shall remain unchanged. The hedging procedure for residents as laid down in A.P. (DIR Series) Circular No. 147 dated June 20, 2014 and for FPIs as laid down in A.P. (DIR Series) Circular No. 148 dated June 20, 2014 shall also remain unchanged. A summary of the position limits is provided in the Table given in Annex III.

6. AD Category-I banks may undertake trading in all permitted exchange traded currency derivatives within their Net Open Position Limit (NOPL) subject to limits stipulated by the exchanges (for the purpose of risk management and preserving market integrity) provided that any synthetic USD-INR position created using a combination of exchange traded FCY-INR and cross-currency contracts shall have to be within the position limit prescribed by the exchange for the USD-INR contract.

7. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

8. The above Directions have been issued under Section 45W of the Reserve Bank of India Act, 1934 and this circular has been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(R Subramanian)
Chief General Manager


Annex I to A.P. (DIR Series) Circular No. 35 dated December 10, 2015

Currency Futures (Reserve Bank) (Amendment) Directions, 2015
Notification No. FMRD. 1/ED(CS)-2015 dated December 10, 2015

The Reserve Bank of India having considered necessary in public interest and to regulate the financial system of the country to its advantage, in exercise of its powers conferred by section 45W of the Reserve Bank of India Act, 1934 and of all the powers enabling it in this behalf, hereby gives the following directions to all the persons dealing in currency futures.

1. Short title and commencement of the directions

These Directions may be called the Currency Futures (Reserve Bank) (Amendment) Directions, 2015 and they shall come into force with effect from December 10th, 2015.

2. Amendment to Currency Futures (Reserve Bank) Directions, 2008

(ii) In paragraph 4,

(a) the existing clause (a), shall be substituted by:

“(a) Foreign Currency-Indian Rupee contracts, viz. USD-INR, EUR-INR, GBP-INR and JPY-INR and Cross Currency contracts (not involving the Indian Rupee), viz. EUR-USD, GBP-USD and USD-JPY are allowed to be traded.”

(b) the existing clause (b), shall be substituted by:

“(b) The size of the USD-INR and USD-JPY contracts shall be USD 1000, of EUR-INR and EUR-USD contracts shall be EUR 1000, of GBP-INR and GBP-USD contracts shall be GBP 1000 and JPY-INR contract shall be JPY 100,000.”

(c) the existing clause (c), shall be substituted by:

“(c) All Foreign Currency-INR contracts shall be quoted and settled in Indian Rupees. EUR-USD and GBP-USD cross currency contracts shall be quoted in USD and USD-JPY contract shall be quoted in JPY. All cross currency contracts shall be settled in Indian Rupees as per the method approved by Reserve Bank.”

(d) the existing clause (e), shall be substituted by:

“(e) The settlement price for USD-INR shall be the Reserve Bank’s Reference Rate and for Euro-INR, GBP-INR and JPY-INR contracts shall be the exchange rates published by the Reserve Bank in its press release on the last trading day. The settlement price in Indian Rupees of the cross-currency contracts shall be computed using the Reserve Bank’s USD-INR Reference Rate and the corresponding exchange rate published by Reserve Bank for EUR-INR, GBP-INR and JPY-INR on the last trading day.”

(Chandan Sinha)
Executive Director


Annex II to A.P. (DIR Series) Circular No. 35 dated December 10, 2015

Exchange Traded Currency Options (Reserve Bank) (Amendment) Directions, 2015
Notification No. FMRD. 2 /ED(CS)-2015 dated December 10, 2015

The Reserve Bank of India having considered necessary in public interest and to regulate the financial system of the country to its advantage, in exercise of its powers conferred by section 45W of the Reserve Bank of India Act, 1934 and of all the powers enabling it in this behalf, hereby gives the following directions to all the persons dealing in currency futures.

1. Short title and commencement of the directions

These directions may be called the Exchange Traded Currency Options (Reserve Bank) (Amendment) Directions, 2015 and they shall come into force with effect from December 10th, 2015.

2. Amendment to Exchange Traded Currency Options (Reserve Bank) Directions, 2010

(i) In para 3, for sub-para (i) the following shall be substituted:

“Currency option contracts are permitted in USD-INR spot rate, EUR-INR spot rate GBP-INR spot rate and JPY-INR spot rate. Cross currency option contracts (not involving the Indian Rupee) are permitted in EUR-USD spot rate, GBP-USD spot rate and the USD-JPY spot rate.”

(ii) In para 4,

(a) for sub-para (a), the following shall be substituted:

“(a) The underlying for the currency option shall be the spot rate of the corresponding permitted currency pair.”

(b) for sub-para (c), the following shall be substituted:

“(c) The size of the USD-INR and USD-JPY contracts shall be USD 1000, of EUR-INR and EUR-USD contracts shall be EUR 1000, of GBP-INR and GBP-USD contracts shall be GBP 1000 and JPY-INR contract shall be JPY 100,000.”

(c) for sub-para (d), the following shall be substituted:

“(d) The premium for all contracts involving the Indian Rupee shall be quoted in Indian Rupees. The premium for EUR-USD and GBP-USD contracts shall be quoted in USD and for USD-JPY contract shall be quoted in JPY. For cross currency contracts the premium shall be payable in Indian Rupees based on the USD-INR Reference Rate or the corresponding exchange rates published by Reserve Bank. The outstanding position shall be in USD for USD-INR and USD-JPY contracts, in Euro for EUR-INR and EUR-USD contracts and in GBP for GBP-INR and GBP-USD contracts.”

(d) for sub-para (g), the following shall be substituted:

“(g) The settlement price for USD-INR option contract shall be the Reserve Bank’s Reference Rate and for Euro-INR, GBP-INR and JPY-INR contracts shall be the exchange rates published by the Reserve Bank in its press release on the expiry date of the contract. The settlement price in Indian Rupees of the cross-currency contracts shall be computed using the Reserve Bank’s USD-INR Reference Rate and the corresponding exchange rate published by Reserve Bank for EUR-INR, GBP-INR and JPY-INR on the expiry date of the contract.”

(Chandan Sinha)
Executive Director


Annex III to A.P. (DIR Series) Circular No. 35 dated December 10, 2015

Position Limits for market participants in the Exchange Traded Currency Derivatives

Type of market participant Position limit for FCY-INR contracts (both futures and options) Position limit for cross-currency contracts (both futures and options)
Clients and Foreign Portfolio Investors (FPIs) USD 15 million for USD-INR pair and USD 5 million for EUR-INR, GBP-INR and JPY-INR, for all pairs put together, per exchange, across all contracts for positions taken without establishing underlying exposure. As per the limits specified by the exchanges without having to establish underlying exposure.
For hedging underlying exposures, participants may take positions in either FCY-INR contracts or in combination with cross-currency contracts up to the underlying exposure and as per limits specified by the exchanges in terms of the guidelines stipulated in A.P. (DIR Series) Circulars No. 147 dated June 20th, 2014 and No. 90 dated March 31st, 2015for residents and A.P. (DIR Series) Circular No. 148 dated June 20th, 2014 for FPIs.
AD Cat-I bank trading members As per the position limits specified by the exchanges subject to the Net Open Position Limit (NOPL) and Aggregate Gap Limits (AGL) in terms of A.P. (DIR Series) Circular No. 86 dated March 1, 2013. Further, any synthetic USD-INR position created using a combination of exchange traded FCY-INR and cross-currency contracts shall have to be within the position limit prescribed by the exchange for the USD-INR contract.

Implementation of Section 51-A of Unlawful Activities Prevention Act (UAPA), 1967- Updates to Al-Qaida Sanctions List

RBI/2015-16/268
DBR. AML. No.7835/ 14.06.001/ 2015-16

December 15, 2015

The Chairpersons/ CEOs of all Scheduled Commercial Banks/ Regional Rural Banks/ Local Area Banks/ All India Financial Institutions/ all NBFCs/ All Primary (Urban) Co-operative Banks /State and Central Co-operative Banks (StCBs / CCBs) /All Payment System Providers/ System Participants and Prepaid Payment Instrument Issuers/ All authorised persons including those who are agents of Money Transfer Service Scheme

Dear Sir/ Madam,

Implementation of Section 51-A of Unlawful Activities Prevention Act (UAPA), 1967- Updates to Al-Qaida Sanctions List

Please refer to our circular DBR.AML.No. 7376/14.06.001/2015-16 dated December 2, 2015 on the captioned subject releasing updates issued vide press releases No.12139 dated November 25, 2015 and No. 12144 dated November 30, 2015 relating to deletion/addition pertaining to UNSCR 1267(1999)/ 1989(2011) Committee’s Al Qaida Sanctions List.

2. Ministry of External Affairs (MEA), UNP Division has now forwarded press release No.12152 and No. 12153 both dated December 10, 2015 relating to deletion/amendments pertaining to Al Qaida sanction list.

Press releases pertaining to the update are available at:
http://www.un.org/press/en/2015/sc12152.doc.htm
http://www.un.org/press/en/2015/sc12153.doc.htm

3. A link to updated list of individuals and entities linked to Al Qaida is available at:
https://www.un.org/sc/suborg/sites/www.un.org.sc.suborg/files/1267.pdf

4. Regulated Entities (REs) are required to update the list of individuals/entities as circulated by Reserve Bank and before opening any new account, it should be ensured that the name/s of the proposed customer does not appear in the list. Further, REs should scan all existing accounts to ensure that no account is held by or linked to any of the entities or individuals included in the list.

5. REs are advised to strictly follow the procedure laid down in the UAPA Order dated August 27, 2009 enclosed to our circular DBOD.AML.BC. No. 44/14.01.001/2009-10 dated September 17, 2009 and ensure meticulous compliance to the Order issued by the Government.

6. As far as freezing of funds, financial assets or economic resources or related services held in the form of bank accounts of the designated individuals/entities are concerned, action should be taken as detailed in paragraph 6 of the circular dated September 17, 2009, mentioned above.

7. A link of press releases in which the relevant changes to the list are announced are posted on the UNSC Sanction Committee’s website at the following URL:
https://www.un.org/sc/suborg/en/sanctions/1267/press-releases

Yours faithfully,

(Thomas Mathew)
General Manager
Encl.: as above

Income-tax (19th Amendment) Rules, 2015

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TEXAS)
NOTIFICATION
New Delhi, the 8th December, 2015
INCOME- TAX

S.O. 3312(E).— In exercise of the powers conferred by sections 92CB and 92D, read with section
295 of the Income-tax Act, 1961(43 of 1961), the Central Board of Direct Taxes hereby makes the following
rules further to amend the Income-tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (19th Amendment) Rules, 2015.
(2) They shall come into force from the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), in rule 10D, for sub-rule
(2A), the following sub-rule shall be substituted, namely:-
“(2A) Nothing contained in sub-rule (1), in so far as it relates to an eligible specified
domestic transaction referred to in rule 10 THB , shall apply in a case of an eligible assessee
mentioned in rule 10 THA and-
(a) the eligible assessee, referred to in clause (i) of rule 10 THA, shall keep and maintain the
following information and documents, namely:-
(i) a description of the ownership structure of the assessee enterprise with details of shares
or other ownership interest held therein by other enterprises;
(ii) a broad description of the business of the assessee and the industry in which the
assessee operates, and of the business of the associated enterprises with whom the
assessee has transacted;
(iii) the nature and terms (including prices) of specified domestic transactions entered into
with each associated enterprise and the quantum and value of each such transaction or
class of such transaction;
(iv) a record of proceedings, if any, before the regulatory commission and orders of such
commission relating to the specified domestic transaction;
(v) a record of the actual working carried out for determining the transfer price of the
specified domestic transaction;
(vi) the assumptions, policies and price negotiations, if any, which have critically affected
the determination of the transfer price; and
(vii) any other information, data or document, including information or data relating to the
associated enterprise, which may be relevant for determination of the transfer price;
(b) the eligible assesse, referred to in clause (ii) of rule 10THA, shall keep and maintain the
following information and documents, namely:-
(i) a description of the ownership structure of the assessee co-operative society with details
of shares or other ownership interest held therein by the members;
(ii) description of members including their addresses and period of membership;
(iii) the nature and terms (including prices) of specified domestic transactions entered into
with each member and the quantum and value of each such transaction or class of such
transaction;

(iv) a record of the actual working carried out for determining the transfer price of the
specified domestic transaction;
(v) the assumptions, policies and price negotiations, if any, which have critically affected
the determination of the transfer price;
(vi) the documentation regarding price being routinely declared in transparent manner and
being available in public domain; and
(vii) any other information, data or document which may be relevant for determination of the
transfer price.”.
3. In rule 10THA of the said rules, for the words “and is a Government company engaged in the
business of generation, transmission or distribution of electricity” , the following shall be substituted,
namely :-
“and-
(i) is a Government company engaged in the business of generation, transmission or
distribution of electricity; or
(ii) is a co-operative society engaged in the business of procuring and marketing milk and
milk products”.
4. In rule 10THB of the said Rules, after clause (iii) the following clause shall be inserted, namely:-
“or
(iv) purchase of milk or milk products by a co-operative society from its members.”.
5. In sub-rule (2) of rule 10THC of the said rules, in the Table, after serial number 1 and entries relating
thereto, the following serial number and entries shall be inserted, namely:-
“2 Purchase of milk or milk products
referred to in clause (iv) of rule 10THB.
The price of milk or milk products is determined at a
rate which is fixed on the basis of the quality of milk,
namely, fat content and Solid Not Fat (SNF) content
of milk; and-
(a) the said rate is irrespective of,-
(i) the quantity of milk procured;
(ii) the percentage of shares held by the members
in the co-operative society;
(iii) the voting power held by the members in the
society; and
(b) such prices are routinely declared by the cooperative
society in a transparent manner and are
available in public domain.”.
6. In sub-rule (1) of rule 10 THD of the said rules, after the second proviso, the following proviso shall be
inserted, namely:-
“Provided also that in respect of eligible specified domestic transactions, referred to in clause (iv) of
rule 10 THB, undertaken during the previous year relevant to the assessment year beginning on the
1st day of April, 2013 or beginning on the 1st day of April, 2014 or beginning on the 1st day of April,
2015, Form 3CEFB may be furnished by the assessee on or before the 31st day of December, 2015.”
7. In Appendix II to the said rules, in Form No. 3CEFB, in sub-paragraph 2, in the Table, after
serial number 1 and the entries relating thereto, the following serial number and entries shall be
inserted, namely:-
6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
“2. Has the eligible assessee entered into any specified domestic
transaction in respect of purchase of milk and milk products
referred to in clause (iv) of rule 10THB?
If yes, provide the following details:
(a) The quantity of milk and milk products purchased
during the year from the members.
(b) Details of milk equivalent of the milk products
purchased from members.
(c) The rate or rates at which milk or milk products have
been purchased during the year.
(d) Whether payment for purchase of milk or milk
product has been made at the same rate to all the
members of the co-operative society.
(e) Whether transfer price is in accordance with the
circumstances specified under rule 10THC.
Yes/No
Milk product Milk
equivalent
Rate Period during
which applicable
Yes/No
Yes/No”.
[Notification No. 90/2015/F.No. 142/7/2014-TPL]
EKTA JAIN, Dy. Secy. (Tax Policy and Legislation)
Note:- The principal rules were published in the Gazette of India Extraordinary, Part III, Section 3, Sub-section (i), vide
notification number S.O. 969(E), dated the, 26th March, 1962 and last amended vide notification number
GSR No. 923(E) dated the 2nd December, 2015.
Printed by the Manager, Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.

RBI-Fourth Bi-monthly Monetary Policy Statement, 2015-16 – SLR Holdings under Held to Maturity Category

RBI/2015-16/261
DBR.No.BP.BC.65/21.04.141/2015-16

December 10, 2015

All Commercial Banks

Dear Sir,

Fourth Bi-monthly Monetary Policy Statement, 2015-16 –
SLR Holdings under Held to Maturity Category

In terms of our circular DBOD.No.BP.BC.42/21.04.141/2014-15 dated October 7, 2014 and also, RPCD.CO.RRB.BC 34/03.05.33/2014-15 dated October 20, 2014on ‘Fourth Bi-monthly Monetary Policy Statement, 2014-15 – SLR Holdings under Held to Maturity Category’, all banks (including Regional Rural banks) are permitted to exceed the limit of 25 per cent of total investments under HTM category provided (a) the excess comprises only of SLR securities, and (b) the total SLR securities held in the HTM category are not more than 23.50 per cent of their NDTL with effect from January 10, 2015, 23.0 per cent with effect from April 4, 2015, 22.5 per cent with effect from July 11, 2015 and 22.0 per cent with effect from September 19, 2015.

2. The SLR was reduced to 21.50 per cent of NDTL with effect from February 7, 2015. Further, as announced in the Fourth Bi-monthly Monetary Policy Statement, 2015-16 on September 29, 2015 (extract enclosed), it has been decided to progressively bring down the SLR by 0.25 per cent every quarter till March 31, 2017 and concurrently reduce the abovementioned ceiling on SLR holdings under HTM in alignment with the SLR requirement.

3. Accordingly, in order to align the ceiling on SLR holdings under HTM category with the mandatory SLR, it is advised that banks are permitted to exceed the limit of 25 per cent of total investments under HTM category provided:

a. the excess comprises only of SLR securities, and

b. the total SLR securities held under the HTM category are not more than

  • 21.50 per cent from January 9, 2016
  • 21.25 per cent from April 2, 2016;
  • 21.00 per cent from July 9, 2016;
  • 20.75 per cent from October 1, 2016;
  • 20.50 per cent from January 7, 2017.

4. As per extant instructions, banks may shift investments to/from HTM with the approval of the Board of Directors once a year and such shifting will normally be allowed at the beginning of the accounting year. In order to enable banks to shift their excess SLR securities from the HTM category to AFS/HFT to comply with instructions as indicated in paragraph 3 above, it has been decided to allow such shifting of the excess securities, as also direct sale from HTM category, at the beginning of every quarter when the HTM ceiling is brought down. This would be in addition to the shifting permitted at the beginning of the accounting year, i.e., in the month of April. Such transfer to AFS/HFT category as well as sale of securities from HTM category, to the extent required to reduce the SLR securities in HTM category in accordance with the regulatory instructions, would be excluded from the 5 per cent cap prescribed for value of sales and transfers of securities to/from HTM category under paragraph 2.3 (ii) of the Master Circular on Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks.

Yours faithfully

(Sudarshan Sen)
Principal Chief General Manager


Extract from Fourth Bi-monthly Monetary Policy Statement 2015-16 announced on September 29, 2015

25. Banks are permitted to hold investments under the HTM category in excess of the limit of 25 per cent of their total investments, provided the excess comprises only SLR securities and the total SLR securities held under the HTM category are not more than 22 per cent of NDTL. The SLR has been reduced to 21.50 per cent of NDTL with effect from February 7, 2015. To align them, it has been decided to bring down the ceiling on SLR securities under HTM from 22 per cent to 21.50 per cent with effect from the fortnight beginning January 9, 2016. Thereafter, both the SLR and the HTM ceiling will be brought down by 0.25 per cent every quarter till March 31, 2017.

Notification – Revised Dates of Counting of Votes

    [TO BE PUBLISHED IN PART III SECTION 4 OF THE GAZETTE OF INDIA,
EXTRAORDINARY DATED 10th DECEMBER, 2015]
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
NEW DELHI ­ 110 002
10th December, 2015
NOTIFICATION
(Chartered Accountants)
No. 54-EL(1)/13/2015: Whereas vide Notification No. 54-EL(1)/2/2015 dated 3rd
September, 2015, 16th December, 2015 to 8th January, 2016 were notified as the dates of
counting of votes and 11th January, 2016 for declaration of result. And whereas, due to
incessant rains and consequent flooding in Chennai and other parts of the Southern Region,
the polling was postponed to 18th and 19th December, 2015 in certain polling booths in
Southern Region vide Notification No. 54-EL(1)/12/2015 dated 7th December, 2015. Arising
out of postponement of dates of polling, it would be difficult for the office to monitor and
conduct the tasks of counting of votes and polling in certain locations in Southern Region
simultaneously.
Now therefore, in view of above compelling reason and in exercise of powers
conferred under sub-rule (3) of rule 4 of the Chartered Accountants (Election to the Council)
Rules, 2006, read with sub-regulation (10) of regulation 134 of the Chartered Accountants
Regulations, 1988, the following revised dates are hereby notified for general information of
the candidates for election to the twenty third Council and twenty second Regional Councils
of the Institute:-
1. Dates of counting of votes                    :        20.12.2015 to 12.01.2016
2. The date of declaration of results            :        15.1.2016* (latest)
*      The date to be reckoned for the purpose of determining the limitation period for filing
election dispute application shall be the date on which the declaration of results is eventually
notified in the Gazette of India.
(V Sagar)
Returning Officer and Secretary
1

RBI-Section 24 and Section 56 of the Banking Regulation Act, 1949 – Maintenance of Statutory Liquidity Ratio (SLR)

RBI/2015-16/262
DBR.No.Ret.BC.64/12.01.001/2015-16

December 10, 2015

All Commercial Banks, Primary (Urban) Co-operative Banks (UCBs),
State and Central Co-operative Banks (StCBs/CCBs)

Dear Sir,

Section 24 and Section 56 of the Banking Regulation Act, 1949 – Maintenance of Statutory Liquidity Ratio (SLR)

Please refer to circulars DBR.Ret.BC.70/12.02.001/2014-15 and DCBR.BPD.(PCB/RCB).Cir.No.14/16.26.000/2014-15 dated February 03, 2015, on maintenance of Statutory Liquidity Ratio under Section 24 and Section 56 of the Banking Regulation Act, 1949.

2. As announced in the fourth Bi-Monthly Monetary Policy Statement 2015-16 by the Reserve Bank of India on September 29, 2015, it has been decided to reduce the Statutory Liquidity Ratio (SLR) of scheduled commercial banks, local area banks, primary (Urban) co-operative banks (UCBs), state co-operative banks and central co-operative banks from 21.5 per cent of their Net Demand and Time Liabilities (NDTL) to:

(i) 21.25 per cent from April 2, 2016;

(ii) 21.00 per cent from July 9, 2016;

(iii) 20.75 per cent from October 1, 2016; and

(iv) 20.50 per cent from January 7, 2017

3. We have moved to issuing a single regulation for the commercial banks, Primary (Urban) Co-operative Banks and State and Central Co-operative Banks. A copy of the relative notification DBR.No.Ret.BC. 63/12.02.001/2015-16 dated December 10, 2015, applicable to all these banks is enclosed.

4. Please acknowledge receipt.

Yours faithfully,

(Sudarshan Sen)
Principal Chief General Manager

Encl: As above


DBR.No.Ret.BC.63 /12.01.001/2015-16

December 10, 2015

NOTIFICATION

In exercise of the powers conferred by sub-section (2A) of Section 24 read with Section 51 and Section 56 of the Banking Regulation Act, 1949 (10 of 1949) and in partial modification of the Notifications Ref.DBR.No.Ret.BC.69/12.02.001/2014-15 dated February 03, 2015 and DCBR.BPD.(PCB/RCB).Not.No.2/16.26.000/2014-15 dated February 03, 2015, the Reserve Bank hereby specifies that:

(i) with effect from the dates given below, every scheduled commercial bank, local area bank, primary co-operative bank, state co-operative bank and central co-operative bank shall maintain in India assets (hereinafter referred to as ‘SLR assets’) the value of which shall not, at the close of business on any day, be less than:

(a) 21.25 per cent from April 2, 2016;

(b) 21.00 per cent from July 9, 2016;

(c) 20.75 per cent from October 1, 2016; and

(d) 20.50 per cent from January 7, 2017

of their total net demand and time liabilities in India as on the last Friday of the second preceding fortnight, valued in accordance with the method of valuation specified by the Reserve Bank from time to time; and

(ii) such SLR assets shall be maintained by:

A. Scheduled commercial banks and local area banks, as -

(a) cash; or

(b) gold valued at a price not exceeding the current market price: or

(c) unencumbered investment in any of the following instruments [hereinafter referred to as Statutory Liquidity Ratio securities (“SLR securities”)], namely:-

(1) Dated securities of the Government of India issued from time to time under the market borrowing programme and the Market Stabilization Scheme ; or

(2) Treasury Bills of the Government of India; or

(3) State Development Loans (SDLs) of the State Governments issued from time to time under the market borrowing programme:

(d) the deposit and unencumbered approved securities required, under sub-section (2) of section 11 of the Banking Regulation Act, 1949(10 of 1949), to be made with the Reserve Bank by a banking company incorporated outside India;

(e) any balance maintained by a scheduled bank with the Reserve Bank in excess of the balance required to be maintained by it under section 42 of the Reserve Bank of India Act,1934 (2 of 1934);

Provided that the instruments referred to in items (1) to (3) above that have been acquired from the Reserve Bank under the Liquidity Adjustment Facility (LAF), shall not be included as SLR securities for the purpose of maintenance of SLR assets;

Provided further that the following securities shall not be treated as encumbered for the purpose of maintenance of SLR assets, namely:-

(a) securities lodged with another institutionfor an advance or any other credit arrangement to the extent to which such securities have not been drawn against or availed of;

(b) securities offered as collateral to the Reserve Bank for availing liquidity assistance from Marginal Standing Facility (MSF) up to the permissible percentage of the total NDTL in India, carved out of the required SLR portfolio of the bank concerned; and

(c) securities offered as collateral to the Reserve Bank for availing liquidity assistance under Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) .

B. Primary (Urban) co-operative banks, as–

(a) Cash, or

(b) Gold valued at a price not exceeding the current market price, or

(c) Unencumbered investment in approved securities as defined in section 5(a) of the Banking Regulation Act, 1949 (10 of 1949) read with section 56 thereof:

Provided that the instruments acquired from the Reserve Bank under the Liquidity Adjustment Facility (LAF) shall not be included as SLR securities for the purpose of maintenance of SLR assets;

Provided further that the following securities shall not be treated as encumbered for the purpose of maintenance of SLR assets, namely:-

The securities lodged with another institutionfor an advance or any other credit arrangement to the extent to which such securities have not been drawn against or availed of;

C. State co-operative bank (StCB) and Central co-operative bank (CCB), as -

(a) Cash, or

(b) Gold valued at a price not exceeding the current market price, or

(c) Unencumbered investment in approved securities as defined in Section 5(a) of the Banking Regulation Act, 1949 (10 of 1949) read with Section 56 thereof.

Provided that the following securities shall not be treated as encumbered for the purpose of maintenance of SLR assets, namely:-

The securities lodged with another institutionfor an advance or any other credit arrangement to the extent to which such securities have not been drawn against or availed of.

Notwithstanding anything contained hereinabove,

i. Unencumbered balances maintained by a Central co-operative bank with the State co-operative bank of the State concerned, in excess of the balance required to be maintained by it under Section 18 of the Banking Regulation Act, 1949 (10 of 1949) read with section 56 thereof;

ii. Any unencumbered term deposits maintained by a Central cooperative bank with the State co-operative bank of the State concerned; and

iii. Unencumbered term deposits held by a State co-operative bank or a central co-operative bank with State Bank of India or a subsidiary bank or a corresponding new bank or IDBI Bank Ltd.

shall also be deemed to be assets for the purpose of calculating the percentage specified under this notification, till March 31, 2017. However, SLR on incremental NDTL over the level as on July 25, 2014 shall be maintained by StCBs / CCBs in the form of approved assets. Maintenance of SLR in the form of approved assets on NDTL as on July 25, 2014 shall be as per the roadmap advised as under.

Date Investment in approved assets
March 31, 2016 10% of NDTL as on July 25, 2014 to be maintained in assets as mentioned at (c) above
From April 1, 2017 Entire SLR as prescribed by RBI as on that date in assets as mentioned in (a) to (c) above
RPCD circular RPCD.RCB.BC.No.16/07.51.020/2014-15 dated July 21, 2014

(N.S.Vishwanathan)
Executive Director


Annex

Explanation- For the purpose of this notification,

(a) “cash” to be maintained by

i) Scheduled commercial banks and local area banks shall include, in addition to cash in hand, the net balance in current accounts with other scheduled commercial banks in India.

ii) Primary (urban) co-operative banks shall include :

  • Any balances maintained by a primary co-operative bank, which is a scheduled bank, with the Reserve Bank in excess of the balance required to be maintained by it under section 42 of the Reserve Bank of India Act, 1934 (2 of 1934);
  • Any balances maintained by a primary co-operative bank, not being a scheduled bank, with the Reserve Bank in excess of the balance required to be maintained by it under Section 18 of the Banking Regulation Act, 1949 (10 of 1949) read with Section 56 thereof; and
  • “Net balances in current accounts” as defined in the Explanation to sub-section (1) of Section 18 of the Banking Regulation Act, 1949 (10 of 1949) read with Section 56 thereof, in excess of the balance required to be maintained by it under the said section.

iii) State co-operative bank or a Central co-operative bank shall include –

  • Any balances maintained by a State co-operative bank, which is a scheduled bank, with the Reserve Bank in excess of the balance required to be maintained by it under Section 42 of the Reserve Bank of India Act, 1934 (2 of 1934);
  • Any balances maintained by a State co-operative bank or Central co-operative bank, not being a scheduled bank, with the Reserve Bank in excess of the balance required to be maintained by it under Section 18 of the Banking Regulation Act, 1949 (10 of 1949) read with Section 56 thereof; and
  • “Net balances in current accounts” as defined in the Explanation to sub-section (1) of section 18 of the Banking Regulation Act, 1949 (10 of 1949) read with section 56 thereof, in excess of the balance required to be maintained by it under the said Section.

(b) “Facility to Avail Liquidity for Liquidity Coverage Ratio” shall mean facility whereby banks will be permitted to reckon government securities held by them up to a certain per cent of their NDTL within the mandatory SLR requirement as level 1 HQLA for the purpose of computing their Liquidity Coverage Ratio (LCR).

(c) “Liquidity Adjustment Facility” shall mean Repo auctions (for injection of liquidity) and reverse repo auctions (for absorption of liquidity) conducted by the Reserve Bank of India.

(d) “Local area bank” shall mean a banking company licensed as such under Section 22 of the Banking Regulation Act, 1949 (10 of 1949).

(e) “Marginal standing facility” shall mean the facility under which the eligible entities can avail liquidity support from the Reserve Bank against SLR securities, up to a certain per cent of their respective NDTL outstanding at the last Friday of the second preceding fortnight.

(f) “Market borrowing programme” shall mean the domestic rupee loans raised by the Government of India and the State Governments from the public and managed by the Reserve Bank through issue of marketable securities, governed by the provisions of the Government Securities Act, 2006, Public Debt Act, 1944 and the Regulations framed under those Acts, through an auction or any other method, as specified in the notification issued in this regard.

(g) “Scheduled commercial bank” shall mean a banking company included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934) and includes the State Bank of India, subsidiary bank, corresponding new bank and Regional Rural Bank.

(h) “State Co-operative Bank” shall mean the Principal Co-operative Society in a State, the primary object of which is the financing of other Co-operative Societies in the State:

Provided that in addition to such Principal Society in a State, or where there is no such Principal Society in a State, the State Government may declare any one or more Co-operative Societies carrying on business in that State to be also or to be a State Co-operative Bank or State Co-operative Banks within the meaning of this definition;

(i) “Central Co-operative Bank” shall mean the Principal Co-operative Society in a district in a State, the primary object of which is the financing of other Co-operative Societies in that district:

Provided that in addition to such Principal Society in a district, or where there is no such Principal Society in a district, the State Government may declare any one or more Co-operative Societies carrying on the business of financing other Co-operative Societies in that district to be also or to be a Central Co-operative Bank or Central Co-operative Banks within the meaning of this definition.

(j) “Primary Co-operative Bank” shall mean a co-operative society, other than a primary agricultural credit society,-

  1. the primary object or principal business of which is the transaction of banking business;
  2. the paid-up share capital and reserves of which are not less than one lakh of rupees; and
  3. the bye-laws of which do not permit admission of any other co-operative society as a member :

Provided that this sub clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State Government for the purpose.

ICAI Tamilnadu Flood Relief Fund

Appeal

ICAI Tamilnadu Flood Relief Fund

The recent floods in the state of Tamilnadu have caused extensive devastation. A large number of people have died and thousands have been rendered homeless.

At this moment, the affected people in Tamilnadu need help to tide over this natural calamity that has fallen upon them, to survive and to rebuild their lives. In this scenario, ICAI has decided to stand with our distressed fellow countrymen, and actively participate in the national effort to support them at this difficult time.

To provide the relief for the people affected by the devastation, ICAI has opened a bank account exclusively for the purpose of collecting donations from members and students.

ICAI appeals to all members, students and others to donate generously through DD/Cheque towards this noble cause. The DD/Cheque payable at New Delhi may be in favour of the following:

ICAI Tamilnadu Flood Relief Fund 

The collected amount will be given to CHIEF MINISTER’S PUBLIC RELIEF FUND at Chennai. The donors are requested to give their name, membership number / student registration number, address, amount and date of contribution, so that receipts could be obtained from CHIEF MINISTER’S PUBLIC RELIEF FUND for onward transmission to the donors. The letter/email can be sent to:

The Joint Secretary
MC & MSS
The Institute of Chartered Accountants of India
ICAI Bhawan
A-29, Sector – 62,
Noida – 201 309

Shamsher Singh Verma vs. State of Haryana (Supreme Court)

Word “document” is defined in Section 3 of the Indian Evidence Act, 1872, as under: – ‘Document’ means any matter expressed or described upon any substance by means of letters, figures or marks, or by more than one of those means, intended to be used, or which may be used, for the purpose of recording that matter.

(ii) In R.M. Malkani vs. State of Maharashtra (1973) 1 SCC 471: 1973 (2) SCR 417, this Court has observed that tape recorded conversation is admissible provided first the conversation is relevant to the matters in issue; secondly, there is identification of the voice; and, thirdly, the accuracy of the tape recorded conversation is proved by eliminating the possibility of erasing the tape record.

(iii) In Ziyauddin Barhanuddin Bukhari vs. Brijmohan Ramdass Mehra and others (1976) 2 SCC 17: 1975 (Supp) SCR 281, it was held by this Court that tape-records of speeches were “documents”, as defined by Section 3 of the Evidence Act, which stood on no different footing than photographs, and that they were admissible in evidence on satisfying certain conditions.

(iv) In view of the definition of ‘document’ in Evidence Act, and the law laid down by this Court, as discussed above, we hold that the compact disc is also a document. It is not necessary for the court to obtain admission or denial on a document under sub-section (1) to Section 294 CrPC personally from the accused or complainant or the witness. The endorsement of admission or denial made by the counsel for defence, on the document filed by the prosecution or on the application/report with which same is filed, is sufficient compliance of Section 294 CrPC. Similarly on a document filed by the defence, endorsement of admission or denial by the public prosecutor is sufficient and defence will have to prove the document if not admitted by the prosecution. In case it is admitted, it need not be formally proved, and can be read in evidence. In a complaint case such an endorsement can be made by the counsel for the complainant in respect of document filed by the defence.

Riviera Home Furnishing vs. ACIT (Delhi High Court)

(i) The submissions made on behalf of the Revenue proceed on the basic misconception regarding the true purport of the provisions of Chapter VIA of the Act and on an incorrect understanding of Section 80A (4) of the Act. The opening words of Section 80A (4) read “Notwithstanding anything to the contrary contained in section 10A or section 10AA or section 10B or section 10BA or in any provisions of this Chapter…..”. What is sought to be underscored, therefore, is that Section 80A, and the other provisions in Chapter VIA, are independent of Sections 10A and 10B of the Act. It appears that the object of Section 80A (4) was to ensure that a unit which has availed of the benefit under Section 10B will not be allowed to further claim relief under Section 80IA or 80IB read with Section 80A (4). The intention does not appear to be to deny relief under Section 10B (1) read with Section 10B (4) or to whittle down the ambit of those provisions. Also, the revenue is not right in contending that the decisions of the High Courts referred to above have not noticed the decision of the Supreme Court in Liberty India v. Commissioner of Income Tax (2009) 317 ITR 218. The Karnataka High Court in CIT v. Motorola India Electronics Pvt. Ltd (2014) 46 Taxmann.com 167 (Kar) makes a reference to the said decision. That decision of the Karnataka High Court has been cited with approval by this Court in Hritnik Exports (decision dated 13th November 2014 in ITA Nos. 219 and 239 of 2014) and Universal Precision Screws decision dated 6th October 2015 in ITA NO 392 of 2015. In Hritnik Exports (supra) the Court quoted with approval the observations of the Special Bench of the ITAT in Maral Overseas Ltd. (supra) that “Section 10A/10B of the Act is a complete code providing the mechanism for computing the ‘profits of the business’ eligible for deduction u/s 10B of the Act. Once an income forms part of the business of the income of the eligible undertaking of the assessee, the same cannot be excluded from the eligible profits for the purpose of computing deduction u/s 10B of the Act.”

(ii) As regards the decision of the ITAT in not accepting the Assessee’s plea in regard to ‘customer claims’ ‘freight subsidy’ and ‘interest on fixed deposit receipts’ even while it accepted the Assessee’s case as regards ‘deemed export drawback’, the contention of the Assessee as regards customer claims was that it had received the claim of Rs. 28,27,224 from a customer for cancelling the export order. Later on the cancelled order was completed and goods were exported to another customer. The sum received as claim from the customer was non-severable from the income of the business of the undertaking. The Court fails to appreciate as to how the ITAT could have held that this transaction did not arise from the business of the export of goods. Even as regards freight subsidy, the Assessee’s contention was that it had received the subsidy in respect of the business carried on and the said subsidy was part of the profit of the business of the undertaking. If the ITAT was prepared to consider the deemed export draw back as eligible for deduction then there was no justification for excluding the freight subsidy. Even as regards the interest on FDR, the Court has been shown a note of the balance sheet of the Assessee [which was placed before the AO] which clearly states that “fixed deposit receipts (including accrued interest) valuing Rs.15,05,875 are under lien with Bank of India for facilitating the letter of credit and bank guarantee facilities.” In terms of the ratio of the decisions of this Court both in Hritnik Exports (supra) and Universal Precision Screws (supra), the interest earned on such FDR ought to qualify for deduction under Section 10B of the Act.

RBI-Guidelines on trading of Currency Futures and Exchange Traded Currency Options in Recognized Stock Exchanges – Introduction of Cross-Currency Futures and Exchange Traded Option Contracts

RBI/2015-16/267
A.P. (DIR Series) Circular No. 35

December 10, 2015

To

All Authorised Dealer Category – I Banks

Madam / Sir,

Guidelines on trading of Currency Futures and Exchange Traded Currency Options in Recognized Stock Exchanges – Introduction of Cross-Currency Futures and Exchange Traded Option Contracts

Attention of Authorized Dealers Category – I (AD Category – I) banks is invited to the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 dated May 3, 2000 (Notification No. FEMA. 25/RB-2000 dated May 3, 2000), as amended from time to time, the Currency Futures (Reserve Bank) Directions, 2008 dated August 6, 2008 and Exchange Traded Currency Options (Reserve Bank) Directions, 2010 dated July 30, 2010 as amended from time to time and also A.P. (DIR Series) circular No. 147 and circular no. 148 both dated June 20, 2014, as amended from time to time, in terms of which persons resident in India and persons resident outside India viz., foreign portfolio investors (FPIs) are permitted to participate in the currency futures and exchange traded currency options market in India subject to the terms and conditions mentioned in the aforementioned notifications and guidelines, ibid.

2. Currently market participants, i.e., residents and eligible non-resident market participants are permitted to trade in US Dollar (USD) – Indian Rupee (INR), Euro (EUR)-INR, Pound Sterling (GBP)-INR and Japanese Yen (JPY)-INR currency futures contracts and USD-INR currency option contract in recognized stock exchanges. In order to enable direct hedging of exposures in foreign currencies and facilitate execution of cross-currency strategies by market participants, it has been decided, as announced in the Fourth Bi-monthly Monetary Policy Statement 2015-16 (Para 38), to permit the recognized stock exchanges to offer cross-currency futures contracts and exchange traded option contracts in the currency pairs of EUR-USD, GBP-USD and USD-JPY. Recognised stock exchanges are also permitted to offer exchange traded currency option contracts in EUR-INR, GBP-INR and JPY-INR in addition to the existing USD-INR option contract, with immediate effect.

3. Accordingly, the Notifications No.FMRD.1 / ED (CS) – 2015 dated December 10, 2015 and No. FMRD. 2/ ED (CS) – 2015 dated December 10, 2015 viz. Currency Futures (Reserve Bank) (Amendment) Directions, 2015 and Exchange Traded Currency Options (Reserve Bank) (Amendment) Directions, 2015 amending the Directions notified vide Notification No.FED.1/DG (SG) – 2008 dated August 6, 2008 and Notification No. FED.1 / ED (HRK) – 2010 dated July 30, 2010 respectively have been issued. Copies of the Directions are enclosed (Annexes I & II).

4. Market Participants, i.e., residents and FPIs, are allowed to take positions in the cross-currency futures and exchange traded cross-currency option contracts without having to establish underlying exposure subject to the position limits as prescribed by the exchanges.

5. The existing position limits of USD 15 million for USD-INR contracts and USD 5 million for non USD-INR contracts, all put together, per exchange, for residents and FPIs, without having to establish underlying exposure, shall remain unchanged. The hedging procedure for residents as laid down in A.P. (DIR Series) Circular No. 147 dated June 20, 2014 and for FPIs as laid down in A.P. (DIR Series) Circular No. 148 dated June 20, 2014 shall also remain unchanged. A summary of the position limits is provided in the Table given in Annex III.

6. AD Category-I banks may undertake trading in all permitted exchange traded currency derivatives within their Net Open Position Limit (NOPL) subject to limits stipulated by the exchanges (for the purpose of risk management and preserving market integrity) provided that any synthetic USD-INR position created using a combination of exchange traded FCY-INR and cross-currency contracts shall have to be within the position limit prescribed by the exchange for the USD-INR contract.

7. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

8. The above Directions have been issued under Section 45W of the Reserve Bank of India Act, 1934 and this circular has been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(R Subramanian)
Chief General Manager


Annex I to A.P. (DIR Series) Circular No. 35 dated December 10, 2015

Currency Futures (Reserve Bank) (Amendment) Directions, 2015
Notification No. FMRD. 1/ED(CS)-2015 dated December 10, 2015

The Reserve Bank of India having considered necessary in public interest and to regulate the financial system of the country to its advantage, in exercise of its powers conferred by section 45W of the Reserve Bank of India Act, 1934 and of all the powers enabling it in this behalf, hereby gives the following directions to all the persons dealing in currency futures.

1. Short title and commencement of the directions

These Directions may be called the Currency Futures (Reserve Bank) (Amendment) Directions, 2015 and they shall come into force with effect from December 10th, 2015.

2. Amendment to Currency Futures (Reserve Bank) Directions, 2008

(ii) In paragraph 4,

(a) the existing clause (a), shall be substituted by:

“(a) Foreign Currency-Indian Rupee contracts, viz. USD-INR, EUR-INR, GBP-INR and JPY-INR and Cross Currency contracts (not involving the Indian Rupee), viz. EUR-USD, GBP-USD and USD-JPY are allowed to be traded.”

(b) the existing clause (b), shall be substituted by:

“(b) The size of the USD-INR and USD-JPY contracts shall be USD 1000, of EUR-INR and EUR-USD contracts shall be EUR 1000, of GBP-INR and GBP-USD contracts shall be GBP 1000 and JPY-INR contract shall be JPY 100,000.”

(c) the existing clause (c), shall be substituted by:

“(c) All Foreign Currency-INR contracts shall be quoted and settled in Indian Rupees. EUR-USD and GBP-USD cross currency contracts shall be quoted in USD and USD-JPY contract shall be quoted in JPY. All cross currency contracts shall be settled in Indian Rupees as per the method approved by Reserve Bank.”

(d) the existing clause (e), shall be substituted by:

“(e) The settlement price for USD-INR shall be the Reserve Bank’s Reference Rate and for Euro-INR, GBP-INR and JPY-INR contracts shall be the exchange rates published by the Reserve Bank in its press release on the last trading day. The settlement price in Indian Rupees of the cross-currency contracts shall be computed using the Reserve Bank’s USD-INR Reference Rate and the corresponding exchange rate published by Reserve Bank for EUR-INR, GBP-INR and JPY-INR on the last trading day.”

(Chandan Sinha)
Executive Director


Annex II to A.P. (DIR Series) Circular No. 35 dated December 10, 2015

Exchange Traded Currency Options (Reserve Bank) (Amendment) Directions, 2015
Notification No. FMRD. 2 /ED(CS)-2015 dated December 10, 2015

The Reserve Bank of India having considered necessary in public interest and to regulate the financial system of the country to its advantage, in exercise of its powers conferred by section 45W of the Reserve Bank of India Act, 1934 and of all the powers enabling it in this behalf, hereby gives the following directions to all the persons dealing in currency futures.

1. Short title and commencement of the directions

These directions may be called the Exchange Traded Currency Options (Reserve Bank) (Amendment) Directions, 2015 and they shall come into force with effect from December 10th, 2015.

2. Amendment to Exchange Traded Currency Options (Reserve Bank) Directions, 2010

(i) In para 3, for sub-para (i) the following shall be substituted:

“Currency option contracts are permitted in USD-INR spot rate, EUR-INR spot rate GBP-INR spot rate and JPY-INR spot rate. Cross currency option contracts (not involving the Indian Rupee) are permitted in EUR-USD spot rate, GBP-USD spot rate and the USD-JPY spot rate.”

(ii) In para 4,

(a) for sub-para (a), the following shall be substituted:

“(a) The underlying for the currency option shall be the spot rate of the corresponding permitted currency pair.”

(b) for sub-para (c), the following shall be substituted:

“(c) The size of the USD-INR and USD-JPY contracts shall be USD 1000, of EUR-INR and EUR-USD contracts shall be EUR 1000, of GBP-INR and GBP-USD contracts shall be GBP 1000 and JPY-INR contract shall be JPY 100,000.”

(c) for sub-para (d), the following shall be substituted:

“(d) The premium for all contracts involving the Indian Rupee shall be quoted in Indian Rupees. The premium for EUR-USD and GBP-USD contracts shall be quoted in USD and for USD-JPY contract shall be quoted in JPY. For cross currency contracts the premium shall be payable in Indian Rupees based on the USD-INR Reference Rate or the corresponding exchange rates published by Reserve Bank. The outstanding position shall be in USD for USD-INR and USD-JPY contracts, in Euro for EUR-INR and EUR-USD contracts and in GBP for GBP-INR and GBP-USD contracts.”

(d) for sub-para (g), the following shall be substituted:

“(g) The settlement price for USD-INR option contract shall be the Reserve Bank’s Reference Rate and for Euro-INR, GBP-INR and JPY-INR contracts shall be the exchange rates published by the Reserve Bank in its press release on the expiry date of the contract. The settlement price in Indian Rupees of the cross-currency contracts shall be computed using the Reserve Bank’s USD-INR Reference Rate and the corresponding exchange rate published by Reserve Bank for EUR-INR, GBP-INR and JPY-INR on the expiry date of the contract.”

(Chandan Sinha)
Executive Director


Annex III to A.P. (DIR Series) Circular No. 35 dated December 10, 2015

Position Limits for market participants in the Exchange Traded Currency Derivatives

Type of market participant Position limit for FCY-INR contracts (both futures and options) Position limit for cross-currency contracts (both futures and options)
Clients and Foreign Portfolio Investors (FPIs) USD 15 million for USD-INR pair and USD 5 million for EUR-INR, GBP-INR and JPY-INR, for all pairs put together, per exchange, across all contracts for positions taken without establishing underlying exposure. As per the limits specified by the exchanges without having to establish underlying exposure.
For hedging underlying exposures, participants may take positions in either FCY-INR contracts or in combination with cross-currency contracts up to the underlying exposure and as per limits specified by the exchanges in terms of the guidelines stipulated in A.P. (DIR Series) Circulars No. 147 dated June 20th, 2014 and No. 90 dated March 31st, 2015for residents and A.P. (DIR Series) Circular No. 148 dated June 20th, 2014 for FPIs.
AD Cat-I bank trading members As per the position limits specified by the exchanges subject to the Net Open Position Limit (NOPL) and Aggregate Gap Limits (AGL) in terms of A.P. (DIR Series) Circular No. 86 dated March 1, 2013. Further, any synthetic USD-INR position created using a combination of exchange traded FCY-INR and cross-currency contracts shall have to be within the position limit prescribed by the exchange for the USD-INR contract.

Empanelment of Chartered Accountant firms/LLPs with the O/o C&AG for the year 2016-2017.

OFFICE OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA 9, DEEN DAYAL UPADHYAYA MARG, NEW DELHI-110124.

Empanelment of Chartered Accountant firms/LLPs for the year 2016-2017

Online Applications are invited from the Chartered Accountant firms/LLPs who desire to be empanelled with the office of the Comptroller and Auditor General of India for appointment as auditors of Government Companies/Corporations for the year 2016-2017. The online application format will be available on our website: www.saiindia.gov.infrom 1st January 2016 to 15th February 2016, the firms/LLPs can apply/update the data showing the status of their firms as on 1st January 2016. After filling/updating the data, they are required to generate online acknowledgement letter for the year. They are also required to submit hard copies of the relevant documents in support of their online application along with a print out of the acknowledgement letter generated online. The application which does not have an online acknowledgement letter would not be entertained as a valid application.

Sd/-
Sr. Administrative Officer/CA-V

Announcement for Campus Placement Programme for Newly Qualified Chartered Accountants February-March 2016

The Committee for Members in Industry (CMII) of The Institute of Chartered Accountants of India (ICAI) takes care of the interest of the members working in industry and organizes Campus Placement Programmes for Chartered Accountants. The CMII is pleased to announce the next Campus Placement Programme for Newly Qualified Chartered Accountants during February-March 2016.This programme would provide an opportunity to the employers to interact with newly qualified Chartered Accountants peruse their particulars and recruit the suitable one in their organizations. An organisation and firms of Chartered Accountants may participate at one or more centres and recruit Chartered Accountants.

 

The organisations intending to recruit Newly Qualified Chartered Accountants through the scheme given below are requested to get in touch with Committee for Members in Industry Secretariat, Tel. No. (011) 30110548/526/491/555 E-Mail- campus@icai.inplacements@icai.in :  Fax- +91(11) 30110583 or log on to www.placement.icai.org/ or www.icai.org/ .

 

                                                            CA. Charanjot Singh Nanda,

Chairman, CMII

 

 

 

Advantages of Participating in the Campus Placement Programme of CMII of ICAI

 

a)   The CMII of ICAI organizes Campus Placement Programmes at 21 centres across the country in a corporate environment and the pre process of interview is highly technologically driven through placement portal  www.placement.icai.org.

b)   It is a One Stop solution for the recruiters to recruit the Chartered Accountants for their organisations and carries the advantage of being a unitary platform for the recruitment of the young Chartered Accountants.

c)   It is a Cost effective mode with significantly shorter recruitment cycles, for the corporates for recruiting young Chartered Accountants together with an improved quality of recruitment process.

d)   Another advantage of Campus Placement is that, after the declaration of results, ICAI holds the Campus Placement Programme which reduces the time for an organisation to pick the candidates according to their need.

e)   The arrangements for the conduct of the entire process at all the centres are made by CMII of ICAI.

Schedule for Campus Interview February-March 2016

 

Starting and Closing Date for filling up initial details for validation of data: 20th December 2014 to 11th January 2016

(For Candidate who have qualified in (i) May 2015 (ii) Nov 2014 or (iii) whose results were declared in revaluation/re verification after 10th August, 2014 and all covered in (i) and (ii) completing their articleship and GMCS between 01st November 2015 and 30th April 2016 www. placement.icai.org/article.asp

 

Smaller centres: Ahmedabad, Baroda, Bhubaneswar, Chandigarh, Coimbatore, Ernakulam, Indore, Jaipur, Kanpur, Ludhiana, Nagpur, Navi Mumbai, Pune, Thane & Vasai

 

Bigger centres:  Bangalore, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi

 

1st Round of registration of candidates (submission of form) for November, 2014 CA Final qualified (and others as mentioned above):27th January 2016 to 2nd February 2016www.placement.icai.org/new_cand.asp?typeofcandidate=F

 

2nd round Registration of candidates for Bigger centres only (covered under S No 6, 7 & 8 in table given below): 19th February, 2016 (Upto 05:00 PM).

 

For the candidates who have missed the registration in First round and the candidates can opt only for bigger centre in the Second Round.

 

 

Submission and Updation of bigger centre choice: 23rd February – 24th February 2016(Upto 11.P.M)

 

a)   The candidates who would opt for the smaller centre as first choice and bigger centre as their second choice would be mandatorily required to revalidate their form and Second Choice centre during 23rd – 24th February 2016 (upto 11. PM) to receive their Centre Code for bigger centre (i.e DEL-etc,).

 

b)   The candidates who would opt to appear at only One Bigger centre shall also be required mandatorily to update/revalidate the choice of centre during 23rd – 24th February 2016 (upto 11. PM) to receive their Centre Code for bigger centre(i.e DEL-,) The same shall be mandatory for the inclusion of their database with the bigger centres. After the said period, no communication shall be entertained in this regard.

 

 


Campus Interview Schedule

 

No.

Centre

Dates

1

Chandigarh & Ludhiana

12th February, 2016

2

Baroda, Coimbatore,  Ernakulam  & Navi Mumbai

15th – 16th  February, 2016

3

Bhubaneswar, Kanpur, Thane & Vasai

16th – 17th February, 2016

4

Indore, Nagpur

17th  - 18th February, 2016

5

Ahmedabad & Pune

18th – 19th February, 2016

6

Jaipur

19th – 20th February, 2016

7

Mumbai & New Delhi

14th , 15th , 16th,17th,18th & 19th  March, 2016

8

Bangalore,Chennai & Kolkata

15th , 16th,17th,18th & 19th  March, 2016

9

Hyderabad

16th,17th,18th & 19th  March, 2016

Candidates opting for centres like smaller centres shall fill in their second choice Online from the Bigger centres on placement portal  www.placement.icai.org during 23rd – 24th February 2016 (upto 11. PM)

Centre

Maximum No. of companies in any single day

Last Date of Registration

(for Companies) #

Last Date of  Short listing by Companies

(Ist Round)*

Consent sending by

Candidates

(Ist Round)*

 Date of  Short listing by Companies

(IInd Round)*

 

Consent sending by

Candidates

 (IInd Round)#

 

Pre-placement Talk 

 (PPT)

Written Test /Psychometric Test

(if any)

 

Baroda, Bhubaneswar, Chandigarh, Coimbatore, Ernakulam , Indore, Kanpur, Ludhiana Nagpur, Navi Mumbai, Thane & Vasai

4

02nd February,

2016

08th  February,

2016

09th February,

2016

10th February, 2016

11th February,2016

No PPT

On the day of Interview

Ahmedabad, Jaipur & Pune

5

03rd February,

2016

09th  February, 2016

10th February,

2016

11th February, 2016

12th February,2016

No PPT

17th   February, 2016

Bangalore,  Kolkata, Mumbai , Chennai,Hyderabad & New Delhi

6

25th February,

2016

03rd March, 2016

04th -05th-06th  March, 2016

07th  March, 2016

08th  March, 2016

10th  March, 2016

11th  March, 2016

Opening of database for Companies at S No. 1, 2, 3, 4, 5 & 6: 3rd February, 2016

Opening of database for Companies at S No.   7, 8 & 9 : 25th February, 2016

 

* The process needs to be completed latest by 11:00 PM

# The process needs to be completed latest by 05:00 PM

 

 

Orientation Programme: The schedule at various centres:

 

 

 

S No.

Centre

Date of the Orientation Programme

1.

Baroda, Coimbatore & Ludhiana

4th  February, 2016

2.

Bhubaneswar, Chandigarh, Kanpur, Navi Mumbai & Thane

5th February, 2016

3.

Indore, Nagpur, Ernakulam & Vasai

6th February, 2016

4.

Ahmedabad & Jaipur

8th February, 2016

5.

Pune

9th  February, 2016

Bangalore

4th March, 2016

Chennai

5th March, 2016

Mumbai

7th March, 2016

New Delhi

9th March, 2016

Kolkata

14th March, 2016

Hyderabad

15th March, 2016

 

 

 

 

 

 

 

Norms for Allotment of Day Slots for participating in the Campus Interviews February-March 2016:

 

Centre* Priority 1 Priority 2
 

Bangalore,

 

Chennai,

 

Kolkata,

 

Mumbai & 

 

New Delhi

 

Day Premier Companies Paying CTC of Rs. 9 Lacs Per Annum & above (INR) for domestic Posting or USD 60,000 Per Annum and above for International Posting to all the candidates. Companies which want to recruit more than 30 candidates from all centres & paying CTC of more than Rs. 8 lacs Per Annum to all the candidates.
Day 1

 

Companies Paying CTC of Rs. 7 lacs Per Annum & above to all the candidates. Companies which want to recruit more than 20 candidates from a centre & paying CTC of more than Rs. 6 lacs Per Annum to all the candidates.
Day 2

 

Companies Paying CTC of Rs. 6 lacs Per Annum & above to all the candidates. Companies which want to recruit more than 20 candidates from all centres & paying CTC of more than Rs. 5 lacs Per Annum to all the candidates.
Day 3 Companies Paying CTC of Rs. 5 lacs Per Annum & above to all the candidates. Companies which want to recruit 15 candidates from all centres & paying CTC of more than Rs. 4.5 lacs Per Annum to all the candidates.
$Day 4 Companies Paying  CTC of Rs. 4.5 lacs Per Annum & above to all the candidates Companies which want to recruit 10 candidates from all centres & paying CTC of more than Rs. 4 lacs Per Annum to all the candidates.
  #Day 5 Onwards First come First Served Basis

(Subject to fulfilling the minimum CTC criteria)

Ahmedabad,

 

Hyderabad,

 

Jaipur &

 

Pune

 

Day 1

 

Companies Paying  CTC of Rs. 5 lacs Per Annum & above to all the candidates Companies which want to recruit more than 20 candidates from all centres & paying CTC of more than Rs. 4 lacs Per Annum to all the candidates
Day 2 Onwards First come First Served Basis

(Subject to fulfilling the minimum CTC criteria)

 

Baroda, Bhubaneswar, Chandigarh, Coimbatore, Ernakulam , Indore, Kanpur, Ludhiana,   Nagpur, Navi Mumbai, Thane & Vasai On First Come First Served Basis (Subject to fulfilling the minimum CTC criteria)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Companies participating should give minimum salary to all the candidates selected as mentioned in priority table. All the above priorities are based on First Come First Served Basis. Definition of CTC is given at  www.placement.icai.org .

$ For Bangalore,Chennai and Kolkata First come First Served Basis subject to fulfilling the minimum CTC criteria of Rs.4.00 lacs for Corporate and Rs 3.00 lacs for CA. Firms .

# Applicable for Bangalore, Chennai, Kolkata, Mumbai and New Delhi centres

 

 

Note: CTC* means cost to company.  It is the total cost that an Organisation is spending towards their employees which includes Salary details like Basic salary, House Rent Allowance, Company Leased Accommodation, Daily Allowance, City Compensatory Allowance, Special Allowance, Conveyance Allowance, Lunch Allowance, Entertainment Allowance, Books/Periodicals Allowance, Education Allowance, House Maintenance Allowance, Furnishing Allowance, Dress/Uniform

Allowance, Other allowances; Benefits/Perks/Reimbursements like Value of company car, Car subsidy (or equivalent tax savings), Driver’s salary, Maintenance and Petrol Expenses, Leave Travel Allowance, Canteen Subsidy, Telephone Expenses, Mobile Phone, Club Membership, Electricity/Gas, Servant/Gardener, Credit Cards, Furnishings/Durables, Holiday facilities, Medical reimbursements, Medical insurance, Personal Accident Scheme, other benefits; Retirals like Provident fund, Superannuation fund, Gratuity; Bonus  like Fixed Bonus, Productivity linked Variable Bonus, Any other performance oriented incentive including Stock Option Plan and; Soft Loans like Interest subsidy, etc.

 

 

 

 

 

 

The tariffs for Campus Interviews to be held in February-March 2016

 

I) For the Corporates*:

Participation at Fee per centre per day(INR)
Day Premier Day 1 Day 2 Day 3 Day 4 Subsequent Day
a. Mumbai and New Delhi 6,00,000 5,00,000 3,50,000 2,50,000 1,25,000  50,000
b. Bangalore, Chennai, & Kolkata 4,00,000 2,00,000 1,50,000 1,00,000 50,000 NA
c. Hyderabad NA 2,00,000 1,50,000 1,00,000 50,000 NA
d. Ahmedabad, Jaipur & Pune NA 70,000 50,000

NA

 

e. Baroda, Bhubaneswar, Coimbatore, Ernakulam , Indore, Kanpur,     Nagpur, Navi Mumbai, Thane & Vasai NA 25,000 20,000
f. Chandigarh & Ludhiana NA 25,000 NA
g. Fee payable for holding written test prior to the conduct of campus interviews 75,000 for Mumbai and New Delhi

50,000 for  Bangalore , Chennai,  Hyderabad  and Kolkata

30,000 for  Ahmedabad, Jaipur  and  Pune

20,000 for other centres

h. Conducting of online psychometric test only on the day of written test  50,000/- Per Centre

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Plus service tax @14.5% as applicable

 

 

 

II) For the Firm of Chartered Accountants (more than ten partners)

 

 

Participation at Fee per centre per day(INR)
Day Premier Day 1 Day 2 Day 3 Day 4 Subsequent Day
a. Mumbai & New Delhi 6,00,000 5,00,000 3,50,000 2,50,000 100000  30000
b. Bangalore,Chennai & Kolkata 4,00,000 2,00,000 1,50,000 1,00,000 30000 NA
c. Hyderabad NA 2,00,000 1,50,000 1,00,000 30000 NA
d. Ahmedabad, Jaipur &    Pune NA

 

70,000 50,000

NA

e. Baroda, Bhubaneswar, Chandigarh, Coimbatore, Ernakulam , Indore, Kanpur, Ludhiana,   Nagpur,  Navi Mumbai, Thane & Vasai NA

 

25,000 20,000
f. Chandigarh & Ludhiana NA 25,000 NA
g. Fee payable for holding written test prior to the conduct of campus interviews 75,000 for Mumbai and New Delhi

50,000 for  Bangalore , Chennai,  Hyderabad  and Kolkata

30,000 for  Ahmedabad, Jaipur  and  Pune

20,000 for other centres

h. Conducting of online psychometric test only on the day of written test 50,000/- Per Centre

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Plus service tax @14.5% as applicable

 

 

 

 

III) For the Firm of Chartered Accountants (upto ten partners)

 

Rs 20,000/- plus service tax per centre on the last day of interviews at any centre from Mumbai , New Delhi Bangalore, Chennai, Hyderabad and Kolkata, Ahmedabad,  Jaipur and Pune.For other days fee will be applicable as for Firm of Chartered Accountants (more than ten partners).

 

The recruiting entities participating at a bigger centre and more than one smaller centre would be provided a concession to participate at the smaller centres which shall be @10 % on the participation fees at second smaller centre onwards at the minimum fee.

 

Payment Terms: Participation fee shall be payable by way of Cheque / Demand Draft in favour of ‘The Secretary, The Institute of Chartered Accountants of India’ payable at New Delhi and should be sent toSecretary, CMII, The Institute of Chartered Accountants of India, ICAI BHAWAN, Indraprastha Marg, New Delhi-110 002 via courier/speed post so as to reach on or before the Last date of registration for companies at respective centres. Also payment may be submitted to any of campus interviews centres in case of delivering the fee by hand/in person.

Kindly also note that the PAN No. of Institute is AAAAT7798M and Service Tax Registration No. is AAAAT7798MST003 (DL-I/ST/MP/R-II/1530/ICA/2006).

The payment may also be made through Net Banking, the details are as follows :

 

Beneficiary Name             THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

Beneficiary address           THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

‘ICAI Bhawan’, Indraprastha Marg, New Delhi- 110002

Bank Account no.             055010100242608

Bank Name                     Axis Bank

Branch address                A-13, Swasthya Vihar, Vikas Marg, New Delhi- 110092

Account Type                  saving

IFSC Code                      UTIB0000055

 

 

 

 

 

Indicative guidelines and Procedure for Companies:

 

  1. 1.    STEPS FOR REGISTRATION FOR RECRUITING ENTITIES FOR CAMPUS INTERVIEWS

                          

 

  Step1:

A)   Visit www.placement.icai.org/ .

B)   Under the head “Company” first fill up the form as a New User and fill up some preliminary details and create a User Name and Password (If already registered may use the same User Name and Password to login and then need to again fill up the Proforma & Payment Form for the Campus Placement Programme February-March 2016)

C)   Login as a Registered User.

D)   Click on Campus Interview and fill up the Form Proforma and Payment to get centre wise Day Slots based on norms of Priority and availability.

 

Step 2:

After the allotment of day slots, the organisation is required to remit the participation fees accordingly.

 

Step 3:

On the completion of online registration and the receipt of the participation fees the CMII Secretariat would provide the online access to the database of the candidates for short listing.

 

Step 4:

The entity is required to do the online short listing of the candidates within the specified time frame for the respective centres as per the schedule of Placement Programme.

 

 

  1. 2.    DISCLOSURE OF INFORMATION REQUIRED FROM RECRUITING ENTITIES

 

The recruiting entities needs to specify the following clearly in Proforma:

 

v  Centre wise indicative figure of the recruitments aimed to be made so that they may shortlist the candidates centre-wise accordingly.

v  Job profile with description + responsibilities + preferable place of posting in Department and City. e.g If a company ‘Y’ has posted 50 vacancies on portal for Corporate Banking, then the break-up of positions should be mentioned as Credit Manager-20, Relationship manager – 10, Global Investment Banking – 20 etc.

v  Geographical location & no. of positions of placement centre- wise: It will be visible in the candidate’s login that at which other centres the recruiting entity is participating other than the centre, from where the candidate has registered for the campus interviews.

v  The timing of the shift i.e, US, UK or India.

v  Age limit, if any.

v  Reservation Status i.e How many vacancies exist for General/OBC/SC/ST/PH candidates.

v  If there is any cut off for percentage of Marks/Attempt in CPT/IPCC/Final.

v  The recruiting entity should also inform the process of recruitment i.e, whether the recruiting entity will hold Group Discussion/ Written Test/ Personal Interviews.

v  The Breakup of the CTC and the Min Take Home Salary to be paid.

v  Timings of the Shifts/Flexible Timings for the female candidates.

v  The recruiting entities shall not ask for filling up of any type of bond for joining their organisation. If any recruiting entity requires bond with the candidates, then they must specify the:

  1. Period of the Bond.
  2. The Amount of the Bond.

 

  1. 3.     SHORTLISTING PROCESS OF THE RECRUITING ENTITIES

 

v  Companies shall short list the candidates in two rounds. After the first round of short listing, companies can see the database of the candidates who have not been shortlisted for and shortlist the remaining Candidates in the second round.

v  Companies shall mark the shortlist of the candidates online within the last date of short listing at the respective centres.

v  Access to the database of the candidates shall be allowed by the CMII Secretariat only after the receipt of participation fee. Fee is chargeable in case a recruiting organisation withdraws after confirming the participation and the data access has been given.

v  The various dates by which the companies have to submit their shortlists and the schedule of the interviews are also available on  www.placement.icai.org.

v  Short listing by individual recruiting entities should be restricted to maximum 15 times of the number of vacancies in that particular organisation, which are expected to be filled up from a particular Campus Placement Programme centre.

v  Candidates shall also be able to view the shortlists online.

v  The entities participating on the last day of the event should also take into consideration that  some meritorious candidates may also remain available on the last days of the event also as all the candidates shortlisted by the entities .

 

 

  1. 4.    MINIMUM PACKAGE TO BE OFFERED BY RECRUITING ENTITIES

 

The Minimum CTC for the recruiting entities for Campus Placement Programme February-March 2016 as follows.

i)  CA. Firms employing members – Rs.3.00 lacs

ii)  Any other Company employing members – Rs.4.00 lacs

 

  1. 5.    INFRASTRUCTURE AND OTHER FACILITIES PROVIDED TO RECRUITING ENTITIES

 

v  The timing for the Interviews at all days shall be from 10 A.M to 6 P.M.

v  The recruiting entity will be provided one room for the conduct of the interview process.

v  If the entity requires more than the space stipulated, extra room(s) can be provided subject to the availability of space and such terms shall be discussed in advance. Also, the same shall also be on a chargeable basis.

v  The Institute of Chartered Accountants of India shall provide working lunch to all candidates and lunch to all the representatives of the companies.

 

  1. 6.    PRE-PLACEMENT TALK, WRITTEN TEST AND GROUP DISCUSSION BY RECRUITING ENTITIES

v  Face to Face Pre Placement Talk would be conducted by the recruiting entities after the candidates consents (Both Rounds) before the Written Test at the metro centres only. Pre Placement Talk (Soft Copy format) of the companies shall also be made available on the Placement Portal  www.placement.icai.org for the information of the Newly Qualified Chartered Accountants. It shall be made automated and data will be taken directly from Proforma filled in by recruiting entities, so as to make this process standardized.

v  It is advisable for the recruiting entities to conduct their Pre Placement Talk for the candidates as per the specified schedule. Also, attending the Pre Placement Talk of the recruiting entities shall be mandatory for the shortlisted candidates.

v  Written Test, if any, shall be conducted by the companies only before the start of the Campus Placement Programme at a particular centre on a given date.

v  At the time of interview, companies may consider to have in the Interview Board a representative from technical side and a representative from HR side and decisions on the selection should be communicated to the candidates on the same day.

v  Companies should not interact directly with candidates for collecting hardcopies of Bio- Data etc.

v  Correspondence with the recruiting entities/ students shall be done via E-mail only.

v  Final list of candidates appearing for interview will be available online on Placement Portal  www.placement.icai.org one day after consent date by candidate at respective centres.

7 .OTHER IMPORTANT INFORMATION

v  A Candidate can appear for only Four interviews irrespective of the fact that he/she is shortlisted by several organisation but the moment he/she is offered job by any organisation and it is accepted by him/her in writing then the candidates will not be permitted to attend the rest of the campus interviews.

v  The candidates who would opt for the smaller centre as first choice and bigger centre as their second choice would be mandatorily required to revalidate their form and Second Choice centre during 23rd – 24th February 2016 (upto 11. PM) to receive their Centre Code for bigger centre (i.e DEL-etc,).

 

v  The candidates who would opt to appear at only One Bigger centre shall also be required mandatorily to update/ revalidate their form and Second Choice centre during 23rd – 24th February 2016 (upto 11. PM) to receive their Centre Code for bigger centre (i.e DEL-etc,). The same shall be mandatory for the inclusion of their database with the bigger centres. After the said period, no email /phone call or any other communication shall be entertained in this regard.

 

v  If any recruiting entity from smaller centres does not select the candidates or candidates does not accept the offer, their database would be merged with the centre of their second choice from the bigger centres. Also these candidates would be given Four fresh chances to select recruiting entity at second choice Centre.

v  List of selected candidates should be announced on the same day of Interview. Recruiting entities participating in Campus Placement Programme February-March 2016 shall have to mandatorily give offer letter to the selected candidates in writing on the same day of interview itself.

v  Once a recruiting entity has selected any candidate and the offer is accepted by the candidate, it is the responsibility of the recruiting entity to inform the organizers and provide the offer letter duly signed by them to the candidate who had accepted the offer.

v  Consideration of the lowest CTC for allotting the Day Slot/slot priority: If companies are giving two different pay packages to different categories such as rank holders and non rank holders , the lower amount paid to the candidates shall be taken into consideration for granting the day slots e.g If a co “ X” mentions the CTC to be 8 lacs for the rank holders and Rs 5.6 Lacs to other candidates then the Rs 5.6 Lacs CTC would be considered for allotting the days.

Important Feature in Campus Placement Programme : Two round of shortlisting by companies: At each of the centre, the recruiting entities may shortlist twice.

 

    Step 1:

After first round of shortlisting by recruiting entities, the candidates shortlisted    would mark their consent online.

 

    Step 2:

First round of consent date will be closed and now recruiting entity can see and shortlist the remaining candidates from that particular centre and following data will be visible to recruiting entity for shortlist.

 

a.      candidate who have not been shortlisted by any recruiting entity till now

b.      candidate shortlisted but  have not given consent to any recruiting entity

c.      candidate has given consent to 1-2 recruiting entities only till now

 

    Step 3: 

Again the candidates shortlisted in second round can give their online consent.

 

    Step 4 :

Also second round shortlisting will be restricted to total vacancy * 15 times ie (previous consent + new shortlisting total =vacancy* 15 times).

 

 

 

 

Indicative guidelines for Candidates:

 

1.   A Non Refundable Registration fee amounting to Rs 250/- shall be charged from the candidates who wish to apply for the Campus Placement Programme February-March 2016.

 

2.   A candidate can appear for only Four interviews irrespective of the fact that he/she is short listed by several organisation but at the moment he is offered job by any organisation and is accepted by him/her in writing then the candidate will not be permitted to attend the rest of the campus interviews.

 

 

3.  Eligibility for appearing in Campus Placement Programme to be held in February-March 2016.

 

The candidates who fulfil the following criteria are eligible to appear in the Campus Placement Programme to be held in February-March 2016:

 

 

  Clearance of Final Examination of Chartered Accountancy Course Completion of Articleship/GMCS Course

Submission of Application for  ICAI Membership*

1 November, 2015 Completing their articleship and GMCS latest by  30th April, 2016 15th May,2016
2 May 2015, November 2014

or whose CA Final results were declared in revaluation/re verification after  10th August, 2015.

Completing their articleship or GMCS between 1st November 2015, and 30thApril, 2016 and have not applied in earlier Campus Placement Programme.

 

*While attending the Orientation Programme/Campus Interviews candidates should either carry the relevant proof of applying for the membership of the Institute or should submit a written declaration that they would apply for the membership by dates as mentioned above.

 

# In the cases where the candidates clearing their CA. Final Examination in November 2015 and have completed their Articleship and GMCS by 30th April, 2016  but have not attained the age of 21 years shall be eligible to participate in the Campus Placement Programme February-March 2016 only on providing an undertaking that they shall be obtaining the Membership of the Institute immediately on attaining the requisite age.

 

4. Attending of Orientation programme & Pre-Placement talk is mandatory for the shortlisted candidates.

 

5.   Dress Code as prescribed and approved by the Council for the Members of ICAI has been made mandatory for attending the Campus Placement Programme February-March 2016. Kindly visitwww.placement.icai.org/imgs/recommend.pdf.

 

6.  Candidates opting for bigger centres may update their bio data online on Placement Portal www.placement.icai.org during during 23rd – 24th February 2016 (upto 11. PM) and would be required to necessarily update their choice of bigger centres during this period to receive their Centre Code for the bigger centre, otherwise their database would not be merged with the bigger centre of their choice for shortlisting.

 

7.  If any recruiting entity from smaller centres does not select the candidate or candidate does not accept the offer, their database would be merged (after updating the form within the date of re-submission) with the centre of their second choice from the bigger centres. Also these candidates would be given Four fresh chances to select recruiting entity at second choice centre.

 

8.  Once finally selected by any recruiting entity and accepting the offer by signing the offer letter, the candidate cannot appear for any other interview or accept job from the recruiting organisation that have interviewed him/her earlier.

 

9. The last dates for filling up online application forms for the candidates, shortlisting details, consents for appearing in the interviews of the various recruiting organizations will be as per the details given onwww.placement.icai.org.

 

10. The shortlisted candidates from the respective companies are required to go through the           Online   Presentations hosted by the recruiting companies in their login which would provide them details regarding the Job Profile, Place of Posting offered etc.

 

Important Feature in Campus Placement Programme: Two round of shortlisting by      companies: At each of the centre, the recruiting entities companies may shortlist twice.

 

    Step 1:

After first round of shortlisting by companies, the shortlisted candidates would mark their consent online.

 

    Step 2:

First round of consent date will be closed and now recruiting entity can see and shortlist the remaining candidates from that particular centre and following data will be visible to recruiting entity for shortlist.

 

a.              candidate who have not been shortlisted by any recruiting entity till now

b.              candidate shortlisted but  have not given consent to any recruiting entity

c.              candidate has given consent to 1-2 recruiting entities only till now

 

    Step 3:  

Again the candidates shortlisted in second round can give their online consent.

 

    Step 4 :

Second round shortlisting will be restricted to total vacancy * 15 times i. e (previous consent +  new shortlisting total =vacancy* 15 times).

 

Candidates who will unable to give their consent in first round of shortlisting cannot give consent after start date of IInd round of shortlisting.

 

11. The Submission of the form for the programme would be complete only after making the online payment of Rs 250/-  after clicking the Submit button once the  Registration Form will be completed.

a. After completing the profile at  www.placement.icai.org at the time of submission of form it will take the candidate to payment gateway to make the online payment.

b. After confirmation of payment receipt at our end candidate would be allotted a centre code by CMII of ICAI.

12. Candidate can update their consent within consent date any number of times i. e they can  delete/change their consent already marked within the designated last date for giving the online consent.

 

Pre-Placement Talk(PPT):

a)    It has been decided to reintroduce the Face to face Pre Placement Talk (PPT) to be conducted by the recruiting organizations after the candidates Consents (Both Rounds) before the Written Test at the bigger centres only. Also the existing practice of hosting of PPT by the recruiting entities online in their login on  www.placement.icai.org which is visible in the candidates login also for their information shall continue.

b)    Attending of PPT at the bigger centres by the shortlisted candidate would be mandatory.

Guidelines for the Orientation Programme:

a)    The shortlisted candidates already attended the orientation program at the smaller centres is advisable not to attend the orientation program at bigger/metro centres after the merger of the database with the second centre of their choice.

b)    If the candidates has opted only for one centre which is a bigger centre for interview the shortlisted candidates is advisable to attend the orientation program at any one of the bigger centres only.

c)   Attending the Orientation Programme shall be mandatory for the shortlisted candidates.

Advices to the candidates

1.    Where the candidates have qualified in November, 2015 final examination but their articleship and/or GMCS is not completing on 30th April, 2016 they shall be permitted to appear in the Campus Placement Programme to be held in August-September, 2016.

 

2.    Organisations participating in the Campus Placement Programme prefer that the candidates selected by them should be ready to join the organisations immediately and should not claim that their GMCS / Articleship is pending and requires more time to join.

 

3.    Candidates should not select a Campus Interview Centre which is  far away from their place of residence because companies at chosen centre may decide the posting location of the candidate presuming that they belong to that particular Campus Interview Centre area.(In other words such candidate may face problem relating to location of the posting).

 

4.   It is also advised to the candidates that they should opt the same Centre for the Orientation Programme and the Campus Interviews as in the above schedule.

 

5.   Before applying for Campus Placement programme kindly make sure that you are in genuine need of a Job.

Steps for submission of online form for candidate on www.placement.icai.org for campus interviews

Category 1: Candidates who have qualified CA final in November, 2015 examination and are eligible.

Step 1: Initial registration: click on  www.placement.icai.org/new_cand.asp?typeofcandidate=F and generate your password after filling up the initial registration details.

Step 2: click on  www.placement.icai.org/ca_login.asp?typeofcandidate=F and logged in by giving your CA final roll number as user name and password which you have chosen earlier .Fill the registration form which is divided into six parts.

Step 3: Submit your form and make the online payment.

Step 4: After which you will receive a centre code like DEL-..,MUM-..etc that means you have successfully completed initial steps.

Step 5: After the successful completion of registration, candidates should take the print out of the Print Profile and the Photo Identity Card which they are required to mandatorily carry while visiting for the Orientation programme and Campus Interviews.

 

Category 2: Candidates who have qualified CA final before November, 2015 examination and are eligible.

 

Step 1: : Preliminary registration:  Click on a separate link given on home page of  www.placement.icai.org/ for candidates who have qualified CA final before November, 2015 examination and fill the details asked for to verify the credentials.

Step 2: You will receive an email and also announcement will be hosted on website confirming the status with new roll number.

Step 3: Initial registration: Click on www.placement.icai.org/new_cand.asp?typeofcandidate=F and generate your password by filling new roll number received via email from CMII Secretariat.

Step 4: Click on www.placement.icai.org/ca_login.asp?typeofcandidate=F and logged in by giving your CA final roll number as user name and password which you have chosen earlier .Fill the registration form which is divided into six parts.

Step 5: Submit your form and make the online payment.

Step 6: After which you will receive a centre code like DEL-..MUM-..etc that means you have successfully completed initial steps.

Step 7: After the successful completion of registration, candidates should take the print out of the Print Profile and the Photo Identity Card which they are required to mandatorily carry while visiting for the Orientation programme and Campus Interviews.

Helpline for the queries of candidates: (011) 30110526/548/549/450, campus@icai.inplacements@icai.in 

 

Disclaimer: The CMII of ICAI reserves the right to change its policy at any point of time as per its discretion.

 

RBI-Survey on Computer Software & Information Technology Enabled Services Exports: 2014-15

The Reserve Bank of India today released, on its website, the data related to the 2014-15 round of the ‘Survey on Computer Software and Information Technology Enabled Services Exports’. 1 The survey collects dimensions of the export of software services as per the activity, type of services (on-site/off-site) and country of destination along with the four modes of supply. For the 2014-15 survey round, nearly 7,000 IT companies were contacted of which 1,095 companies, including most of the large companies, responded. The responding companies accounted for around 77 per cent of the total software exports during the year. Exports of the remaining companies (mostly small) were estimated using the related distribution patterns after categorising them in four groups, viz., IT services, BPO services, engineering services and software product development. The survey schedule is enclosed in the Annex.

Main Findings:

  • Software and ITES/BPO services exports: India’s total export of computer services and ITES/BPO services (excluding commercial presence) during 2014-15 is estimated at ₹ 5,014.0 billion (US$ 82.0 billion), registering 14.8 per cent growth in US $ terms over the previous year. Exports of ‘computer services’ and ‘ITES/BPO services’ contributed 72.0 per cent and 28.0 per cent, respectively, of the total software services exports. Public limited companies accounted for 55.6 per cent share of the total software services exports during 2014-15 (Tables 12 & 3).
  • Country/Currency Distribution: USA & Canada continued as the major destination and accounted for nearly 60 per cent in total export of software services during 2014-15. Europe had nearly 25 per cent share, of which UK accounted for almost half. US Dollar was the invoice currency for around three-fourths of the software exports followed by Pound Sterling and Euro (Tables 4 & 5).
  • On-site/Off-site/Modes of Supply: As in the previous year, off-site mode accounted for 80 per cent of the software export in 2014-15 while on-site mode accounted for the remaining 20 per cent. While export of software services through both Mode-1 (cross-border supply) and Mode-3 (commercial presence) increased, the share of Mode-3 increased marginally in 2014-15 and the share of Mode-1 moderated (Tables 6 & 7).
  • Software exports by Foreign Affiliates of Indian Companies: Software exports by foreign affiliates stood at ₹ 841.7 billion (US$ 13.8 billion) in 2014-15 and total export of software services by India, including the services delivered by foreign affiliates established abroad, stood at ₹ 5,855.7 billion (US$ 95.8 billion). USA had the major share in total software business by foreign affiliates followed by UK (Tables 78 & 9).

An article analysing the results of the Survey on Computer Software & Information Technology Enabled Services Exports for 2014-15 is being published in the January 2016 issue of the RBI Bulletin.

Sangeeta Das
Director

Press Release : 2015-2016/1352


Annex

Table 1: Software Services Export from India
Activity 2013-14 2014-15
₹ billion US $ billion* Share (%) ₹ billion US $ billion* Share (%)
(1) (2) (3) (4) (5) (6)
A). Computer Services 3,181.7 52.6 73.6 3,610.8 59.1 72.0
Of which: i) IT services 2,936.7 48.5 67.9 3,399.7 55.6 67.8
ii) Software Product Development 245.0 4.0 5.7 211.1 3.5 4.2
B). BPO Services 1,141.1 18.9 26.4 1,403.2 22.9 28.0
Of which: i) BPO Services 934.1 15.4 21.6 1,089.2 17.8 21.7
ii) Engineering Services 206.9 3.4 4.8 314.0 5.1 6.3
Total Export of Software Services (A+B) 4,322.8 71.4 100.0 5,014.0 82.0 100.0
Note: Sum of components may differ from total due to rounding off. This is applicable for other tables also.
* Using annual average Rupee/ Dollar exchange rate. This is applicable for all other tables also.

 

Table 2: Industry-wise Distribution of ITES/BPO Services Exports
Activity 2013-14 2014-15
₹ billion US$ billion* Share (%) ₹ billion US$ billion* Share (%)
(1) (2) (3) (4) (5) (6)
BPO Services 934.1 15.44 81.9 1,089.2 17.8 77.6
Customer interaction services 96.2 1.59 8.4 64.3 1.1 4.6
Finance and Accounting, auditing, book keeping and tax consulting services 127.4 2.11 11.2 171.5 2.8 12.2
HR Administration 7.9 0.13 0.7 13.0 0.2 0.9
Procurements and logistics 3.5 0.06 0.3 7.4 0.1 0.5
Medical transcription 15.2 0.25 1.3 13.9 0.2 1.0
Document Management 10.6 0.18 0.9 9.3 0.2 0.7
Content development and management and publishing 10.3 0.17 0.9 12.9 0.2 0.9
Other BPO service 663.0 10.96 58.1 796.9 13.0 56.8
Engineering Services 206.9 3.42 18.1 314.0 5.1 22.4
Embedded Solutions 60.1 0.99 5.3 57.4 0.9 4.1
Product Design Engineering (mechanical, electronics excluding software) 63.1 1.04 5.5 82.3 1.3 5.9
Industrial automation and enterprise asset management 2.5 0.04 0.2 2.7 0.0 0.2
Other Engineering service 81.2 1.34 7.1 171.6 2.8 12.2
Total 1,141.1 18.86 100.0 1,403.2 22.9 100.0

 

Table 3: Organisation-wise Distribution of Software Services Exports
Types of Organisation 2013-14 2014-15
₹ billion US$ billion* Share (%) ₹ billion US$ billion* Share (%)
(1) (2) (3) (4) (5) (6)
Private Limited Company 1,555.5 25.71 36.0 2,162.8 35.4 43.1
Public Limited Company 2,750.2 45.46 63.6 2,785.3 45.5 55.6
Others 17.1 0.28 0.4 65.9 1.1 1.3
Total 4,322.8 71.45 100.0 5,014.0 82.0 100.0

 

Table 4: Destination of Software Services Exports
Activity 2013-14 2014-15
₹ billion US$ billion* Share (%) ₹ billion US$ billion* Share (%)
(1) (2) (3) (4) (5) (6)
USA & Canada 2,712.2 44.8 62.7 3,004.9 49.1 59.9
Europe 1,054.0 17.4 24.4 1,235.9 20.2 24.6
of which UK 544.0 9.0 12.6 611.7 10.0 12.2
Asia 245.1 4.1 5.7 451.8 7.4 9.0
of which East Asia 157.0 2.6 3.6 356.0 5.8 7.1
West Asia 69.2 1.1 1.6 91.3 1.5 1.8
South Asia 18.8 0.3 0.4 4.5 0.1 0.1
Australia & New Zealand 168.5 2.8 3.9 169.0 2.8 3.4
Other countries 143.1 2.4 3.3 152.4 2.5 3.0
Total 4,322.8 71.4 100.0 5,014.0 82.0 100.0

 

Table 5: Currency Composition of Invoice- Software Services Exports
Currency 2013-14 2014-15
₹ billion US$ billion* Share (%) ₹ billion US$ billion* Share (%)
(1) (2) (3) (4) (5) (6)
USD 3,138.3 51.9 72.6 3,642.6 59.6 72.6
GBP 407.6 6.7 9.4 464.7 7.6 9.3
EUR 318.4 5.3 7.4 354.1 5.8 7.1
AUD 128.7 2.1 3.0 152.8 2.5 3.0
INR 107.4 1.8 2.5 168.7 2.7 3.4
Other Currencies 222.4 3.7 5.1 231.1 3.8 4.6
Total 4,322.8 71.4 100.0 5,014.0 82.0 100.0

 

Table 6: Software Services Exports – Type of Services-wise
Type of Services 2013-14 2014-15
₹ billion US$ billion* Share (%) ₹ billion US$ billion* Share (%)
(1) (2) (3) (4) (5) (6)
On-site Services 857.3 14.2 19.8 1,001.6 16.4 20.0
Off-site Services 3,465.5 57.3 80.2 4,012.4 65.6 80.0
Total 4,322.8 71.4 100.0 5,014.0 82.0 100.0

 

Table 7: Mode-wise Exports of Software Services
Type of Mode Amount (₹ billion) Share in Total (per cent)
2013-14 2014-15 2013-14 2014-15
(1) (2) (3) (4)
Mode 1 (cross-border supply) 3,460.5 4,009.3 69.0 68.4
Mode 2 (consumption abroad) 5.0 3.2 0.1 0.1
Mode 3 (commercial presence) 689.0 841.7 13.7 14.4
Mode 4 (presence of natural person) 857.3 1,001.5 17.1 17.1
Total 5,011.8 5,855.7 100.0 100.0

 

Table 8: Software Business by Foreign Affiliates of Indian Companies ─ Activity Distribution
(₹ billion)
Activity 2014-15
Locally To India Other Countries
(1) (2) (3)
IT services 28.5 2.2 3.1
Software Product Development 7.4 0.6 16.4
BPO Services 17.4 2.3 6.2
Engineering Services 4.5 0.0 0.1
Other services 783.9 330.6 131.1
Total (₹ billion) 841.7 335.7 156.9
Total (US$ billion*) 13.8 5.5 2.6

 

Table 9: Software Business by foreign affiliates of Indian Companies – Country Distribution
(₹ billion)
Country Share in Total Software business by foreign affiliates (%) Software business by foreign affiliates
Locally To India Other Countries
(1) (2) (3) (4)
USA 66.7 547.4 270.6 71.5
United Kingdom 8.0 80.8 4.8 20.6
Canada 3.3 28.3 12.3 3.1
Germany 2.4 17.3 13.1 2.2
Singapore 3.3 25.1 10.0 8.9
Netherlands 2.3 16.6 6.1 8.5
Other Countries 14.0 126.3 18.9 42.2
Total 100.0 841.7 335.7 156.9

1 The previous data release in the series covering 2013-14 survey round was released on the RBI website on February 16, 2015.

Income-tax deduction from salaries during the Financial Year 2015-16 under section 192 of the Income-tax Act, 1961

1
CIRCULAR NO : 20/2015
F.No. 275/192/2015-IT(B)
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
******

North Block, New Delhi
Dated the 2nd December, 2015

SUBJECT: INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2015-16 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961.
*****
Reference is invited to Circular No.17/2014 dated 10.12.2014 whereby the rates of deduction of income-tax from the payment of income under the head “Salaries” under Section 192 of the Income-tax Act, 1961 (hereinafter ‘the Act’), during the financial year 2014-15, were intimated. The present Circular contains the rates of deduction of income-tax from the payment of income chargeable under the head “Salaries” during the financial year 2015-16 and explains certain related provisions of the Act and Income-tax Rules, 1962 (hereinafter the Rules). The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department- www.incometaxindia.gov.in.
2. RATES OF INCOME-TAX AS PER FINANCE ACT, 2015:
As per the Finance Act, 2015, income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head “Salaries” for the financial year 2015-16 (i.e. Assessment Year 2016-17) at the following rates:
2.1 Rates of tax
A. Normal Rates of tax:
Sl No
Total Income
Rate of tax
1
Where the total income does not exceed Rs. 2,50,000/-.
Nil
2
Where the total income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.
10 per cent of the amount by which the total income exceeds Rs. 2,50,000/-
3
Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.
Rs. 25,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.
4
Where the total income exceeds Rs. 10,00,000/-.
Rs. 1,25,000/- plus 30 per cent of the amount by which the total income
exceeds Rs. 10,00,000/-
2
B. Rates of tax for every individual, resident in India, who is of the age of sixty years or more but less than eighty years at any time during the financial year:
Sl No
Total Income
Rate of tax
1
Where the total income does not exceed Rs. 3,00,000/-
Nil
2
Where the total income exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,000/-
10 per cent of the amount by which the total income exceeds Rs. 3,00,000/-
3
Where the total income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-
Rs. 20,000/- plus 20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-.
4
Where the total income exceeds Rs. 10,00,000/-
Rs. 1,20,000/- plus 30 per cent of the amount by which the total income
exceeds Rs. 10,00,000/-
C. In case of every individual being a resident in India, who is of the age of eighty years or more at any time during the financial year:
Sl No
Total Income
Rate of tax
1
Where the total income does not exceed Rs. 5,00,000/-
Nil
2
Where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000/-
20 per cent of the amount by which the total income exceeds Rs. 5,00,000/-
4
Where the total income exceeds Rs. 10,00,000/-
Rs. 1,00,000/- plus 30 per cent of the amount by which the total income
exceeds Rs. 10,00,000/-
2.2 Surcharge on Income tax:
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 of the Income-tax Act, shall, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, having a total income exceeding one crore rupees, be increased by a surcharge for the purpose of the Union calculated at the rate of twelve per cent of such income-tax:
Provided that in the case of persons mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
2.3.1 Education Cess on Income tax:
The amount of income-tax including the surcharge if any, shall be increased by Education Cess on Income Tax at the rate of two percent of the income-tax.
3
2.3.2 Secondary and Higher Education Cess on Income-tax:
An additional education cess is chargeable at the rate of one percent of income-tax including the surcharge if any, but not including the Education Cess on income tax as in 2.3.1.
3. SECTION 192 OF THE INCOME-TAX ACT, 1961: BROAD SCHEME OF TAX DEDUCTION AT SOURCE FROM “SALARIES”:
3.1 Method of Tax Calculation:
Every person who is responsible for paying any income chargeable under the head “Salaries” shall deduct income-tax on the estimated income of the assessee under the head “Salaries” for the financial year 2015-16. The income-tax is required to be calculated on the basis of the rates given above, subject to the provisions related to requirement to furnish PAN as per sec 206AA of the Act, and shall be deducted at the time of each payment. No tax, however, will be required to be deducted at source in any case unless the estimated salary income including the value of perquisites, for the financial year exceeds Rs. 2,50,000/- or Rs.3,00,000/- or Rs. 5,00,000/-, as the case may be, depending upon the age of the employee.(Some typical illustrations of computation of tax are given at Annexure-I).
3.2 Payment of Tax on Perquisites by Employer:
An option has been given to the employer to pay the tax on non-monetary perquisites given to an employee. The employer may, at its option, make payment of the tax on such perquisites himself without making any TDS from the salary of the employee. However, the employer will have to pay the tax at the time when such tax was otherwise deductible i.e. at the time of payment of income chargeable under the head “salaries” to the employee.
3.2.1 Computation of Average Income Tax:
For the purpose of making the payment of tax mentioned in para 3.2 above, tax is to be determined at the average of income tax computed on the basis of rate in force for the financial year, on the income chargeable under the head “salaries”, including the value of perquisites for which tax has been paid by the employer himself.
3.2.2 Illustration:
The income chargeable under the head “salaries” of an employee below sixty years of age for the year inclusive of all perquisites is Rs.4,50,000/-, out of which, Rs.50,000/- is on account of non-monetary perquisites and the employer opts to pay the tax on such perquisites as per the provisions discussed in para 3.2 above.
STEPS:
Income Chargeable under the head “Salaries” inclusive of all perquisites
Rs. 4,50,000/-
Tax on Total Salary (including Cess)
Rs. 20,600/-
Average Rate of Tax [(20,600/4,50,000) X 100]
4.57%
Tax payable on Rs.50,000/= (4.57% of 50,000)
Rs. 2285/-
Amount required to be deposited each month
Rs. 190 ((Rs. 190.40) =2285/12)
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The tax so paid by the employer shall be deemed to be TDS made from the salary of the employee.
3.3 Salary From More Than One Employer:
Section 192(2) deals with situations where an individual is working under more than one employer or has changed from one employer to another. It provides for deduction of tax at source by such employer (as the tax payer may choose) from the aggregate salary of the employee, who is or has been in receipt of salary from more than one employer. The employee is now required to furnish to the present/chosen employer details of the income under the head “Salaries” due or received from the former/other employer and also tax deducted at source therefrom, in writing and duly verified by him and by the former/other employer. The present/chosen employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer).
3.4 Relief When Salary Paid in Arrear or Advance:
3.4.1 Under section 192(2A) where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Section 89(1) he may furnish to the person responsible for making the payment referred to in Para (3.1), such particulars in Form No. 10E duly verified by him, and thereupon the person responsible, as aforesaid, shall compute the relief on the basis of such particulars and take the same into account in making the deduction under Para(3.1) above.
Here “university” means a university established or incorporated by or under a Central, State or Provincial Act, and includes an institution declared under Section 3 of the University Grants Commission Act, 1956 to be a university for the purpose of that Act.
3.4.2 With effect from 1/04/2010 (AY 2010-11), no such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in section 10(10C)(i) (read with Rule 2BA), a scheme of voluntary separation, if an exemption in respect of any amount received or receivable on such voluntary retirement or termination of his service or voluntary separation has been claimed by the assessee under section 10(10C) in respect of such, or any other, assessment year.
3.5 Information regarding Income under any other head:
(i) Section 192(2B) enables a taxpayer to furnish particulars of income under any head other than “Salaries” ( not being a loss under any such head other than the loss under the head “ Income from house property”) received by the taxpayer for the same financial year and of any tax deducted at source thereon. The particulars may now be furnished in a simple statement, which is properly signed and verified by the taxpayer in the manner as prescribed under Rule 26B(2) of the Rules and shall be annexed to the simple statement. The form of verification is reproduced as under:
I, …………………. (name of the assessee), do declare that what is stated above is true to the best of my information and belief.
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It is reiterated that the DDO can take into account any loss only under the head “Income from house property”. Loss under any other head cannot be considered by the DDO for calculating the amount of tax to be deducted.
3.6 Computation of income under the head “ Income from house property”:
While taking into account the loss from House Property, the DDO shall ensure that the employee files the declaration referred to above and encloses therewith a computation of such loss from house property. Following details shall be obtained and kept by the employer in respect of loss claimed under the head “ Income from house property” separately for each house property:
a) Gross annual rent/value
b) Municipal Taxes paid, if any
c) Deduction claimed for interest paid, if any
d) Other deductions claimed
e) Address of the property
f) Amount of loan, if any; and
g) Name and address of the lender (loan provider)
3.6.1 Conditions for Claim of Deduction of Interest on Borrowed Capital for Computation of Income From House Property [Section 24(b)]:
Section 24(b) of the Act allows deduction from income from houses property on interest on borrowed capital as under:-
(i) the deduction is allowed only in case of house property which is owned and is in the occupation of the employee for his own residence. However, if it is actually not occupied by the employee in view of his place of the employment being at other place, his residence in that other place should not be in a building belonging to him.
(ii) the quantum of deduction allowed as per table below:
Sl No
Purpose of borrowing capital
Date of borrowing capital
Maximum Deduction allowable
1
Repair or renewal or reconstruction of the house
Any time
Rs. 30,000/-
2
Acquisition or construction of the house
Before 01.04.1999
Rs. 30,000/-
3
Acquisition or construction of the house
On or after 01.04.1999
Rs. 1,50,000/-
(upto AY 2014-15)
Rs. 2,00,000/-
(w. e. f. AY 2015-16)
In case of Serial No. 3 above
(a) The acquisition or construction of the house should be completed within3 years from the end of the FY in which the capital was borrowed. Hence, it is necessary for the DDO to have the completion certificate of the house property against which deduction is claimed either from the builder or through self-declaration from the employee.
(b) Further any prior period interest for the FYs upto the FY in which the property was acquired or constructed (as reduced by any part of interest allowed as deduction under any other section of the Act) shall be deducted in equal installments for the FY in question and subsequent four FYs.
6
(c) The employee has to furnish before the DDO a certificate from the person to whom any interest is payable on the borrowed capital specifying the amount of interest payable. In case a new loan is taken to repay the earlier loan, then the certificate should also show the details of Principal and Interest of the loan so repaid.
3.7 Adjustment for Excess or Shortfall of Deduction:
The provisions of Section 192(3) allow the deductor to make adjustments for any excess or shortfall in the deduction of tax already made during the financial year, in subsequent deductions for that employee within that financial year itself.
3.8 Salary Paid in Foreign Currency:
For the purposes of deduction of tax on salary payable in foreign currency, the value in rupees of such salary shall be calculated at the “Telegraphic transfer buying rate” of such currency as on the date on which tax is required to be deducted at source ( see Rule 26).
4. PERSONS RESPONSIBLE FOR DEDUCTING TAX AND THEIR DUTIES:
4.1. As per section 204(i) of the Act, in the context of payments other than payments by the Central Government of the State Government the “persons responsible for paying” for the purpose of Section 192 means the employer himself or if the employer is a Company, the Company itself including the Principal Officer thereof. Further, as per Section 204(iv), in case the credit, or as the case may be, the payment is made by or on behalf of Central Government or State Government, the DDO or any other person by whatever name called, responsible for crediting, or as the case may be, paying such sum is the “persons responsible for paying” for the purpose of Section 192.
4.2. The tax determined as per para 9 should be deducted from the salary u/s 192 of the Act.
4.3. Deduction of Tax at Lower Rate:
If the jurisdictional TDS officer of the Taxpayer issues a certificate of No Deduction or Lower Deduction of Tax under section 197 of the Act, in response to the application filed before him in Form No 13 by the Taxpayer; then the DDO should take into account such certificate and deduct tax on the salary payable at the rates mentioned therein.(see Rule 28AA). The Unique Identification Number of the certificate is required to be reported in Quarterly Statement of TDS (Form 24Q).
4.4. Deposit of Tax Deducted:
Rule 30 prescribes time and mode of payment of tax deducted at source to the account of Central Government.
4.4.1. Due dates for payment of TDS:
Prescribed time of payment/deposit of TDS to the credit of Central Government account is as under:
a) In case of an Office of Government:
Sl No.
Description
Time up to which to be deposited.
1
Tax deposited without Challan [Book Entry]
SAME DAY
2
Tax deposited with Challan
7TH DAY NEXT MONTH
7
3
Tax on perquisites opt to be deposited by the employer.
7TH DAY NEXT MONTH
b) In any case other than an Office of Government
Sl No.
Description
Time up to which to be deposited.
1
Tax deducted in March
30th APRIL NEXT FINANCIAL YEAR
2
Tax deducted in any other month
7TH DAY NEXT MONTH
3
Tax on perquisites opted to be deposited by the employer
7TH DAY NEXT MONTH
However, if a DDO applies before the jurisdictional Additional/Joint Commissioner of Income Tax to permit quarterly payments of TDS under section 192, the Rule 30(3) allows for payments on quarterly basis and as per time given in Table below:
Sl. No.
Quarter of the financial year ended on
Date for quarterly payment
1
30th June
7th July
2
30th September
7th October
3
31st December
7th January
4
31st March
30th April next Financial Year
4.4.2 Mode of Payment of TDS
4.4.2.1 Compulsory filing of Statement by PAO, Treasury Officer, etc in case of payment of TDS by Book Entry u/ s 200 (2A):
In the case of an office of the Government, where tax has been paid to the credit of the Central Government without the production of a challan [Book Entry], the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person by whatever name called to whom the deductor reports about the tax deducted and who is responsible for crediting such sum to the credit of the Central Government, shall‐
(a) submit a statement in Form No. 24G under section 200 (2A) within ten days from the end of the month to the agency authorized by the Director General of Income‐tax (Systems) [TIN Facilitation Centres currently managed by M/s National Securities Depository Ltd] in respect of tax deducted by the deductors and reported to him for that month; and
(b) intimate the number (hereinafter referred to as the Book Identification Number or BIN) generated by the agency to each of the deductors in respect of whom the sum deducted has been credited. BIN consist of receipt number of Form 24G, DDO sequence number in Form No. 24G and date on which tax is deposited.
If the PAO/CDDO/TO etc, as stated above, fails to deliver the statement as required u/s 200(2A), he will be liable to pay, by way of penalty, under section 272A(2)(m), a sum which shall be Rs.100/- for every day during which the failure continues. However, the amount of such penalty shall not exceed the amount of tax which is deductable at source.
The procedure of furnishing Form 24G is detailed in Annexure III. PAOs/DDOs should go through the FAQs in Annexure IV to understand the correct process to be followed. The ZAO / PAO of Central Government Ministries is responsible for filing of Form No. 24G on monthly basis. The person responsible for filing Form No. 24G in case of State Govt. Departments is shown at Annexure V.
The procedure of furnishing Form 24G is detailed in Annexure IV. PAOs/DDOs should go through the FAQs therein to understand the correct process to be followed.
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4.4.2.2 Payment by an Income Tax Challan:
(i) In case the payment is made by an income-tax challan, the amount of tax so deducted shall be deposited to the credit of the Central Government by remitting it, within the time specified in Table in para 4.4.1 above, into any office of the Reserve Bank of India or branches of the State Bank of India or of any authorized bank;
(ii) In case of a company and a person (other than a company), to whom provisions of section 44AB are applicable, the amount deducted shall be electronically remitted into the Reserve Bank of India or the State Bank of India or any authorised bank accompanied by an electronic income-tax challan (Rule125).
The amount shall be construed as electronically remitted to the Reserve Bank of India or to the State Bank of India or to any authorized bank, if the amount is remitted by way of:
(a) internet banking facility of the Reserve Bank of India or of the State Bank of India or of any authorized bank; or
(b) debit card. {Notification No.41/2010 dated 31st May 2010}
4.5 Interest, Penalty & Prosecution for Failure to Deposit Tax Deducted:
4.5.1 If a person fails to deduct the whole or any part of the tax at source, or, after deducting, fails to pay the whole or any part of the tax to the credit of the Central Government within the prescribed time, he shall be liable to action in accordance with the provisions of section 201 and shall be deemed to be an assessee-in-default in respect of such tax and liable for penal action u/s 221 of the Act. Further Section 201(1A) provides that such person shall be liable to pay simple interest
(i) at the rate of 1% for every month or part of the month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and
(ii) at the rate of one and one-half percent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid.
Such interest, if chargeable, is mandatory in nature and has to be paid before furnishing of quarterly statement of TDS for respective quarter.
4.5.2 Section 271C inter alia lays down that if any person fails to deduct whole or any part of tax at source or fails to pay the whole or part of tax under the second proviso to section 194B, he shall be liable to pay, by way of penalty, a sum equal to the amount of tax not deducted or paid by him.
4.5.3 Further, section 276B lays down that if a person fails to pay to the credit of the Central Government within the prescribed time, as above, the tax deducted at source by him or tax payable by him under the second proviso to Section 194B, he shall be punishable with rigorous imprisonment for a term which shall be between 3 months and 7 years, along with fine.
4.6 Furnishing of Certificate for Tax Deducted (Section 203):
4.6.1 Section 203 requires the DDO to furnish to the employee a certificate in Form 16 detailing the amount of TDS and certain other particulars. Rule 31 prescribes that Form 16 should be furnished to the employee by 31st May after the end of the financial year in which the income was paid and tax deducted. Even the banks deducting tax at the time of payment
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of pension are required to issue such certificates. Revised Form 16 annexed to Notification No 11 dated 19-02-2013 is enclosed. The certificate in Form 16 shall specify
(a) Valid permanent account number (PAN) of the deductee;
(b) Valid tax deduction and collection account number (TAN) of the deductor;
(c) (i) Book identification number or numbers (BIN) where deposit of tax deducted is without production of challan in case of an office of the Government;
(ii) Challan identification number or numbers (CIN*) in case of payment through bank.
(*Challan identification number (CIN) means the number comprising the Basic Statistical Returns (BSR) Code of the Bank branch where the tax has been deposited, the date on which the tax has been deposited and challan serial number given by the bank.)
(d) Receipt numbers of all the relevant quarterly statements of TDS (24Q). The receipt number of the quarterly statement is of 8 digit.
Further as per Circular 04/2013 dated 17-04-2013 all deductors (including Government deductors who deposit TDS in the Central Government Account through book entry) shall issue the Part A of Form No. 16, by generating and subsequently downloading it through TRACES Portal and after duly authenticating and verifying it, in respect of all sums deducted on or after the 1st day of April, 2012 under the provisions of section 192 of Chapter XVII-B. Part A of Form No 16 shall have a unique TDS certificate number. ‘Part B (Annexure)’ of Form No. 16 shall be prepared by the deductor manually and issued to the deductee after due authentication and verification alongwith the Part A of the Form No. 16.
It may be noted that under the new TDS procedure, TAN of deductee/ PAN of the deductee and receipt number of TDS statement filed by the deductor act as unique identifier for granting online credit of TDS to the decutee. Hence due care should be taken in filling these particulars. Due care should also be taken in indicating correct CIN/ BIN in TDS statement.
If the DDO fails to issue these certificates to the person concerned, as required by section 203, he will be liable to pay, by way of penalty, under section 272A(2)(g), a sum which shall be Rs.100/- for every day during which the failure continues.
It is, however, clarified that there is no obligation to issue the TDS certificate in case tax at source is not deductible/deducted by virtue of claims of exemptions and deductions.
[Note: TRACES is a web-based application of the Income - tax Department that provides an interface to all stakeholders associated with TDS administration. It enables viewing of challan status, downloading of NSDL Conso File, Justification Report and Form 16 / 16A as well as viewing of annual tax credit statements (Form 26AS). Each deductor is required to Register in the Traces portal. Form 16/16A issued to deductees should mandatorily be generated and downloaded from the TRACES portal].
Certain essential points regarding the filing of the Statement and obtaining TDS certificates are mentioned below:
(a) TDS certificate (Form16) would be generated for the deductee only if Valid PAN is correctly mentioned in the Annexure II of Form 24Q in Quarter 4 filed by the deductor. Moreover, employers are advised to ensure in Form 16 that the status of “matching” with respect to “Form 24G/OLTAS” is ‘F’. If the status of matching other than ‘F’, kindly take necessary action promptly to rectify the same. It is pertinent to mention here that certain
10
facilities have been provided to the deductors at website www.tdscpc.gov.in/ including online correction of statements (Form 24Q).
(b) The employer should quote the gross amount of salary (including any amount exempt under section 10 and the deductions under chapter VI A) in column 321 (Amount paid/credited) of Annexure I of Form 24Q as per NSDL RPU (hereafter Return Preparation Utility).
(c) The employer should quote the amount of salary excluding any amount exempt under section 10 in column 333 (Total amount of salary) of Annexure II of Form 24Q as per NSDL RPU.
(d) TDS on Income (including loss from House Property) under any Head other than the head ‘Salaries’ offered for TDS (shown in column 339) can be shown in column 350 (Reported amount of TDS by previous employer, as per NSDL RPU.
(e) Employer is advised to quote Total Taxable Income (Column 344) in Annexure II without rounding-off and TDS should be deducted and reported accordingly i.e. without rounding-off of TDS also.
Example:
Total Taxable Income
Total Taxable Income (Rounded Off)
TDS to be Deducted
TDS Deducted/ Reported after rounding-off of income
Short Deduction
Rs.1350094
Rs. 1350090
Rs. 235028.20
Rs 235027
Rs.1.20
4.6.2. If an assessee is employed by more than one employer during the year, each of the employers shall issue Part A of the certificate in Form No. 16 pertaining to the period for which such assessee was employed with each of the employers and Part B may be issued by each of the employers or the last employer at the option of the assessee.
4.6.3. Authentication by Digital Signatures:
(i) Where a certificate is to be furnished in Form No. 16, the deductor may, at his option, use digital signatures to authenticate such certificates.
(ii) In case of certificates issued under clause (i), the deductor shall ensure that
(a) the conditions prescribed in para 4.6.1 above are complied with;
(b) once the certificate is digitally signed, the contents of the certificates are not amenable to change; and
(c) the certificates have a control number and a log of such certificates is maintained by the deductor.
 The digital signature is being used to authenticate most of the e-transactions on the internet as transmission of information using digital signature is failsafe. It saves time specially in organisations having large number of employees where issuance of certificate of deduction of tax with manual signature is time consuming (Circular no 2 of 2007 dated 21.05.2007)
4.6.4. Furnishing of particulars pertaining to perquisites, etc (Section 192(2C):
4.6.4.1 As per section 192(2C), the responsibility of providing correct and complete particulars of perquisites or profits in lieu of salary given to an employee is placed on the
11
person responsible for paying such income i.e., the person responsible for deducting tax at source. The form and manner of such particulars are prescribed in Rule 26A, Form 12BA (Annexure II) and Form 16 of the Rules. Information relating to the nature and value of perquisites is to be provided by the employer in Form 12BA in case salary paid or payable is above Rs.1,50,000/-. In other cases, the information would have to be provided by the employer in Form 16 itself.
4.6.4.2 An employer, who has paid the tax on perquisites on behalf of the employee as per the provisions discussed in para 3.2 of this circular, shall furnish to the employee concerned, a certificate to the effect that tax has been paid to the Central Government and specify the amount so paid, the rate at which tax has been paid and certain other particulars in the amended Form 16.
4.6.4.3 The obligation cast on the employer under Section 192(2C) for furnishing a statement showing the value of perquisites provided to the employee is a crucial responsibility of the employer, which is expected to be discharged in accordance with law and rules of valuation framed there under. Any false information, fabricated documentation or suppression of requisite information will entail consequences thereof provided under the law. The certificates in Forms 16 and/or Form 12BA specified above, shall be furnished to the employee by 31st May of the financial year immediately following the financial year in which the income was paid and tax deducted. If he fails to issue these certificates to the person concerned, as required by section 192(2C), he will be liable to pay, by way of penalty, under section 272A(2)(i), a sum which shall be Rs.100/- for every day during which the failure continues.
As per Section 139C of the Act, the Assessing Officer can require the taxpayer to produce Form 12BA alongwith Form 16, as issued by the employer.
4.6.5 DDOs empowered to obtain evidence of proof or particulars of the prescribed claim (including claim for set-off of loss) under the section 192(2D):
DDOs have been authorized u/s 192 to allow certain deductions, exemptions or allowances or set-off of certain loss as per the provisions of the Act for the purpose of estimating the income of the assessee or computing the amount of tax deductible under the said section. The evidence /proof /particulars for some of the deductions/exemptions/allowances/set-off of loss claimed by the employee such as rent receipt for claiming deduction in HRA, evidence of interest payments for claiming loss from self-occupied house property, etc is not available to the DDO. To bring certainity and uniformity in this matter, Finance Act, 2015 inserted section 192(2D). Section 192(2D) provides that person responsible for paying (DDOs) shall obtain from the assessee evidence or proof or particular of the prescribed claim (including claim for set off of loss) in the form and manner as may be prescribed.
4.7 Mandatory Quoting of PAN and TAN:
4.7.1 Section 203A of the Act makes it obligatory for all persons responsible for deducting tax at source to obtain and quote the Tax deduction and collection Account No (TAN) in the challans, TDS-certificates, statements and other documents. Detailed instructions in this regard are available in this Department’s Circular No.497 [F.No.275/118/ 87-IT(B) dated 9.10.1987]. If a person fails to comply with the provisions of section 203A, he will be liable to pay, by way of penalty, under section 272BB, a sum of ten thousand rupees. Similarly, as per Section 139A(5B), it is obligatory for persons deducting tax at source to quote PAN of the persons from whose income tax has been
12
deducted in the statement furnished u/s 192(2C), certificates furnished u/s 203 and all statements prepared and delivered as per the provisions of section 200(3) of the Act.
4.7.2 All tax deductors are required to file the TDS statements in Form No.24Q (for tax deducted from salaries). As the requirement of filing TDS certificates alongwith the return of income has been done away with, the lack of PAN of deductees is creating difficulties in giving credit for the tax deducted. Tax deductors are, therefore, advised to procure and quote correct PAN details of all deductees in the TDS statements for salaries in Form 24Q. Taxpayers are also liable to furnish their correct PAN to their deductors. Non-furnishing of PAN by the deductee (employee) to the deductor (employer) will result in deduction of TDS at higher rates u/s 206AA of the Act mentioned in para 4.8 below.
4.8 Compulsory Requirement to furnish PAN by employee (Section 206AA):
4.8.1 Section 206AA in the Act makes furnishing of PAN by the employee compulsory in case of receipt of any sum or income or amount, on which tax is deductible. If employee (deductee) fails to furnish his/her PAN to the deductor , the deductor has been made responsible to make TDS at higher of the following rates:
i) at the rate specified in the relevant provision of this Act; or
ii) at the rate or rates in force; or
iii) at the rate of twenty per cent.
The deductor has to determine the tax amount in all the three conditions and apply the higher rate of TDS. However, where the income of the employee computed for TDS u/s 192 is below taxable limit, no tax will be deducted. But where the income of the employee computed for TDS u/s 192 is above taxable limit, the deductor will calculate the average rate of income-tax based on rates in force as provided in sec 192. If the tax so calculated is below 20%, deduction of tax will be made at the rate of 20% and in case the average rate exceeds 20%, tax is to be deducted at the average rate. Education cess @ 2% and Secondary and Higher Education Cess @ 1% is not to be deducted, in case the tax is deducted at 20% u/s 206AA of the Act.
4.9 Statement of deduction of tax under section 200(3) [Quarterly Statement of TDS]:
4.9.1 The person deducting the tax (employer in case of salary income), is required to file duly verified Quarterly Statements of TDS in Form 24Q for the periods [details in Table below] of each financial year, to the TIN Facilitation Centres authorized by DGIT (System’s) which is currently managed by M/s National Securities Depository Ltd (NSDL). Particulars of e-TDS Intermediary at any of the TIN Facilitation Centres are available at http://www.incometaxindia.gov.in and http://tin-nsdl.com portals. The requirement of filing an annual return of TDS has been done away with w.e.f. 1.4.2006. The quarterly statement for the last quarter filed in Form 24Q (as amended by Notification No. S.O.704(E) dated 12.5.2006) shall be treated as the annual return of TDS. Due dates of filing this statement quarterwise is as in the Table below.
TABLE: Dates of filing Quarterly Statements E-TDS Return 24Q
Sl No
Return for Quarter ending
Due date for Government Offices
Due date for Other Deductors
1
30th June
31st July
15th July
2
30th September
31st October
15th October
3
31st December
31st January
15th January
4
31st March
15th May
15th May
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4.9.2 The statements referred above may be furnished in paper form or electronically under digital signature or alongwith verification of the statement in Form 27A of verified through an electronic process in accordance with the procedures, formats and standards specified by the Director General of Income‐tax (Systems). The procedure for furnishing the e-TDS/TCS statement is detailed at Annexure VI.
4.9.3 All Returns in Form 24Q are required to be furnished in electronically except in case where the number of deductee records is less than 20 and deductor is not an office of Government, or a company or a person who is required to get his accounts audited under section 44AB of the Act. [Notification No. 11 dated 19.02.2013].
4.9.4 Fee for default in furnishing statements (Section 234E):
If a person fails to deliver or caused to be delivered a statement within the time prescribed in section 200(3) in respect of tax deducted at source on or after 1.07.2012 he shall be liable to pay, by way of fee a sum of Rs. 200 for every day during which the failure continues. However, the amount of such fee shall not exceed the amount of tax which was deductible at source. This fee is mandatory in nature and to be paid before furnishing of such statement.
4.9.5 Rectification of mistake in filing TDS Statement:
A DDO can also file a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered earlier.
4.9.6 Penalty for failure in furnishing statements or furnishing incorrect information (section 271H):
If a person fails to deliver or caused to be delivered a statement within the time prescribed in section 200(3) or furnishes an incorrect statement, in respect of tax deducted at source on or after 1.07.2012, he shall be liable to pay, by way of penalty a sum which shall not be less than Rs. 10,000/- but which may extend to Rs 1,00,000/-. However, the penalty shall not be levied if the person proves that after paying TDS with the fee and interest, if any, to the credit of Central Government, he had delivered such statement before the expiry of one year from the time prescribed for delivering the statement.
4.9.7 At the time of preparing statements of tax deducted, the deductor is required to:
(i) mandatory quote his tax deduction and collection account number (TAN) in the statement;
(ii) mandatory quote his permanent account number (PAN) in the statement except in the case where the deductor is an office of the Government( including State Government). In case of Government deductors “PANNOTREQD” to be quoted in the e-TDS statement;
(iii) mandatory quote of permanent account number PAN of all deductees;
(iv) furnish particulars of the tax paid to the Central Government including book identification number or challan identification number, as the case may be.
(v) furnish particular of amounts paid or credited on which tax was not deducted in view of the issue of certificate of no deduction of tax u/s 197 by the assessing officer of the payee.
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4.10 TDS on Income from Pension:
In the case of pensioners who receive their pension (not being family pension paid to a spouse) from a nationalized bank, the instructions contained in this circular shall apply in the same manner as they apply to salary-income. The deductions from the amount of pension under section 80C on account of contribution to Life Insurance, Provident Fund, NSC etc., if the pensioner furnishes the relevant details to the banks, may be allowed. Necessary instructions in this regard were issued by the Reserve Bank of India to the State Bank of India and other nationalized Banks vide RBI’s Pension Circular(Central Series) No.7/C.D.R./1992 (Ref. CO: DGBA: GA (NBS) No.60/GA.64 (11CVL)-/92) dated the 27th April 1992, and, these instructions should be followed by all the branches of the Banks, which have been entrusted with the task of payment of pensions. Further all branches of the banks are bound u/s 203 to issue certificate of tax deducted in Form 16 to the pensioners also vide CBDT circular no. 761 dated 13.1.98.
4.11. Matters pertaining to the TDS made in case of Non Resident:
4.11.1 Where Non-Residents are deputed to work in India and taxes are borne by the employer, if any refund becomes due to the employee after he has already left India and has no bank account in India by the time the assessment orders are passed, the refund can be issued to the employer as the tax has been borne by it [Circular No. 707 dated 11.07.1995].
4.11.2 In respect of non-residents, the salary paid for services rendered in India shall be regarded as income earned in India. It has been specifically provided in the Act that any salary payable for rest period or leave period which is both preceded or succeeded by service in India and forms part of the service contract of employment will also be regarded as income earned in India.
5. COMPUTATION OF INCOME UNDER THE HEAD “SALARIES”
5.1 INCOME CHARGEABLE UNDER THE HEAD “SALARIES”:
(1) The following income shall be chargeable to income-tax under the head “Salaries” :
(a) any salary due from an employer or a former employer to an assessee in the previous year, whether paid or not;
(b) any salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer though not due or before it became due to him.
(c) any arrears of salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer, if not charged to income-tax for any earlier previous year.
(2) For the removal of doubts, it is clarified that where any salary paid in advance is included in the total income of any person for any previous year it shall not be included again in the total income of the person when the salary becomes due.
Any salary, bonus, commission or remuneration, by whatever name called, due to, or received by, a partner of a firm from the firm shall not be regarded as “Salary”.
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5.2 DEFINITION OF “SALARY”, “PERQUISITE” AND “PROFIT IN LIEU OF SALARY” (SECTION 17):
5.2.1 “Salary” includes:-
i. wages, fees, commissions, perquisites, profits in lieu of, or, in addition to salary, advance of salary, annuity or pension, gratuity, payments in respect of encashment of leave etc.
ii. the portion of the annual accretion to the balance at the credit of the employee participating in a recognized provident fund as consists of {Rule 6 of Part A of the Fourth Schedule of the Act}:
a) contributions made by the employer to the account of the employee in a recognized provident fund in excess of 12% of the salary of the employee, and
b) interest credited on the balance to the credit of the employee in so far as it is allowed at a rate exceeding such rate as may be fixed by Central Government. [w.e.f. 01-09-2010 rate is fixed at 9.5% - Notification No SO 1046(E) dated 13-05-2011]
iii. the contribution made by the Central Government or any other employer to the account of the employee under the New Pension Scheme as notified vide Notification F.N. 5/7/2003- ECB&PR dated 22.12.2003 (enclosed as Annexure VII) referred to in section 80CCD (para 5.5.3 of this Circular).
It may be noted that, since salary includes pension, tax at source would have to be deducted from pension also, unless otherwise so required. However, no tax is required to be deducted from the commuted portion of pension to the extent exempt under section 10 (10A).
Family Pension is chargeable to tax under head “Income from other sources” and not under the head “Salaries”. Therefore, provisions of section 192 of the Act are not applicable. Hence, DDOs are not required to deduct TDS on family pension paid to person.
5.2.2 Perquisite includes:
I. The value of rent free accommodation provided to the employee by his employer;
II. The value of any concession in the matter of rent in respect of any accommodation provided to the employee by his employer;
III. The value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases:
i) By a company to an employee who is a director of such company;
ii) By a company to an employee who has a substantial interest in the company;
iii) By an employer (including a company)to an employee, who is not covered by (i) or (ii) above and whose income under the head “Salaries” (whether due from or paid or allowed by one or more employers), exclusive of the value of all benefits and amenities not provided by way of monetary payment, exceeds Rs.50,000/-.
[What constitutes concession in the matter of rent have been prescribed in Explanations 1 to 4 below section 17(2)(ii) of the Act]
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IV. Any sum paid by the employer in respect of any obligation which would otherwise have been payable by the assessee.
V. Any sum payable by the employer, whether directly or through a fund, other than a recognized provident fund or an approved superannuation fund or other specified funds u/s 17, to effect an assurance on the life of an assessee or to effect a contract for an annuity.
VI. The value of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the employer, or former employer, free of cost or at concessional rate to the employee and for this purpose, .
(a) “specified security” means the securities as defined in section 2(h) of the Securities Contracts (Regulation) Act, 1956 and, where employees’ stock option has been granted under any plan or scheme therefor, includes the securities offered under such plan or scheme;
(b) “sweat equity shares” means equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called;
(c) the value of any specified security or sweat equity shares shall be the fair market value of the specified security or sweat equity shares, as the case may be, on the date on which the option is exercised by the assessee as reduced by the amount actually paid by, or recovered from the assessee in respect of such security or shares;
(d) “fair market value” means the value determined in accordance with the method as may be prescribed (refer Rule 3(9) of the IT Rules);
(e) “option” means a right but not an obligation granted to an employee to apply for the specified security or sweat equity shares at a predetermined price;
VII. The amount of any contribution to an approved superannuation fund by the employer in respect of the assessee, to the extent it exceeds one lakh rupees; and
VIII The value of any other fringe benefit or amenity as prescribed in Rule 3.
5.2.2A Rules for valuation of such benefit or amenity as given in Rule 3 are as under : -
I. Residential Accommodation provided by the employer [Rule 3(1)]:-
“Accommodation” includes a house, flat, farm house or part thereof , hotel accommodation, motel, service apartment, guest house, a caravan, mobile home, ship or other floating structure.
A. For valuation of the perquisite of rent free unfurnished accommodation, all employees are divided into two categories:
(i) For employees of the Central and State governments the value of perquisite shall be equal to the licence fee charged for such accommodation as reduced by the rent actually paid by the employee. Employees of autonomous, semi-autonomous institutions, PSUs/PSEs & subsidiaries, Universities, etc. are not covered under this method of valuation.
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(ii) For all others, i.e., those salaried taxpayers not in employment of the Central government and the State government, the valuation of perquisite in respect of accommodation would be at prescribed rates, as discussed below:
a) Where the accommodation provided to the employee is owned by the employer:
Sl No
Cities having population as per the 2001 census
Perquisite
1
Exceeds 25 lakh
15% of salary
2
Exceeds 10 lakhs but does not exceed 25 lakhs
10% of salary
3
For other places
7.5 % of salary
b) Where the accommodation so provided is taken on lease/ rent by the employer:
The prescribed rate is 15% of the salary or the actual amount of lease rental payable by the employer, whichever is lower, as reduced by any amount of rent paid by the employee. Meaning of ‘Salary ‘for the purpose of calculation of perquisite in respect of Residential Accommodation :
a. Basic Salary ;
b. Dearness Allowance, or Dearness Pay if it enters into the computation of superannuation or retirement benefit of the employees;
c. Bonus ;
d. Commission ;
e. All other taxable allowances (excluding the portion not taxable ); and
f. Any monetary payment which is chargeable to tax (by whatever name called).
Salary from all employers shall be taken into consideration in respect of the period during which an accommodation is provided. Where on account of the transfer of an employee from one place to another, he is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with reference to only one such accommodation which has the lower value for a period not exceeding 90 days and thereafter the value of perquisite shall be charged for both such
accommodation.
B Valuation of the perquisite of furnished accommodation- the value of perquisite as determined by the above method (in A) shall be increased by-
i) 10% of the cost of furniture, appliances and equipments, or
ii) where the furniture, appliances and equipments have been taken on hire, by the amount of actual hire charges payable
and the value so arrived at shall be reduced by any charges paid by the employee himself.
It is added that where the accommodation is provided by the Central Government or any State Government to an employee who is serving on deputation with any body or undertaking under the control of such Government,-
(i). the employer of such an employee shall be deemed to be that body or undertaking where the employee is serving on deputation; and
(ii). the value of perquisite of such an accommodation shall be the amount calculated in accordance with Table in A(ii)(a) above, as if the accommodation is owned by the employer.
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C. Furnished Accommodation in a Hotel: The value of perquisite shall be determined on the basis of lower of the following two:
1. 24% of salary paid or payable in respect of period during which the accommodation is provided; or
2. Actual charges paid or payable by the employer to such hotel,
for the period during which such accommodation is provided as reduced by any rent actually paid or payable by the employee.
However, nothing in (C) shall be taxable if following two conditions are satisfied :
1. The hotel accommodation is provided for a total period not exceeding in aggregate 15 days in a previous year, and
2. Such accommodation is provided on an employee’s transfer from one place to another place.
It may be clarified that while services provided as an integral part of the accommodation, need not be valued separately as perquisite, any other services over and above that for which the employer makes payment or reimburses the employee shall be valued as a perquisite as per the residual clause. In other words, composite tariff for accommodation will be valued as per the Rules and any other charges for other facilities provided by the hotel will be separately valued under the residual clause.
D. However, the value of any accommodation provided to an employee working at a mining site or an on-shore oil exploration site or a project execution site or a dam site or a power generation site or an off-shore site will not be treated as a perquisite if:
i) such accommodation is located in a “remote area” or
ii) where it is not located in a “remote area”, the accommodation is of a temporary nature having plinth area of not more than 800 square feet and should not be located within 8 kilometers of the local limits of any municipality or cantonment board.
A project execution site here means a site of project up to the stage of its commissioning. A “remote area” means an area located at least 40 kilometers away from a town having a population not exceeding 20,000 as per the latest published all-India census.
II Perquisite on Motor car provided by the Employer [ Rule 3(2)]:
(1) If an employer provides motor car facility to his employee, the value of such perquisite shall be :
a) Nil, if the motor car is used by the employee wholly and exclusively in the performance of his official duties.
b) Actual expenditure incurred by the employer on the running and maintenance of motor car including remuneration to chauffeur as increased by the amount representing normal wear and tear of the motor car and as reduced by any amount charged from the employee for such use (in case the motor car is exclusively for private or personal purposes of the employee or any member of his household).
c) Rs. 1800/- (plus Rs. 900/-, if chauffeur is also provided) per month (in case the motor car is used partly in performance of duties and partly for private or personal purposes of the employee or any member of his household if the expenses on maintenance and running of motor car are met or reimbursed by the employer). However, the value of perquisite will be Rs. 2400/-(plus Rs. 900/-, if chauffeur is also provided) per month if the cubic capacity of engine of the motor car exceeds 1.6 litres.
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d) Rs. 600/- (plus Rs. 900/-, if chauffeur is also provided) per month (In case the motor car is used partly in performance of duties and partly for private or personal purposes of the employee or any member of his household if the expenses on maintenance and running of motor car for such private or personal use are fully met by the employee). However, the value of perquisite will be Rs. 900/- (plus Rs. 900/-, if chauffeur is also provided) per month if the cubic capacity of engine of the motor car exceeds 1.6 litres.
(2) If the motor car or any other automotive conveyance is owned by the employee but the actual running and maintenance charges are met or reimbursed by the employer, the method of valuation of perquisite value is different and as below:
a) where the motor car or any other automotive conveyance is owned by the employee but actual maintenance & running expenses (including chauffeur salary, if any) are met or reimbursed by the employer, no perquisite shall be chargeable to tax if the car is used wholly and exclusively for official purposes. However following compliances are necessary:
 The employer has maintained complete details of the journey undertaken for official purposes;
 The employer gives a certificate that the expenditure was incurred wholly for official duties.
However if the motor car is used partly for official or partly for private purposes then the amount of perquisite shall be the actual expenditure incurred by the employer as reduced by the amounts in c) referred to in (1) above.
Normal wear and tear of the motor shall be taken at 10 % per annum of the actual cost of the motor car.
III Personal attendants etc. [Rule 3(3)]: The value of free service of all personal attendants including a sweeper, gardener and a watchman is to be taken at actual cost to the employer. Where the attendant is provided at the residence of the employee, full cost will be taxed as perquisite in the hands of the employee irrespective of the degree of personal service rendered to him. Any amount paid by the employee for such facilities or services shall be reduced from the above amount.
IV Gas, electricity & water for household consumption [Rule 3(4)]: The value of perquisite in the nature of gas, electricity and water shall be the amount paid by the employer. Where the supply is made from the employer’s own resources, the manufacturing cost per unit incurred by the employer would be taken for the valuation of perquisite. Any amount paid by the employee for such facilities or services shall be reduced from the perquisite value.
V Free or concessional education [Rule 3(5)]: Perquisite on account of free or concessional education for any member of the employee’s household shall be determined as the sum equal to the amount of expenditure incurred by the employer in that behalf. However, where such educational institution itself is maintained and owned by the employer or where such free educational facilities are provided in any institution by reason of his being in employment of that employer, the value of the perquisite to the employee shall be determined with reference to the cost of such education in a similar institution in or near the locality if the cost of such education or such benefit per child exceeds Rs.1000/- p.m. The value of perquisite shall be reduced by the amount, if any, paid or recovered from the employee.
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VI Carriage of Passenger Goods [Rule 3(6)]: The value of any benefit or amenity resulting from the provision by an employer, who is engaged in the carriage of passengers or goods, to any employee or to any member of his household for personal or private journey free of cost or at concessional fare, in any conveyance owned, leased or made available by any other arrangement by such employer for the purpose of transport of passengers or goods shall be taken to be the value at which such benefit or amenity is offered by such employer to the public as reduced by the amount, if any, paid by or recovered from the employee for such benefit or amenity. This will not apply to the employees of any airline or the railways.
VII Interest free or concessional loans [Rule 3(7)(i)]: It is common practice, particularly in financial institutions, to provide interest free or concessional loans to employees or any member of his household. The value of perquisite arising from such loans would be the excess of interest payable at prescribed interest rate over interest, if any, actually paid by the employee or any member of his household. The prescribed interest rate would now be the rate charged per annum by the State Bank of India as on the 1st day of the relevant financial year in respect of loans of same type and for the same purpose advanced by it to the general public. Perquisite value would be calculated on the basis of the maximum outstanding monthly balance method. For valuing perquisites under this rule, any other method of calculation and adjustment otherwise adopted by the employer shall not be relevant. However, small loans up to Rs. 20,000/- in the aggregate are exempt.
Loans for medical treatment of diseases specified in Rule 3A are also exempt, provided the amount of loan for medical reimbursement is not reimbursed under any medical insurance scheme. Where any medical insurance reimbursement is received, the perquisite value at the prescribed rate shall be charged from the date of reimbursement on the amount reimbursed, but not repaid against the outstanding loan taken specifically for this purpose.
VIII Perquisite on account of travelling, touring, accommodation and any other expenses paid for or reimbursed by the employer for any holiday availed [Rule 3(7)(ii)]:
The value of perquisite on account of travelling, touring, accommodation and any other expenses paid for or reimbursed by the employer for any holiday availed of by the employee or any member of his household, other than leave travel concession (as per section 10(5) ), shall be the amount of the expenditure incurred by the employer in that behalf. However, any amount recovered from or paid by the employee shall be reduced from the perquisite value so determined.
Where such facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public. If a holiday facility is maintained by the employer and is available uniformly to all employees, the value of such benefit would be exempt.
Where the employee is on official tour and the expenses are incurred in respect of any member of his household accompanying him, the amount of expenditure with respect to the member of the household shall be a perquisite.
IX Value of Subsidized / Free food / non-alcoholic beverages provided by employer to an employee[Rule 3(7)(iii)]:
Value of taxable perquisite is calculated as under:
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Expenditure incurred by the employer on the value of food / non-alcoholic beverages including ‘paid vouchers which are not transferable and usable only at eating joints’ XXX
Less: Fixed value of a sum of Rs. 50/- per meal XXX
Less: Amount recovered from the employee XXX XXX
Balance amount is the taxable as perquisites on the value of food
provided to the employees XXX
Note : Exemption is given in following situations :
1. Tea / snacks provided in working hours.
2. Food & non-alcoholic beverages provided in working hours in remote area or in an offshore installation.
X Membership fees and Annual Fees [Rule 3(7)(v)]: Any membership fees and annual fees incurred by the employee (or any member of his household), which is charged to a credit card (including any add-on card) provided by the employer, or otherwise, paid for or reimbursed by the employer is taxable on the following basis:
Amount of expenditure incurred by the employer XXX
Less : Expenditure on use for official purposes XXX
Less : Amount, if any, recovered from the employee XXX XXX
Amount taxable as perquisite XXX
However if the amount is incurred wholly and exclusively for official purposes it will be exempt if the following conditions are fulfilled
i) Complete details of such expense, including date and nature of expenditure, is maintained by the employer.
ii) Employer gives a certificate that the same was incurred wholly and exclusively for official purpose.
XI Club Expenditure [Rule 3(7)(vi)]:
Any annual or periodical fee for Club facility and any expenditure in a club by the employee (or any member of his household), which is paid or reimbursed by the employer is taxable on the following basis:
Amount of expenditure incurred by the employer XXX
Less : Expenditure on use for official purposes XXX
Less : Amount, if any, recovered from the employee XXX XXX
Amount taxable as perquisite XXX
However if the amount is incurred wholly and exclusively for official purposes it will be exempt if the following conditions are fulfilled
i) Complete details of such expense, including date and nature of expenditure and its business expediency is maintained by the employer.
ii) Employer gives a certificate that the same was incurred wholly and exclusively for official purpose.
Note: 1) Health club, sport facilities etc. provided uniformly to all classes of employee by the employer at the employer’s premises and expenditure incurred on them are exempt.
2) The initial one-time deposits or fees for corporate or institutional membership, where benefit does not remain with a particular employee after cessation of employment are exempt. Initial fees / deposits, in such case, is not included.
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XII Use of assets [Rule 3(7)(vii)]: It is common practice for a movable asset (other than those referred in other sub rules of rule 3) owned by the employer to be used by the employee or any member of his household. This perquisite is to be charged at the rate of 10% of the original cost of the asset as reduced by any charges recovered from the employee for such use. However, the use of Computers and Laptops would not give rise to any perquisite.
XIII Transfer of assets [Rule 3(7)(viii)]: Often an employee or member of his household benefits from the transfer of movable asset (not being shares or securities) at no cost or at a cost less than its market value from the employer. The difference between the original cost of the movable asset (not being shares or securities) and the sum, if any, paid by the employee, shall be taken as the value of perquisite. In case of a movable asset, which has already been put to use, the original cost shall be reduced by a sum of 10% of such original cost for every completed year of use of the asset. Owing to a higher degree of obsolescence, in case of computers and electronic gadgets, however, the value of perquisite shall be worked out by reducing 50% of the actual cost by the reducing balance method for each completed year of use. Electronic gadgets in this case means data storage and handling devices like computer, digital diaries and printers. They do not include household appliance (i.e. white goods) like washing machines, microwave ovens, mixers, hot plates, ovens etc. Similarly, in case of cars, the value of perquisite shall be worked out by reducing 20% of its actual cost by the reducing balance method for each completed year of use.
XIV Gifts [Rule 3(7)(iv)]:
The value of any gift or vouchers or token in lieu of which such gift may be received, given by the employer to the employee or member of his household, is taxable as perquisite. However gift, etc less than Rs. 5,000 in aggregate per annum would be exempt.
XV Medical Reimbursement by the employer exceeding Rs. 15,000/- p.a. u/s 17(2) is to be taken as perquisite.
It is further clarified that the method regarding valuation of perquisites are given in section 17(2) of the Act and in rule 3 of the Rules. The deductors may look into the above provisions carefully before they determine the perquisite value for deduction purposes.
5.2.3 ‘Profits in lieu of salary’ shall include
I. the amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with the termination of his employment or the modification of the terms and conditions relating thereto;
II. any payment (other than any payment referred to in clauses (10), (10A), (10B), (11), (12) (13) or (13A) of section 10 due to or received by an assessee from an employer or a former employer or from a provident or other fund, to the extent to which it does not consist of contributions by the assessee or interest on such contributions or any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy.
“Keyman insurance policy” shall have the same meaning as assigned to it in section 10(10D);
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III. any amount due to or received, whether in lump sum or otherwise, by any assessee from any person—
(A) before his joining any employment with that person; or
(B) after cessation of his employment with that person.
5.3 INCOMES NOT INCLUDED UNDER THE HEAD “SALARIES” (EXEMPTIONS)
Any income falling within any of the following clauses shall not be included in computing the income from salaries for the purpose of section 192 of the Act :-
5.3.1 The value of any travel concession or assistance received by or due to an employee from his employer or former employer for himself and his family, in connection with his proceeding (a) on leave to any place in India or (b) after retirement from service, or, after termination of service to any place in India is exempt under Section 10(5) subject, however, to the conditions prescribed in Rule 2B of the Rules.
For the purpose of this clause, “family” in relation to an individual means:
(i) the spouse and children of the individual; and
(ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual.
It may also be noted that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel.
5.3.2 Death-cum-retirement gratuity or any other gratuity is exempt to the extent specified from inclusion in computing the total income under Section 10(10). Any death-cum-retirement gratuity received under the revised Pension Rules of the Central Government or, as the case may be, the Central Civil Services (Pension) Rules, 1972, or under any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all-India services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority or any payment of retiring gratuity received under the Pension Code or Regulations applicable to the members of the defence service is exempt. Gratuity received in cases other than those mentioned above, on retirement, termination etc is exempt up to the limit as prescribed by the Board. Presently the limit is Rs. 10 lakhs w.e.f. 24.05.2010 [Notification no. 43/2010 S.O. 1414(E) F.No. 200/33/2009-ITA-1 dated 11th June 2010].
5.3.3 Any payment in commutation of pension received under the Civil Pensions (Commutation) Rules of the Central Government or under any similar scheme applicable to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union (such members or holders being persons not governed by the said Rules) or to the members of the all- India services or to the members of the defence services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority] or a corporation established by a Central, State or Provincial Act, is exempt under Section10(10A)(i). As regards payments in commutation of pension received under any scheme of any other employer, exemption will be governed by the provisions of section 10(10A)(ii). Also, any payment in commutation of pension from a fund referred to in Section 10(23AAB) is exempt under Section 10(10A)(iii).
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5.3.4 Any payment received by an employee of the Central Government or a State Government, as cash-equivalent of the leave salary in respect of the period of earned leave at his credit at the time of his retirement, whether on superannuation or otherwise, is exempt under Section 10(10AA)(i). In the case of other employees, this exemption will be determined with reference to the leave to their credit at the time of retirement on superannuation or otherwise, subject to a maximum of ten months’ leave. This exemption will be further limited to the maximum amount specified by the Government of India Notification No.S.O.588(E) dated 31.05.2002 at Rs. 3,00,000/- in relation to such employees who retire, whether on superannuation or otherwise, after 1.4.1998.
5.3.5 Under Section 10(10B), the retrenchment compensation received by a workman is exempt from income-tax subject to certain limits. The maximum amount of retrenchment compensation exempt is the sum calculated on the basis provided in section 25F(b) of the Industrial Disputes Act, 1947 or any amount not less than Rs.50,000/- as the Central Government may by notification specify in the Official Gazette, whichever is less. These limits shall not apply in the case where the compensation is paid under any scheme which is approved in this behalf by the Central Government, having regard to the need for extending special protection to the workmen in the undertaking to which the scheme applies and other relevant circumstances. The maximum limit of such payment is Rs. 5,00,000/- where retrenchment is on or after 1.1.1997 as specified in Notification No. 10969 dated 25-06-1999.
5.3.6 Under Section 10(10C), any payment received or receivable (even if received in installments) by an employee of the following bodies at the time of his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of public sector company, a scheme of voluntary separation, is exempt from income-tax to the extent that such amount does not exceed Rs. 5,00,000/-:
a) A public sector company;
b) Any other company;
c) An Authority established under a Central, State or Provincial Act;
d) A Local Authority;
e) A Cooperative Society;
f) A university established or incorporated or under a Central, State or Provincial Act, or, an Institution declared to be a University under section 3 of the University Grants Commission Act, 1956;
g) Any Indian Institute of Technology within the meaning of Section 3 (g) of the Institute of Technology Act, 1961;
h) Such Institute of Management as the Central Government may by notification in the Official Gazette, specify in this behalf.
The exemption of amount received under VRS has been extended to employees of the Central Government and State Government and employees of notified institutions having importance throughout India or any State or States. It may also be noted that where this exemption has been allowed to any employee for any assessment year, it shall not be allowed to him for any other assessment year. Further, if relief has been allowed under section 89 for any assessment year in respect of amount received on voluntary retirement or superannuation, no exemption under section 10(10C) shall be available.
5.3.7 Any sum received under a Life Insurance Policy (Sec 10(10D), including the sum allocated by way of bonus on such policy other than the following is exempt under section 10(10D):
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i) any sum received under section 80DD(3) or section 80DDA(3); or
ii) any sum received under a Keyman insurance policy; or
iii) any sum received under an insurance policy issued on or after 1.4.2003, but on or before 31-03-2012, in respect of which the premium payable for any of the years during the term of the policy exceeds 20 percent of the actual capital sum assured; or
iv) any sum received under an insurance policy issued on or after 1.4.2012 in respect of which the premium payable for any of the years during the term of the policy exceeds 10 percent of the actual capital sum assured; or
v) any sum received under an insurance policy issued on or after 1.4.2013 in cases of persons with disability or person with severe disability as per Sec 80U or suffering from disease or ailment as specified in Sec 80DDB, in respect of which the premium payable for any of the years during the term of the policy exceeds 15 percent of the actual capital sum assured
However, any sum received under such policy referred to in (iii), (iv) and (v) above, on the death of a person would be exempt.
5.3.8 Any payment from a Provident Fund to which the Provident Funds Act, 1925, applies or from any other provident fund set up by the Central Government and notified by it in the Official Gazette is exempt under section 10(11).
5.3.9 Under section 10(13A) of the Act, any special allowance specifically granted to an assessee by his employer to meet expenditure incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee is exempt from Income-tax to the extent as may be prescribed, having regard to the area or place in which such accommodation is situated and other relevant considerations. According to Rule 2A of the Rules, the quantum of exemption allowable on account of grant of special allowance to meet expenditure on payment of rent shall be the least of the following:
(a) the actual amount of such allowance received by the assessee in respect of the relevant period i. e. the period during which the accommodation was occupied by the assesse during the financial year; or
(b) the actual expenditure incurred in payment of rent in excess of one-tenth of the salary due for the relevant period; or
(i) where such accommodation is situated in Bombay, Calcutta, Delhi or Madras, 50% of the salary due to the employee for the relevant period; or
(ii) where such accommodation is situated in any other places, 40% of the salary due to the employee for the relevant period.
For this purpose, “Salary” includes dearness allowance, if the terms of employment so provide, but excludes all other allowances and perquisites.
It has to be noted that only the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee subject to the limits laid down in Rule 2A, qualifies for exemption from income-tax. Thus, house rent allowance granted to an employee who is residing in a house/flat owned by him is not exempt from income-tax. The disbursing authorities should satisfy themselves in this regard by insisting on production of evidence of actual payment of rent before excluding the House Rent Allowance or any portion thereof from the total income of the employee.
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Though incurring actual expenditure on payment of rent is a pre-requisite for claiming deduction under section 10(13A), it has been decided as an administrative measure that salaried employees drawing house rent allowance upto Rs.3000/- per month will be exempted from production of rent receipt. It may, however, be noted that this concession is only for the purpose of tax-deduction at source, and, in the regular assessment of the employee, the Assessing Officer will be free to make such enquiry as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent.
Further if annual rent paid by the employee exceeds Rs 1,00,000 per annum, it is mandatory for the employee to report PAN of the landlord to the employer. In case the landlord does not have a PAN, a declaration to this effect from the landlord along with the name and address of the landlord should be filed by the employee.
5.3.10 Section 10(14) provides for exemption of the following allowances :-
(i) Any special allowance or benefit granted to an employee to meet the expenses wholly, necessarily and exclusively incurred in the performance of his duties as prescribed under Rule 2BB subject to the extent to which such expenses are actually incurred for that purpose.
(ii) Any allowance granted to an employee either to meet his personal expenses at the place of his posting or at the place he ordinarily resides or to compensate him for the increased cost of living, which may be prescribed and to the extent as may be prescribed.
However, the allowance referred to in (ii) above should not be in the nature of a personal allowance granted to the assessee to remunerate or compensate him for performing duties of a special nature relating to his office or employment unless such allowance is related to his place of posting or residence.
The CBDT has prescribed guidelines for the purpose of Section 10(14) (i) & 10 (14) (ii) vide notification No.SO 617(E) dated 7th July, 1995 (F.No.142/9/95-TPL)which has been amended vide notification SO No.403(E) dt 24.4.2000 (F.No.142/34/99-TPL). The transport allowance granted to an employee to meet his expenditure for the purpose of commuting between the place of his residence and the place of duty is exempt to the extent of Rs. 1600 p. m. or Rs 3200 p.m. (for a person who is blind or deaf and dumb or is orthopaedically handicapped with disabilities of lower extremes) vide notification S.O.No. 395(E) dated 13.05.98 r/w S.O. No. 1002 (E) dated 13.04.2015 & S.O. No. 2604 (E) dated 23.09.2015.
5.3.11 Under Section 10(15)(iv)(i) of the Act, interest payable by the Government on deposits made by an employee of the Central Government or a State Government or a public sector company out of his retirement benefits, in accordance with such scheme framed in this behalf by the Central Government and notified in the Official Gazette is exempt from income-tax. By notification No.F.2/14/89-NS-II dated 7.6.89, as amended by notification No.F.2/14/89-NS-II dated 12.10.89, the Central Government has notified a scheme called Deposit Scheme for Retiring Government Employees, 1989 for the purpose of the said clause.
5.3.12 Any scholarship granted to meet the cost of education is not to be included in total income as per provisions of section 10(16) of the Act.
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5.3.13 Section 10(18) provides for exemption of any income by way of pension received by an individual who has been in the service of the Central Government or State Government and has been awarded “Param Vir Chakra” or “Maha Vir Chakra” or “Vir Chakra” or such other gallantry award as may be specifically notified by the Central Government. Family pension received by any member of the family of such individual is also exempt [Notifications No.S.O.1948(E) dated 24.11.2000 and 81(E) dated 29.1.2001, which are enclosed as per Annexure VIII & IX]. “Family” for this purpose shall have the meaning assigned to it in Section 10(5) of the Act.
DDO may not deduct any tax in the case of recipients of such awards after satisfying himself about the veracity of the claim.
5.3.14 Under Section 17 of the Act, exemption from tax will also be available in respect of:-
(a) the value of any medical treatment provided to an employee or any member of his family, in any hospital maintained by the employer;
(b) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or of any member of his family:
(i) in any hospital maintained by the Government or any local authority or any other hospital approved by the Government for the purposes of medical treatment of its employees;
ii) in respect of the prescribed diseases or ailments as provided in Rule 3A(2) of the Rules in any hospital approved by the Chief Commissioner having regard to the prescribed guidelines as provided in Rule 3(A)(1)of the Rules,
(c) premium paid by the employer in respect of medical insurance taken for his employees (under any scheme approved by the Central Government or Insurance Regulatory and Development Authority) or reimbursement of insurance premium to the employees who take medical insurance for themselves or for their family members (under any scheme approved by the Central Government or Insurance Regulatory and Development Authority);
(d) reimbursement, by the employer, of the amount spent by an employee in obtaining medical treatment for himself or any member of his family from any doctor, not exceeding in the aggregate Rs.15,000/- in an year;
(e) As regards medical treatment abroad, the actual expenditure on stay and treatment abroad of the employee or any member of his family, or, on stay abroad of one attendant who accompanies the patient, in connection with such treatment, will be excluded from perquisites to the extent permitted by the Reserve Bank of India. It may be noted that the expenditure incurred on travel abroad by the patient/attendant, shall be excluded from perquisites only if the employee’s gross total income, as computed before including the said expenditure, does not exceed Rs.2 lakhs.
For the purpose of availing exemption on expenditure incurred on medical treatment, “hospital” includes a dispensary or clinic or nursing home, and “family” in relation to an individual means the spouse and children of the individual. Family also includes parents, brothers and sisters of the individual if they are wholly or mainly dependent on the individual.
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It is pertinent to mention that benefits specifically exempt u/s 10(13A), 10(5), 10(14), 17 etc. of the Act would continue to be exempt. These include benefits like house rent allowance, leave travel concession, travel expense allowance on tour and transfer, daily allowance to meet tour expenses as prescribed, medical facilities subject to conditions.
5.3.15 In this connection it is to be noted that as per sec. 10 (14) read wit rule 2BBany allowance granted to meet the cost of travel on tour or on transfer includes any sum paid in connection with transfer, packing and transportation of personal effects o such transfer shall be exempt. Also any allowance, whether, granted for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence form his normal place of duty shall be exempt.
5.4 DEDUCTIONS U/S 16 OF THE ACT FROM THE INCOME FROM SALARIES
5.4.1 Entertainment Allowance [Section 16(ii)]:
A deduction is also allowed under section 16(ii) in respect of any allowance in the nature of an entertainment allowance specifically granted by an employer to the assessee, who is in receipt of a salary from the Government, a sum equal to one-fifth of his salary(exclusive of any allowance, benefit or other perquisite) or five thousand rupees whichever is less. No deduction on account of entertainment allowance is available to non-government employees.
5.4.2 Tax on Employment [Section 16(iii)]:
The tax on employment (Professional Tax) within the meaning of article 276(2) of the Constitution of India, leviable by or under any law, shall also be allowed as a deduction in computing the income under the head “Salaries”.
It may be clarified that “Standard Deduction” from gross salary income, which was being allowed up to financial year 2004-05 is not allowable from financial year 2005-06 onwards.
5.5 DEDUCTIONS UNDER CHAPTER VI-A OF THE ACT
In computing the taxable income of the employee, the following deductions under Chapter VI-A of the Act are to be allowed from his gross total income:
5.5.1 Deduction in respect of Life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc. (section 80C)
A. Section 80C, entitles an employee to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs.1,50,000/-:
(1) Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the spouse or any child of the individual.
(2) Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan as is referred to in item (7) herein below on the life of the individual, the spouse or any child of the individual, provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity;
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(3) Any sum deducted from the salary payable by, or, on behalf of the Government to any individual, being a sum deducted in accordance with the conditions of his service for the purpose of securing to him a deferred annuity or making provision for his spouse or children, in so far as the sum deducted does not exceed 1/5th of the salary;
(4) Any contribution made :
(a) by an individual to any Provident Fund to which the Provident Fund Act, 1925 applies;
(b) to any provident fund set up by the Central Government, and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of an individual, or spouse or children;
[The Central Government has since notified Public Provident Fund vide Notification S.O. No. 1559(E) dated 3.11.05]
(c) by an employee to a Recognized Provident Fund;
(d) by an employee to an approved superannuation fund;
It may be noted that “contribution” to any Fund shall not include any sums in repayment of loan or advance;
(5) Any sum paid or deposited during the year as a subscription :-
(a) in the name of employee or a girl child of that employee including a girl child for whom the employee is the legal guardian in any such security of the Central Government or any such deposit scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf;
[The Central Government has since notified the scheme ‘Sukanya Samriddhi Account’ vide Notification GSR No. 863(E) dated 02.12.2014]
(b) to any such saving certificates as defined under section 2(c) of the Government Saving Certificate Act, 1959 as the Government may, by notification in the Official Gazette, specify in this behalf.
[The Central Government has since notified National Saving Certificate (VIIIth Issue) vide Notification S.O. No. 1560(E) dated 3.11.05and National Saving Certificate (IXth Issue) vide Notification . G.S.R. 848 (E), dated the 29th November, 2011, publishing the National Savings Certificates (IX-Issue) Rules, 2011 G.S.R. 868 (E), dated the 7th December, 2011, specifying the National Savings Certificates IX Issue as the class of Savings Certificates F No1-13/2011-NS-II r/w amendment Notification No.GSR 319(E), dated 25-4-2012 ]
(6) Any sum paid as contribution in the case of an individual, for himself, spouse or any child,
a. for participation in the Unit Linked Insurance Plan, 1971 of the Unit Trust of India;
b. for participation in any unit-linked insurance plan of the LIC Mutual Fund referred to section 10 (23D) and as notified by the Central Government.
[The Central Government has since notified Unit Linked Insurance Plan (formerly known as Dhanraksha, 1989) of LIC Mutual Fund vide Notification S.O. No. 1561(E) dated 3.11.05.]
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(7) Any subscription made to effect or keep in force a contract for such annuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify;
[The Central Government has since notified New Jeevan Dhara, New Jeevan Dhara-I, New Jeevan Akshay, New Jeevan Akshay-I and New Jeevan Akshay-II vide Notification S.O. No. 1562(E) dated 3.11.05 and Jeevan Akshay-III vide Notification S.O. No. 847(E) dated 1.6.2006 ]
(8) Any subscription made to any units of any Mutual Fund, of section 10(23D), or from the Administrator or the specified company referred to in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002 under any plan formulated in accordance with any scheme as the Central Government, may, by notification in the Official Gazette, specify in this behalf;
[The Central Government has since notified the Equity Linked Saving Scheme, 2005 for this purpose vide Notification S.O. No. 1563(E) dated 3.11.2005]
The investments made after 1.4.2006 in plans formulated in accordance with Equity Linked Saving Scheme, 1992 or Equity Linked Saving Scheme, 1998 shall also qualify for deduction under section 80C.
(9) Any contribution made by an individual to any pension fund set up by any Mutual Fund referred to in section 10(23D), or, by the Administrator or the specified company defined in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002, as the Central Government may, by notification in the Official Gazette, specify in this behalf;
[The Central Government has since notified the Equity Linked Saving Scheme, 2005 for this purpose vide Notification S.O. No. 1563(E) dated 3.11.2005]
(10) Any subscription made to any such deposit scheme of, or, any contribution made to any such pension fund set up by, the National Housing Bank, as the Central Government may, by notification in the Official Gazette, specify in this behalf;
(11) Any subscription made to any such deposit scheme, as the Central Government may, by notification in the Official Gazette, specify for the purpose of being floated by (a) public sector companies engaged in providing long-term finance for construction or purchase of houses in India for residential purposes, or, (b) any authority constituted in India by, or, under any law, enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both.
[The Central Government has since notified the Public Deposit Scheme of HUDCO vide Notification S.O. No.37(E), dated 11.01.2007, for the purposes of Section 80C(2)(xvi)(a)].
(12) Any sums paid by an assessee for the purpose of purchase or construction of a residential house property, the income from which is chargeable to tax under the head “Income from house property” (or which would, if it has not been used for assessee’s own residence, have been chargeable to tax under that head) where such payments are made towards or by way of any instalment or part payment of the amount due under any self-financing or other scheme of any Development Authority, Housing Board etc.
The deduction will also be allowable in respect of re-payment of loans borrowed by an assessee from the Government, or any bank or Life Insurance Corporation, or National Housing Bank, or certain other categories of institutions engaged in the business of providing long term finance for construction or purchase of houses in India. Any repayment of loan borrowed from the employer will also be covered, if the employer happens to be a public company, or a public sector company, or a university established by law, or a
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college affiliated to such university, or a local authority, or a cooperative society, or an authority, or a board, or a corporation, or any other body established under a Central or State Act.
The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall also be covered. Payment towards the cost of house property, however, will not include, admission fee or cost of share or initial deposit or the cost of any addition or alteration to, or, renovation or repair of the house property which is carried out after the issue of the completion certificate by competent authority, or after the occupation of the house by the assessee or after it has been let out. Payments towards any expenditure in respect of which the deduction is allowable under the provisions of section 24 of the Act will also not be included in payments towards the cost of purchase or construction of a house property.
Where the house property in respect of which deduction has been allowed under these provisions is transferred by the tax-payer at any time before the expiry of five years from the end of the financial year in which possession of such property is obtained by him or he receives back, by way of refund or otherwise, any sum specified in section 80C(2)(xviii), no deduction under these provisions shall be allowed in respect of such sums paid in such previous year in which the transfer is made and the aggregate amount of deductions of income so allowed in the earlier years shall be added to the total income of the assessee of such previous year and shall be liable to tax accordingly.
(13) Tuition fees, whether at the time of admission or thereafter, paid to any university, college, school or other educational institution situated in India, for the purpose of full-time education of any two children of the employee.
Full-time education includes any educational course offered by any university, college, school or other educational institution to a student who is enrolled full-time for the said course. It is also clarified that full-time education includes play-school activities, pre-nursery and nursery classes.
It is clarified that the amount allowable as tuition fees shall include any payment of fee to any university, college, school or other educational institution in India except the amount representing payment in the nature of development fees or donation or capitation fees or payment of similar nature.
(14) Subscription to equity shares or debentures forming part of any eligible issue of capital made by a public company, which is approved by the Board or by any public finance institution.
(15) Subscription to any units of any mutual fund referred to in clause (23D) of Section 10 and approved by the Board, if the amount of subscription to such units is subscribed only in eligible issue of capital of any company.
(16) Investment as a term deposit for a fixed period of not less than five years with a scheduled bank, which is in accordance with a scheme framed and notified by the Central Government, in the Official Gazette for these purposes.
[The Central Government has since notified the Bank Term Deposit Scheme, 2006 for this purpose vide Notification S.O. No. 1220(E) dated 28.7.2006]
(17) Subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by such notification in the Official Gazette, specify in this behalf.
(18) Any investment in an account under the Senior Citizens Savings Scheme Rules, 2004.
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(19) Any investment as five year time deposit in an account under the Post Office Time Deposit Rules, 1981.
B. Section 80C(3) & 80C(3A) states that in case of Insurance Policy other than contract for a deferred annuity the amount of any premium or other payment made is restricted to:
Policy issued before 1st April 2012
20% of the actual capital sum assured
Policy issued on or after 1st April 2012
10% of the actual capital sum assured
Policy issued on or after 1st April 2013 * – In cases of persons with disability or person with severe disability as per Sec 80 U or suffering from disease or ailment as specified in rules made under Sec 80DDB
15% of the actual capital sum assured
*Introduced by Finance Act 2013
Actual capital sum assured in relation to a life insurance policy means the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account –
i. the value of any premium agreed to be returned, or
ii. any benefit by way of bonus or otherwise over and above the sum actually assured which may be received under the policy by any person.
5.5.2 Deduction in respect of contribution to certain pension funds (Section 80CCC)
Section 80CCC allows an employee deduction of an amount paid or deposited out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the Fund referred to in section 10(23AAB). However, the deduction shall exclude interest or bonus accrued or credited to the employee’s account, if any and shall not exceed Rs. 1,50,000.
However, if any amount is standing to the credit of the employee in the fund referred to above and deduction has been allowed as stated above and the employee or his nominee receives this amount together with the interest or bonus accrued or credited to this account due to the reason of
(i) Surrender of annuity plan whether in whole or part
(ii) Pension received from the annuity plan
then the amount so received during the Financial Year shall be the income of the employee or his nominee for that Financial Year and accordingly will be charged to tax.
Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C.
5.5.3 Deduction in respect of contribution to pension scheme of Central Government (Section 80CCD):
Section 80CCD(1) allows an employee, being an individual employed by the Central Government on or after 01.01.2004 or being an individual employed by any other employer,
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or any other assessee being an individual, a deduction of an amount paid or deposited out of his income chargeable to tax under a pension scheme as notified vide Notification F. N. 5/7/2003- ECB&PR dated 22.12.2003 National Pension System-NPS or as may be notifed by the Central Government. However, the deduction shall not exceed an amount equal to 10% of his salary (includes Dearness Allowance but excludes all other allowance and perquisites).
As per section 80CCD(1B), an assessee referred to in 80CCD(1) shall be allowed an deduction in computation of his income, of the whole of the amount paid or deposited in the previous year in his account under the pension scheme notified or as may be notified by the Central Government, which shall not exceed Rs. 50,000. The deduction of Rs. 50,000 shall be allowed whether or not any deduction is allowed under sub-section(1). However, the same amount cannot be claimed both under sub-section (1) and sub-section (1B) of section 80CCD.
As per Section 80CCD(2), where any contribution in the said pension scheme is made by the Central Government or any other employer then the employee shall be allowed a deduction from his total income of the whole amount contributed by the Central Government or any other employer subject to limit of 10% of his salary of the previous year.
If any amount is standing to the credit of the employee in the pension scheme referred above and deduction has been allowed as stated above, and the employee or his nominee receives this amount together with the amount accrued thereon, due to the reason of
(i) Closure or opting out of the pension scheme or
(ii) Pension received from the annuity plan purchased and taken on such closure or opting out
then the amount so received during the FYs shall be the income of the employee or his nominee for that Financial Year and accordingly will be charged to tax.
Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C.
Further it has been specified that w.e.f 01.04.09 any amount received by the employee from the New Pension Scheme shall be deemed not to have been received in the previous year if such amount is used for purchasing an annuity plan in the same previous year.
It is emphasized that as per the section 80CCE the aggregate amount of deduction under sections 80C, 80CCC and Section 80CCD(1) shall not exceed Rs.1,50,000/-. The deduction allowed under section 80 CCD(1B) is an additional deduction in respect of any amount paid in the NPS upto Rs. 50,000/-. However, the contribution made by the Central Government or any other employer to a pension scheme u/s 80CCD(2) shall be excluded from the limit of Rs.1,50,000/- provided under this section.
5.5.4 Deduction in respect of investment made under an equity savings scheme (Section 80 CCG):
Section 80CCG provides deduction wef assessment year 2013-14 in respect of investment made under notified equity saving scheme. Rajiv Gandhi Equity Savings Scheme 2012 has been notified vide SO No 2777 E, dated 23.11.2012 (subsequent corrigendum SO NO. 2835E dated 05.12.2012) and amended vide notification SO No. 3693E dated 18.12.2013 as a scheme under this section. The scheme was modified in December 2013 vide notification
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SO 3693 dated 18.12.13 ( RGESS, 2013). The deduction under this section in accordance with RGESS 2013 is available if following conditions are satisfied:
(a) The assessee is a resident individual
(b) His gross total income does not exceed Rs. 12 lakhs;
(c) He has acquired listed shares in accordance with a notified scheme or listed units of an equity oriented fund as defined in section 10(38);
(d) The assessee is a new retail investor;
(e) The investment is locked-in for a period of 3 years from the date of acquisition in accordance with the above scheme;
(f) The assessee satisfies any other condition as may be prescribed.
Amount of deduction –The amount of deduction is at 50% of the amount invested in equity shares/units. However, the amount of deduction under this provision cannot exceed Rs. 25,000.
Withdrawal of deduction – If the assessee, after claiming the aforesaid deduction, fails to satisfy the above conditions, the deduction originally allowed shall be deemed to be the income of the assessee of the year in which default is committed.
This deduction is allowed for three consecutive assessment years beginning with the AY in which the listed equity shares or units were first acquired. If any deduction is claimed by a taxpayer under this section in any year, he shall not be entitled to any deduction under this section for any other year.
5.5.5 Deduction in respect of health insurance premia paid, etc. (Section 80D)
Section 80D provides for deduction available for health insurance premia paid, etc. which is calculated as under:
Sl No
Persons for whom payment made
Nature of payment
Mode of payment
Allowable Deduction (in Rs)
1
Employee or his family*
 the whole of the amount paid to effect or to keep in force an insurance on the health of the employee or his family or
 any contribution made to the CGHS or such other scheme as may be notified by Central Government (Finance Act 2013)
any mode other than cash
Aggregate allowable is Rs 25,000/
(Rs 30000/- for senior and very senior citizen)
2
 any payment on account of preventive health check-up of the employee or family, [restricted to Rs 5000/-; cash payment allowed here]
any mode including cash
3
 Whole of the amount paid on account of medical expenditure incurred on health of a very senior citizen and no amount has been paid to effect of keep in force an insurance on the health of such person
any mode other than cash
Aggregate allowable is Rs 30,000/
4
Parent or Parents of employee*
 the whole of the amount paid to effect or keep in force an insurance on the health of the parent or parents of the employee
any mode other than cash
Aggregate allowable is Rs 25,000/
(Rs 30000/-
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5
 any payment made on account of preventive health check-up of the parent or parents of the employee [restricted to Rs 5000/-; cash payment allowed here]
any mode including cash
for senior and very senior citizen)
6
 Whole of the amount paid on account of medical expenditure incurred on health of a very senior citizen and no amount has been paid to effect of keep in force an insurance on the health of such person
any mode other than cash
Aggregate allowable is Rs 30,000/
*Aggregate of the sum allowable as deduction under Sl No 1, 2 & 3 and 4, 5 &6 above shall not exceed Rs 30000/-
Here
i) “family” means the spouse and dependent children of the employee.
ii) Senior citizen” means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.
iii) Very senior citizen means an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year
The DDO must ensure that the medical insurance referred to above shall be in accordance with a scheme made in this behalf by-
(a) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalization) Act, 1972 and approved by the Central Government in this behalf; or
(b) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999.
5.5.6 Deductions in respect of expenditure on persons or dependants with disability
5.5.6.1 Deductions in respect of maintenance including medical treatment of a dependent who is a person with disability (section 80DD):
Under section 80DD, where an employee, who is a resident in India, has, during the previous year-
(a) incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or
(b) paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in this regard and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability, the employee shall be allowed a deduction of a sum of Rs 75,000/- from his gross total income of that year.
However, where such dependant is a person with severe disability, an amount Rs 1,25,000/- shall be allowed as deduction subject to the specified conditions.
The deduction under (b) above shall be allowed only if the following conditions are fulfilled:-
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(i) the scheme referred to in (b) above provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual in whose name subscription to the scheme has been made;
(ii) the employee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability.
However, if the dependant, being a person with disability, predeceases the employee, an amount equal to the amount paid or deposited under sub-para(b) above shall be deemed to be the income of the employee of the previous year in which such amount is received by the employee and shall accordingly be chargeable to tax as the income of that previous year.
5.5.6.2 Deductions in respect of a person with disability (section 80U):
Under section 80U, in computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of Rs 75,000/-. However, where such individual is a person with severe disability, a higher deduction of Rs 1,25,000/- shall be allowable.
DDOs should note that 80DD deduction is in case of the dependent of the employee whereas 80U deduction is in case of the employee himself. However, under both the sections, the employee shall furnish to the DDO the following:
1. A copy of the certificate issued by the medical authority as defined in Rule 11A(1) in the prescribed form as per Rule 11A(2) of the Rules. The DDO has to allow deduction only after seeing that the Certificate furnished is from the Medical Authority defined in this Rule and the same is in the form as mentioned therein.
2. Further in cases where the condition of disability is temporary and requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any subsequent period unless a new certificate is obtained from the medical authority as in 1 above and furnished before the DDO.
3. For the purposes of sections 80DD and 80 U some of the terms defined are as under:-
(a) “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 ;
(b) “dependant” means—
(i) in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them;
(ii) in the case of a Hindu undivided family, a member of the Hindu undivided family, dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year;
(c) “disability” shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 and includes “autism”, “cerebral palsy” and “multiple disability” referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999;
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(d) “Life Insurance Corporation” shall have the same meaning as in clause (iii) of sub-section (8) of section 88;
(e) “medical authority” means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 or such other medical authority as may, by notification, be specified by the Central Government for certifying “autism”, “cerebral palsy”, “multiple disabilities”, “person with disability” and “severe disability” referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999;
(f) “person with disability” means a person as referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 or clause (j) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999;
(g) “person with severe disability” means—
(i) a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995; or
(ii) a person with severe disability referred to in clause (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999;
(h) “specified company” means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002.
5.5.7. Deduction in respect of medical treatment, etc. (Section 80DDB):
Section 80DDB allows a deduction in case of employee, who is resident in India, during the previous year, of any amount actually paid for the medical treatment of such disease or ailment as may be specified in the rules 11DD (1) for himself or a dependant. The deduction allowed is equal to the amount actually paid is in respect of the employee or his dependant or Rs. 40,000 whichever is less.
Now the deduction can be allowed on the basis of a prescription from an oncologist, a urologist, nephrologist, a haematologist, an immunologist or such other specialist, as mentioned in Rule 11DD. However, the amount of the claim shall be reduced by the amount if any received from the insurer or reimbursed by the employer. Further in case of the person against whom such claim is made is a senior citizen (60 age years or more) then the deduction upto Rs 60,000/- is allowed and in case of very senior citizen (80 age years or more) the deduction upto Rs 80,000/- is allowed.
For the purpose of this section, in the case of an employee, “dependant” means individual, the spouse, children, parents, brothers and sisters of the employee or any of them, dependant wholly or mainly on the employee for his support and maintenance.
Vide Notification SO No. 2791(E) dated 12.10.2015, Rules 11DD has been amended to do away with the requirement of furnishing a certificate in Form 10-I. A prescription from a specialist as specified in the Rules containing the name and age the patient, name of the disease/ailment along with the name, address, registration number & qualification of the specialist issuing the prescription would now be required.
5.5.8 Deduction in respect of interest on loan taken for higher education (Section 80E):
38
Section 80E allows deduction in respect of payment of interest on loan taken from any financial institution or any approved charitable institution for higher education for the purpose of pursuing his higher education or for the purpose of higher education of his spouse or his children or the student for whom he is the legal guardian.
The deduction shall be allowed in computing the total income for the Financial year in which the employee starts paying the interest on the loan taken and immediately succeeding seven Financial years or until the Financial year in which the interest is paid in full by the employee, whichever is earlier.
For the purpose of this section -
(a) “approved charitable institution” means an institution established for charitable purposes and approved by the prescribed authority section 10(23C), or an institution referred to in section 80G(2)(a);
(b) “financial institution” means a banking company to which the Banking Regulation Act, 1949 applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;
(c) “higher education” means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognized by the Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so;
5.5.9 Deductions on respect of donations to certain funds, charitable institutions, etc. (Section 80G):
Section 80G provides for deductions on account of donation made to various funds , charitable organizations etc. In cases where employees make donations to the Prime Minister’s National Relief Fund, the Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund through their respective employers, it is not possible for such funds to issue separate certificate to every such employee in respect of donations made to such funds as contributions made to these funds are in the form of a consolidated cheque. An employee who makes donations towards these funds is eligible to claim deduction under section 80G. It is, hereby, clarified that the claim in respect of such donations as indicated above will be admissible under section 80G on the basis of the certificate issued by the Drawing and Disbursing Officer (DDO)/Employer in this behalf – Circular No. 2/2005, dated 12-1-2005.
No deduction under this section is allowable in case the amount of donation exceeds Rs 10000/- unless the amount is paid by any mode other than cash.
5.5.10 Deductions is respect of rents paid (Section 80GG):
Section 80GG allows the employee to a deduction in respect of house rent paid by him for his own residence. Such deduction is permissible subject to the following conditions :-
(a) the employee has not been in receipt of any House Rent Allowance specifically granted to him which qualifies for exemption under section 10(13A) of the Act;
(b) the employee files the declaration in Form No.10BA. (Annexure X)
(c) The employee does not own:
39
(i) any residential accommodation himself or by his spouse or minor child or where such employee is a member of a Hindu Undivided Family, by such family, at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or
(ii) at any other place, any residential accommodation which is in the occupation of the employee, the value of which is to be determined under section 23(2)(a) or section 23(4)(a), as the case may be.
(d) He will be entitled to a deduction in respect of house rent paid by him in excess of 10% of his total income. The deduction shall be equal to 25% of total income or Rs. 2,000/- per month, whichever is less. The total income for working out these percentages will be computed before making any deduction under section 80GG.
The Drawing and Disbursing Authorities should satisfy themselves that all the conditions mentioned above are satisfied before such deduction is allowed by them to the employee. They should also satisfy themselves in this regard by insisting on production of evidence of actual payment of rent.
5.5.11 Deductions in respect of certain donations for scientific research or rural development (Section 80 GGA):
Section 80GGA allows deduction from total income of employee in respect of donations of any sum as given in the Table below:
Sl No
Donations made to persons
Approval / Notification under Section
Authority granting approval/ Notification
1
A research association which has as its object the undertaking of scientific research or to a University, college or other institution to be used for scientific research
u/s 35(1)(ii)
Central Government
2
A research association which has as its object the undertaking of research in social science or statistical research or to a University, college or other institution to be used for research in social science or statistical research
u/s 35(1)(iii)
Central Government
3
an association or institution, which has as its object the undertaking of any programme of rural development, to be used for carrying out any programme of rural development approved for the purposes of section 35CCA
furnishes the certificate u/s 35CCA (2)
Prescribed Authority under Rule 6AAA
4
an association or institution which has as its object the training of persons for implementing programmes of rural development.
furnishes the certificate u/s 35CCA (2A)
Prescribed Authority under Rule 6AAA
5
a public sector company or a local authority or to an association or institution approved by the National Committee, for carrying out any eligible project or scheme.
furnishes the certificate u/s 35AC(2)(a)
National Committee for Promotion of Social & Economic Welfare
7
a rural development fund
notified u/s 35CCA (1)(c)
set up and notified by the Central Government
8
National Urban Poverty Eradication Fund
notified u/s
set up and notified
40
35CCA (1)(d)
by the Central Government
No deduction under this section is allowable in case:
i) The employee has gross total income which includes income which is chargeable under the head “Profits and gains of business or profession”.
ii) The amount of donation exceeds Rs 10000 and is paid in cash.
The Drawing and Disbursing Authorities should satisfy themselves that all the conditions mentioned above are satisfied before such deduction is allowed by them to the employee. They should also satisfy themselves in this regard by insisting on production of evidence of actual payment of donation and a receipt from the person to whom donation has been made and ensure that the approval/notification has been issued by the right authority. DDO must ensure a self-declaration from the employee that he has no income from “Profits and gains of business or profession”.
5.5.12 Deduction in respect of interest on deposits in savings account (Section 80TTA):
Section 80TTA has been introduced from the Financial Year 2012-13 and it allows to an employee from his gross total income if it includes any income by way of interest on deposits (not being time deposits) in a savings account, a deduction amounting to:
(i) in a case where the amount of such income does not exceed in the aggregate ten thousand rupees, the whole of such amount; and
(ii) in any other case, ten thousand rupees.
The deduction is available if such savings account is maintained in a
(a) banking company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act);
(b) co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or
(c) Post Office as defined in clause (k) of section 2 of the Indian Post Office Act, 1898,
For this section, “time deposits” means the deposits repayable on expiry of fixed periods.
6. REBATE OF Rs 2000 FOR INDIVIDUALS HAVING TOTAL INCOME UPTO Rs 5 LAKH [SECTION 87A]
Finance Act 2013 provided relief in the form of rebate to individual taxpayers, resident in India, who are in lower income bracket, i. e. having total income not exceeding Rs 5,00,000/-. The amount of rebate is Rs 2000/- or the amount of tax payable, whichever is lower. This rebate is available for AY 2014-15 and subsequent assessment years.
7 TDS ON PAYMENT OF ACCUMULATED BALANCE UNDER RECOGNISED PROVIDENT FUND AND CONTRIBUTION FROM APPROVED SUPERANNUATION FUND:
7.1 The trustees of a Recognized Provident Fund, or any person authorized by the regulations of the Fund to make payment of accumulated balances due to employees, shall in cases where sub-rule(1) of Rule 9 of Part A of the Fourth Schedule to the Act
41
applies, at the time when the accumulated balance due to an employee is paid, make therefrom the deduction specified in Rule 10 of Part A of the Fourth Schedule to the Act.
The accumulated balance is treated as income chargeable under the head “Salaries”.
7.2 Where any contribution made by an employer, including interest on such contributions, if any, in an approved Superannuation Fund is paid to the employee, tax on the amount so paid shall be deducted by the trustees of the Fund to the extent provided in Rule 6 of Part B of the Fourth Schedule to the Act. TDS should be at the average rate of tax at which, the employee was liable to be taxed during the preceding three years or during the period, if that period is less than three years, when he was member of the fund.
The deductor shall remain liable to deduct tax on any sum paid on account of returned contributions (including interest, if any) even if a fund or part of a fund ceases to be an approved Superannuation fund.
7.3 As per section 192A of the Act, w. e. f. 01.06.2015 the trustees of the EPF Scheme 1952 framed under section 5 of the EPF & Misc. Provisions Act, 1952 or any person authorized under the scheme to make payment of accumulated balance due to employees, shall, in a case where the accumulated balance due to an employee participating in a recognized provident fund is includible in his total income owing to the provisions of Rule 8 of Part A of Fourth Schedule not being applicable at the time of payment of accumulated balance due to the employee, deduct income tax thereon @ 10% if the amount of such payment or aggregate of such payment exceeds Rs 30,000/-. In case the employee does not provide his/her PAN No., then the deduction will have to be made at maximum marginal rate.
8. DDOS TO SATISFY THEMSELVES ABOUT THE GENUINENESS OF CLAIM:
The Drawing and Disbursing Officers should satisfy themselves about the actual deposits/ subscriptions / payments made by the employees, by calling for such particulars/ information as they deem necessary before allowing the aforesaid deductions. In case the DDO is not satisfied about the genuineness of the employee’s claim regarding any deposit/ subscription/ payment made by the employee, he should not allow the same, and the employee would be free to claim the deduction/ rebate on such amount by filing his return of income and furnishing the necessary proof etc., therewith, to the satisfaction of the Assessing Officer.
9. CALCULATION OF INCOME-TAX TO BE DEDUCTED:
9.1 Salary income for the purpose of section 192 shall be computed as follow:-
(a) First compute the gross salary as mentioned in para 5.1 including all the incomes mentioned in para 5.2 and excluding the income mentioned in para 5.3.
(b) Allow deductions mentioned in para 5.4 from the figure arrived at (a) above and compute the amount to arrive at Net salary of the employee
(c) Add income from all other heads- ‘House property’, ‘Profits & gains of Business or Profession’, Capital gains and Income from other Sources to arrive at the Gross Total Income as shown in the form of simple statement mentioned para 3.5. However it may be remembered that no loss under any such head is allowable by DDO other than loss under the Head “Income from House property”.
42
(d) Allow deductions mentioned in para 5.5 from the figure arrived at (c) above ensuring that the relevant conditions are satisfied. The aggregate of the deductions subject to the threshold limits mentioned in para 5.5 shall not exceed the amount at (b) above and if it exceeds, it should be restricted to that amount.
This will be the amount of total income of the employee on which income tax would be required to be deducted. This income should be rounded off to the nearest multiple of ten rupees.
9.2 Income-tax on such income shall be calculated at the rates given in para 2.1 of this Circular keeping in view the age of the employee and subject to the provisions of sec. 206AA, as discussed in para 4.8. Rebate as per Section 87A upto Rs 2000/- to eligible persons (see para 6) may be given. Surcharge shall be calculated in cases where applicable (see para 2.2).
9.3 The amount of tax payable so arrived at shall be increased by educational cess as applicable (2% for primary and 1% for secondary education) to arrive at the total tax payable.
9.4 The amount of tax as arrived at para 9.3 should be deducted every month in equal installments. Any excess or deficit arising out of any previous deduction can be adjusted by increasing or decreasing the amount of subsequent deductions during the same financial year.
10. MISCELLANEOUS:
10.1 These instructions are not exhaustive and are issued only with a view to guide the employers to understand the various provisions relating to deduction of tax from salaries. Wherever there is any doubt, reference may be made to the provisions of the Income-tax Act, 1961, the Income-tax Rules, 1962, the Finance Act 2015, the relevant circulars / notifications, etc.
10.2 In case any assistance is required, the Assessing Officer/the Local Public Relation Officer of the Income-tax Department may be contacted.
10.3 These instructions may be brought to the notice of all Disbursing Officers and Undertakings including those under the control of the Central/ State Governments.
10.4 Copies of this Circular are available with the Director of Income-tax (Public Relations, Printing & Publications and Official Language), 6th Floor, Mayur Bhavan, Connaught Place, New Delhi-110 001 and at the following websites:
www.finmin.nic.in & www.incometaxindia.gov.in
Hindi version will follow.
(Sandeep Singh)
Under Secretary to the Govt. of India
Copy to
1. All State Governments/Union Territories.
43
2. All Ministries/Departments of Government of India etc.
3. President’s Secretariat
4. Vice-President’s Secretariat
5. Prime Minister’s Office
6. Lok Sabha Secretariat
7. Rajya Sabha Secretariat
8. Cabinet Secretariat
9. Secretary, U.P.S.C., Dholpur House, New Delhi
10. Secretary, Staff Selection Commission, Lodhi Complex, New Delhi
11. Supreme Court of India, New Delhi
12. Election Commission, New Delhi
13. Planning Commission, New Delhi
14. Secretariat of Governors/Lt. Governors of all States/Union Territories
15. All Integrated Financial Advisors to Ministries/Departments of Government of India
16. All Heads of Departments & Offices subordinate to the Department of Revenue CBDT, CBEC
17. Army Headquarters, New Delhi
18. Air Headquarters, New Delhi
19. Naval Headquarters, New Delhi
20. Director-General of Posts & Telegraphs, New Delhi(10 copies)
21. Comptroller & Auditor General of India (50 copies)
22. Accountant General – I, Andhra Pradesh, Hyderabad
23. Accountant General-II, Andhra Pradesh, Hyderabad
24. Accountant General, Assam, Shillong
25. Accountant General-I, Bihar, Ranchi
26. Accountant General-II, Bihar, Patna
27. Accountant General-I, Gujarat, Ahmedabad
28. Accountant General-II, Gujarat, Rajkot
29. Accountant General, Kerala, Thiruananthapuram
30. Accountant General, Madhya Pradesh, Gwalior
31. Accountant General, Tamil Nadu, Chennai
32. Accountant General-I, Maharashtra, Mumbai
33. Accountant General-II, Maharashtra, Nagpur
34. Accountant General, Karnataka, Bengaluru
35. Accountant General, Orissa, Bhubaneshwar
36. Accountant General, Punjab, Chandigarh
37. Accountant General, Himachal Pradesh, Simla
38. Accountant General, Rajasthan, Jaipur
39. Accountant General-I, II & III, Uttar Pradesh, Allahabad
40. Accountant General, West Bengal, Kolkata
41. Accountant General, Haryana, Chandigarh
42. Accountant General, Jammu & Kashmir, Srinagar
43. Accountant General, Manipur, Imphal
44. Accountant General, Tripura, Agartala
45. Accountant General, Nagaland, Kohima
46. Director of Audit(Central)Kolkata
47. Director of Audit(Central Revenue), New Delhi
48. Director of Audit (Central), Mumbai
49. Director of Audit, Scientific & Commercial Department, Mumbai
50. All Banks (Public Sector, Nationalized including State Bank of India)
51. Secretary, Reserve Bank of India Central Office P.B.No.406, Mumbai-400001 (25 copies for distribution to its Branches).
52. Accounts Officer, Inspector General of Assam Rifles, (Hqrs), Shillong
53. All Chambers of Commerce & Industry
44
54. Lok Sabha /Rajya Sabha Secretariat Libraries(15 copies each)
55. All Officers and Sections in Technical Wing of CBDT
56. Asstt. Chief Inspector, RBI Inspection Deptt. Regional Cell Mumbai/Kolkata/ Chennai/New Delhi/and Kanpur.
57. Controller of Accounts, Deptt. Of Economic Affairs, New Delhi
58. Manager , Reserve Bank of India, Public Debt Office, Ahmedabad/Bengaluru/ Bhubaneswar/ Mumbai/Kolkata/Hyderabad/Kanpur/Jaipur/Chennai/Nagpur/New Delhi/ Patna/ Guwahati/Trivandrum.
59. Accountant General, Post & Telegraph, Simla.
60. Controller General of Defence Accounts, New Delhi.
61. Directorate of Audit, Defence Services, New Delhi.
62. World Health Organisation, New Delhi.
63. International Labour Office, India Branch, New Delhi.
64. Secretary, Indian Red Cross Society, New Delhi
65. Atomic Energy Deptt. Mumbai.
66. Secretary, Development Board, Ministry of Commerce&Industry.
67. National Saving Organisation, Nagpur.
68. Deputy Accountant General, Post & Telegraph, Kolkata.
69. The Legal Adviser, Export-Import Bank of India, P.B.No.19969, umbai.4000021.
70. Manager, State Bank of India, Local Head Office :-
i. Jeevan Deep Building, 1 Middleton Street, Kolkata.
ii. Circle Top House, Rajai Salai, Chennai-600001.
iii. Lucknow, Uttar Pradesh.
iv. Bank Street, Hyderabad-500001
v. Hamida Road, Bhopal-462001
vi. Shop Nos.101 to 105, Sector 17-B, Chandigarh
vii. New Amn.Building, Madam Cama Road, Mumbai-400021
viii. 9, Parliament Street, New Delhi-110001
ix. Bhedru, Ahmedabad-380001
x. Judges Court Road, Post Box No.103, Patna-800001
xi. 59, Forest Park, Bhubaneshwar
xii. Guwahati, Assam
71. Chief Controller of Accounts, CBDT, Lok Nayak Bhawan, Khan Market, New Delhi
72. State Bank of Patiala, (Head Office), The Mall, Patiala
73. State Bank of Bikaner and Jaipur, Head Office, Tilak Marg, ‘C’ Scheme Jaipur
74. State Bank of Hyderabad, Head Office, Gun Factory, Hyderabad
75. State Bank of Indore, 5 Yashwant Nivas Road, Indore.
76. State Bank of Mysore (Head Office), K.G.Road, Bengaluru
77. State Bank of Saurashtra, Behind Satyanarayan Road, Bhavnagar, Gujarat
78. State Bank of Travancore, Post Box No.34, Thiruanathpuram
79. N. S. Branch, Department of Economic Affairs, New Delhi
80. The Editor, ‘The Income-tax Reporter’ Company Law Institute of India (P) Ltd., 88, Thyagaraja Road, Thyagaraja Nagar, Chennai-600017
81. The Editor, Chartered Secretary, The Institute of Company Secretaries of India, ‘ICSI House, 22, Institutional Area, Lodhi Road, New Delhi-110003
82. The Editor, “Taxation” 174, Jorbagh, New Delhi
83. The Editor, “The Tax Law Review” Post Box No.152, Jallandhar-144001
84. The Editor, “Taxmann” Allied Services (P)Ltd., 1871, Kucha Chelan, Khari Baoli, Delhi-110006
85. The Min. of Law (Deptt. of Legal Affairs), Shastri Bhawan New Delhi.
86. Food Corporation of India, 16-17, Barakhamba Lane, New Delhi-110001
87. IFCI, Bank of Baroda Building, 16, Parliament Street, New Delhi
88. IDBI, IDBI Tower, Cuffe Parad, Mumbai-400 005
89. ICICI, 163, Backbay Reclamation, Mumbai-400 020
90. NABARD, Poonam Chambers, Dr.Annie Besant Road, P.B.No.552,Worli, Mumbai
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91. National Housing Bank, 3rd Floor, Bombay Life Building, 45, Veer Nariman Road, Mumbai
92. IRBI, 19, Netaji Subhash Road, Kolkata
93. All Foreign Banks operating in India
94. Air India, New Delhi
95. University Grants Commission, Bahadur Shah Jafar Marg, New Delhi
96. The Deputy Director(Admn.), NSSO (FOD), Mahalonobis Bhavan, 6th Floor, 164, G.L.Tagore Road, Kolkata-700108.
(Sandeep Singh)
Under Secretary to the Govt. of India
ANNEXURE-I
SOME ILLUSTRATIONS
Example 1
For Assessment Year 2016-17
(A) Calculation of Income tax in the case of an employee (Male or Female) below the age of sixty years and having gross salary income of:
i) Rs.2,50,000/- ,
ii) Rs.5,00,000/- ,
iii) Rs.10,00,000/-
iv) Rs.20,00,000/-. and
v) Rs. 1,10,00,000/-
(B) What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
Particulars
Rupees
(i)
Rupees
(ii)
Rupees
(iii)
Rupees
(iv)
Rupees
(v)
Gross Salary Income (including allowances)
2,50,000
5,00,000
10,00,000
20,00,000
1,10,00,000
Contribution of G.P.F.
45,000
50,000
1,00,000
1,00,000
1,00,000
Computation of Total Income and tax payable thereon
Particulars
Rupees
(i)
Rupees
(ii)
Rupees
(iii)
Rupees
(iv)
Rupees
(v)
Gross Salary
2,50,000
5,00,000
10,00,000
20,00,000
1,10,00,000
Less: Deduction U/s 80C
45,000
50,000
1,00,000
1,00,000
1,00,000
Taxable Income
2,05,000
4,50,000
9,00,000
19,00,000
1,09,00,000
(A) Tax thereon
Nil
18,000*
1,05,000
3,95,000
3095000
Surcharge
3095000
Add:
(i) Education Cess @ 2%.
(ii) Secondary and Higher
Education Cess @1%
Nil
Nil
360
180
2100
1050
7,900
3950
68,090
34,045
Total tax payable
Nil
18,540
1,08,150
406850
35,06,635
(B) TDS under sec. 206AA in case where PAN is not furnished by the employee
Nil
38,000
1,30,000
406850
35,06,635
* include Rebate of Rs 2000 u/s 87A
Example 2
For Assessment Year 2016-17
Calculation of Income Tax in the case of an employee below the age of sixty years having a handicapped dependent (With valid PAN furnished to employer).
S.No.
Particulars
Rupees
1
Gross Salary
4,20,000
2
Amount spent on treatment of a dependant, being person with disability (but not severe disability)
7000
3
Amount paid to LIC with regard to annuity for the maintenance of a dependant, being person with disability( but not severe disability)
60,000
4
GPF Contribution
25,000
5
LIP Paid
10,000
6
Interest Income on Savings Account
12,000
Computation of Tax
S.No.
Particulars
Rupees
1
Gross Salary
4,20,000
2
Add: Income from Other Sources
Interest Income on Savings Account
Rs 12,000
3
Gross Total Income
4,32,000
4
Less: Deduction U/s 80DD (Restricted to Rs.60,000/- only)
60,000
5
Less: Deduction U/s 80C (i) GPF Rs.25,000/-
(ii) LIP Rs.10,000/- = Rs.35,000/-
35,000
6
Less: Deduction u/s 80TTA on Interest Income on savings account (restricted to Rs 10000/-)
10000
7
Total Income
3,27,000
8
Income Tax thereon/payable
(includes Rebate of Rs 2000 as per Section 87A)
5,700
9
Add:
(i). Education Cess @2%
(ii). Secondary and Higher Education Cess @1%
114
57
10
Total Income Tax payable
5,871
11
Rounded off to
5,870
Example 3
For Assessment Year 2016-17
Calculation of Income Tax in the case of an employee below age of sixty years where medical treatment expenditure was borne by the employer (With valid PAN furnished to employer).
S.No.
Particulars
Rupees
1
Gross Salary
5,20,000
2
Medical Reimbursement by employer on the treatment of self and dependent family member
35,000
3
Contribution of GPF
20,000
4
LIC Premium
20,000
5
Repayment of House Building Advance
25,000
6
Tuition fees for two children
60,000
7
Investment in Unit-Linked Insurance Plan
30,000
8
Interest Income on Savings Account
8,000
9
Interest Income on Time Deposit
15,000
Computation of Tax
S.No.
Particulars
Rupees
1
Gross Salary
5,20,000
2
Add: Perquisite in respect of reimbursement of Medical Expenses
In excess of Rs.15,000/- in view of Section 17(2)(v)
20,000
3
Income from Other Sources
i) Interest Income on Savings Account Rs 8,000
ii) Interest Income on Savings Account Rs 15,000
23,000
4
Gross Total Income
5,63,000
5
a.Less: Deduction U/s 80C
(i) GPF Rs.20,000/-
(ii) LIC Rs.20,000/-
(iii) Repayment of House Building Advance Rs.25,000/-
(iv) Tuition fees for two children Rs.60,000/-
(v) Investment in Unit-Linked Insurance Plan Rs.30,000/-
Total =Rs.1,55,000/-
Restricted to Rs. 1,58,000/-
b. Less: Deduction u/s 80TTA on Interest Income on savings account (restricted to Rs 8000/- – available only on Savings account interest) Rs 8000
Total deduction available Rs 1,58,000/-
1,58,000
6
Total Income
4,05,000
7
Income Tax thereon/payable (after rebate u/s 87A)
15,800
8
Add:
(i). Education Cess @2%
(ii). Secondary and Higher Education Cess @1%
276
138
9
Total Income Tax payable
14,214
10
Rounded off to
14,214
Example 4
For Assessment Year 2016-17
Illustrative calculation of House Rent Allowance U/s 10 (13A) in respect of residential accommodation situated in Delhi in case of an employee below the age of sixty years (With valid PAN furnished to employer).
S.No.
Particulars
Rupees
1
Salary
3,50,000
2
Dearness Allowance
2,00,000
3
House Rent Allowance
1,40,000
4
House rent paid
1,44,000
5
General Provident Fund
36,000
6
Life Insurance Premium
4,000
7
Subscription to Unit-Linked Insurance Plan
50,000
Computation of total income and tax payable thereon
S.No.
Particulars
Rupees
1
Salary + Dearness Allowance + House Rent Allowance
3,50,000+2,00,000+1,40,000 = 6,90,000
6,90,000
2
Total Salary Income
6,90,000
3
Less: House Rent allowance exempt U/s 10(13A):
Least of:
(a). Actual amount of HRA received= 1,40,000
(b). Expenditure of rent in excess of 10% of salary
(including D.A. presuming that D.A. is taken
for retirement benefit) (1,44,000-55,000) = 89,000
(c). 50% of Salary(Basic+ DA) = 2,75,000
89,000
Gross Total Income
6,01,000
Less: Deduction U/s 80C
(i) GPF Rs.36,000/-
(ii) LIC Rs. 4,000
(iii) Investment in Unit-Linked Insurance Plan Rs.50,000/-
Total =Rs.1,14,000/-
90,000
3
Total Income
5,11,000
Tax payable
27,200
Add:
(i). Education Cess @2%
(ii). Secondary and Higher Education Cess @1%
544
272
Total Income Tax payable
28016
Rounded off to
28020
Example 5
For Assessment Year 2016-17
Illustrating valuation of perquisite and calculation of tax in the case of an employee below age of sixty years of a private company in Mumbai who was provided accommodation in a flat at concessional rate for ten months and in a hotel for two months ( With valid PAN furnished to employer).
S.No.
Particulars
Rupees
1
Salary
7,00,000
2
Bonus
1,40,000
3
Free gas, electricity, water etc. (Actual bills paid by company)
40,000
4(a)
Flat at concessional rate (for ten month). @ Rs.36000/month
3,60, 000
4(b
Hotel rent paid by employer (for two month)
1,00,000
4(c)
Rent recovered from employee.
60,000
4(d)
Cost of furniture.
2,00,000
5
Subscription to Unit Linked Insurance Plan
50,000
6
Life Insurance Premium
10,000
7
Contribution to recognized P.F.
42,000
COMPUTATION OF TOTAL INCOME AND TAX PAID THEREON:
S.No.
Particulars
Rupees
1
Salary
7,00,000
2
Bonus
1,40,000
3
Total Salary(1+2) for Valuation of Perquisites
8,40,000
Valuation of perquisites
4(a)
Perquisite for flat:
Lower of (15% of salary for 10 months=Rs.1,05,000/-)
and (actual rent paid= Rs 3,60,000) i.e. Rs. 1,05,000
1,38,600
4(b)
Perquisite for hotel :
Lower of (24% of salary of 2 months=Rs 33,600)
and (actual payment= Rs 1,00,000) i.e. Rs 33,600
4(c)
Perquisites for furniture(Rs.2,00,000) @ 10% of cost Rs. 20,000
4(c)(i)
Total of [4(a)+(b)+(c)] (1,05,000+ 33,600+ 20,000)Rs.158,600
Less: rent recovered (-)Rs. 60,000 = Rs. 98,600
4(d)
Add
Perquisite for free gas, electricity, water etc. Rs.40,000 (+) Rs 98,600 [4(c)(i)] = Rs1,38,600
Total perquisites
5
Gross Total Income (Rs.8,40,000+ 1,38,600)
9,78,600
6
Gross Total Income
9,78,600
7
Less: Deduction U/s 80C:
(i). Provident Fund (80C) :42,000
(ii). LIC (80C) :10,000
(iii). Subscription to Unit Linked Insurance Plan(80C) :50,000/-
Total = 1,02,000
Restricted to Rs 1,02,000 u/s 80C
1,02,000
8
Total Income
8,76,600
9
Tax Payable
1,00,320
10
Add:
(i). Education Cess @2%
(ii). Secondary and Higher Education Cess @1%
2,006
1,003
11
Total Income Tax payable
1,03,329
12
Rounded off to
1,03,330
Example 6
For Assessment Year 2016-17
Illustrating Valuation of perquisite and calculation of tax in the case of an employee below the age of 60 years of a Private Company posted at Delhi and repaying House Building Loan ( With valid PAN furnished to employer).
S.No.
Particulars
Rupees
1
Salary
4,00,000
2
Dearness Allowance
1,00,000
3
House Rent Allowance
1,80,000
4
Special Duties Allowance
12,000
5
Provident Fund
60,000
6
LIP
10,000
7
Deposit in NSC VIII issue
30,000
8
Rent Paid by the employee for house hired by her
1,20,000
9
Repayment of House Building Loan (Principal)
60,000
10
Tuition Fees for three children (Rs.10,000 per child)
30,000
Computation of total income and tax payable thereon
S.No.
Particulars
Rupees
1
Gross Salary (Basic+DA+HRA+SDA)
6,92,000
Less: House rent allowance exempt U/s 10 (13A)
Least of:
(a). Actual amount of HRA received. :Rs.1,80,000
(b). Expenditure on rent in excess of 10% of salary
(Including D.A.)assuming D.A. is included for
retirement benefits (1,20,000- 50,000) :Rs. 70,000
(c). 50% of salary (including D.A) : Rs. 2,50,000
70,000
2
Gross Total Taxable Income
6,22,000
Less: Deduction U/s 80C
(i). Provident Fund : 60,000
(ii). LIP : 10,000
(iii). NSC VIII Issue : 30,000
(iv). Repayment of HBA : 60,000
(v). Tuition Fees (Restricted to two children) : 20,000 Total : 1,80,000
Restricted to 1,50,000
1,50,000
Total Income
4,72,000
Income Tax thereon/payable
20,200
Add:
(i). Education Cess @2%
(ii). Secondary and Higher Education Cess @1%
404
202
Total Income Tax payable
20,806
Rounded off to
20,810
Example 7
For Assessment Year 2016-17
A. Calculation of Income tax in the case of a retired employee above the age of sixty years but below the age of 80 years and having gross pension of:
iv) Rs.4,50,000/-,
v) Rs.8,00,000/- ,
vi) Rs. 12,50,000/-.
B What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
Particulars
Rupees
(i)
Rupees
(ii)
Rupees
(iii)
Gross Pension
4,50,000
8,00,000
12,50,000
Contribution of P.P.F.
70,000
1,00,000
1,50,000
Computation of Total Income and tax payable thereon
Particulars
Rupees
(i)
Rupees
(ii)
Rupees
(iii)
Gross Pension
4,50,000
8,00,000
12,50,000
Less: Deduction U/s 80C
70,000
1,00,000
1,50,000
Taxable Income
3,80,000
7,00,000
11,00,000
Tax thereon (after rebate u/s 87A)
6,000
60,000
1,50,000
Add:
(i) Education Cess @ 2%.
(ii) Secondary and Higher Education Cess @1%
120
60
1200
600
3000
1500
Total tax payable
6,180
61,800
1,54,500
TDS under sec. 206AA in case where PAN is not furnished by the employee
24,000
90,000
1,70,000
Example 8
For Assessment Year 2016-17
A. Calculation of Income tax in the case of a retired employee above the age of 80 years and having gross pension of:
i) Rs.5,00,000/-,
ii) Rs.8,00,000/- ,
iii) Rs. 12,50,000/-.
B What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
Particulars
Rupees
(i)
Rupees
(ii)
Rupees
(iii)
Gross Pension
5,00,000
8,00,000
12,50,000
Contribution of P.P.F.
80,000
1,20,000
1,50,000
Computation of Total Income and tax payable thereon
Particulars
Rupees
(i)
Rupees
(ii)
Rupees
(iii)
Gross Pension
5,00,000
8,00,000
12,50,000
Less: Deduction U/s 80C
80,000
1,20,000
1,50,000
Taxable Income
4,20,000
6,80,000
11,00,000
Tax thereon
Nil
36,000
1,30,000
Add:
(i) Education Cess @ 2%.
(ii) Secondary and Higher Education Cess @1%
720
360
2600
1300
Total tax payable
Nil
37,080
1,33,900
B. TDS under sec. 206AA in case where PAN is not furnished by the employee
Nil
37,080
1,33,900
Example 9
Exemption u/s 10 (13A)
1. Mr. A, employed with XYZ Ltd. Up to 31.10.2015, received following emoluments :
S.No.
Particulars
Rupees
1.
Basic pay p.m.
13,000
2.
Bonus for the year received in July, 2015
72,000
3.
Club facility (for private use only) Expenditure by employer p.m.
700
4.
House Rent Allowance p.m.
2,800
5.
Employer’s contribution to URPF p.m. (Mr. A also made equal contribution)
1,000
W.e.f. 01.11.2015, Mr. A joined PQR Ltd., with following pay package :
1.
Basic pay p.m.
18,000
2.
House Rent Allowance p.m.
1,600
3.
Club Facility (for private use only) Expenditure by employer p.m.
1,100
4.
Use of car for journey between office and residence – Employer’s expenditure p.m.
600
5.
Employer’s contribution to RPF p.m. (Mr. A also made equal contribution)
2,000
Other particulars of Mr. A are as under :
1.
Mr. A resides at Amritsar paying a monthly rent of
3,500
2.
Mr. A’s income from other sources
95,000
3.
Mr. A contributed to LIC/PPR/NSC etc.
20,000
Compute Mr. A’s taxable income and tax liability for A.Y. 2016-17.
Computation of Tax
S.No.
Particulars
Rupees
1.
Income from Salary
(a) From XYZ Ltd.
Basic pay (Rs.13,000 x 7)
91,000
Bonus
7,200
Club facility (Rs.700 x 7)
Rupees
4,900
H.R.A. (Rs.2,800 x 7)
19,600
Less : Exempt u/s 10(13A)
15,400
4,200
Employer’s Contribution to U.R.P.F.
1,07,300
(b) From PQR Ltd.
Rupees
Basic pay (Rs.18,000 x 5)
90,000
H.R.A. (Rs.1,600 x 5)
8,000
Less : Exempt u/s 10(13A)
8,000
Club Facility (Rs.1,100 x 5)
5,500
Facility of Car (not taxable as perquisite)
15,400
Employer’s Contribution to R.P.F.
95,500
Gross Salary
2,02,800
Less: Deduction
—–
Net Salary
2,02,800
2.
Income from Others Sources
95,000
Gross Total Income
2,97,800
Less : Deduction u/s 80C
: Contribution to LIC/PPF/NSC
Rs. 20,000
: Contribution to RPF ( Rs.2000 x 5)
Rs. 10,000
30,000
Total Income
2,67,800
Computation of Tax Liability
Tax payable on Rs.2,67,800
1,780
Less : Rebate u/s 87A
1,780
Net Income-tax payable
Nil
Add : Surcharge
Nil
Add : EC @ 2%

Add : S&HEC @ 1%

Total Tax Payable
Nil
Example 10
2. One Computation of Taxable Salary and allowances, Deduction for Interest on Housing Loan and Deduction u/s 80C.
Mr. X, a Central Govt. Officers in Delhi, is receiving Basic Pay Rs.23,720, grade Pay Rs.7,600, DA at prescribed rates, transport allowances @ Rs.3200+DA thereon, and HRA 30% of basic pay + grade pay (though living in his own house). His date of increment is Ist July. The following are other particulars of his income. Compute his taxable income and tax payable, for A.Y.2015-16.
S.No.
Particulars
Rupees
1.
Honorarium for valuation of answer books of a departmental examination
3,000
2.
Fee for work done for a private body (1/3rd of fees has been retained by Govt.)
6,000
3.
Contributions to G.P.F. p.m.
4,700
4.
Postal Life Insurance Premium financed from G.P.F. p.m.
280
5.
Contribution to Central Govt. Employees Group Insurance Scheme p.m.
500
6.
Life Insurance Premium (being a Life Insurance Policy of Rs.1,00,000 taken in name of his wife before 1.04.2012)
10,500
7.
Contribution to Public Provident Fund
10,000
8.
Repayment of HDFC loan borrowed after 1.04.1999 EMI Rs.25,000 (Towards loan Rs.95,000, towards interest Rs.2,05,000)
3,00,000
Computation of Tax
S.No.
Particulars
Rupees
1.
Income from Salary
Basic Pay @ Rs 23,720 p.m
(March to June ’14)
94,880
@ Rs 24,660 p.m * (July 2014 to Feb 2015)
1,97,280
2,92,160
91,200
Grade Pay @ Rs 7,600 p.m
Dearness Allowance
1.3.2014 to 30.06.2014 @ 100% i.e., Rs 31,320 p.m
1,25,280
1.7.2014 to 31.12.2014 @ 107% i.e. Rs 34,518 p.m
2,07,108
1.1.2015 to 28.02.2015 @ 113% (assumed) i.e.,
Rs. 36,454 p.m
72,908
4,05,296
House Rent Allowance
@ 30% of basic pay + grade pay
1.3.2014 to 30.06.2014 @ Rs 9,396
33,584
1.07.2014 to 28.2.2015 @ Rs 9,678
77,424
1,15,008
Transport Allowance
1.3.2014 to 30.6.2014 @ Rs 6,400 p.m
25600
1.7.2014 to 31.12.2014 @ Rs 6,624 p.m
39,744
1.1.2015 to 28.2.2015 @ Rs 6,816 p.m
13,632
78,976
Less: Exempt u/s 10(14) @ 800 p.m
9600
69,376
9,73,040
Honorarium
3,000
Fees (2/3 retained by him)
4000
Total Salary
9,80,040
Less: Standard Deduction
-
Net Salary
9,80,040
2.
Income from House Property
Self-occupied u/s 23(2)(a) deemed at nil
Less: Interest on HDFC Loan
2,00,000 (-)
2,00,000
Gross Total Income
7,80,040
Less: Deduction u/s 80 C
- GPF @ Rs 4,700/-p.m
56,400
- CGEGIS @ Rs 500/- p.m
6,000
- Life Insurance Premium
10, 500
- Repayment of HDFC Loan
95,000
- Deposit in Public Provident Fund
10,000
1,77,900
1,50,000
Restricted to a maximum of Taxable Income
6,30, 040
Computation of Tax Liability
Tax payable
51,008
Add: Surcharge
-
Add: Education Cess
1020
Total Tax Liability
52,538

ANNEXURE-II
FORM NO.12BA
{See rule 26A(2)(b)}
Statement showing particulars of perquisites, other fringe benefits or amenities and profits in lieu of salary with value thereof
1) Name and address of employer :
2) TAN
3) TDS Assessment Range of the employer :
4) Name, designation and PAN of employee :
5) Is the employee a director or a person with :
substantial interest in the company
(where the employer is a company)
6) Income under the head “Salaries” of the employee :
(other than from perquisites)
7) Financial Year :
8) Valuation of Perquisites
S.No
Nature of perquisite
(see rule 3)
Value of perquisite as per rules
(Rs.)
Amount, if any recovered from the employee
(Rs.)
Amount of perquisite chargeable to tax
Col(3) – Col(4)
(Rs.)
(1)
(2)
(3)
(4)
(5)
1
Accommodation
2
Cars/Other automotive
3
Sweeper, gardener, watchman or personal attendant
4
Gas, electricity, water
5
Interest free or concessional loans
6
Holiday expenses
7
Free or concessional travel
8
Free meals
9
Free Education
10
Gifts, vouchers etc.
11
Credit card expenses
12
Club expenses
13
Use of movable assets by employees
14
Transfer of assets to employees
15
Value of any other benefit/amenity/service/privilege
16
Stock options (non-qualified options)
17
Other benefits or amenities
18
Total value of perquisites
19
Total value of Profits in lieu of salary as per 17(3)
9. Details of tax, -
(a) Tax deducted from salary of the employee u/s 192(1) ………
(b) Tax paid by employer on behalf of the employee u/s 192(1A) ………
(c) Total tax paid ………
(d) Date of payment into Government treasury ………
DECLARATION BY EMPLOYER
I ………………. s/o …………………. working as ……………………………(designation) do hereby declare on behalf of ……………..….. (name of the employer) that the information given above is based on the books of account, documents and other relevant records or information available with us and the details of value of each such perquisite are in accordance with section 17 and rules framed thereunder and that such information is true and correct.
Signature of the person responsible
for deduction of tax
Place…
Date… Full Name ……………………
Designation…………………………
ANNEXURE III
POINT NO.4.4.2.1 OF CIRCULAR OF DEDUCTION OF TAX AT SOURCE – INCOME TAX DEDUCTION FROM SALARIES U/S 192 OF THE INCOME-TAX ACT, 1961 – FINANCIAL YEAR 2015-16
Compulsory filing of Statement by PAO, Treasury Officer, etc. in case of payment of TDS by Book Entry.
1. Procedure of preparation and furnishing Form 24G at TIN-Facilitation Centres (TIN-FCs):
The Form 24G should be prepared by the PAO/DTO/CDDO (hereinafter referred to as AOs) as per the data structure (File format) prescribed by the DIT (Systems), Delhi which is available on TIN website www.tin-nsdl.com. The AOs can prepare Form 24G either by using in-house facilities, third party software or by using form 24G Return Preparation Utility (RPU) developed by NSDL e-Governance Infrastructure Limited (NSDL), which is freely downloadable from the TIN web-site www.tin-nsdl.com.
After preparation of form 24G, the AO is required to validate the same by using the Form 24G File Validation Utility (FVU) which is freely available on TIN website.
Once file is validated through FVU, ‘.fvu file’ in CD/DVD/Pen Drive along with physical Statement Statistic Report (SSR) signed by the AO, to be furnished at TIN-FCs. On successful acceptance of Form 24G at the TIN-FC, an acknowledgement containing 15 digit Token no. is provided to the AO. The AO can view the status of Form 24G on TIN website.
Book identification Number (BIN) is generated for each ‘DDO record with valid TAN’ reported in Form 24G, which is further disseminated to the AOs on email ID mentioned in Form 24G. AOs need to communicate the BIN details to respective DDOs. BIN is to be quoted by the DDOs in quarterly e-TDS/TCS statements. BIN consists of receipt number of Form 24G. DDO serial number and date of transfer voucher.
The AO is required to furnish Form 24G within ten days from the end of the month in respect of tax deducted by the deductors and reported to him for that month. Only one regular Form 24G for a ‘month-FY’ can be submitted.
1.1 Correction in Form 24G:
AO can file a correction Form 24G for any modification or cancellation of Form 24G accepted at TIN central system. Preparation and validation of correction Form 24G is in line with regular form 24G. The validated Form 24G correction file (.fvu file) copied on a CD/pen drive is to be submitted along with the provisional receipt of original Form 24G and SSR to TIN-FC. On successful acceptance of correction Form 24G at the TIN-FC, an acknowledgement containing 15 digit Token no. is provided to the AO. The AO can view the status of Form 24G on TIN website.
2. Online upload of Form 24G at TIN websites:
For online upload of Form 24G at TIN website, the Accounts Office Identification Number (AIN) is a pre-requisite. For online AIN registration, AO need to file at least one Form 24G through TIN-FC. After AIN registration, AO can file Form 24G through AO Account at TIN website. Preparation and validation of correction Form 24G is in line with regular Form 24G (submitted at TIN-FC). The validated Form 24G correction file (.fvu file) is to be uploaded at TIN website. There is no need to submit SSR in online upload. For Form 24G accepted at TIN Central System an online acknowledgement containing a 15 digit token number is generated and displayed to the AO. The format of the acknowledgement is identical to the one issued by the TIN-FC.
No charges are applicable to AOs for online upload of Form 24G.
On login, AO can also View/Download BIN details and update demographic details.
No Digital Signature Certificate (DSC) is required for registration and online uploading of Form 24G.
2.1 Online uploading of correction Form 24G at TIN website:
AO can file a correction Form 24G for any modification or cancellation of Form 24G accepted at TIN Central System. Preparation and validation of correction form 24G is in line with regular form 24G. The validated Form 24G correction file (.fvu file) can be uploaded online through AO account at TIN website. For correction Form 24G accepted at TIN central system, an online acknowledgement containing a 15 digit token number is generated and displayed to the AO. The format of the acknowledgement is identical to the one issued by the TIN-FC. There is no need to submit SSR and provisional receipt of original form 24G in online upload.
3. For FAQs and further details, AOs are advised to log on TIN website www.tin-nsdl.com
******
ANNEXURE IV
Furnishing of Monthly Form No. 24G Statements by Pay and Accounts Officers (PAOs)/District Treasury Officers (DTOs)/Cheque Drawing and Disbursing Officers(CDDOs)
1. Under what income tax rule should Form 24G be filed?
Income-tax Department Notification no. 41/2010 dated May 31, 2010amended the Income Tax Rule 30 which mandates that in case of an office of the Government, where tax has been paid to the credit of Central Government without the production of a challan (associated with deposit of the tax in a bank), the relevant PAO / CDDO / DTO or an equivalent office of the government (herein after called as AO in this document) is required to file Form 24G on monthly basis.
2. Who is the relevant PAO/CDDO/DTO who is liable for filing Form 24G?
A relevant PAO/CDDO/DTO is that office to whom the Deductor/DDO (TAN holder) reports remittance of TDS/TCS through book adjustment. Generally, the Central Government DDOs report TDS through book entry to their respective Pay and Accounts Officers (PAOs) and the State Government DDOs report TDS through book entry to their respective District Treasury Officers(DTOs). Such PAOs and DTOs are required to file Form 24G on monthly basis.
There are also cases of Cheque Drawing and Disbursing Officers (CDDOs) who report TDS through book entry directly to State AG. For example, PWD, Forest Department etc. Such CDDOs are also required to file Form 24G on monthly basis. Schematic Diagram at Annexure-III clarifies the person responsible for filing Form 24G in different scenarios.
3. Can the same office/officer also act as DDO and AO?
Ordinarily, the PAO office is the one to whom the DDO reports the TDS and therefore, both should be from different offices. However, where the DDO and AO are the same, as in the case of CDDOs, the statistics report of Form 24G should be counter signed by his superior officer.
4. What is AIN and who should apply?
Accounts Office Identification Number (AIN) is a unique seven digit which is allotted by the Directorate of Income Tax (Systems), Delhi, to every AO. Each AO is uniquely identified in the system by this number. AOs are required to apply for AIN with jurisdictional TDS office. The AIN application can be downloaded from TIN site. Every AIN holder is required to file Form 24G.
Each DDO is identified in the system by a Tax Deduction and Collection Account Number (TAN). This number is allotted by Income Tax Department.
5. Where should the Accounts Office Identification Number (AIN) application be submitted ?
The duly filled and signed application for AIN allotment is to be submitted in physical form by the PAO / CDDO / DTO to the jurisdictional CIT (TDS). Complete and correct AIN application forms will be forwarded by the jurisdictional CIT (TDS) to NSDL e-Governance Infrastructure Limited (NSDL), Times Tower, 1st Floor, Kamala Mills Compound, SenapatiBapatMarg, Lower Parel, Mumbai – 400013 recommending allotment of AIN to the PAO / CDDO / DTO.
6. What information should be submitted through Form 24G?
Every AO should furnish one complete, correct and consolidated Form 24G every month having details of each type of deduction / collection separately viz. TDS-Salary / TDS-Non Salary / TDS-Non Salary Non Residents / TCS made by each DDO under his jurisdiction.
7. Where should Form 24G be submitted?
Form 24G is to be furnished only in electronic form in a CD/pen drive at TIN-FCs or online through AO Account at www.tin-nsdl.com web portal. The facility to submit Form No. 24G online is available free of cost. Provisional Receipt Number (PRN) is issued as an acknowledgement of the receipt of Form 24G.
8. How to register for online facility?
Registration for AO Account is mandatory for filing Form No. 24G online through TIN website, www.tin-nsdl.com. Registration AO Account is required once only. AO required to submit the Form No. 24G at TIN-FC at least once to comply with the Know Your Customer (KYC) norms for registration of the AO Account. After registration, it is optional for AO either to submit the Form No.24G in CD/Pen drive at TIN-FC or online.
9. What are the functionalities available with AO Account?
Through the AO Account, the AO can view the status of Form No. 24G filed, obtain BIN (Book Identification Number) details, update AO profile and upload Form No. 24G. The status tracking is based on AIN and concerned Provisional Receipt Number (PRN) of Form 24G.
10. Can the AO furnish Form No. 24G in paper form?
No. Form 24G is to be filed only in electronic form.
11. Can the AO submit the electronically prepared Form No.24G at the Income Tax Office? No. Electronically prepared Form No.24G can only be submitted at TIN-FC or online .
12. What does Form 24G contain?
Every Form 24G should be prepared in accordance with the data structure prescribed by the Income Tax Department (ITD). Form 24G contains-
 Details of the AO filing Form 24G (AIN, name, demographic information, contact details).
 Category of AO (Central / State Government) along with details of ministry / state.
 Statement details (month and year for which Form 24G is being filed).
 Payment summary; nature of deduction wise (TDS – Salary /TDS Non-salary / TDS – Non-salary Non-resident / TCS).
 DDO wise payment details (TAN of DDO, name, demographic details, total tax deducted and remitted to the Government account (A.G. / Pr.CCA).
 DDOs which are associated with the AO. If the AO wants to add/delete or update details of DDO, same should be mentioned in the statement.
13. What is the procedure to prepare the Form 24G statement?
The AOs can prepare Form 24G either by using in-house facilities, third party software or by using Form 24G Preparation Utility developed by NSDL, which is freely downloadable from the TIN web-site (www.tin-nsdl.com) or ITD website (www.incometaxindia.gov.in).
Once the statement is prepared, the AO shall validate the same by using File Validation Utility (FVU) developed by NSDL and freely available at the TIN or ITD website. The statement can be furnished in Compact Disk (CD) at any of the TIN-Facilitation Centres (TIN-FC) managed by NSDL along with Form 24G Statement Statistics Report (generated through File Validation Utility), duly signed by the AO. The list of TIN-FCs is available at TIN or ITD website.
Once Form 24G is accepted by the TIN-FC, it will issue a provisional receipt with a unique Provisional Receipt Number (PRN) to the AO as a proof of submission of the statement.
14. What is Form 24G Preparation Utility?
The Form 24G Preparation Utility is a Java based utility. Form 24G Preparation Utility can be freely downloaded from www.tin-nsdl.com. After downloading, it needs to be saved on the local disk of the machine.
JRE (Java Run-time Environment) [versions: SUN JRE: 1.4.2_02 or 1.4.2_03 or 1.4.2_04 or IBM JRE: 1.4.1.0] should be installed on the computer where Form 24G Preparation Utility is being installed. JRE is freely downloadable from http://java.sun.com and http://www.ibm.com/developerworks/java/jdk or you can ask your computer vendor (hardware) to install the same for you.
Form 24G Preparation Utility can be executed on Windows platform(s) Win 2K Prof. / Win 2K Server/ Win NT 4.0 Server/ Win XP Prof. To run the ‘Form 24G Preparation Utility’, click on the ‘24GRPU.bat’ file.
If JRE is not installed on the computer, then on clicking ‘24GRPU.bat’, a message will be displayed. In such cases, install JRE and try again. If appropriate version of JRE is installed, then the ‘Form 24G Preparation Utility’ will be displayed.
15. What are the steps to download and install Form 24G Preparation Utility?
For assistance in downloading and using Form 24G Preparation Utility, please read the instructions provided in ‘Help’ in the Form 24G Preparation Utility. This utility can be used for preparation of Form 24G with upto 75,000 records. Form 24G Preparation Utility (version 1.2) should be used for regular and correction statements.
16. What is File Validation Utility (FVU)?
The AO should pass the Form 24G (Regular/Correction) file generated using Preparation Utility through the File Validation Utility (FVU) to ensure format level accuracy of the file. This utility is also freely downloadable from TIN website. In case the Form 24G contains any errors, the AO should rectify the same. After rectifying the errors, user should pass the rectified Form 24G through the FVU. This process should be continued till an error-free Form 24G is generated. Form 24G (regular/correction) prepared from F.Y. 2005-06 onwards can be validated using this utility.
The Form 24G FVU is a Java based utility. JRE (Java Run-time Environment) [versions: SUN JRE: 1.4.2_02 or 1.4.2_03 or 1.4.2_04 or IBM JRE: 1.4.1.0] should be installed on the computer where the Form 24G FVU is being installed. JRE is freely downloadable from http://java.sun.com and http://www.ibm.com/developerworks/java/jdk or you can request your computer vendor (hardware) to install the same for you.
The Form 24G FVU setup comprises of two files, namely-
 Form 24G FVU.bat: This is a setup program for installation of FVU.
 Form 24G_FVU_STANDALONE.jar: This is the FVU program file.
These files are in an executable zip file (Form24GFVU.exe) (version 1.2). These files are required for installing the Form 24G FVU.
Instructions for extracting and setup are given in:
 Form 24G FVU Extract and Setup
17. After preparation of Form No. 24G statement through RPU, three files are generated when such statement passes through FVU. Is the AO required to take all three files in CD /Pen drive to TIN-FC?
When a valid file is passed through the FVU, the following three files are generated:-
(a) The upload file
(b) Form 24G statement Statistics Report and
(c) Form 24G.
Every Form 24G (upload file) mentioned at Sr. No. (a) is to be saved in CD and the same should be accompanied with the Statement Statistic Report mentioned at Sr. No. (b), in paper form duly signed by the Accounts Officer, which needs to be submitted at TIN-FCs.
Form 24G: Form 24G, at serial number (c) above, is a reader friendly format of TDS/TCS Book Adjustment form. This is like the physical form of Form 24G in html format. It contains all the details of Accounts Officer as well as Drawing and Disbursement Officer. There is no need to submit this file.
18. Can the Form 24G Statement be corrected?
Every Form 24G is to be prepared in accordance with the data structure prescribed by the Income Tax Department (ITD). If it does not confirm to the new data structure it will be rejected by TIN.
As per procedure, statements relating to Form 24G should be complete and correct. No fragmented statements are expected to be filed (i.e. separate statements giving details for deductions under different form type with respect to the same AIN, FY and month). However, any mistake made in an original accepted statement can be rectified by submitting a ‘correction statement’. For correction, the latest version of the RPU should be downloaded from TIN website.
Form 24G corrections can also be uploaded directly at the TIN website. For direct upload at TIN Central system, AO has to first register AIN at TIN website and upload the Form 24G correction.
19. What are the different kinds of correction statements allowed?
There are two different types of correction statements that can be furnished by the AO. These are listed below.
 M (Modify) -: For any modification in the existing Form 24G statement.
 X (Cancel) -: For cancellation of an existing Form 24G statement.
For preparation of correction statement, the receipt number of the original statement and receipt number of the previous statement is mandatory.
In case of first correction, PRN of original statement should be provided in field “Receipt number of Original Statement” and also in the field “Receipt number of Previous Statement “.
In case a correction statement has already been filed earlier, PRN of original statement should be provided in field “Receipt number of Original Statement” and PRN of last correction to be mentioned in field “Receipt number of Previous Statement”.
20. What is M –Type of Correction Statement?
This type of correction statement is to be furnished by AO, if it wishes to update any of its details like its name, address, Responsible person details, category, Ministry, State or deletion and addition of DDO (Drawing & Disbursing Officer) etc. Modifications in AIN (Account office Identification Number), Financial Year and Month are not allowed.
There are three modes by which changes can be made in the DDO details provided in original Form 24G statement:
 Add: DDO records can be added to the original Form 24G statement
 Update: details of DDO (i.e. TAN, TAN Name, demographic and contact details, amount of tax deducted and remitted, nature of deduction) can be updated for the DDO records provided in original or subsequent correction statement
 Delete: DDO records provided in original Form 24G or subsequent correction statement can be deleted
M-type correction statement will always contain AO details and details of DDO which are added and/or deleted.
21. What is X–Type of Correction Statement?
This type of correction statement is to be furnished by AO if it wishes to cancel an existing Form 24G statement. Filing of Correction type X will allow AOs to file regular Form 24G for the same primary key (AIN, Financial year and Month). This type of correction is to be filed only if the Form 24G has been filed with wrong AIN, F.Y. or Month.
22. What is BIN?
BIN stands for “Book Identification Number” for each form type mentioned in the accepted monthly form No. 24G. BIN consists of the following:
(i) Receipt Number: Receipt number is a seven digit unique number generated on successful acceptance of Form 24G.
(ii) DDO Serial Number: It is a five digit unique number generated for every DDO transaction reported in Form 24G statement.
(iii) Transfer Voucher Date: It is the last date of month for which Form 24G statement is filed.
BIN is required to be disseminated to the respective DDOs who in turn are required to report the same in the TDS/TCS Statement. The quoting of BIN has been made mandatory w.e.f 01stFebruary, 2012. BIN is a unique number to verify the claim of TDS deposited without production of challan. As it is a verification key, it is advised that valid BIN disseminated by AO to the respective DDO should be correctly filled in TDS statement.
23. When is BIN generated?
On processing of accepted Form 24G statement, BIN is generated for each DDO record (with valid TAN) present in Form 24G statement. BIN are generated at TIN Central System and intimated to the PAOs with details of TAN and Form Type.
24. What do the PAO and DDO have to do with the BIN?
PAOs have to disseminate the BINS to respective DDOs. While preparing the quarterly TDS/TCS statement, DDO has to quote the said BIN details, if tax has been paid through transfer voucher (book adjustment).
BINs generated for a particular 24G are mailed to the AO on the e-mail id provided in Form 24G. In addition, AO may also download the BIN details through AO login at TIN site.
25. Under what circumstances will BIN be generated?
 BIN will be generated for valid TAN-DDO records added in Form 24G correction statement.
 BIN will be generated for DDO records where invalid TANs/TAN not present in Income Tax Department database is updated with a valid TAN.
 New BIN will not be generated for any update made in TAN name, demographic and contact details, amount of Tax deducted and remitted or nature of deduction.
 BIN details will not be generated for deleted DDO records.
26. What is the utility of BIN?
The BIN details and amount of TDS reported in the quarterly TDS/TCS Statement filed by the DDO will be matched with the respective details filed in Form No.24G filed by the PAO for verification purpose.
27. Are there instances where BIN details and amount of TDS reported in TDS/TCS statements do not match with that reported in Form 24G? What are the consequences of such mismatch?
(i) Instances of wrong/incorrect reporting of BIN by the DDOs in the TDS/TCS Statement have been observed. Reporting of incorrect BINs and corresponding amount in TDS statement will lead to mismatch with the respective amount as reported in the Form No. 24G. In this situation, the corresponding deductees may not get credit of the TDS/TCS. Therefore, the BIN as disseminated by the respective PAO should be reported correctly along with the corresponding amount in the TDS/TCS Statement filed by the DDOs.
(ii) In a number of cases, one distinct DDO has been found to be reported by more than one AO in the Form No. 24G for the same form type of TDS statement which is not a valid scenario. The DDOs and respective AOs are advised to reconcile the issue and one DDO should be mapped to one AO only for a particular form type for a particular month.
28. What are the duties of PAOs/DTOs/CDDOs?
i. To apply for AIN with jurisdictional TDS office. AIN application can be downloaded from TIN site.
ii. To obtain correct TAN from the reporting DDOs.
iii. To file Form No. 24G (in CD, DVD, Pen Drive), within 10 days from the end of the month, electronically either at TIN-FC or by direct online upload at TIN website.
iv. To track status of the filed Form No. 24G through TIN website.
v. To download Book Identification Number (BIN) generated on the basis of 24G statement.
vi. To disseminate BIN to the respective DDOs.
29. What are the duties of DDOs?
i. To provide correct TAN to their PAOs/DTOs/CDDOs to whom the DDO/Deductor reports the tax so deducted & who is responsible for crediting such sum to the credit of the Central Government.
ii. To report to PAOs/DTOs/CDDOs, the details of tax deducted and credited to the Central Government account through book adjustment.
iii. To quote BIN in the quarterly TDS/TCS Statement (24Q, 26Q, etc) for the tax deducted and credited through book adjustment.
iv. Filing of TDS/TCS statement (24Q, 26Q etc) within the due date.
v. To download Form 16/26A from TRACES website (www.tdscpc.gov.in) and timely issuance of the same to the deductees.
30. What are the consequences of non-quoting of BIN details in quarterly TDS/TCS statement?
(a) BIN details and amount of TDS reported in the quarterly TDS/TCS Statement filed by the DDO will be matched with the details filed in Form No.24G filed by the PAO for verification purpose.
(b) Any wrong information reported by the DDOs in TDS/TCS Statement may lead to mismatch due to which credit to the respective deductee will not be available in the deductee’s Form 26AS.
(c) Further details are available at TIN website www.tin-nsdl.com and ITD website www.incometaxindia.gov.in.
31. What is the format of Form 16/16A to be issued to the deductees?
It is mandatory to download and generate the Form 16/16A from the TRACES portal only. Deductor is allowed to issue manually only part ‘B’ of Form 16 for salary details.
32. Is there any scenario where the DDO is also required to obtain the AIN?
Yes, if the deductor is in the capacity of CDDO and directly reports tax deduction through transfer voucher to State AG, in that case CDDO is required to obtain the AIN and file 24G for the respective book adjustment entries and then also required to file the TDS/TCS statement as a TAN holder.
For example in the case of Executive Engineer in state Government who are making payments to the contractors after deducting the TDS/TCS through cheque are liable to file Form 26Q for reporting such TDS transactions. They will be required to obtain the AIN and file form 24G for monthly reporting of these book adjustment entries and file quarterly TDS statements as TAN holder by quoting the corresponding BINs.
***
ANNEXURE V
“Person Responsible for filing Form No. 24G in case of State Govt. Departments”
F
E
A
D
C B
Type of Reporting of Book Entry
Person Responsible (AIN holder) for filing 24G.
A
PAO / DTO
B
PAO / DTO
C
PAO / DTO
D
PAO / DTO
E
CDDO
F
STO
AG
Accountant General
PAO
Pay & Accounts Officer
DTO
District Treasury Office
STO
Sub Treasury Office
DDO
Drawing & Disbursing Officer
CDDO
Cheque Drawing & Disbursing Officer
AG (State)
PAO/DTO
Sub Treasury Office
CDDO
CDDO
DDO
ANNEXURE VI
POINT NO.4.9 OF DRAFT CIRCULAR OF DEDUCTION OF TAX AT SOURCE FROM SALARIES U/S 192 OF THE INCOME TAX ACT, 1961 – FINANCIAL YEAR 2015-16- PROCEDURE OF PREPARATION OF QUARTERLY STATEMENT OF DEDUCTION OF TAX UNDER SECTION 200(3) OF THE ACT
1. Quarterly e-TDS statement/return should be prepared by Deductor/DDO as per the data structure (File Format) prescribed by the DIT (Systems), Delhi which is available on TIN website www.tin-nsdl.com. Deductor/DDO can prepare e-TDS statement/return either by using in-house facilities, third party software or by using Return Preparation Utility (RPU) developed by NSDL e-Governance Infrastructure Limited (NSDL), which is freely downloadable from the TIN website.
After preparation of e-TDS statement/return, the Deductor/DDO is required to validate the same by using the File Validation Utility (FVU) which is freely available on TIN website.
2. Procedure of furnishing of e-TDS statement/return at TIN Facilitation Centres (TIN-FCs):
Once file is validated through FVU, ‘.fvu file’ is generated. Copy of this ‘.fvu file’ in CD/DVD/Pen Drive along with physical Form 27A duly filled and signed by the Deductor/DDO or by the person authorized by the Deductor/DDO, to be furnished at TIN-FC, an acknowledgement containing a unique 15 digit token number is provided to the Deductor/DDO. Deductor/DDO can view the status of e-TDS statement/return on TIN website.
Only one regular e-TDS statement/return for a ‘FY-Quarter-TAN-Form’ can be submitted.
2.1 Correction in e-TDS statements/returns:
2.1.1 CPC-TDS portal (www.tdscpc.gov.in) has also introduced online correction of statements whereby personal information, PAN correction, add/update of challan information, add/update of salary detail, add/update/movement of deductee row etc. can be done in the statements filed by the deductors, with or without the digital signatures. For further details, kindly refer the matrix below:
Default Summary View
Personal Information
Challan Correction (Unmatched, matched Deductee + Deductee Movement
PAN Correction (Annex.I)
PAN Correction (Annex. II)
Add Challan to statement
Interest, Levy Payment
Modify/Add deductee rows
Delete/Add salary deducted rows
Online Correction (with digital signature, 2013-14 onwards)
Y
Y
Y
Y
Y
Y
Y
Y
Y
Online Correction (with digital signature, prior to 2013-14 onwards)
Y
Y
Y
N
N
Y
Y
N
N
Online Correction (without digital signature, 2013-14 onwards)
Y
N
Y
N
N
Y
Y
N
N
Online Correction (withoutdigital
Y
N
Y
N
N
Y
Y
N
N
signature, prior to 2013-14 onwards)
For more information, deductors are advised to refer to e-tutorials/FAQs available on TRACES portal. Online correction entails no charges and does away with the requirement of downloading conso file and visiting TIN-FCs.
2.1.2 With effect from 1st January, 2015, TRACES will be providing a correction window of 7 days from date of processing at CPC-TDS (generally 2 days after date of filing of statement). This facility will enable the filer to correct PAN errors and challan mismatch cases identified by CPC-TDS and avoiding of issuance of demand notices. Therefore, deductors are advised to check the processing status promptly so as to utilize this facility.
2.1.3 Deductor/DDO can also file a correction e-TDS statement for any modification in the e-TDS statement. Correction statement can be prepared by using the TDS Consolidated file that is available at TRACES (www.tdscpc.gov.in). Validation of correction statement is in line with regular e-TDS statement, physical Form 27A duly signed and Statement Statistical Report at TIN-FC. On successful acceptance of correction e-TDS statement at the TIN-FC, an acknowledgement containing a unique 15 digit token no. is provided to the Deductor/DDO. Deductor/DDO can view the status of e-TDS statement on TRACES website.
3. Procedure of preparation and furnishing of paper TDS statement/return at TIN-Facilitation Centres (TIN-FCs):
All statement/return in Form 24Q are required to be furnished in computer media except in case where the number of deductee records are equal to or less than 20. Paper statement/return duly filled and signed by the Deductor/DDO can be furnished at TIN-FC. On successful acceptance of paper statement/return at the TIN-FC, an acknowledgment containing a unique 15 digit token no. is provided to the Deductor/DDO. Deductor/DDO can view the status of paper statement/return on TIN website. No charges are applicable for paper TDS statement/return.
3.1 Correction in paper statements/returns:
The physical TDS statement/return is to be filed again in case of any correction to a physical TDS statement/return accepted at TIN. The deductor will submit the duly filled and signed physical TDS statement/return along with a copy of provisional receipt of regular paper statement/return at TIN-FC. On successful acceptance of correction paper statement/return at the TIN-FC, an acknowledgement containing a unique 15 digit token number is provided to the Deductor/DDO. Deductor/DDO can view the status of paper statement/return on TIN website.
4. Procedure of furnishing of e-TDS statement/return online at TIN website:
Deductor/DDO is required to procure Digital Signature Certificate (DSC) for online upload of e-TDS statement/return. After registration on TIN website, an authorization letter by the Deductor/DDO should be provided on the letter head of the organisation to NSDL. Once application is approved by NSDL, user ID is created and intimated to Deductor/DDO on their registered email ID provided at the time of registration. Preparation and validation of e-TDS statement is in line with regular e-TDS statement/return (submitted at TIN-FC).Deductor/DDO can login with its user ID and DSSC and upload the validated e-TDS file (.fvu file) generated by the FVU to the TIN website. On successful acceptance of e-TDS statement/return at TIN, an acknowledgement containing a unique 15 digit token no. and 8 digit receipt number is generated
and displayed. There is no need to submit physical form 27A in online upload. Deductor/DDO can view the status of e-TDS statement/return on TIN website.
No charges are applicable for online upload of e-TDS statement/return.
4.1 Correction of e-TDS statement/return online at TIN website:
Deductor/DDO can file a correction e-TDS statement/return for any modification in e-TDS statement/return accepted at TIN central system. Correction statement/return can be prepared by using the TDS consolidated file only, available at the CPC-TDS portal www.tdscpc.gov.in through TAN registration. Preparation and validation of e-TDS statement is in line with regular e-TDS statement/return (submitted at TIN-FC) Deductor/DDO can login with its user ID and DSC and upload the validated e-TDS file (.fvu file) generated by the FVU to the TIN website. On successful acceptance of correction e-TDS statement/return at TIN, an acknowledgement containing a unique 15 digit token number is generated and displayed. There is no need to submit copy of provisional receipt of regular e-TDS statement/return, physical Form 27A and SSR in online upload. Deductor/DDO can view the status of e-TDS statement/return on TIN website.
5. For FAQs and further details, Deductors/DDOs are advised to log on website www.tin-nsdl.com
*******
ANNEXURE-VII
MINISTRY OF FINANCE
(Department of Economic Affairs)
(ECB & PR Division)
NOTIFICATION
New Delhi, the 22nd December, 2003
F.No. 5/7/2003-ECB &PR- The government approved on 23rd August, 2003 the proposal to implement the budget announcement of 2003-04 relating to introducing a new restructured defined contribution pension system for new entrants to Central Government service, except to Armed Forces, in the first stage, replacing the existing system of defined benefit pension system.
i. The system would be mandatory for all new recruits to the Central Government service from 1stof January 2004 (except the armed forces in the first stage). The monthly contribution would be 10 percent of the salary and DA to be paid by the employee and matched by the Central government. However, there will be no contribution form the Government in respect of individuals who are not Government employees. The contribution and investment returns would be deposited in a non-withdrawable pension tier-I account. The existing provisions of defined benefit pension and GPF would not be available to the new recruits in the Central Government service.
ii. In addition to the above pension account, each individual may also have a voluntary tier-II withdrawable account at his option. This option is given as GPF will be withdrawn for new recruits in Central government service. Government will make no contribution into this account. These assets would be managed through exactly the above procedures. However, the employee would be free to withdraw part or all of the ‘second tier’ of his money anytime. This withdrawable account does not constitute pension investment, and would attract no special tax treatment.
iii. Individuals can normally exit at or after age 60 years for tier-I of the pension system. At the exit the individual would be mandatorily required to invest 40 percent of pension wealth to purchase an annuity (from an IRDA- regulated life insurance company). In case of Government employees the annuity should provide for pension for the lifetime of the employee and his dependent parents and his spouse at the time of retirement. The individual would receive a lump-sum of the remaining pension wealth, which he would be free to utilize in any manner. Individuals would have the flexibility to leave the pension system prior to age 60. However, in this case, the mandatory annuitisation would be 80% of the pension wealth.
Architecture of the new Pension System
(i) It will have a central record keeping and accounting (CRA) infrastructure, several pension fund managers (PFMs) to offer three categories of schemes viz. option A, B and C.
(ii) The participating entities (PFMs and CRA) would give out easily understood information about past performance, so that the individual would be able to make informed choices about which scheme to choose.
2. The effective date for operationalization of the new pension system shall be form 1st of January, 2004.
U.K. SINHA, Jt. Secy.
ANNEXURE-VIII
MINISTRY OF FINANCE
Department of Revenue
(Central Board of Direct Taxes)
Notification
New Delhi, the 24th November, 2000
INCOME- TAX
S.O.1048 (E) – In exercise of the powers conferred by sub-clause (i) of clause (18) of Section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government, hereby specifies the gallantry awards for the purposes of the said Section, mentioned in column 2 of the table below awarded in the circumstances as mentioned in corresponding column 3 thereof:-
Table
———————————————————————————————————————-
Sl. No. Name of gallantry award Circumstances for eligibility
———————————————————————————————————————-
(1) (2) (3)
———————————————————————————————————————-
1. Ashok Chakra When awarded to Civilians for gallantry
2. Kirti Chakra – do -
3. Shaurya Chakra – do -
4. SarvottanJeevanRaksha When awarded to Civilians for bravery
Padak displayed by them in life saving acts.
5. UttamJeevanRaksha Medal – do -
6. JeevanRakshaPadak – do -
7. President’s Police Medal When awarded for acts of exceptional
for gallantry courage displayed by members of police
forces, Central police or security forces and certified to this effect by the head
of the department concerned
.
8. Police Medal for Gallantry – do -
9. Sena Medal When awarded for acts of courage or
conspicuous gallantry and supported
by certificate issued to this effect by
relevant service headquarters.
10. NaoSena Medal – do -
11. VayuSena Medal – do –
12. Fire Services Medal for Gallantry When awarded for acts of courage or conspicuous gallantry and supported by certificate issued to this effect by the last Head of Department.
13. President’s Police & Fire -do-
Services Medal for Gallantry
14. President’s Fire Services Medal for
Gallantry -do-
15. President’s Home Guards and -do-
Civil Defence Medal for Gallantry
16. Home Guard and Civil Defence
Medal for Gallantry -do-
( Notification no. 1156/F.No. 142/29/99-TPL)
T.K. SHAH
Director
ANNEXURE IX
MINISTRY OF FINANCE
Department of Revenue
Central Board of Direct Taxes
New Delhi,the 29th January,2001
S.O.81(E)- In exercise of the powers conferred by sub-clause (i ) of clause (18) of Section 10 of the Income –tax Act, 1961 (43 of 1961)), the Central Government, hereby specifies the gallantry awards for the purposes of the said Section and for that purpose 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) number S.O.1048(E), dated the 24th November 2000, namely:-
In the said notification, in the Table, against serial numbers 1,2 and 3 under column (3) relating to “Circumstances for eligibility” the words “to civilians” shall be omitted.
(Notification No.22/F.No.142/29/99-TPL)
T.K. SHAH
Director
ANNEXURE-X
FORM NO. 10BA
(See rule 11B)
DECLARATION TO BE FILED BY THE ASSESSEE
CLAIMING DEDUCTION U/S 80 GG
I/We…………………………………………………………………………………………………..
( Name of the assessee with permanent account number)
do hereby certify that during the previous Year………….I/We had occupied the premise………………………….(full address of the premise) for the purpose of my/our own residence for a period of…………………..months and have paid Rs. ………………. In cash/through crossed cheque, bank draft towards payment of rent to Shri/Ms/M/s……………………….(name and complete address of the landlord).
It is further certified that no other residential accommodation is owned by
a) me/my spouse/my minor child/our family (in case the assessee is HUF), at ………………….where I/we ordinarily reside/perform duties of officer or employment or carry on business or profession, or
b) me/us at any other place, being accommodation in my occupation, the value of which is to be determined u/s 23(2)(a)(i) of u/s 23(2)(b).
**********

RBI-Recruitment of Assistants – 2015: Display of Roll Numbers of Provisionally Selected Candidates for Appointment in the Bank

We refer to the advertisement dated June 12, 2015 published on our website www.rbi.org.in inviting applications for the posts of Assistant.

On the basis of performance of the candidates in the online test and interview, the list of provisionally selected candidates for the above post and the Cut off in the online examination applied for calling candidates for interview in respect of each category Centre –wise is given in the link provided below.

Roll numbers of Provisionally Selected Candidates and Cut – off marks for being called for interview

This list is provisional, subject to the candidates being found medically fit and submitting acceptable documentary evidence in respect of all eligibility criteria such as Age, Educational qualification, Category, Caste Certificate as per the Government of India approved formats etc., relieving letter from the previous employer (if employed with a Government Organisation/PSU) as stipulated in our advertisement referred to above. It may please be noted that in the absence of required certificates/documents, candidates may not be appointed in the Bank.

Offers of appointment to the provisionally selected candidates are being sent to their postal addresses available with us. Decision of the Bank in all matters pertaining to selection process shall be final and binding.

Individual Mark sheet for the above result will be displayed on the website within a fortnight.

We congratulate all the candidates who have made it to the Select List.

Reserve Bank of India
Human Resource Management Department
Central Office
Mumbai

Disclaimer: Though utmost care has been taken while preparing the list of successful candidates, the Bank reserves the right to rectify inadvertent errors, if any.


Recruitment of Assistant
(Online Examination held on August 01, 08 & 09 2015)
Roll Numbers of Finally Selected Candidates

Ahmedabad
1580304650 1580500898 1580703463 1580707764 1660700267 1680700140
1580308922 1580500914 1580703490 1580710654 1661500072 1680701309
1580308948 1580505012 1580703874 1590700406 1670301305 1690301355
1580309192 1580509791 1580705464 1620500527 1670702120 1690501398
1580500819 1580701392 1580707372 1650400148 1680300050 1690501402

 

Bengaluru
2010108281 2010503799 2010701966 2010705120 2030100781 2140100043
2010200009 2010503819 2010702092 2010709998 2040100292 2140102404
2010303634 2010503936 2010702121 2010712901 2041500448 2160700178
2010308836 2010503949 2010702132 2010713580 2110500730 2200100003
2010308980 2010511962 2010704609 2011505610 2120501009 2210500254
2010500901 2010512411 2010704652 2011510784 2130500138
2010501397 2010512657 2010704903 2020700793 2131300666

 

Bhopal
1530500107 1540300794 2380702335 2380708504 2400705485 2410502352
1540100736 2380106806 2380708015 2400502815

 

Bhubaneshwar
2660700406 2680103462 2680311497 2680704169 2681508364 2700700706
2660700574 2680111210 2680509268 2680708272 2700300632 2730300253
2670700240 2680303452 2680701706 2681508113 2700700320 2740500187
2680100271 2680310985

 

Chandigarh
1500102566 1501503609 1740500136 1800700641 2820101348 2870101181
1500511612 1700102089 1740700647 1800700643 2820501522 2870700506
1500705741 1700701987 1750701366 1830100316 2820502119 2870700541
1500706093 1710500371 1750701394 1850700596 2820504089 2870701971
1500708180 1730500823 1770102094 1880100111 2830100209 2910700823
1501304501 1730700134 1771300603 2810701496 2840102581

 

Chennai
2780500972 3050304303 3050508491 3050705953 3051317184 3130101568
2780700415 3050501402 3050511325 3050708912 3060700966 3130101649
3050100211 3050502347 3050514514 3050712186 3070500044 3180500624
3050110519 3050504581 3050515161 3050716881 3090503301 3201300656
3050110806 3050507608 3050705613 3050716914 3120500850 3210500522
3050113199

 

Guwahati
1310700801 1330302941 1330703200 1350300011 1370700097 2610600126
1330301143 1330501994 1340700110 1370100011

 

Hyderabad
1130500061 1170203601 1180701772 1200703376 1280500132 3260717759
1150100032 1170500824 1190700466 1200704648 3260311015 3260722283
1150500718 1170503279 1190701933 1201503585 3260516615 3260722565
1150700810 1170504226 1190801520 1210103348 3260517313 3261508652
1150703713 1180100480 1200102910 1220501169 3260703720 3280301186

 

Jaipur
2920101474 2970316009 2970517829 2970704265 2970718113 2980700329
2920101574 2970321915 2970522250 2970708423 2970718182 2980701343
2920102075 2970503269 2970522511 2970709427 2970719218 2990302368
2970110465 2970508068 2970522775 2970709543 2970800045 3010700307
2970311547 2970517332 2970703916 2970713870 2970914576 3030702126

 

Jammu
1920700057 1940500784 1940501600 1940701359 1940702240 1941502070
1940301241 1940501526 1940701274 1940701936

 

Kanpur & Lucknow
3310100306 3420106749 3421503921 3430511271 3430716523 3560700198
3310701213 3420107316 3430501537 3430511470 3430716752 3560701107
3330504931 3420109940 3430501661 3430514777 3460100251 3560701538
3370700262 3420510737 3430504860 3430702935 3500700228 3570700329
3370701406 3420701716 3430508260 3430705834 3530700765 3570700631
3380501267 3420711183 3430508294 3430715724 3540100110
3420104249 3420711684 3430511221 3430716221 3560101736

 

Kolkata
3580700128 3620701292 3650104774 3650312562 3650512814 3650710393
3590500890 3640100169 3650104786 3650505381 3650702234 3650714046
3600100168 3640701572 3650104934 3650505526 3650702555 3650714193
3610700328 3640701604 3650108394 3650509182 3650710179 3650714269
3620100374 3650104190 3650312544 3650509268 3650710226 3660700880

 

Mumbai
2440501547 2470500652 2470810531 2480312109 2510102130 2510701284
2440702657 2470529413 2471509403 2480509186 2510109879 2510702807
2440703862 2470701738 2471515495 2480509202 2510110511 2510705616
2440704323 2470702977 2471521555 2490100487 2510307638 2510705927
2450304041 2470704856 2471528120 2490100581 2510310919 2510706136
2470117029 2470705547 2480100120 2490701518 2510500948 2510708691
2470122341 2470715078 2480101450 2490701740 2510508006 2510709344
2470126372 2470718417 2480104939 2500302826 2510508045 2510712111
2470129299 2470719133 2480104983 2500700751 2510508074 2510713060
2470300537 2470720997 2480107486 2500703984 2510508387 2510713065
2470304700 2470725179 2480110807 2501304062 2510511487 2511513689
2470314064 2470725815 2480111285 2510100035 2510511881
2470320189 2470730709 2480115105 2510100249 2510609623
2470329832 2470810527 2480312072 2510100417 2510701033

 

Nagpur
1510700358 2380708632 2450704709 2480706814 2480713438 2480803554
1510800466 2390700539 2471323679 2480709736 2480716766 2481503531
1530700164 2400703125 2480509319 2480712951 2480717838 2481513671
1540700416 2410701175 2480603593 2480713012 2480803552 2511313659
2380702849

 

New Delhi
1700501579 1760500554 2650137505 2650529513 2650719194 2650739243
1710500302 2650103185 2650500169 2650534294 2650719267 2650740915
1710500317 2650111108 2650503271 2650709356 2650721564
1730500437 2650120032 2650526458 2650710856 2650723745
1730700310 2650136842 2650528472 2650719000 2650731590

 

Patna
1400500168 1440701874 1450508108 1450709315 1970100948 2000102325
1400701253 1441501933 1450508521 1450712364 1990300910 2000103472
1420500770 1450110011 1450513829 1450712506 1990500311 2000304113
1440501661 1450504326 1450705417 1960700734 1990701074 2000704738
1440701778

 

Thiruvananthapuram & Kochi
2220700233 2240703531 2271501138 2310700555 2320700639 2320802886
2240500153 2241503746 2290700324 2310700964 2320701586 2321301884
2240702249 2250700619 2300100003 2320100084 2320701622 2321503821
2240703031 2270500355 2300500103 2320102987 2320701874 2330700421
2240703154 2270701382 2301300873 2320500279 2320703690 2330700776

Cut off Marks of the provisionally selected candidates – Centre – wise- Assistant-2015

Centre Gen SC ST OBC PWD EXS
Ahmedabad 158.00 —- 118.25 147.50 89.75 118.00
Bengaluru 150.75 134.00 133.25 142.75 113.75 107.25
Bhopal 169.00 152.75 147.00 160.50 113.50 124.50
Bhubaneshwar 169.25 153.25 135.75 165.50 142.75 103.25
Chandigarh 171.50 148.50 —- 158.50 106.50 137.25
Chennai 163.25 150.00 137.75 159.75 114.75 127.25
Guwahati 161.75 142.25 136.75 151.25 105.50 127.75
Hyderabad 169.00 156.25 139.00 163.25 158.00 87.75
Jaipur 169.00 146.75 142.00 163.50 141.75 109.25
Jammu 163.75 118.50 135.25 96.75 108.25
Kanpur & Lucknow 170.25 150.25 —- 162.00 130.00 82.25
Kolkata 169.25 150.50 137.25 157.50 84.50 131.75
Mumbai 155.50 143.75 119.75 150.75 120.50 126.00
Nagpur 154.50 —- —- —- 110.00 86.50
New Delhi 170.75 146.50 —- 158.25 121.25 116.50
Patna 170.00 146.00 135.75 163.50 125.75 136.50
Thiruvananthapuram & Kochi 165.00 147.75 —- 129.25 130.75

Disclaimer: Though utmost care has been taken while preparing the result, the Bank reserves the right to rectify inadvertent errors, if any.

Income-tax (18th Amendment) Rules, 2015

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION NO. 89/2015

New Delhi, the 2nd December, 2015

Income-tax

G.S.R. 923(E).-In exercise of the powers conferred by section 282 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend theIncome-tax Rules, 1962, namely:-

1.        (1) These rules may be called the Income-tax (18th Amendment) Rules, 2015.

(2) They shall come into force on the date of publication in the Official Gazette.

2.        In the Income-tax Rules, 1962, after rule 126, following rule shall be inserted, namely:-

“Service of notice, summons, requisition, order and other communication.

127. (1) For the purposes of sub-section (1) of section 282, the addresses (including the address for electronic mail or electronic mail message) to which a notice or summons or requisition or order or any other communication under the Act (hereafter in this rule referred to as “communication”) may be delivered or transmitted shall be as per sub-rule (2).

(2) The addresses referred to in sub-rule (1) shall be-

(a) for communications delivered or transmitted in the manner provided in clause (a) or clause (b) of subsection(1) of section 282-

(i) the address available in the PAN database of the addressee; or

(ii) the address available in the income-tax return to which the communication relates; or

(iii) the address available in the last income-tax return furnished by the addressee; or

(iv) in the case of addressee being a company, address of registered office as available on the website of Ministry of Corporate Affairs:

Provided that the communication shall not be delivered or transmitted to the address mentioned in item (i) to (iv) where the addressee furnishes in writing any other address for the purposes of communication to the income-tax authority or any person authorised by such authority issuing the communication;

(b) for communications delivered or transmitted electronically-

(i) email address available in the income-tax return furnished by the addressee to which the communication relates; or

(ii) the email address available in the last income-tax return furnished by the addressee; or

(iii) in the case of addressee being a company, email address of the company as available on the website of Ministry of Corporate Affairs; or

(iv)any email address made available by the addressee to the income-tax authority or any person authorised by such income-tax authority.

(3) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall specify the procedure, formats and standards for ensuring secure transmission of electronic communication and shall also be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to such communication.”

F. No. 133/79/2015-TPL]

EKTA JAIN, Dy. Secy

Auditing and Assurance Standards Board issues Exposure Drafts of New/Revised Standards on Auditing for Comments

FOR THE ATTENTION OF THE MEMBERSAuditing and Assurance Standards Board issues Exposure Drafts of New/Revised Standards on Auditing for Comments

The Auditing and Assurance Standards Board of the ICAI is issuing the Exposure Drafts of following new/revised Standards on Auditing (SAs) for comments.

S.N. Standard
1 Revised SA 700, Forming an Opinion and Reporting on Financial Statements Click here for Exposure Draft
2 New SA 701, Communicating Key Audit Matters in the Independent Auditor’s Report Click here for Exposure Draft
3 Revised SA 705, Modifications to the Opinion in the Independent Auditor’s Report Click here for Exposure Draft
4 Revised SA 706, Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report Click here for Exposure Draft
5 Revised SA 260, Communication with Those Charged with Governance Click here for Exposure Draft
6 Revised SA 570, Going Concern Click here for Exposure Draft

The comments on these Exposure Drafts can be sent latest by January 18, 2016 at the following address:

Secretary, Auditing and Assurance Standards Board
The Institute of Chartered Accountants of India
ICAI Bhawan, A-29, Sector-62,
NOIDA, Uttar Pradesh – 201 309
The comments can also be sent by email at: aasb@icai.in

(CA. ABHIJIT BANDYOPADHYAY)
Chairman, Auditing and Assurance Standards Board
The Institute of Chartered Accountants of India

RBI-Regional Rural Banks – Priority Sector Lending – Targets and Classification

RBI/2015-16/257
FIDD.CO.Plan.BC.No.14/04.09.01/2015-16

December 3, 2015

The Chairman
All Regional Rural Banks

Dear Sir/Madam,

Regional Rural Banks – Priority Sector Lending – Targets and Classification

During the last decade, Regional Rural Banks (RRBs) have undergone significant structural and operational changes, be it two-phased amalgamation, implementation of CBS platform or recapitalization, inter alia. Considering the growing significance of RRBs in pursuit of financial inclusion agenda, it has been decided to revise the priority sector guidelines for RRBs. Accordingly, the comprehensive revised guidelines on Priority Sector Lending – Targets and Classification for Regional Rural Banks are enclosed as Annex. The revised guidelines supersede all earlier guidelines mentioned in the Master Circular RPCD.CO.RRB.BC 5/03.05.33/2014-15 dated July 1, 2014 on Regional Rural Banks – Lending to Priority Sector.

Some of the salient features of the guidelines are as under:-

  1. Targets: 75 per cent of total outstanding to the sectors eligible for classification as priority sector lending and sub sector targets as indicated in subsequent paragraphs.
  2. Categories of the Priority Sector: Medium Enterprises, Social Infrastructure and Renewable Energy will form part of the Priority Sector, in addition to the existing categories, with a cap of 15 per cent of total outstanding.
  3. Agriculture: 18% per cent of total outstanding should be advanced to activities mentioned under Agriculture.
  4. Small and Marginal Farmers: A target of 8 percent of total outstanding has been prescribed for Small and Marginal Farmers within Agriculture.*
  5. Micro Enterprises: A target of 7.5 per cent of total outstanding has been prescribed for Micro Enterprises. **
  6. Weaker Sectors: A target of 15 per cent of total outstanding has been prescribed for Weaker Sections.
  7. Monitoring: Priority Sector Lending will be monitored on a quarterly as well as annual basis.

(* RRBs that have not achieved the 8 percent sub target may achieve the same in a phased manner i.e. 7 per cent by March 2016 and 8 per cent by March 2017.)

(**RRBs that have not achieved the 7.5 percent sub target may achieve the same in a phased manner i.e. 7 per cent by March 2016 and 7.5 per cent by March 2017.)

The revised guidelines will be operational with effect from January 1, 2016. The priority sector loans sanctioned under the guidelines issued prior to this date will continue to be classified under priority sector till repayment/maturity/renewal.

Yours faithfully,

(A. Udgata)
Principal Chief General Manager


Annexure

I. CATEGORIES UNDER PRIORITY SECTOR

  1. Agriculture
  2. Micro, Small and Medium Enterprises (MSMEs)
  3. Education
  4. Housing
  5. Social Infrastructure
  6. Renewable Energy
  7. Others

The details of eligible activities under the above categories are specified in Paragraph III.

II. Targets /Sub-targets for Priority sector

RRBs will have a target of 75 per cent of their outstanding advances for priority sector lending and sub-sector targets as indicated in table below.

Categories Targets
Total Priority Sector 75 per cent of total outstanding*
Agriculture 18 per cent of total outstanding
Small and Marginal Farmers 8 percent of total outstanding**
Micro Enterprises 7.5 per cent of total outstanding***
Weaker Sections 15 per cent of total outstanding

* The overall Priority Sector target may be achieved across all prescribed categories viz. – Agriculture, MSME, Education, Housing, Social Infrastructure, Renewable Energy and Others. However, lending to Medium Enterprises, Social Infrastructure and Renewable Energy shall be reckoned for priority sector achievement only up to 15 per cent of total outstanding.

** RRBs that have not achieved the 8 percent sub target may achieve the same in a phased manner i.e. 7 per cent by March 2016 and 8 per cent by March 2017.

*** RRBs that have not achieved the 7.5 percent sub target may achieve the same in a phased manner i.e. 7 per cent by March 2016 and 7.5 per cent by March 2017.

The computation of priority sector targets/sub-targets achievement will be based on the total outstanding as on the corresponding date of the preceding year.

III. Description of the eligible categories under priority sector

1. Agriculture

The lending to agriculture sector will be categorized as (i) Farm Credit (which will include short-term crop loans and medium/long-term credit to farmers) (ii) Agriculture Infrastructure and (iii) Ancillary Activities. A list of eligible activities under the three sub-categories is indicated below:

1.1 Farm credit A. Loans to individual farmers [including Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual farmers, provided banks maintain disaggregated data of such loans], directly engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture. This will include:
(i) Crop loans to farmers which will include traditional/non-traditional plantations and horticulture, and, loans for allied activities.
(ii) Medium and long-term loans to farmers for agriculture and allied activities (e.g. purchase of agricultural implements and machinery, loans for irrigation and other developmental activities undertaken in the farm, and developmental loans for allied activities.)
(iii) Loans to farmers for pre and post-harvest activities, viz., spraying, weeding, harvesting, sorting, grading and transporting of their own farm produce.
(iv) Loans to farmers up to ₹50 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months.
(v) Loans to distressed farmers indebted to non-institutional lenders.
(vi) Loans to farmers under Kisan Credit Card Scheme.
(vii) Loans to small and marginal farmers for purchase of land for agricultural purposes.

B. Loans to corporate farmers, farmers’ producer organizations/companies of individual farmers, partnership firms and co-operatives of farmers directly engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture up to an aggregate limit of ₹2 crore per borrower. This will include:
(i) Crop loans to farmers which will include traditional/non-traditional plantations and horticulture, and, loans for allied activities.
(ii) Medium and long-term loans to farmers for agriculture and allied activities (e.g. purchase of agricultural implements and machinery, loans for irrigation and other developmental activities undertaken in the farm, and developmental loans for allied activities.)
(iii) Loans to farmers for pre and post-harvest activities, viz., spraying, weeding, harvesting, sorting, grading and transporting of their own farm produce.
(iv) Loans up to ₹50 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months.

1.2. Agriculture infrastructure i) Loans for construction of storage facilities (warehouses, market yards, godowns and silos) including cold storage units/ cold storage chains designed to store agriculture produce/products, irrespective of their location.
ii) Soil conservation and watershed development.
iii) Plant tissue culture and agri-biotechnology, seed production, production of bio-pesticides, bio-fertilizer, and vermi composting.
For the above loans, an aggregate sanctioned limit of ₹100 crore per borrower from the banking system, will apply.
1.3.Ancillary activities (i) Loans up to ₹5 crore to co-operative societies of farmers for disposing of the produce of members.
(ii) Loans for setting up of Agriclinics and Agribusiness Centres.
(iii) Loans for Food and Agro-processing up to an aggregate sanctioned limit of ₹100 crore per borrower from the banking system.
(iv) Loans to Custom Service Units managed by individuals, institutions or organizations who maintain a fleet of tractors, bulldozers, well-boring equipment, threshers, combines, etc., and undertake farm work for farmers on contract basis.

For the purpose of computation of 7 per cent / 8 per cent target, Small and Marginal Farmers will include following:-

  • Farmers with landholding of up to 1 hectare are considered as Marginal Farmers. Farmers with a landholding of more than 1 hectares and up to 2 hectares are considered as Small Farmers.
  • Landless agricultural laborers, tenant farmers, oral lessees and share-croppers, whose share of landholding is within the limits prescribed for small and marginal farmers.
  • Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual Small and Marginal farmers directly engaged in Agriculture and Allied Activities provided banks maintain disaggregated data of such items.
  • Loans to farmers’ producer companies of individual farmers, and co-operatives of farmers directly engaged in Agriculture and Allied Activities, where the membership of Small and Marginal Farmers is not less than 75 per cent by number and whose land-holding share is also not less than 75 per cent of the total land-holding.

2. Micro, Small and Medium Enterprises (MSMEs)

2.1. The limits for investment in plant and machinery/equipment for manufacturing / service enterprise, as notified by Ministry of Micro, Small and Medium Enterprises, vide S.O.1642(E) dated September 9, 2006 are as under:-

Manufacturing Sector
Enterprises Investment in plant and machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but does not exceed five crore rupees
Medium Enterprises More than five crore rupees but does not exceed ten crore rupees
Service Sector
Enterprises Investment in equipment
Micro Enterprises Does not exceed ten lakh rupees
Small Enterprises More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises More than two crore rupees but does not exceed five crore rupees

Bank loans to Micro, Small and Medium Enterprises, for both manufacturing and service sectors are eligible to be classified under the priority sector as per the following norms:

2.2. Manufacturing Enterprises

The Micro, Small and Medium Enterprises engaged in the manufacture or production of goods to any industry specified in the first schedule to the Industries (Development and Regulation) Act, 1951 and as notified by the Government from time to time. The Manufacturing Enterprises are defined in terms of investment in plant and machinery.

2.3. Service Enterprises

Bank loans up to 5 crore per unit to Micro and Small Enterprises and 10 crore to Medium Enterprises engaged in providing or rendering of services and defined in terms of investment in equipment under MSMED Act, 2006.

2.4. Khadi and Village Industries Sector (KVI)

All loans to units in the KVI sector will be eligible for classification under the sub-target of 7 per cent/7.5 per cent prescribed for Micro Enterprise under priority sector.

2.5. Other Finance to MSMEs

(i) Loans to entities involved in assisting the decentralized sector in the supply of inputs to and marketing of outputs of artisans, village and cottage industries.
(ii) Loans to co-operatives of producers in the decentralized sector viz. artisans, village and cottage industries.
(iii) Credit outstanding under General Credit Cards (including Artisan Credit Card, Laghu Udyami Card, Swarojgar Credit Card, and Weaver’s Card etc. in existence and catering to the non-farm entrepreneurial credit needs of individuals).

2.6. To ensure that MSMEs do not remain small and medium units merely to remain eligible for priority sector status, the MSME units will continue to enjoy the priority sector lending status up to three years after they grow out of the MSME category concerned.

2.7 Overdrafts under PMJDY:

Overdrafts extended by banks after April 8, 2015 upto ₹5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts provided the borrowers household annual income does not exceed ₹100,000/- for rural areas and ₹1,60,000/- for non-rural areas. These overdrafts will also qualify for target of Micro Enterprises and Weaker Section under Priority Sector Lending.

3. Education

Loans to individuals for educational purposes including vocational courses upto ₹10 lakh irrespective of the sanctioned amount will be considered as eligible for priority sector.

4. Housing

(i) Loans to individuals up to ₹20 lakh in for purchase/construction of a dwelling unit per family provided the overall cost of the dwelling unit should not exceed ₹25 lakh. The housing loans to banks’ own employees will be excluded.

(ii) Loans for repairs to damaged dwelling units of families up to ₹2 lakh.

(iii) Bank loans to any governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers subject to a ceiling of ₹10 lakh per dwelling unit.

(iv) The loans sanctioned by banks for housing projects exclusively for the purpose of construction of houses for economically weaker sections and low income groups, the total cost of which does not exceed ₹10 lakh per dwelling unit. For the purpose of identifying the economically weaker sections and low income groups, the family income limit of ₹2 lakh per annum, irrespective of the location, is prescribed.

5. Social Infrastructure

Bank loans up to a limit of 5 crore per borrower for building social infrastructure for activities namely schools, health care facilities, drinking water facilities, sanitation facilities, construction/refurbishment of household toilets and household level water improvements in Tier II to Tier VI centres.

6. Renewable Energy

Bank loans up to a limit of 15 crore to borrowers for purposes like solar based power generators, biomass based power generators, wind mills, micro-hydel plants and for non-conventional energy based public utilities viz. street lighting systems, and remote village electrification. For individual households, the loan limit will be 10 lakh per borrower.

7. Others

7.1. Loans not exceeding ₹50,000/- per borrower provided directly by banks to individuals and their SHG/JLG, provided the individual borrower’s household annual income in rural areas does not exceed ₹100,000/- and for non-rural areas it does not exceed ₹1,60,000/-.

7.2. Loans to distressed persons [other than farmers already included under III (1.1) A (v)] not exceeding ₹100,000/- per borrower to prepay their debt to non-institutional lenders.

7.3. Loans sanctioned to State Sponsored Organisations for Scheduled Castes/ Scheduled Tribes for the specific purpose of purchase and supply of inputs and/or the marketing of the outputs of the beneficiaries of these organisations.

IV. Weaker Sections

Priority sector loans to the following borrowers will be considered under Weaker Sections category:-

No. Category
1. Small and Marginal Farmers
2. Artisans, village and cottage industries where individual credit limits do not exceed ₹1 lakh
3. Beneficiaries under Government Sponsored Schemes such as National Rural Livelihood Mission (NRLM), National Urban Livelihood Mission (NULM) and Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS)
4. Scheduled Castes and Scheduled Tribes
5. Beneficiaries of Differential Rate of Interest (DRI) scheme
6. Self Help Groups
7. Distressed farmers indebted to non-institutional lenders
8. Distressed persons other than farmers, with loan amount not exceeding ₹1 lakh per borrower to prepay their debt to non-institutional lenders
9. Individual women beneficiaries up to ₹1 lakh per borrower
10. Persons with disabilities
11. Overdrafts upto ₹5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts, provided the borrowers’ household annual income does not exceed ₹100,000/- for rural areas and ₹1,60,000/- for non-rural areas
12. Minority communities as may be notified by Government of India from time to time

In States, where one of the minority communities notified is, in fact, in majority, item (12) will cover only the other notified minorities. These States/ Union Territories are Jammu & Kashmir, Punjab, Meghalaya, Mizoram, Nagaland and Lakshadweep.

V. Monitoring:

The data on priority sector advances has to be furnished by RRBs to NABARD at quarterly and annual intervals. The quarterly and annual reporting formats are annexed. For the purpose of calculation of priority sector lending targets, total outstanding will be calculated as on corresponding date of the previous year. (i.e. for reporting PSL data for quarter ending June 2016, total outstanding will be considered as on June 30, 2015).

VI. Other Guidelines

RRBs can issue Inter Bank Participation Certificates (IBPCs) to Scheduled Commercial Banks in respect of their priority sector advances in excess of 75 per cent of their outstanding advances.

VII. Common guidelines for priority sector loans

RRBs should comply with the following common guidelines for all categories of advances under the priority sector.

1. Rate of interest

The rate of interest on bank loans will be as per directives issued by our Department of Banking Regulation from time to time.

2. Service charges

No loan related and adhoc service charges/inspection charges should be levied on priority sector loans up to ₹ 25,000. In case of lending to SHGs/JLGs, the loan limit shall be applicable per member of SHG/JLG and not to the group as a whole.

3. Receipt, Sanction/Rejection/Disbursement Register

A register/ electronic record should be maintained by the bank, wherein the date of receipt, sanction/rejection/disbursement with reasons thereof, etc., should be recorded. The register/electronic record should be made available to all inspecting agencies.

4. Issue of Acknowledgement of Loan Applications

Banks should provide acknowledgement for loan applications received under priority sector loans. Bank Boards should prescribe a time limit within which the bank communicates its decision in writing to the applicants.

VIII. Amendments

These guidelines are subject to any further instructions that may be issued by the RBI from time to time.

Banks should ensure that loans extended under priority sector are for approved purposes and the end use is continuously monitored. The banks should put in place proper internal controls and systems in this regard.

Representation to the Principal Chief Commissioner, Chandigarh

29-CA/Law/NDM-1134                                             27th November, 2015
To,
The Principal Chief Commissioner
Income Tax,
Chandigarh
Sub:   Only enrolled Advocates are licensed to practice Law in India- Not to
allow Chartered Accountants/ Non- Advocates for practice of law in the
course of proceedings before revenue authorities falling under the
jurisdiction of Principal Commissioner of Income Tax and Commission
of Income Tax, Amritsar, Jammu etc.
Dear Sir,
Recently, it has come to our knowledge that a proposal not allowing
Chartered Accountants/ Non- Advocates for practice of law in the course of
proceedings before revenue authorities falling in your jurisdiction is under
consideration.
In this regard, although, comments have not been called for from the
Institute of Chartered Accountants of India New Delhi, yet being the statutory body
and regulator as well, we wish to bring the following facts for your consideration.
The Institute of Chartered Accountants of India, is a statutory body
established by an Act of Parliament namely `The Chartered Accountants Act, 1949'
for regulating the profession of Chartered Accountants. We further, wish to inform
you that a significant majority of our membership is in the practice with a good
deal of specialisation in the traditional areas of direct/ indirect taxes and in
emergent specialism inter alia, in financial services, information technology,
insurance sector, joint ventures, mutual funds, exchange risk management, risk
and assurance services, environment / energy/quality audits, investment
counselling, corporate structuring and foreign collaborations etc.
The Institute of Chartered Accountants of India is also engaged in the
Nation building by contributing to Central and various State Governments and
other regulators viz, the Ministry of Corporate Affairs, Trade Policy division of the
Ministry of Commerce and Industry, Central Board of Direct Taxes, Reserve Bank
of India, Insurance Regulatory and Development Authority, Comptroller and
Auditor General of India, Securities Exchange Board of India etc. to name a few, on
1 
the relevant matter of importance to the profession and having bearing to the
public interest.
The education and training programme of the Institute to the qualification of
Chartered Accountancy is adequately designed to ensure that our members have in
depth knowledge/ experience of accounting, taxation, financing and audit etc. The
Institute spares no efforts in keeping pace with the current accounting and
auditing practices prevalent throughout the world. An individual who qualifies as a
Chartered Accountant has to mandatorily undergo rigorous practical training and
has to keep his knowledge updated in the matter relating to accountancy, audit,
taxation and corporate laws etc. The area of training covers accountancy, auditing,
taxation, company law and other laws. The level of knowledge prescribed in the
various subjects covered by the syllabus of the Chartered Accountancy course is
`expert knowledge'.
That Taxation including Indirect Taxes is one of the core-competence areas
of Chartered Accountants. In India, Chartered Accountants have expertise in
accounting, auditing and taxation, since these subjects are dealt with in great
depth in the CA curriculum. Further, Taxation constitutes a significant area of
practice of CAs. It is due to this reason the Institute has three separate dedicated
committees on taxation, namely, Direct Taxes Committee, Indirect Taxes
Committee and Committee on International Taxation. These committees are
amongst the most important committees of the Institute and they act as a liaison
between the Revenue and the tax payers. The Committees comprise of chartered
accountant members of the Central Council, as well as other co-opted members,
who are experts in the field of Taxation from across the country. Therefore, it is
clear that a chartered accountant, on passing his final examination and completing
his articled training, is an expert in taxation, accountancy, auditing, company law
and other laws etc., and he is accordingly fully qualified to practice in these fields.
Chartered Accountants are thus well trained in various laws which are applied
while conducting cases before various tribunals and other similar authorities.
The provisions of Income tax Act involve computation and analysis of profit
and loss account which directly relates to accounting procedure or the recording,
presentation or certification of financial facts or data. Chartered Accountants being
an expert in understanding and analyzing the financial statements are thus the
right person for explaining the related facts in case of dispute.
For application of tax legislations, the prima facie documents are financial
statements thus the government has given the task relating to financial statements
appropriately to Chartered Accountants.
The matters before the Tax Authorities involve issues and questions mainly
relating to accountancy and require knowledge and expertise in accounting
matters. This is why many of the leading and most successful tax advocates are
also qualified Chartered Accountants. The appearance of Chartered Accountants
before tax authorities and tribunals has always been considered to be an integral
part of the practice of a Chartered Accountancy ever since 1940s, when the Income
2 
Tax Appellate Tribunal was first set up and when Chartered Accountants began
appearing before it.
It is necessary to note that the members of the Institute are thus well trained
in the fields of various laws which are applied while conducting the cases before the
various tax/revenue authorities. It is in recognition of that crucial fact the various
applicable statutes specifically permit Chartered Accountants to appear before
authorities and Tribunals constituted under those statutes. A few of such statutes
are listed below:-
(a)    Section 288 of the Income Tax Act, 1961 read with Rule 50
of the Income Tax Rules, 1962
(b)    Section 35-Q of the Central Excise Act, 1944
(c)    Section 146-A of the Customs Act, 1962 read with Rule 9(a)
of the Customs (Appeals) Rules, 1982
(d)    Section 15-V of the Securities and Exchange Board of India
Act, 1992
(e)    Section 22(C) of the Securities Contracts (Regulation) Act,
1956
(f)    Section 17 of the Telecom Regulatory Authority of India Act,
1991
(g)    Section 432 of the Companies Act, 2013
(h)    Regulation 19 of the Company Law Board Regulations, 1991
(i)    Section 35 and Section 53 S of the Competition (Amendment)
Act, 2007
(j)    Rule 61 of the Special Economic Zone Rules, 2006
(k)    Before the Central Electricity Regulatory Commission vide
Notification No.8/(1)/99/CERC dated 27.8.1999
(l)    Airport Economic Regulatory Authority of India Act; in terms
of section 30, CA can appear before Appelate Tribunal
(m)    The Foreign Exchange Management Act, 1999 -- in terms of
Sections 16 and 32
3 
Needless to mention that the Institute, since its inception in the year of
1949, has always remained at the forefront in serving the nation by establishing
sound financial prudence within the country.
Further, the Institute has a stringent code of conduct/Ethics which are
required to be followed by its members. It is also pertinent to mention that the
Chartered Accountants Act, 1949 provides the disciplinary mechanism for making
investigation     and    taking     disciplinary   action   in   respect   of any
complaint/information of professional/other misconduct in respect of a member
and/or levy of penalty of permanent removal of name from the register of members
and/or levy of penalty up to Rupees Five Lakhs as well depending on the gravity of
offence(s). Therefore, the Chartered Accountants are governed by the Chartered
Accountants Act, 1949 and the Chartered Accountants Regulations 1988 framed
there under and are subject to strict provisions of professional ethics and
professional conduct and any deviation there from would make them liable for
disciplinary action under the said Act. The ICAI has established a Peer Review
Board to ensure compliance with technical standards, acceptance and adherence to
quality control policies and procedures by Chartered Accountants firm in the
services being rendered by them. Such reviews certainly boost the confidence of
society at large in the quality of work of Chartered Accountants in India.
The term `practice of profession of law' has not been defined under the
Advocates Act, 1961. The appearance before the Authorities established under the
Income-Tax Act does not amount to `practice of profession of law'. The Hon'ble
Supreme Court in the case of C. Venkatachalam vs. Ajitkumar C. Shah & Ors. [6
(2011) 9 SCC 707], while considering the provisions of the Consumer Protection
Act, 1986, upheld the judgment of the Division Bench of the Bombay High Court,
whereby the Hon'ble High Court held that a party before the District Consumer
Forum/State Commission cannot be compelled to engage the service of an
advocate. The Hon'ble Supreme Court also observed that the High Court was fully
justified in observing that the authorized agents do not practice law when they are
permitted to appear before the District Forum and the State Commission. Further,
the Hon'ble Supreme Court also approved the view taken by the High Court that
many statutes, such as, Value Added Tax, Income Tax and Competition Act also
permit non-advocates to represent the parties before the authorities and those non-
advocates cannot be said to be practicing law.
A perusal of Section 33 of the Advocates Act, 1961 shows that it specifically
contemplates and provides that the other statute in question may specifically
permit persons other than Advocates to appear before Courts and Tribunals
functioning under that statute. Such provisions are to be found in all Central as
well as State Acts dealing with various direct and indirect taxes such as Income
Tax, Excise Duty, Value Added tax, etc. The Hon'ble Supreme Court in R.D. Nagpal
v. Vijay Dutt [(2011) 12 SCC 498] considered the provisions of the Consumer
Protection Act, 1986. Rule 14(3) of the Consumer Protection Rules, 1987 allowed
the parties or their agents to appear before the National Commission, and the
expression `agent' as defined in Section 2(b) of the said Act means a person duly
authorised by a party to present any complaint, appeal or reply on its behalf before
4 
the National Commission. The Supreme Court held that given the wide definition of
the expression `agent', there was no reason, if the Commission were otherwise
satisfied that a person was authorised on behalf of the appellant, to refuse to allow
him to represent it and to cross examine the complainant. The provisions of Section
33 of the Advocates Act of 1961 came up for consideration and it was held as
follows:-
6.    The learned counsel appearing on behalf of the respondents has relied upon
Section 33 of the Advocates Act, 1961. Section 33 makes it clear that
advocates alone will be entitled to practice before any court or before any
authority, etc. "except as otherwise provided in this Act or in any other law for
the time being in force". The Consumer Protection Act read with the Rules
would be "a law for the time being in force".
Recently, the Lucknow Bench of the Hon'ble High Court of Judicature at
Allahabad, in case No. 7116 of 2014, Tax Lawyers Association, Lucknow Throu
General Secry. & Anr. vs. State of U.P. Thru Prin. Secy. Tax &
Registration, has passed an Order dated 06.08.2014 directing, inter alia, that any
person, who is not a registered Advocate, shall not be permitted to appear before
the Authority under the U.P. VAT Act. Further, the Hon'ble Bench of the Chief
Justice of Lucknow Bench of the Allahabad High Court, after hearing the
arguments in detail on 20th August, 2014, modified the above Order dated 6th
August, 2014 vacating the stay and consequently, Chartered Accountants continue
to be permitted to appear before the authorities under the VAT Act in the State of
U.P. The Division Bench of the Hon'ble Chief Justice's Court, in its Order dated
20.08.2014, observed that Section 29 of the Advocates Act, 1961 speaks of there
being only one class of persons entitled to practice the profession of law, namely,
advocates. Section 33 of the said Act contemplates that only a person who is
enrolled as an advocate under the Act will be entitled to practice in any court or
before any authority or person. The entitlement to practice under Section 33 of the
Advocates Act, 1961 is obviously an entitlement to practice the profession of law
but what is more important is that Section 33 recognises that any other provision
of law and for that matter, the Act itself may authorize a person who is not enrolled
as an advocate under it to practice in any court or before any authority or person.
Consequently, there is no question of the ultra vires doctrine being attracted for the
simple reason that Section 33 of the Act of 1961 contemplates that any other law
may authorize a person who is not enrolled as an advocate under the Act to
practice before any court, authority or person.
It is stated that the above matter is pending before the Lucknow Bench of
the Hon'ble High Court of Judicature at Allahabad for final hearing.
The Statute only confers on lawyers the exclusive right to practice law. With
the passage of time there are a lot of functions which are overlapping with the
practice of law and such overlapping functions cannot confer the right on lawyers
under the Advocates Act. Any such interpretation will stultify the growth and
evolution of society and the rules of effective and expeditious dispute resolution. It
5 
is, therefore, of vital importance to note that Section 33 of the Advocates Act, 1961
itself specifically contemplates and provides that the other statute in question may
specifically permit persons other than Advocates to appear before Courts and
Tribunals functioning under that statute. Such provisions are to be found in all
Central as well as State Acts dealing with various direct and indirect taxes such as
Income tax, Excise duty, value added tax etc. Thus, the Income Tax Appellate
Tribunal is constituted under the provisions of The Income Tax Act, 1961. Section
288 of the Income Tax Act, 1961 provides for appearance by `authorised
representatives' before any Income-tax Authority or the Income-tax Appellate
Tribunal.
Moreover, the matters before the various tax/revenue authorities involving
mainly issues and questions relating to Accountancy and require knowledge and
expertise in accounting matters. Indeed, even if an advocate appears in such
matters, he cannot present his case in the most effective manner without a good
knowledge of accountancy. This is why many of the leading and most successful
tax advocates are also qualified Chartered Accountants. The appearance of
Chartered Accountants before tax authorities and tribunals has always been
considered to be an integral part of the practice of a Chartered Accountancy ever
since 1940s. As stated above, the Institute spares no efforts in keeping pace with
the accounting practices prevalent and those evolving throughout the World. A
person who qualifies as a Chartered Accountant is to undergo rigorous practical
training spanning three years and has to keep his knowledge updated in the
matters relating to accountancy and the applicable laws. In any event, it is entirely
for the framers of the various enactments viz. Income Tax Act, 1961, the
Companies Act, 2013 etc. to lay down who should be eligible to appear before the
Tribunals and authorities constituted under each of these respective enactments.
The Income Tax Act and the provisions contained therein as to who can appear in
proceedings under those enactments are special provisions of law which would
necessarily prevail over the general provisions contained in the Advocates Act.
Each legislation enacted by Parliament or by a State Legislature is an
independent code by itself. Parliament and the State Legislature duly take into
consideration the various issues involved and incorporate the requirements into the
respective legislations. Therefore, to re-write such provisions so as to provide that
the appearance by other professionals is for a limited purpose only is totally
unwarranted.
That law is a dynamic subject and the growth of trade and commerce and
the requirements of revenues of Governments have resulted in the emergence of
specialized legislations like the Income-tax Act, the Central Excise Act, 1944 and
the Customs Act, 1956 and other various State-Level VAT Legislations. The
Constitution of India itself has recognized the importance of the specialized fields of
such legislations and has expressly provided for the creation of specialized
tribunals which take care of such specialized fields of law. Parliament in its
wisdom, while enacting aforesaid legislations have considered all the relevant
issues before incorporating the provisions relating to authorized representatives
These legislations specifically allowed professionals other than advocates to be
6 
authorized representatives. This clearly amplifies the point that the legislature is
fully conscious of the requirements of the particular specialized legislation. The
purpose of establishing various Tribunals is to decide issue on a particular subject
by experts in that field and in that direction, specialized Tribunals have been
created by the various statutes. If the Chartered Accountants, who for reasons of
rigorous practical training and examinations, have acquired expertise in
accounting and taxation laws, were not to be allowed to appear before such
specialized authorities/Tribunals, the very purpose of establishment of such
Tribunals would get defeated. Besides, such restrictions will limit the choice
afforded to the affected persons by the statutes to choose their representative.
In the matter of Rajkot Engineering Association and Ors. And Tax
Advocates Association and Ors.v. Union of India MANU/GJ/0019/1986 the
Gujarat High Court held as follows:
"There is no restriction on the right of the assessees to select as their own
authorised representatives whomever they like whether the same
chartered accountants who have carried out the tax audit or other
chartered accountants or other Income Tax practitioners....
In the present state of Income Tax law, the interpretation and development
of which has become very intricate and complex, it is not difficult to
anticipate that a situation has arisen where more and more assessees
would like to be assisted both by the chartered accountants as well
Income Tax consultants and practitioners who may be non-chartered
accountants in arranging their financial affairs and in the maintenance of
their accounts, records and documents for preparation of the returns and
in the course of assessment before tax authorities."
In the above backdrop we are of the view that it would not be appropriate to
consider any such proposal which restrains the Chartered Accountants from
appearing before the revenue authorities in India particularly when various
Central/State legislations including the Income Tax Act, 1961 expressly provide
and authorise the Chartered Accountants to appear and represent the cases before
the authorities under the Income Tax Act, 1961. Further, we may request you to
consider our submissions as above and afford us an opportunity to present our
case in person before taking any final decision in this regard. In case your good
office needs any further clarifications, we may please be advised.
Thanking you,
Yours faithfully,
(V. Sagar)
7

Auditing and Assurance Standards Board seeks Suggestions on the Proposed New CARO

Announcement for the Attention of the Members

Auditing and Assurance Standards Board seeks Suggestions on the Proposed New CARO

Dear Members

The Ministry of Corporate Affairs recently constituted a Committee to formulate the Companies (Auditor’s Report) Order (CARO) to be issued under section 143(11) of the Companies Act, 2013. This aforesaid Order is proposed to be made applicable for audit reports on the financial statements of the companies for the financial year 2015-16 and onwards. The undersigned, as Chairman, of the Auditing and Assurance Standards Board, is representing the Institute of Chartered Accountants of India (ICAI) on this Committee. The aforesaid Committee has requested the Auditing and Assurance Standards Board of ICAI to develop a draft of the proposed CARO for the consideration of the Committee. With a view to ensure that the proposed CARO is a value add report for the managements, stakeholders as well as the relevant Government agencies, and at the same time adequately balances public interest vis a vis nature and scope of an audit of financial statements under the Standards on Auditing, we request you to kindly share with us your thoughts on what areas can be included for reporting under the CARO.

I request you to mail your valuable suggestions to us on aasb@icai.in by 3rd December 2015.

(CA. ABHIJIT BANDYOPADHYAY)
Chairman, Auditing & Assurance Standards Board
The Institute of Chartered Accountants of India

Amendment in Delhi Value Added Tax Rules, 2005.

(TO BE PUBLISHED IN PART IV OF THE DELHI GAZETTE EXTRAORDINARY)

GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI

FINANCE (REVENUE-I) DEPARTMENT

DELHI SACHIVALAYA, I.P. ESTATE: NEW DELHl-110 002

 

No.F .3(23)/Fin(Rev-1)/2015-2016/dsvi/ Dated: the_______2015

 

NOTIFICATION

 

No.F.3(23)/Fin(Rev-1)/2015-2016  .-  In exercise of the powers conferred by section 102 of the Delhi Value Added Tax Act, 2004 (Delhi Act 3 of 2005), the Lt. Governor of the National Capital Territory of Delhi, hereby, makes the following rules further to amend the Delhi Value Added Tax Rules, 2005, namely:-

RULES

 

I. Short title and commencement.- (1) These rules may be called the Delhi Value Added Tax (Amendment) Rules, 2015.

 

(2) They shall be deemed to have come into force with effect from 1st April, 2014.

 

2. Amendment of rule 35.- In the Delhi Value Added Tax Rules, 2005, in rule 35, in sub­rule (2), after the proviso and before explanation, the following new proviso shall be inserted, namely:-

 

“Provided further that the Commissioner admit an application for refund or an additional or a revised application for refund, as the case may be, under section 41, from the Embassies, High Commissions and International Organisations listed in the entry at serial No. 1 of the Sixth Schedule, upto a period of one year from the end of relevant quarter, subject to his satisfaction about existence of sufficient cause preventing submission of a true and correct application for refund within the time limit of three months from the end of relevant quarter.”

 

By order and in the name of the Lt. Governor

of the National Capital Territory of Delhi,

(A. K. Singh)

Dy. Secretary VI (Finance)

 

Spentex Industries Ltd vs. CCE (Supreme Court)

The Supreme Court was concerned with whether or not the manufacturer/exporter is entitled to rebate of the excise duty paid both on the inputs and on the manufactured product, when excise duty is paid on a manufactured product and also on the inputs which have gone into manufacturing the product and such manufactured product is exported? HELD in that context by the Court:

(i) It is to be borne in mind that it is the Central Government which has framed the Rules as well as issued the notifications. If the Central Government itself is of the opinion that the rebate is to be allowed on both the forms of excise duties the government is bound thereby and the rule in-question has to interpreted in accord with this understanding of the rule maker itself. Law in this respect is well settled and, therefore, it is not necessary to burden this judgment by quoting from various decisions. Our purpose would be served by referring to one such decision in the case of R & B Falcon (A) Pty Ltd. v. Commissioner of Income Tax (2008) 12 SCC 466 wherein interpretation given by the Central Board of Direct Taxes (CBDT) to a particular provision was held binding on the tax authorities.
{ad}
(ii) We are also of the opinion that another principle of interpretation of statutes, namely, principle of contemporanea expositio also becomes applicable which is manifest from the act of the Government in issuing two notifications giving effect to Rule 18. This principle was explained by the Court in Desh Bandhu Gupta and Co. and others v. Delhi Stock Exchange Association Ltd.2 in the following manner: It is a well-settled principle of construction that courts in construing a statute will give much weight to the interpretation put upon it, at the time of its enactment and since, by those whose duty it has been to construe, execute and apply it. I do not suggest for a moment that such interpretation has by any means a controlling effect upon the Courts; such interpretation may, if occasion arises have to be disregarded for cogent and persuasive reasons and in a clear case of error, a Court would without hesitation refuse to follow such construction.

(iii) Interpretation of word ‘OR’ occurring in Rule 18: We are conscious of the principle that the word ‘or’ is normally disjunctive and ‘and’ is normally conjunctive (See Union of India v. Kamlabhai Harjiwandas Parekh and others3). However, there may be circumstances where these words are to be read as vice-versa to give effect to manifest intention of the Legislature as disclosed from the context. Of course, these two words normally ‘or’ and ‘and’ are to be given their literal meaning in unless some other part of same Statute or the clear intention of it requires that to be done. However, wherever use of such a word, viz., ‘and’/’or’ produces unintelligible or absurd results, the Court has power to read the word ‘or’ as ‘and’ and vice-versa to give effect to the intention of the Legislature which is otherwise quite clear. This was so done in the case of State of Bombay v. R.M.D. Chamarbaugwala (1957) 1 SCR 874
{ad}

Corrigendum to the List of Voters

 


The Institute of Chartered Accountants of India

New Delhi

ELECTION – 2015

Announcement

Corrigendum to the List of Voters

In pursuance of sub-rule (1) of rule 6 of the Chartered Accountants (Election to the Council) Rules, 2006 read with sub-regulation (4)(i) of regulation 134 of the Chartered Accountants Regulations, 1988, the Lists of Voters as on 1.4.2015 for election to the twenty third Council and twenty second Regional Councils were published and made available w.e.f. 3rd September, 2015. Pursuant to the publication of the said Lists of Voters, certain clerical mistakes/omissions were brought to the notice of the Institute in respect of the said List of Voters. In order to remove the likely hardship to the voters concerned, these clerical mistakes/omissions have been rectified, after verification of records, in exercise of powers vested under sub-rule (6) of rule 6 of the aforesaid Rules read with sub-regulation (4)(vi) of regulation 134 of the aforesaid Regulations, by way of issue of Corrigendum. These Corrigendum are hereby hosted for information of the Candidates, affected members and others. To view the aforesaid Corrigendum, please click the Links below:-

Western India Regional Constituency

Southern India Regional Constituency

Eastern India Regional Constituency

Central India Regional Constituency

Northern India Regional Constituency

( V. SAGAR )
RETURNING OFFICER AND SECRETARY

Announcement regarding Non-application of AS 30, AS 31 and AS 32 in the Final Course Paper 1: Financial Reporting

The entire IAS 39 “Financial Instruments: Recognition and Measurement”, on which AS 30 “Financial Instruments: Recognition and Measurement” was based, has been replaced by IFRS 9 “Financial Instruments”. Therefore, the Government of India opted to notify Ind AS 109 “Financial Instruments” in correspondence to IFRS 9 and not IAS 39. Also, AS 30, AS 31 and AS 32 on ‘Financial Instruments’ were earlier proposed to be made mandatory for Level I entities only. However, after notification of Ind AS in February, 2015, these entities will be applying the provisions stated in Ind AS 32, Ind AS 107 and Ind AS 109 and not AS 30, AS 31 and AS 32 for accounting of financial instruments. Therefore, it is felt appropriate to make applicable Ind AS 32, Ind AS 107 and Ind AS 109 in place of AS 30, AS 31 and AS 32 to the topic ‘Accounting for Financial Instruments’.

Accordingly, it has been decided to make Ind AS 32 “Financial Instruments: Presentation”, Ind AS 107 “Financial Instruments: Disclosures” and Ind AS 109 “Financial Instruments” applicable on the topic ‘Accounting for Financial Instruments’ instead of AS 30 “Financial Instruments: Recognition and Measurement”, AS 31 “Financial Instruments: Presentation” and AS 32 “Financial Instruments: Disclosures” from May, 2016 examinations for Paper 1 : Financial Reporting at the Final level.

Further, it may also be noted that existing Accounting Standards as already given in the study material will continue to be part of the syllabus alongwith the topic “Introduction of Indian Accounting Standards (Ind AS); Comparative study of ASs vis-a-vis Ind ASs; Carve outs/ins in Ind ASs vis- à-vis International Financial Reporting Standards (IFRSs)”, which has been recently included in the syllabus from May, 2016 examination and onward. Thus for the remaining topics of the syllabus of Financial Reporting paper, existing Accounting Standards will still be applicable.

Government of India announce the sale of five dated securities for ₹ 15,000 crore on November 27, 2015

The Government of India has announced the sale (issue/re-issue) of five dated securities as per the following details:

Sr. No. Security Notified Amount
(₹ Cr)
Auction Date Settlement date
1. 7.68% GS 2023 2,000 November 27, 2015
(Friday)
November 30, 2015
(Monday)
2. 7.72% GS 2025 7,000
3. 7.73% GS 2034 3,000
4. 8.17% GS 2044 2,000
5. 7.72% GS 2055 1,000

The auctions will be conducted using multiple price method. Up to 5% of the notified amount of the sale of the stocks will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on November 27, 2015. The non-competitive bids should be submitted between 10.30 a.m. and 11.30 a.m. and the competitive bids should be submitted between 10.30 a.m. and 12.00 noon. The result of the auctions will be announced on November 27, 2015.

The stocks will qualify for the ready forward facility.

The underwriting of the Government Securities under auctions by the ‘Primary Dealers’ will be as per the “Revised Scheme of Underwriting Commitment and Liquidity Support” announced by the Reserve Bank vide circular RBI/2007-08/186 dated November 14, 2007. Bids for underwriting of the Additional Competitive Underwriting (ACU) portion can be submitted by ‘Primary Dealers’ from 10.30 a.m. up to 12.00 noon on November 26, 2015 (Thursday) on the Reserve Bank of India Core Banking Solution (E-Kuber) system.

The Stocks will be eligible for “When Issued” trading for a period commencing from November 24, 2015–November 27, 2015 in accordance with the guidelines on ‘When Issued transactions in Central Government Securities’ issued by the Reserve Bank of India vide circular No. RBI/2006-07/178 dated November 16, 2006as amended from time to time.

Anirudha D. Jadhav
Assistant Manager

Press Release : 2015-2016/1215

Service Tax Refund Under Service Tax

Where an assessee has paid service tax to the Central Government in respect of taxable service not provided by him, for any reason, the assessee may adjust the excess service tax so paid by him calculated on a pro rata basis against the service tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received. (up to 1.4.2011)

W.e.f. 1.4.2011. it has also been provided that when an invoice has been issued or a payment received for a service which is not subsequently provided, the assessee may take the credit of the service tax earlier paid when the amount has been refunded by him to the recipient or by the issue of credit note, as the case may be.

In CCE, Jaipur v. Vinayak Agrotech Ltd. 2012 (5) TMI 524 – CESTAT, NEW DELHI, where assessee was liable to pay duty and same was collected from customers and realization of that duty was not required to be paid due to eligibility of SSI exemption and assessee returned the duty so collected to customers by way of credit notes, it was held that assessee in such a case did not collect any duty from customers representing it as excess duty. Therefore, that amount was not liable to be recovered under Section 11Bof Central Excise Act, 1944. Hence, it was held that unjust enrichment was not applicable.

In CCE, Vadodara v. Apollo Tyres Ltd. 2012 (12) TMI 798 – CESTAT AHMEDABAD, where by mistake, duty was discharged in excess and seller has issued credit note to buyer for such excess duty, it was held that it could be said that burden of duty was not passed to any other person. Hence, seller could claim refund of such excess duty.

Rule 6(4A)

Where an assessee has paid excess service tax for a month or quarter, the assessee may adjust such excess in the subsequent month or quarter subject to the following conditions:

  1. It is not due to interpretation of law, classification (omitted w.e.f. 1-7-2012), valuation and applicability of exemption notification.
  2. An assessee registered under rule 4(2) on account of delayed receipt may adjust without monetary limit.
  3. Other than the above, maximum of Rs. one lakh can be adjusted in a month or quarter and intimated to jurisdictional central excise officer. (w.e.f. 1.4.2011, Rs. Two lakh) w.e.f. 1-4-2012, unlimited amounts of permissible adjustments shall be allowed subject to Rule 6(4B).

Rule 6(1)

Service tax is payable on value of taxable services received. If no payments are received, there is no need to pay service tax. However, with Point of Taxation Rules, 2011 w.e.f. 1-4-2011, Service Tax shall be payable on accrual basis.

Prior Approval for acquisition of shares or voting rights in Private Sector Banks: Directions, 2015

RBI/2015-16/240
Master Direction No.DBR.PSBD.No.56/16.13.100/2015-16

November 19, 2015

Prior Approval for acquisition of shares or voting rights in Private Sector Banks: Directions, 2015

In exercise of the powers conferred by Sections 21 and 35 A of the Banking Regulation Act, 1949 and pursuant to the Section 12B of the Banking Regulation Act, 1949 as amended by Banking Amendment Act 2012, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.

CHAPTER – I
PRELIMINARY

1. Short Title and Commencement

  1. These Directions shall be called the Reserve Bank of India (Prior approval for acquisition of shares or voting rights in private sector banks) Directions, 2015.
  2. These directions shall come into effect on the day these are placed on the official website of the Reserve Bank of India.

2. Applicability

The provisions of these Directions shall apply to the existing and proposed “major shareholders” of the Private Sector Banks and all Private Sector Banks including Local Area Banks, licensed to operate in India by Reserve Bank of India.

3. Definitions

(i) In these Directions, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below -

(a) “Private Sector Banks” means banks licensed to operate in India under Banking Regulation Act, 1949, other than Urban Co-operative Banks, Foreign Banks and banks licensed under specific Statutes.

(b) “Acquisition” means the act of acquiring

  • Shares, or
  • compulsorily convertible preference shares / debentures / bonds, or
  • voting rights, or

converting of optionally convertible preference shares / debentures / bonds, or a combination of the above, through purchase or transfer, in a private sector bank.

(c) “Concerned bank” means the bank in which the “acquisition” is being made.

(d) “Applicant” means the person making an application under Section 12B of Banking Regulation Act, 1949.

(e) “Aggregate holding” means the total holding including through “acquisition” and shares or compulsorily convertible debentures / bonds or voting rights held by the applicant, his relatives, associate enterprises and persons acting in concert with him in the concerned bank. The aggregate holding will also include optionally convertible preference shares / debentures / bonds if the option of conversion is proposed to be exercised.

  • In case of compulsorily convertible preference shares / debentures / bonds, the computation of holding in this respect will be as if the event of conversion has occurred and as such, the quantum of these instruments shall be included in “aggregate holding” and also to the paid-up share capital of the bank.
  • In case of optionally convertible preference shares / debentures / bonds also, the computation of holding will be the same as indicated for compulsorily convertible preference shares / debentures / bonds, if the option of conversion is proposed to be exercised.

(f) “Relative” has the same meaning as defined in Section 2(77) of the Companies Act, 2013 and rules made thereunder.

(g) “Associate enterprise” has the same meaning assigned to it in Explanation1(a) to Section 12 B of Banking Regulation Act, 1949.

(h) “Persons acting in concert” has the same meaning as stated in Explanation1(c) to Section 12 B of Banking Regulation Act, 1949.

(i) “Major shareholder” means shareholder having / likely to have an “aggregate holding” to the extent of 5 per cent or more of the paid-up share capital of the bank or 5 per cent or more of the total voting rights of the concerned bank.

(j) “Major shareholding” means “aggregate holding” resulting in / likely to result in the applicant having 5 per cent or more of the paid-up share capital of the concerned bank or entitles him to exercise 5 per cent or more of the total voting rights of the concerned bank.

(ii) All other expressions unless defined herein shall have the same meaning as have been assigned to them under the Banking Regulation Act, 1949 or the Reserve Bank of India Act, 1934 or any statutory modification or re-enactment thereto or as used in commercial parlance, as the case may be.

CHAPTER – II
DIRECTIONS ON PRIOR APPROVAL

4. Every person who intends to make an acquisition / make an agreement for acquisition which will / is likely to take the aggregate holding of such person together with shares / voting rights / compulsorily convertible debentures / bonds held by him, his relatives, associate enterprises and persons acting in concert with him, to 5 per cent or more of the paid-up share capital of the concerned bank or entitles him to exercise 5 per cent or more of the total voting rights of the concerned bank, shall seek prior approval of the Reserve Bank in the manner specified in Chapter III and IV of these directions.

CHAPTER – III
PROCEDURE FOR APPLICATION

5. Procedure of application

5.1 Every person referred to in Chapter II above shall make an application to the Reserve Bank along with the Declaration in Form A specified in the Schedule to these Directions.

5.2 On receipt of the application and declaration from the applicant, the Reserve Bank shall seek the recommendations on the acquisition from the concerned bank.

5.3 On receipt of the reference from the Reserve Bank, the concerned bank’s Board shall furnish its recommendations along with a copy of the relevant Board Resolution and information in Form C specified in the Schedule, to the Reserve Bank after considering all relevant aspects. Without prejudice to the generality of the aspects to be considered, the concerned bank’s Board shall deliberate on the proposed acquisition based on the application, the information provided by the applicant and its own investigations and make an assessment of the credibility of the proposed major shareholder.

5.4 The Reserve Bank would undertake a due diligence on the applicant to assess his “fit and proper” status. It will be open to the Reserve Bank to seek additional information / documents from the applicant / concerned bank, including but not limited to shareholder agreements and make such enquiries with regulator/s, revenue authorities, investigation agencies, credit rating agencies, etc. as considered appropriate.

5.5 The decision of the Reserve Bank to accord or deny permission or accord permission for acquisition of a lower quantum than that has been applied for, shall be conveyed to the applicant and the concerned bank and the decision shall be binding on the applicant and the concerned bank. If the decision is to grant approval, the concerned bank shall register the transfer / purchase, as the case may be, in the name of the applicant. If the decision is to reject the application, the concerned bank shall not give effect to such acquisition, or disallow exercise of voting rights on the shares. In the event of the Reserve Bank according permission for a lower quantum of acquisition, the concerned bank shall register the transfer / purchase of such lower quantum of shares or lower quantum of compulsorily convertible debentures / bonds or lower percentage of voting rights.

CHAPTER – IV
PRIOR APPROVAL IN CASE OF SUBSEQUENT INCREASE IN SHAREHOLDING

6.1 Fresh acquisition by an existing major shareholder, who has already obtained prior approval of the Reserve Bank for having a major shareholding in a bank prior to such fresh acquisition, shall be subject to the provisions of sections 6.2 and 6.3 below as the case may be.

6.2 Where the acquisition referred to in section 6.1 results in the aggregate holding of the major shareholder of upto 10 per cent of the shares or voting rights of the concerned bank, prior approval of the Reserve Bank is not necessary,

Provided that the major shareholder furnishes the details of the source of funds for such incremental acquisition to the concerned bank before such acquisition and obtains ‘no objection’ from the concerned bank before such incremental acquisition.

Provided further that the concerned bank reports the incremental acquisitions by the major shareholders in its annual certificates furnished to the Reserve Bank regarding continuance of “fit and proper” status of its major shareholders, as referred to in section 8.1 of these Directions.

6.3 Where the acquisition referred to in section 6.1 shall result in the aggregate holding of the major shareholder exceeding 10 per cent of the shares or voting rights of the concerned bank, he shall seek a fresh prior approval of Reserve Bank for the proposed aggregate holding in the manner specified in section 5 of these Directions along with additional information specified in Form A. Without prejudice to the generality of the factors that may determine the grant or refusal of approval for such acquisitions by the Reserve Bank, approval for acquisition of shares or voting rights in excess of 10 per cent shall be considered at the discretion of the Reserve Bank in the following cases

  1. The promoters / promoter group of the bank; or
  2. Financial institutions that are well regulated, well diversified and listed; or
  3. Government or a public sector undertaking; or
  4. Under exceptional circumstances; or
  5. In the interest of consolidation in the banking sector; etc.

CHAPTER – V
DETERMINATION OF “FIT AND PROPER” STATUS

7. Illustrative criteria for determining “fit and proper” status of applicants

In determining whether the applicant is “fit and proper” to be a major shareholder, the Reserve Bank may take into account all relevant factors, as appropriate, including, but not limited to the following :

(i) For acquisition of 5 per cent or more upto 10 per cent in the bank

  1. The applicant’s integrity, reputation and track record in financial matters and compliance with tax laws,
  2. Whether the applicant has been the subject of any proceedings of a serious disciplinary or criminal nature, or has been notified of any such impending proceedings or of any investigation which may lead to such proceedings,
  3. Whether the applicant has a record or evidence of previous business conduct and activities where the applicant has been convicted for an offence under any legislation designed to protect members of the public from financial loss due to dishonesty, incompetence or malpractice,
  4. Whether the applicant has achieved a satisfactory outcome as a result of due diligence conducted with the relevant regulator, revenue authorities, investigation agencies and credit rating agencies etc. as considered appropriate,
  5. Whether the applicant has a record of any serious financial misconduct, bad loans or whether the applicant was adjudged to be bankrupt,
  6. The source of funds for the acquisition,
  7. Where the applicant is a body corporate, its track record or reputation for operating in a manner that is consistent with the standards of good corporate governance, financial strength and integrity in addition to the assessment of individuals and other entities associated with the body corporate as enumerated above.

(ii) For acquisition in excess of 10 per cent in the bank

  1. All aspects as laid down in section 7 (i) of these Directions.
  2. Details in respect of the conglomerates, in case the applicant belongs to a conglomerate group.
  3. Source and stability of funds for acquisition and the ability to access financial markets as a source of continuing financial support for the bank.
  4. The business record and experience of the applicant including any experience in acquisition of business.
  5. The extent to which the corporate structure of the applicant will be in consonance with effective supervision and regulation of the bank.
  6. Whether the applicant is a financial entity, and whether the applicant is a widely held entity, publicly listed and a well-established regulated financial entity in good standing in the financial community.
  7. Whether the shareholding is by a Government or a public sector undertaking.
  8. The acquisition is in public interest.
  9. The desirability of diversified ownership of banks.
  10. The soundness and feasibility of the plans of the applicant for the future conduct and development of the business of the bank.
  11. Shareholder agreements and their impact on control and management of the bank.

CHAPTER – VI
CONTINUOUS MONITORING ARRANGEMENTS

8. Continuous monitoring arrangements for due diligence in case of existing major shareholders

8.1 It is the responsibility of the concerned bank to ensure that all its major shareholders are fit and proper and for this purpose every bank shall,

(a) obtain, within one month of the close of financial year, an annual declaration from all its major shareholders in Form B as specified in the Schedule to these Directions, and

(b) deliberate on the declarations, obtained from the major shareholders, at its Board meetings and make an assessment about the “fit and proper” status of such shareholders in the light of information provided through the declarations and its own investigations; and

(c) furnish a certificate, by the end of September every year, to the Reserve Bank regarding continuance of the “fit and proper” status of all its major shareholders. In case any major shareholder is assessed to be not “fit and proper”, the concerned bank shall report the same immediately in Form D specified in the Schedule to these Directions to the Chief General Manager, Private Sector Banks Division, Department of Banking Regulation, 13th Floor, Central Office, Reserve Bank of India, Mumbai.

8.2 Apart from the annual review as specified in section 8.1 above, every bank shall examine any concern / information regarding the major shareholders that may come to its notice that render(s) the persons not “fit and proper” to hold such shares or voting rights and the bank shall immediately furnish the report on the same to the Reserve Bank.

CHAPTER – VII
CONTROLLING INTEREST IN PRIVATE SECTOR BANKS

9. Acquisition of shares / voting rights for the purpose of gaining controlling interest in a private sector bank

Notwithstanding anything contained in these directions, even when the acquisition / aggregate holding is proposed to be less than 5 per cent and if the concerned bank suspects that dubious methods have been adopted to get over the ceiling of 5 per cent to camouflage the real purpose of cornering of shares or voting rights by individuals / groups with a view to acquire controlling interest in the bank, a reference shall be made to the Reserve Bank by the concerned bank. In such cases, it shall be in order for the Reserve Bank to require such shareholders to comply with the procedure referred to in Chapter III of these Directions.

CHAPTER – VIII
COMPLIANCE WITH OTHER REGULATIONS AND VOTING RIGHTS

10. The prior approval from Reserve Bank for having major shareholding in private sector banks will be subject to compliance with FEMA 1999 and other applicable laws and regulations, by the applicant.

11. Voting rights provisions and other related provisions of the Banking Regulation Act, 1949, as amended from time to time, will continue to be applicable. Nothing in the permission granted under Section 12B of Banking Regulation Act, 1949 for acquisition of major shareholding shall have the effect of automatic increase in the voting rights unless otherwise specified by the Reserve Bank.

CHAPTER – IX
REPEAL AND OTHER PROVISIONS

12. With the issue of these directions, the instructions / guidelines contained in the following circulars issued by the Reserve Bank stand repealed:

  1. DBOD.No.Fol.BC.129/C.249-91 dated May 23, 1991 on Transfer of Shares of Banks addressed to all Indian Private Sector Commercial Banks,
  2. DBOD.No.44/16.13.100/94 dated April 16, 1994 on Acquisition of Shares of Banks for Gaining Controlling Interest addressed to all Indian Private Sector Commercial Banks,
  3. DBOD.No.PSBS.BC.349/16.13.100/99-2000 dated September 21, 1999 on Transfer of Shares addressed to all Indian Private Sector Commercial Banks,
  4. DBOD.No.PSBS.BC.182/16.13.100/99-2000 dated May 31, 2000 on Transfer of Shares addressed to all Indian Private Sector Commercial Banks,
  5. DBOD.No.PSBS.BC.05/16.13.100/2000-2001 dated July 18, 2000 on Transfer of Shares addressed to all Indian Private Sector Commercial Banks,
  6. DBOD.No.PSBS.BC.41/16.13.100/2002-2003 dated November 7, 2002 on Transfer of Shares – Prior Acknowledgment of RBI addressed to all Indian Banks in the Private Sector,
  7. DBOD.No.PSBS.BC.64/16.13.100/2003-04 dated February 3, 2004 on Guidelines for Acknowledgement of Transfer / Allotment of Shares in Private Sector Banks addressed to all Scheduled Commercial Banks, and
  8. RBI letters DBOD.No.PSBD.155/16.13.100/2004-05 dated August 13, 2005 and DBOD.No.PSBD 435/16.13.100/2005-06 dated October 26, 2005 on Transfer of shares of banks addressed to all Private Sector Banks.

12.1 All approvals / acknowledgements given under the above circulars shall be deemed as given under these directions.


SCHEDULE
FORMS

Form A
Declaration to be submitted by the applicants intending to acquire major shareholding in a private sector bank

Name of the private sector bank in which acquisition is sought:

S.no. Aspect Remarks
Information to be submitted by the applicant for acquisition of shares or compulsorily convertible debentures / bonds or voting rights to the extent of 5% or more upto 10% in the bank
1. Name of the applicant (including previous names, if any)
2. Name of the father of the applicant / main individual promoter behind the applicant
3. Present address of the applicant
4. Permanent address of the applicant
5. Citizenship and Resident status if the applicant is an individual / ownership and control status if the applicant is an entity (as per FEMA)
6. Occupation of the applicant/ Nature of business of the entity
7. Shareholding pattern if the applicant is an entity
8. Details of “acquisition” by the applicant and “aggregate holding” in the bank (name, shareholding in Rs. and %)
9. a) List of “relatives” of the applicant

b) List of “persons acting in concert” with the applicant

c) List of “associate enterprises

The lists should contain details of name, net worth, total assets, credit rating, shareholding (if any) in the bank in Rs. and %

10. Source of funds for acquisition of the shares / compulsorily convertible debentures / bonds / voting rights in the bank (Duly certified by the Chartered Accountant)
11. Total net worth, profitability and average income of the applicant over the last 5 years (Duly certified by the Chartered Accountant)
12. In case of acquisition of voting rights, the details of agreement in brief and consideration paid for such agreement, if any
13. Has the applicant, or any of the entities listed in 9 above been adjudged bankrupt at any time
14. If the applicant, or any of the entities listed in 9 above is a member of a professional association / body, details of disciplinary action, if any, pending or commenced or resulting in conviction in the past against him / her or whether he / she has been banned from entry of at any profession / occupation at any time  
15. Has the applicant or any of the entities at 9 above been subject to any investigation at the instance of Government department or agency?  
16. Details of prosecution, if any, pending or commenced or resulting in conviction in the past against the applicant, or entities listed in 9 above for violation of economic laws, tax laws and regulations  
17. Details of serious disciplinary or criminal prosecution, if any, pending or commenced or resulting in conviction in the past against the applicant, or entities listed in 9 above  
18. Has the applicant, or entities listed in 9 above at any time been found guilty of violation of rules / regulations / legislative requirements by customs / excise / income tax / foreign exchange / other revenue authorities, if so give particulars  
19. Whether the applicant, or entities listed in 9 above has at any time come to the adverse notice of any regulator / revenue authorities / investigative agency including issuance of Show Cause Notice. (Though it shall not be necessary for a person to mention in the column about orders and findings made by regulators which have been later on reversed / set aside in toto, it would be necessary to make a mention of the same, in case the reversal / setting aside is on technical reasons like limitation or lack of jurisdiction, etc., and not on merit. If the order of the regulator is temporarily stayed and the appellate / court proceedings are pending, the same also should be mentioned).  
20. Whether the applicant, or entities listed in 9 above has been convicted for any offence under any legislation designed to protect members of the public from financial loss due to dishonesty, incompetence or malpractice.
21. Whether any other person has beneficial interest in the proposed acquisition(if applicable)
22. Details of shareholding / voting rights / compulsorily convertible debentures / bonds of the applicant in other banks and other institutions in the financial sector
23. If the applicant is a regulated entity, names and addresses of the regulators of the applicant in India and abroad
24. Details of the applicant and persons / entities at 9 above regarding – date of birth / incorporation, Registered Office address, nature of business activity, PAN no., TAN No., CIN No. / DIN No., income tax circle, name of the regulator, type of registration with SEBI, bank, branch and account number (including credit facilities and non-fund based facilities) , net worth, total assets. (May be given in a separate annexure).
25. Income Tax returns and financial statements of the applicant for the last three years
26. Any other explanation / information in regard to items above considered relevant for judging “fit and proper” status of the applicant and entities listed in 9
Additional information to be submitted by the applicants intending to acquire shares or compulsorily convertible debentures / bonds or voting rights to the extent of more than 10 % in the bank
27. Whether the applicant is a financial sector entity or Government / public sector undertaking
28. In case the applicant belongs to a conglomerate Group, name and details of the group it belongs to
29. Whether the applicant is listed, if yes, at which stock exchanges and the extent of public shareholding
30. Details of capital raised by the applicant during the past 5 years
31. List of

  1. List of entities which hold 10% or more of the paid-up share capital of the applicant
  2. list of HUFs where the applicant or his family member is a member / karta
  3. List of entities in which the HUF at (b) above is holding 10% or more of the paid-up share capital of that entity
  4. List of entities in which the applicant is holding 10% or more of the paid-up share capital of such entities
  5. entities, if any, in which the applicant is considered as being interested [Refer Section 184 of Companies Act, 2013]
  6. entities where there are common shareholders of the applicant who collectively hold 20% or more of the paid-up share capital of the applicant and also those entities
  7. associates of the applicant
  8. related parties of the applicant
  9. entities in which the collective shareholding, by the applicant and persons / entities in 9 and from (a) to (h) above, is 10% or more of the paid-up share capital of that entity

entities in which persons / entities named in 9 and from (a) to (i) above have individually or collectively divested their shareholding in the past 5 years

32. Details of “acquisition” and “aggregate holding” by persons / entities in 9 and 31 above (details of – name, shareholding in Rs. and %)
33. Has the applicant, or any of the entities listed in 31 above been adjudged bankrupt at any time
34. If any of the entities listed in 31 above is a member of a professional association / body, details of disciplinary action, if any, pending or commenced or resulting in conviction in the past against him / her or whether he / she has been banned from entry of at any profession / occupation at any time
35. Have any of the entities at 31 above been subject to any investigation at the instance of Government department or agency?
36. Details of prosecution, if any, pending or commenced or resulting in conviction in the past against the entities listed in 31 above for violation of economic laws and regulations
37. Have any of the entities in 31 above at any time been found guilty of violation of rules / regulations / legislative requirements by customs / excise / income tax / foreign exchange / other revenue authorities, if so give particulars
38. Whether any of the entities at 31 above has at any time come to the adverse notice of any regulator / revenue authorities / investigative agency including issuance of Show Cause Notice. (Though it shall not be necessary for a person to mention in the column about orders and findings made by regulators which have been later on reversed / set aside in toto, it would be necessary to make a mention of the same, in case the reversal / setting aside is on technical reasons like limitation or lack of jurisdiction, etc, and not on merit. If the order of the regulator is temporarily stayed and the appellate / court proceedings are pending, the same also should be mentioned)
39. Whether any of the entities at 31 above has been convicted for any offence under any legislation designed to protect members of the public from financial loss due to dishonesty, incompetence or malpractice
40. Details of serious disciplinary or criminal prosecution, if any, pending or commenced or resulting in conviction in the past against the applicant, or entities listed in 31 above
41. Whether the applicant intends to have a Board representation in the bank
42. Details of representation of the applicant on the Boards of other banks and other institutions in the financial sector
43. Details of corporate structure of the group in case the applicant belongs to a group indicating the total assets and shareholding pattern of the entities in the group (starting from the individual shareholders of the group)
44. Tabulation of details of the date of incorporation, PAN/TAN No., CIN No., DIN No., Registered Office address, nature of business activity, income tax circle, name of the regulator, type of registration with SEBI, if any, bank, branch and account number (including credit facilities and non-fund based facilities) , net worth and total of the entities listed in 31 above. (May be given in a separate annexure).
45. Balance sheets of the major entities from 9 and 31 above (covering atleast 50% of the group’s total assets) in the group for the last three years
46. The business record and experience of the applicant including any experience of acquisition of companies / business
47. Brief details of shareholder agreements
48. Reasons for acquiring a stake or voting rights in the bank
49. Any other explanation / information in regard to items above considered relevant for judging “fit and proper” status of the entities listed in 31 above

Undertaking

I confirm that the above information is to the best of my knowledge and belief, true and complete. I undertake to keep the bank fully informed, as soon as possible, of all events which take place subsequent to submission of this declaration which are relevant to the information provided above.

Signature and stamp of the applicant

Place :
Date :

Form B
Annual declaration (as on March 31 every year) to be furnished to the bank by all the existing “major shareholders” of private sector banks

Name of the bank :

1. Name of the major shareholder
2. Address of the major shareholder
3. Occupation of the major shareholder(in case of individuals)
4. Total number of shares / compulsorily convertible debentures / bonds / extent of voting rights held by the major shareholder in the bank
5. Date/s of acquisition of shareholding / compulsorily convertible debentures / voting rights in the bank in the past 5 years  
6. Details of regulatory actions against the major shareholder and entities as per 9 and 31 of Form A above by regulators in India or abroad, during the last 5 years  
7. Whether there have been any criminal proceedings against the major shareholder and entities as per 9 and 31 of Form A above during the last 5 years, if so, details thereof.  
8. Whether there have been any civil proceedings against the major shareholder and entities as per 9 and 31 of Form A above during the last 5 years, if so, details thereof.  
9. Change of ownership of the major shareholder in the last 5 years (in case of entities), if any  

(Signature of the major shareholder alongwith date)

Form C
Information to be furnished to the Reserve Bank by the private sector bank while considering the application for seeking prior approval of “major shareholding”

1. Name of the bank
2. Paid-up capital of the bank
3. Names of the existing major shareholders of the bank holding 5% or more of the paid-up share capital of the bank/ holding voting rights of 5% or more  
4. Applicant’s track record on integrity and reputation  
5. Report of the bank on the acquisition (based on a review by the Board of Directors)
6. In case of foreign / non-resident investors, declaration of the bank regarding compliance with the relevant provisions of FEMA 1999
7. Whether the applicant or entities as per 9 and 31 of Form A above been subject to any proceedings of serious disciplinary or criminal nature
8. Even if the acquisition is not “major shareholding”, but if the Board is of the opinion that the acquisition reflects attempts at takeover or destabilisation of the management, full details are to be reported
9. Names and percentage of persons holding only voting rights in the bank

Encl :
1. Report of the bank
2. Copy of the Board resolution

(Authorised signatory of the bank and date)

Form D
Information to be furnished by the bank to RBI in respect of existing “major shareholder” who is assessed not “fit and proper”

Name of the bank :

1. Name of the major shareholder
2. Address of the major shareholder
3. Occupation of the major shareholder (in case of individuals)
4. Total number of shares / compulsorily convertible debentures / bonds / extent of voting rights held by the major shareholder in the bank
5. Date/s of acquisition of shareholding/ voting rights in the bank  
6. Details of regulatory actions against the major shareholder and entities as per 9 and 31 of Form Aabove, by regulators in India or abroad, during the last 5 years  
7. Whether there have been any criminal proceedings against the major shareholder and entities as per 9 and 31 of Form A above during the last 5 years, if so, details thereof.  
8. Whether there have been any civil proceedings against the major shareholder and entities as per 9 and 31 of Form A above during the last 5 years, if so, details thereof.  
9. Change of ownership of the major shareholder during the last 5 years (in case of entities), if any  
10. Outcome of the due diligence exercise conducted by the bank (wherever applicable)  
11. Any other information that has come to the notice of the bank which has a bearing on the major shareholder’s “fit and proper” status  

(Authorised signatory of the bank and date)

List of candidates and their respective particulars for election to the Council and Regional Councils to be held in December, 2015.

ANNOUNCEMENT
17th November, 2015

Re: List of candidates and their respective particulars for election to the Council and Regional Councils to be held in December, 2015.

In accordance with sub-rule (3) of Rule 15 read with Schedule 5 to the Chartered Accountants (Election to the Council) Rules, 2006, we have prepared list containing the particulars concerning the candidates for election to the twenty third Council and twenty second Regional Councils to be held in December, 2015. The list contains information to the extent furnished by the respective candidates under sub-rule (4) of rule 9 read with Schedule 4 to the said Rules. While the list pertaining to respective Council/Regional Council is under despatch to the voters, a copy of the same is hereby hosted for their general information. To view the list, please click the link below:

Particulars of candidates for Council from -

Western India Regional Constituency
Southern India Regional Constituency
Eastern India Regional Constituency
Central India Regional Constituency
Northern India Regional Constituency

Particulars of candidates for Regional Council -

Western India Regional Council 
Southern India Regional Council 
Eastern India Regional Council 
Central India Regional Council 
Northern India Regional Council 

( V. SAGAR )
RETURNING OFFICER AND SECRETARY

Extension of last date for submission of Application Form for financial assistance from CASBF

The Board of Trustees of The Chartered Accountants’ Students Benevolent Fund has decided to grant financial assistance to 800 students, out of which 400 male and 400 female students, who are currently undergoing articled training in accordance with The Chartered Accountants Regulations, 1988 and are poor, needy but meritorious to pursue the Chartered Accountancy Course, @ Rs. 1000/- p.m. for one year with effect from 1st April, 2015 to 31st March, 2016 to be paid in lump sum, subject to filing of required application.

The eligibility criteria for obtaining financial assistance from CASBF are as under:

  • Passed 10 + 2 examination with a minimum of 70 percent marks and Common Proficiency Test of ICAI in the first attempt or
  • Passed B. Com Examination from a recognized University with a minimum of 60% marks.
  • Currently undergoing articled training as per CA Regulations, 1988.
  • Annual income of parents from all sources must be less than Rs. 1.50 lakh.

Students both male and female who are fulfilling the above criteria may apply for financial assistance from the Chartered Accountants’ Students Benevolent Fund. Students may send their request in the prescribed Application form duly filled in to the Member Secretary, Chartered Accountants’ Students Benevolent Fund at the following address so as to reach on or before 31st December, 2015.

The form can be downloaded by clicking the following link:

http://www.icai.org/new_post.html?post_id=12016&c_id=240

The filled in application form should be sent to the following address:

Member Secretary
Chartered Accountants’ Students Benevolent Fund
C/o The Institute of Chartered Accountants of India,
“ICAI Bhawan”,
A-29, Sector-62, Noida-201309,
Dist. Gautam Budh Nagar (U.P.)
Website: www.icai.org; email: cabf@icai.in

Application Form for Financial Assistance from CASBF 2015-2016

Non-Operative Financial Holding Company (NOFHC) – Application of Capital Adequacy Norms

RBI/2015-16/238
DBR.No.BP.BC.57/21.06.201/2015-16

November 19, 2015

All Scheduled Commercial Banks
(Excluding Local Area Banks
and Regional Rural Banks)

Madam / Sir,

Non-Operative Financial Holding Company (NOFHC) – Application of Capital Adequacy Norms

Please refer to the Guidelines for Licensing of New Banks in the Private Sector issued on February 22, 2013. The guidelines inter alia require setting up of wholly-owned Non-Operative Financial Holding Company (NOFHC) by eligible entities / groups in the private sector for carrying out business of banking and other permissible financial activities. Further, in terms of paragraph 2(H) of the guidelines, capital adequacy norms would be applied to the NOFHC on consolidated basis as applicable to the existing banking groups.

2. In this context, it is clarified that consolidated (Group) level capital adequacy would also mean application of consolidated capital adequacy norm to the NOFHC after consolidating the relevant entities held by it in terms of paragraph 3: Scope of Application of Capital Adequacy Framework of the Master Circular on Basel III Capital Regulations issued vide circular DBOD.No.BP.BC.6/21.06.201/2014-15 dated July 1, 2014, in conjunction with the Guidelines for consolidated accounting and other quantitative methods to facilitate consolidated supervision issued vide circular dated DBOD.No.BP.BC.72 /21.04.018/2001-02 dated February 25, 2003.

Yours faithfully,

(Sudarshan Sen)
Principal Chief General Manager

RBI extends Directions issued to Lokseva Sahakari Bank Ltd., Pune, Maharashtra till May 19, 2016

The Reserve Bank of India notified that Lokseva Sahakari Bank Ltd., Pune, was placed under directions for a period of six months vide directive dated May 19, 2014, from the close of business on May 20, 2014. The validity of the directions was extended twice, for a period of six months each, vide order dated November 12, 2014 and dated May 06, 2015. It is hereby notified for the information of the public that the period of operation of the directive dated May 19, 2014 read with directive dated November 12, 2014 and May 06, 2015 has been extended for a further period of six months from November 19, 2015 to May 19, 2016 vide modified order dated November 04, 2015 subject to review. The other terms and conditions of the directive under reference shall remain unchanged. A copy of the directive dated November 04, 2015 is displayed at the bank’s premises for the perusal of public.

The aforesaid modification by the Reserve Bank of India should not per-se be construed to imply that Reserve Bank of India is satisfied of substantive improvement in the financial position of the above bank.

Alpana Killawala
Principal Chief General Manager

Press Release: 2015-2016/1187

Implementation of Section 51-A of Unlawful Activities Prevention Act (UAPA), 1967- Updates to Al-Qaida and Taliban Sanctions List

RBI/2015-16/235
DBR. AML.No.6854/14.06.001/2015-16

November 18, 2015

The Chairpersons/ CEOs of all Scheduled Commercial Banks/ Regional Rural Banks/ Local Area Banks/ All India Financial Institutions/ all NBFCs/ All Primary (Urban) Co-operative Banks /State and Central Co-operative Banks (StCBs / CCBs) /All Payment System Providers/ System Participants and Prepaid Payment Instrument Issuers/ All authorised persons including those who are agents of Money Transfer Service Scheme

Dear Sir/ Madam,

Implementation of Section 51-A of Unlawful Activities Prevention Act (UAPA), 1967- Updates to Al-Qaida and Taliban Sanctions List

Please refer to our circular DBR. AML. No. 4897/ 14.06.001/ 2015-16 dated October 7, 2015 on the captioned subject releasing the update issued vide press release No.12066 dated September 30, 2015 and No. 12067 dated October 2, 2015 regarding UNSCR 1267(1999)/ 1989(2011) Committee’s Al Qaida Sanctions List and another circular DBR. AML. No. 14900/ 14.06.001/ 2014-15 dated April 7, 2015 regarding the update issued on March 27, 2015 pertaining to 1988 Committee’s Taliban Sanctions List.

2. Ministry of External Affairs (MEA), UNP Division has now forwarded press releases No. SC/12082 dated October 14, 2015No. SC/12097 dated October 26, 2015 and No. SC/12118 dated November 12, 2015 relating to amendments/ deletions pertaining to Al Qaida sanction list and another press release No. SC/12104 dated November 2, 2015 relating to addition of one entry to its 1988 Sanction List pertaining to Taliban.

Press releases pertaining to the update are available at:
Al Qaida:
http://www.un.org/press/en/2015/sc12082.doc.htm
http://www.un.org/press/en/2015/sc12097.doc.htm
http://www.un.org/press/en/2015/sc12118.doc.htm
Taliban: http://www.un.org/press/en/2015/sc12104.doc.htm respectively

3. A link to updated list of individuals and entities linked to Al Qaida is available at:
https://www.un.org/sc/suborg/sites/www.un.org.sc.suborg/files/1267.pdf

and a link to updated list of individuals and entities linked to Taliban is available at:
https://www.un.org/sc/suborg/sites/www.un.org.sc.suborg/files/1988.pdf

4. Regulated Entities (REs) are required to update the list of individuals/entities as circulated by Reserve Bank and before opening any new account, it should be ensured that the name/s of the proposed customer does not appear in the list. Further, REs should scan all existing accounts to ensure that no account is held by or linked to any of the entities or individuals included in the list.

5. REs are advised to strictly follow the procedure laid down in the UAPA Order dated August 27, 2009 enclosed to our circular DBOD.AML.BC. No. 44/14.01.001/2009-10 dated September 17, 2009 and ensure meticulous compliance to the Order issued by the Government.

6. As far as freezing of funds, financial assets or economic resources or related services held in the form of bank accounts of the designated individuals/entities are concerned, action should be taken as detailed in paragraph 6 of the circular dated September 17, 2009, mentioned above.

7. A link of press releases in which the relevant changes to the list are announced are posted on the UNSC Sanction Committee’s website at the following URL:

https://www.un.org/sc/suborg/en/sanctions/1267/press-releases and

https://www.un.org/sc/suborg/en/sanctions/1988/press-releases

Yours faithfully,

(Thomas Mathew)
General Manager
Encl.: as above

Examination for the Certificate Course on Valuation scheduled on 31st January, 2016

“Corporate Laws & Corporate Governance Committee is conducting Examination for the Certificate Course on Valuation scheduled from 10:00 AM to 1:00 PM. on 31st January, 2016, at respective locations in India”.

The candidates who have attended the 7 days classes of the Certificate Course on Valuation are eligible to appear for the examination. To qualify this course a project report of 100 marks on any topic of the choice of the participant has to be submitted. A participant of the course has to pass the written examination, comprising of multiple choice questions of 60 marks and subjective questions of 40 marks, Total Written Examination is for 100 marks. A certificate will be awarded to the qualified participant scoring 60% marks in each, project report and written examination. The Last date for submission of Project Report is 15th January, 2016.Those who have already submitted hard copy of the Project report, please ignore the requirement of submission of project report .The Project Report has to be submitted in Hard copy either by courier or by hand at the below mentioned address:

Secretary
Corporate Laws and Corporate Governance Committee
4th Floor, Administrative block
The Institute of Chartered Accountants of India
ICAI Bhawan, Plot A-29,
Sector 62, Noida-201309,
Dist: Gautam Budh Nagar

Fees for examination

The fees for the first appearance of the examination are NIL.

However for the subsequent appearance the fee charged is Rs 1000. Please pay the fee in case Re-appearing for the exams. The Fees can be paid at the respective centres by DD/ Cheque payable at par all over India” The Secretary, The Institute of Chartered Accountants of India” or may be paid online at the following link:

http://www.icai.org/ccm.html?progid=1077

For any query, please contact:

Corporate Laws and Corporate Governance Committee Secretariat.
Ph: 0120- 3045969
E-mail: valuation@icai.in

Risk Management & Inter-Bank Dealings: Relaxation of facilities for residents for hedging of foreign currency borrowings

RBI/2015-16/232
A.P. (DIR Series) Circular No. 28

November 5, 2015

To,

All Authorised Dealer Category – I banks

Madam / Sir,

Risk Management & Inter-Bank Dealings: Relaxation of facilities for residents for hedging of foreign currency borrowings

Attention of Authorised Dealers Category-I (AD Category-I) banks is invited to the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 dated May 3, 2000 (Notification No.FEMA/25/RB-2000 dated May 3, 2000) as amended from time to time and A.P. (DIR Series) Circular No. 32 dated December 28, 2010 containing Comprehensive Guidelines on Over the Counter (OTC) Foreign Exchange Derivatives and Overseas Hedging of Commodity Price and Freight Risks, as amended from time to time.

2. Under the existing guidelines, residents having a long term foreign currency liability in terms of Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000, FEMA 3/2000-RB, dated May 3, 2000, as amended from time to time and rules, regulations and directions issued thereunder, are permitted to hedge exchange rate and/or interest rate risk exposure thereof by undertaking a foreign currency-INR swap to move from a foreign currency liability to a rupee liability with an AD Cat-I bank subject to the operational guidelines, terms and conditions as mentioned in the above circular.

3. With a view to facilitating hedging of long term foreign currency borrowings by residents, it has been decided to permit them to enter in to FCY-INR swaps with Multilateral or International Financial Institutions (MFI/IFI) in which Government of India is a shareholding member subject to the following terms and conditions:

(i) Such swap transactions shall be undertaken by the MFI / IFI concerned on a back-to-back basis with an AD Category-I bank in India.

(ii) AD Category-I banks shall face, for the purpose of the swap, only those Multilateral Financial Institutions (MFIs) and International Financial Institutions (IFIs) in which Government of India is a shareholding member.

(iii) The FCY-INR swaps shall have a minimum tenor of three years. All other operational guidelines, terms and conditions relating to FCY-INR swaps as laid down in A.P. (DIR Series) Circular No. 32 dated December 28, 2010, as amended from time to time, shall apply, mutatis mutandis.

(iv) In the event of a default by the resident borrower on its swap obligations, the MFI / IFI concerned shall bring in foreign currency funds to meet its corresponding liabilities to the counterparty AD Cat-I bank in India.

(v) AD Category-I bank shall report the FCY-INR swaps transactions entered into with the MFIs / IFIs on a back-to-back basis to CCIL reporting platform, including details of the foreign currency borrower, in terms of Reserve Bank circular no. FMD.MSRG.No. 94/02.05.002/2013-14 dated December 4, 2013 on the reporting platform for OTC Foreign Exchange and Interest Rate Derivatives.

4. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

5. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

Yours faithfully,

(R Subramanian)
Chief General Manager

Inviting Suggestions on drafted Background Material of Certificate Course on Forex and Treasury Management

Committee on Financial Markets and Investors’ Protection of ICAI is conducting Certificate course on Forex and Treasury Management from the year 2009. With the continuous overwhelming response of members, committee is able to successfully complete 31st batches till date.

With a view to deliver the members a good quality education in the same field, committee has decided to review its existing course curriculum and redesign the course curriculum and develop the comprehensive Background Material of the Forex and Treasury Management course.

The restructured Course curriculum is available on the following link:

Certificate Course on Forex and Treasury Management – Course curriculum

The drafted Background Material of Module- 3 is available on the following link:

Module-3“Theory and Practice of Forex and Treasury Management”

Suggestions are invited on the drafted BGM of Module-3 from the Members/Professionals/Subject matter experts. Interested persons are requested to send their suggestions/comments to: cfmip@icai.in, mark copy to: akagrawal@icai.in or Contact at 0120-3045945.

Thanks and Regards,

CA. Anuj Goel,
Chairman, Committee on Financial Markets and Investors’ Protection, ICAI

Corporate Bond Markets in India: A Framework for Further Action (Remarks by Shri Harun R. Khan, Deputy Governor, Reserve Bank of India at FICCI CAPAM -2015

Speaking at this event – in this panel – leaves me with a sense of déjà vu. The fact that I spoke about the same issue at the same forum three years back in 2012 – and many other fora earlier – reflects the deep-rooted, inertial nature of underlying factors. At least for more than 10 years now development of corporate bond markets in India has been the focus of all stakeholders but the arduous pursuit of the ‘holy grail’ has not delivered desired results. In the process this has unfortunately become a convenient stick to flag the policy and regulatory intent. Every set of stakeholders has its own views on what needs to be done but much of the prognosis ends up giving a limited perspective.

2. Maybe it is time to dispassionately understand the big picture and acknowledge ten fundamental facts about the financial ecosystem as it exists today:

  1. Bond markets globally are institutional in nature – that too buy and hold kind of investors;
  2. A sound bankruptcy regime is a pre-requisite for deep bond markets;
  3. Development of bond markets needs sustained participation of long-term institutional investors across the credit curve;
  4. Tax regime for financial instruments remains one of the key drivers of investor interest;
  5. Development of the market mechanisms and infrastructure can at best be an enabling factor – not the driving factor;
  6. Fiscal consolidation leading to lower sovereign borrowings can enhance the demand for corporate bonds;
  7. High indebtedness of major corporates both from domestic and external sources is not conducive for issuance of corporate bonds;
  8. The centrality of banks in the financial system is a given at our stage of economic development. The corporate debt market, therefore, cannot play a predominant role in financing in the near future;
  9. Predominant reliance on the banking system to support development of corporate bond market, directly or indirectly, militates against the very idea of the bond market de-risking the banking sector; and
  10. The corporate debt market cannot be looked as totally detached from the sovereign bond market. Corporate bond market may get a fillip as the interest rates come down and the fiscal deficit targets are achieved. The play on spreads across the credit curve will become more attractive.

3. Alongwith recognizing the hard facts comes the realization that there are not many low hanging fruits remaining to be plucked – work forward is contingent on multifarious factors and some hard policy choices.

4. There have been a number of reports on the corporate bond markets, viz., R. H. Patil Committee report (December 2005), Report of the High Powered Expert Committee on Making Mumbai an International Financial Centre in 2007 (Percy Mistry Committee) and A Hundred Small Steps [Report of the Committee on Financial Sector Reforms (CFSR)] in 2009 (Raghuram Rajan Committee), Reports of the City of London, which have examined in detail various aspects related to the development of corporate bond market and have made useful recommendations. It has been recently decided by the Financial Stability and Development Council (FSDC) and its Sub-Committee that the issue needs to be looked into its entirety. An inter-regulatory group has already started work in this direction. The focus of this group will be to distill key actionable recommendations made by all earlier committees and suggest a time bound plan for implementation of the same.

Measures taken to develop the corporate debt market

5. Taking into account the recommendations made by various expert committees, several measures have been taken by the Government of India, the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) for the development of corporate debt market in India. The success of these measures in achieving the intended outcomes has, however, been varied. Impact of some of the measures taken is captured below:

Intended outcomes mostly achieved Intended outcomes partially achieved/ too early to say Intended outcomes not achieved
  • Setting up of reporting platform for post-trade transparency
  • Introduction of DvP in settlement of OTC trades in corporate bonds to eliminate settlement risk
  • Issue of long-term bonds by banks allowed with a minimum maturity of seven years to raise resources for lending to (a) long term projects in infrastructure sub-sectors, and (b) affordable housing. These bonds have been exempted from computation of net demand and time liabilities (NDTL) and are therefore not been subjected to CRR/SLR requirements
  • The investment limit for Foreign Portfolio Investors (FPI) has been increased to USD 51 billion during the last few years. Limit allocation methodology have been rationalized and withholding tax rate has been reduced from 20% to 5%
  • FPIs have been permitted to invest only in corporate debts of at least 3 years of residual maturity
  • International financial institutions like IFC were permitted to float a rupee linked bond overseas to deepen the off-shore rupee bond market so that IFC and other investors can raise rupees to invest in India. This has facilitated development of benchmark yield for long term corporate bonds
  • SEBI has allowed setting up of dedicated debt segment on the exchanges
  • Banks and PDs allowed to become members of stock exchanges to trade in corporate bonds
  • Investment norms for banks and PDs relaxed to facilitate investment in corporate bonds
  • Final guidelines issued for partial credit enhancements by banks to corporate bonds
  • Measures taken to encourage investor interest/participation in the corporate bond market in terms of liberalizing the listing requirements; simplification in procedures and processes, simplified disclosure norms and standardisation of market conventions
  • Rationalisation of FPI regulations has been put in place for easier registration process and operating framework for overseas entities seeking to invest in Indian capital markets
  • Introduction of Repo in corporate bonds to meet the funding needs
  • Introduction of Credit Default Swaps to facilitate hedging of credit risk by the holders of corporate bonds Reissuance of bonds permitted by SEBI

6. The measures taken by the Reserve Bank of India, SEBI and the Government have resulted in considerable increase in issuance as well as secondary market trading of corporate bonds. Total corporate bond issuance has increased by around 155% from ₹ 2709.46 billion in 2010-11 to ₹ 4,789.62 billion in 2014-15. Similarly, the number of issuances increased by almost 77% from 4,280 in 2010-11 to 10,941 in 2014-15 (Table 1).

Table 1: Issues and Total outstanding Corporate Debt
(amount in Rupee billion)
Financial Year Issuance details % change in issuance Net outstanding (As at end-March) No. of outstanding instruments % change in outstanding amount
No. of issues Amount
2010-11 4,280 2,709.46 8,895.09 12,155
2011-12 5,565 3,100.69 14.44 10,516.38 13,721 18.23
2012-13 5,578 3,880.25 25.14 12,901.46 15,874 22.68
2013-14 4,911 3,881.51 0.03 14,673.96 13,104 13.74
2014-15 10,941 4,789.62 23.40 17,503.20 19,439 19.28
2015-16 (up to Sept 2015) 4,358 1,442.48 69.88 18,660.59 21035 6.61
Source: Securities and Exchange Board of India

7. In comparison to other economies, the size of the bond market in India, however, remains moderate as a percentage of GDP (Table 2)

Table 2: Size of the local currency corporate bond market in other Asian economies
(as a % of GDP)
Q2 2014 Q2 2015
China 17.8 18.8
Hong Kong 29.3 29
Indonesia 2.2 2.2
South Korea 74 76.4
Malaysia 41.3 41.5
Philippines 5.6 5.8
Singapore 30.6 32.4
Thailand 16.7 17.4
Japan 16.9 16.2
{Source: Asia Bond Monitor, Sept 2015}

8. It, however, needs to be noted that the development of a corporate bond market in India has lagged behind in comparison with other financial market segments due to certain structural issues. Some of these issues include:

  • The corporate bond issuance is dominated by private placements as these account for more than 95% of the total issuance of corporate debt (2014-15);
  • Issuances are concentrated in the AA or above rating, largely by public sector entities and financial institutions
  • A majority of the issuances are concentrated in the 2-5 year tenor;
  • Limited/narrow investor base. Investment mandates of institutional investors such as insurance companies, pension funds and provident funds do not permit large investment in corporate bonds;
  • Reissuance of bonds has not picked up;
  • Lack of functional trading platform with CCP facility like NDS-OM (as available in Government securities market) impedes the growth of secondary market;
  • Market for credit risk protection instruments like CDS has not yet developed;
  • Non-standardized stamp duties on corporate bonds across various states affects issuances.

Way forward

9. Activating the corporate bond market will require a number of regulatory measures to address both the macro issues as well as the market micro-structure issues. While creating an efficient market infrastructure will create conditions for issuers and investors, the structural issues can be addressed over the longer term as the market evolves and the financial system gets more integrated with international markets. It would be convenient to look at the set of issues in a comprehensive manner. I would like to classify some of the possible measures in the ‘7I’ framework which I had talked about in one of my earlier speeches.

Issuer

Reissuance of bonds

10. Corporates may be encouraged to re-issue existing bonds under the same ISIN code. This will augment market liquidity and potentially reduce the cost of borrowings. Though SEBI has recently allowed reissuances by the corporates, there has not been any reissue of bonds by any corporate. In order to encourage reissuances, there may be a need for some incentives in the form reduced documentation formalities, less issuance fees, etc.

Issuance of municipal bonds

11. An active corporate bond market would enable market for municipal bonds issued by the Urban Local Bodies (ULBs). The potential for issuing municipal bonds assumes importance in the context of the proposal to set up 100 smart cities. However, the size of the municipal bond market in India is rather limited and is distributed over a few strong municipalities of Ahmadabad, Nasik, Nagpur, etc. The possible reasons could be overlapping jurisdiction on municipal bodies leading to plethora of rules; perceived lack of specialized project management support in ULBs; non-transparent budgeting and accounting systems in many of the ULBs and limited exit route for investors due to lack of secondary market trading.

12. To address these issues some of the measures which could be considered, are strengthening the governance structure of the municipal issuers by ring fencing the municipal bond funds; providing partial or full guarantee by the Central/ State government; mandating Escrow account for debt servicing of bond proceeds, etc. SEBI has since issued the Regulations for Issue and Listing of Securities by Municipalities.

Investor

Liberalising the investment guidelines for long term players

13. In order to encourage demand, investment norms for regulated entities may be reviewed to facilitate their active participation in corporate debt market. The current investment guidelines for pension and other retirement benefit funds may be reviewed from ownership criteria (public sector / private sector) to ratings based criteria. They may also be permitted to use interest rate swaps, repos and credit default swaps.

Encouraging Retail Participation

14. Participation of retail investors in corporate bonds continues to be limited. In order to increase retail investors’ participation in corporate bonds, we need to encourage issuance of zero coupon bonds, provide clarity on taxation issues, include provision of special quota for retail investors in debt issues and provide reduced transactions costs for retail investors.

Intermediaries

Introduction of a market making scheme

15. A market making scheme in corporate bond could potentially improve market liquidity. But market making in an illiquid market is challenging and not many intermediaries will be ready to take on the risks of making two-way quotes. A viable market making scheme may have to be formulated with suitable incentives to encourage market participants to provide two way quotes. Stock exchanges may have to come out with market making scheme in consultation with the regulators. Perhaps the role of debenture trustees in this regard may also need to be explored.

Infrastructure

Efficient trading platforms for corporate bonds

16. NSE has developed a dedicated trading platform for privately placed corporate bonds. There is, however, negligible activity on the trading platform. Although the system provides for DVP-III guaranteed settlement, it is learnt that the system has some issues, viz. high margin, high penalty for default, non-availability of all the issued bonds on the platform, etc. According to some market participants, there is a need for combined settlement for corporate bond repo and outright market under DVP-III mechanism at par with the G-Sec market in order to increase the traders’ participation.

17. Stock exchanges could discuss with the market participants and make suitable changes in the existing platform to encourage trading. If required, they may adopt a calibrated approach in the matter and explore introduction of DVP-II settlement in initial stages and then move to DVP-III depending on development of the market.

18. An electronic trading platform similar to the CROMS platform for G-sec has been announced for repo in corporate debt. This needs to be taken forward quickly. Legal framework for recognizing and regulating such platforms may have to be put in place.

Rating Agencies

19. Rating Agencies play an important role by way of providing credit evaluation of the instruments like bonds issued by corporates. Their role came into focus internationally after the Global Financial Crisis and certain principles for reform of the rating agencies had been agreed internationally. In India also, SEBI had come out with certain transparency and disclosure norms for the Credit Rating Agencies (“CRAs”) in 2010. CRAs. Based on the experience, the guidelines may need to be reviewed.

Bankruptcy laws

20. A robust and effective bankruptcy regime is essential to development of corporate debt market from investors’ point of view. Steps, such as, reforming bankruptcy law, early resolution of bankruptcy cases and streamlining the procedures relating to insolvency would go a long way in achieving the same. The issue of insolvency of financial institutions established under statutes and bi-lateral netting among them during bankruptcy also need resolution. One of the most significant steps in this direction was the setting up of the Bankruptcy Law Reform Committee under Shri T. K. Viswanathan which has just submitted its report. The Committee has come out with the draft legal framework for resolving matters of insolvency and bankruptcy which, when fully implemented, will have far reaching impact. Early enactment of this proposed legislation and the follow-up action will be a game changer for development of corporate bond markets.

Incentives

Cap on borrowings of corporate from banks for capital purpose

21. Restricting the proportion of borrowings by large corporates from banks and making such corporates use the market mechanism (such as, corporate bonds, commercial papers and other instruments) to meet a part of their short term as well as long term financing needs will help in the development of corporate bonds markets. Reserve Bank has already issued a Discussion Paper on “Large Exposures Framework and Enhancing Credit Supply through Market Mechanism” on March 27, 2015.

Resolving distribution tax related issue for securitization

22. Securitization of the corporate debt instruments would provide a big fillip to the market as it would improve risk transference and diversification and provide liquidity to the issuers. Subjecting income of SPV to tax hampers the growth of securitized debt. Market participants have been demanding that the taxation structure in securitized debt needs to be changed from distribution tax at SPV level to taxation in the hands of investors.

Rationalisation of stamp duty norms

23. In terms of the provisions of entry 91 of Union List, the Central Government has the power to levy stamp duty on issue of debentures. However, some state stamp laws also provide for duty on issue/transfer of debentures. Stamp duty laws need to be rationalised to provide an incentive to issuers and work is already on in this direction.

Use of corporate bonds a collateral

24. Post Global Financial Crisis has seen large scale use of non-sovereign papers as collateral by the central banks for providing liquidity during periods of stress. Similar enabling arrangement in India, subject of course to appropriate haircuts and other safeguards, could be examined. This will enhance the demand for good quality corporate paper.

Instruments

Activating the repo market

25. The reasons cited for lack of interest in corporate bond repo include non-signing of the Global Master Repo Agreement (GMRA), lack of lenders such as mutual funds and insurance companies in repo market, etc. Reserve Bank is engaging with other regulators to address these issues. It is also envisaged to widen the participation base in corporate debt repo by allowing more investors in repo market.

26. Internationally, GMRA is the standard document used by the market participants to undertake repo transactions. In India also, we have adopted the same document. Market participants need to highlight the specific issues in GMRA which need to be addressed.

Kickstarting CDS market

27. Unavailability of credit risk transfer mechanism in the corporate bond market works as a deterrent. Though CDS has been introduced in India, there is no activity in the market. One of the major constraints is restriction on netting of MTM position against the same counterparty for capital adequacy and exposure norms. Without netting, the trades in CDS have become capital intensive as banks and PDs have to provide higher capital charge on gross basis even if they are acting as market makers and having positive and negative position against the same counterparty. Netting has not been allowed due to lack of legal clarity. To provide clarity on the enforceability of netting including close-out netting, suitable amendments to provisions in the RBI Act are being proposed.

28. Regulators are also examining the possibility of allowing more entities to buy/sell protection through CDS. Availability of more number of protection sellers will encourage activity in the CDS market. In this connection, it may be necessary that financially sound insurance companies and other long term investors may be permitted to sell CDS protection subject to prudential norms prescribed by the regulators.

Rated Municipal Securities

29. As discussed earlier, a new asset class may be included for rated municipal securities under the IRDA & PFRDA investment guidelines.

Innovation

Use of banks’ PCE facility by corporates

30. Partial credit enhancements (PCE) by banks may give a boost to the corporate bond market in its evolution phase. Taking into account the feedback received, RBI has now issued the final guidelines under which the banks may provide PCE to support (senior) project bonds issued by companies/SPVs, and thereby improve the credit rating of the bond issue making them more attractive to certain specific set of investors, such as the institutional and long term investors. It is expected that issuers will take advantage of the scheme to issue long term bonds.

Bond Index

31. Though indices, such as, Nifty 50 and the BSE Sensex index serve as popular benchmarks for equities, designing debt indices has posed challenges in India as the market lacks breadth and depth. Market participants, however, need a debt index to compare the performance in corporate debt vis-a-vis the performance of different asset classes. More work needs to be done in this area by benchmark and index companies.

Concluding Thoughts

32. A well-developed corporate bond market can truly address some of the travails of the existing bank-based financial system. Development of efficient and robust bond markets is a challenge globally and only a few jurisdictions can claim to have genuine local currency bond markets. Even in those markets, the concerns relating to market illiquidity are increasingly being highlighted. The recent IMF Global Financial Stability Report has discussed these factors at length. While many of the factors may not be of immediate relevance to our market, the experience may hold important lessons as the regulatory regimes and market systems across jurisdictions which are increasingly becoming homogenized. While regulatory changes are likely to have had mixed effects on market liquidity, several structural drivers, such as, concentrated holdings by institutional investors, growth of electronic platforms and high frequency trading, reduced market making, etc. have also played a part.

33. We will have to assess the implications of these factors, including the emerging regulatory regime, on corporate bond market development. While it is recognized that the regulatory regime may need to respond positively to some of the critical issues unless the structural factors mentioned earlier are addressed, it would be difficult to have a deep corporate bond market. Early implementation of the draft bankruptcy code submitted by the Viswanathan Committee alongwith providing legal certainty to close-out netting for certain transactions would address the two key issues for enabling a credit market. Work is already underway in addressing some of the market infrastructure issues, including development of an electronic platform for repo in corporate bonds. Market making in corporate bonds has proved to be a challenging issue, particularly the funding of brokers. Banks are explicitly permitted to fund market making activities but at the end of day, it will be their call based on commercial judgement. Separate structure for market making with direct/indirect support of the Government could be a possible way out.

34. It is also important to recognize that the path towards creating an enabling environment may be fraught with event-specific hurdles which may take the process a few steps back. The recent case of default on a top rated bond is a case in point. More than the fact of default, some of the market practices that have come to light through media reports can dent the confidence of investors in the market. This particular instance reiterates the importance of strong market practices and institutional frameworks in development of healthy markets.

35. While there is a continuing, concerted effort to identify the constraints and address them in right earnest, we must, however, be careful that our pursuit of perfect bond markets does not end up as an endless chimerical chase. Bond markets are part of a broader ecosystem and it would be best if these markets evolve organically. As a regulator, our endeavor is to continually facilitate an enabling framework. The group set up under the aegis of the FSDC is expected to look into the whole gamut of issues, mostly focusing on the recommendations of all the earlier committees. One can expect more exciting times ahead for the development of the corporate bond market in India.


1 Remarks by Shri Harun R. Khan, Deputy Governor, Reserve Bank of India at FICCI CAPAM -2015 at Mumbai on October 27, 2015. The speaker acknowledges the contributions of Shri Vaibhav Chaturvedi and Shri Vivek Singh of the Reserve Bank of India.

RBI-Exclusion of the name of “HSBC Bank Oman S.A.O.G.” from the Second Schedule to the Reserve Bank of India Act, 1934

RBI/2015-16/227
DBR.No.Ret.BC. 51/12.07.135A/2015-16

November 5, 2015

All Scheduled Commercial Banks

Dear Sir,

Inclusion of the name of “Korea Exchange Bank Co., Ltd.” in
the Second Schedule to the Reserve Bank of India Act, 1934

We advise that the name of “Korea Exchange Bank Co., Ltd.” has been included in the Second Schedule to the Reserve Bank of India Act, 1934 vide Notification DBR.IBD.No.2927/23.13.065/2015-16 dated August 28, 2015, published in the Gazette of India (Part III – Section 4) dated October 3 – October 9, 2015.

Yours faithfully

(M.K.Samantaray)
General Manager

Draft Interpretation on Uncertainty over Income Tax Treatments

Draft Interpretation published by the IFRS Interpretations Committee for comment only. Comments on the Draft Interpretation need to be received by December 21, 2015.

The International Accounting Standards Board’s IFRS Interpretations Committee (‘Interpretations Committee’) published for public comment a proposed Interpretation of Standards, designed to address diversity in how the Standard is applied in practice. This proposed Interpretation gives guidance on how uncertainty over income tax treatments should affect the accounting for income taxes.

Interpretations form part of the authoritative International Financial Reporting Standards (IFRS) requirements. They are developed by the Interpretations Committee, which works with the International Accounting Standards Board (IASB) to provide guidance on specific implementation issues, helping those using IFRS and supporting consistency in application.

IAS 12 Income Taxes provides requirements on the recognition and measurement of current or deferred tax liabilities or assets, but does not provide specific guidance for how uncertainty about a tax treatment should be reflected in the accounting for income tax. Consequently, the Interpretations Committee proposes an Interpretation to provide that guidance.

Invitation to comment

ASB invites comments on the Draft Interpretation from the public. The downloadable version of the draft is available at:

http://www.ifrs.org/Current-Projects/IASB-Projects/IAS-12-Measurement-income-tax-uncertain-tax-position/Draft-Interpretation-October-2015/Documents/ED_IFRIC_UncertaintyOverIncomeTaxTreatments.pdf

How to comment

Comments should be submitted using one of the following methods:

1. Electronically: Click on the below mentioned option to submit a comment letter or visit at the following link (Preferred method):
http://www.icai.org/comments/asb/
2. Email: Comments can be sent to: commentsasb@icai.in
3. Postal: Secretary, Accounting Standards Board,
The Institute of Chartered Accountants of India,
ICAI Bhawan, Post Box No. 7100,
Indraprastha Marg,
New Delhi 110 002

Further clarifications on this Draft Interpretation may be sought by e-mail to geetanshu.bansal@icai.in

Draft Interpretation on Foreign Currency Transactions and Advance Consideration

Draft Interpretation published by the IFRS Interpretations Committee for comment only. Comments on the Draft Interpretation need to be received by December 21, 2015.

The International Accounting Standards Board’s IFRS Interpretations Committee (‘Interpretations Committee’) published for public comment a proposed Interpretation of Standards, designed to address diversity in how the Standard is applied in practice. This proposed Interpretation addresses which exchange rate should be used to report foreign currency transactions when payment is made or received in advance.

Interpretations form part of the authoritative International Financial Reporting Standards (IFRS) requirements. They are developed by the Interpretations Committee, which works with the International Accounting Standards Board (IASB) to provide guidance on specific implementation issues, helping those using IFRS and supporting consistency in application.

IAS 21 The Effects of Changes in Foreign Exchange Rates sets out requirements about which exchange rate to use when recording a foreign currency transaction on initial recognition in the entity’s functional currency. However, the Interpretations Committee observed diversity in practice in circumstances in which consideration was received or paid in advance of the recognition of the related asset, expense or income. Consequently, the Interpretations Committee proposes an Interpretation to provide guidance in these specific circumstances.

ASB invites comments on the Draft Interpretation from the public. The downloadable version of the draft is available at:

http://www.ifrs.org/Current-Projects/IASB-Projects/date-of-transaction-identifying-applicable-exchange-rate-revenue-recognition/Draft-Interpretation-October-2015/Documents/ED_IFRIC_ForeignCurrencyTransactionsandAdvanceConsideration.pdf How to comment

Comments should be submitted using one of the following methods:

1. Electronically: Click on the below mentioned option to submit a comment letter or visit at the following link (Preferred method):
http://www.icai.org/comments/asb/
2. Email: Comments can be sent to: commentsasb@icai.in
3. Postal: Secretary, Accounting Standards Board,
The Institute of Chartered Accountants of India,
ICAI Bhawan, Post Box No. 7100,
Indraprastha Marg,
New Delhi 110 002

Further clarifications on this Draft Interpretation may be sought by e-mail to geetanshu.bansal@icai.in

Meeting with Hon’ble Minister of State for Finance, Shri Jayant Sinha

CA. Manoj Fadnis, President, ICAI and CA. Anuj Goel, Member, Central Council & Chairman, Professional Development Committee met and represented before Hon’ble Minister of State for Finance, Shri Jayant Sinha on 6th Novemeber, 2015 to discuss the issues involved in the current procedure of appointment of Central Statutory Auditors and Branch Statutory Auditors of Public Sector Banks (PSBs).

In the meeting the inadequacies arising out of the said procedure of appointment of Auditors of Public Sector Banks (PSBs) was explained. It was mentioned that the managerial autonomy is correct to the extent of day to day decisions making but nowhere the authority to appoint the auditor lies with the persons whose decisions are to be audited.

Such delegation in the long run is a great peril to the economy itself. ICAI recommended that appointment of Central Statutory Auditors and Branch Statutory Auditors of Public Sector Banks (PSBs) may be done by the selection committee comprising of representative from O/o C&AG, Indian Bank’s Association & Ministry of Finance (as done for financial year 2011-12, 2012-13 & 2013-14). ICAI requested that the names of auditor(s) may be recommended by Selection Committee to the banks and selection may be made accordingly.

The Hon’ble Minister has noted the concern of the ICAI and assured to take forward the matter.

CA. Anuj Goyal, Chairman,
Professional Development Committee

International Placement Programme through Video Conferencing Mode, Organised by Committee for Members in Industry November – December, 2015

 

International Placement Programme through Video Conferencing Mode,

Organised by

Committee for Members in Industry

November – December, 2015

 

OBJECTIVE

 

The Committee for Members in Industry of the Institute of Chartered Accountants of India provides opportunity to the employers to interact with newly qualified Chartered Accountants and makes all arrangements at its centres, thereby providing a cost effective mode of recruiting qualified Chartered Accountants.

 

International Placement Programme is a step ahead as an extension to the same programme but with a different objective. CMII has taken an initiative to organize a separate International Placement Programme through video conferencing mode for Chartered Accountants. Chartered Accountants are getting placed not only within the country but are also taking up jobs abroad. Many CAs are providing their services to the organizations internationally. To facilitate employment for chartered accountants at international level, CMII of ICAI is organizing International Placement Programme.

 

This programme would enable the corporates working across the world to recruit Chartered Accountants through video conferencing mode from Bangalore, Chennai, Kolkata, Hyderabad, Mumbai and New Delhi centres from India.

 

MEET THE COMPLETE BUSINESS SOLUTION PROVIDERS: CHARTERED ACCOUNTANTS

Chartered Accountants are considered as complete business solution providers in this dynamic business world. They are trained practically in all avenues of finance, accounting, auditing, management and information technology. They can undertake responsibilities ranging from carrying out feasibility study, raising financial resources, compliance with regulatory framework, capital structure and planning, organizational development, installation of efficiency accounting, budgetary control, information system apart from giving advice on complex issues such as joint ventures, foreign collaborations, amalgamation, merger, diversification, modernization, product pricing, BPO, KPO, restructuring etc.

INTERNATIONAL PLACEMENT PROGRAMME – A GREAT ADVANTAGE FOR CORPORATES

Corporates working across the world can now end their search by participating in International Placement Programme wherein they would have access to a vast database of Chartered Accountants of The Institute of Chartered Accountants of India.

The event would provide an opportunity to companies to select Chartered Accountants as per their requirement criterion.

 

 

ELIGIBILITY OF MEMBERS FOR INTERNATIONAL PLACEMENT PROGRAMME

Chartered Accountants fulfilling the following conditions are eligible to take part in International Placements.

 

  1. Having the membership number of Institute as on 20th November, 2015. The membership number should be available with you and would be required for registration.
  2. Passed CA. final examination on or before May, 2015.
  3. The members who have got placements through the placement programme organized by the Institute between 01.10.2014 to 1.11.2015 are not eligible to apply.

 

 

Important Dates for International Placement Programme

Start Date for Member registration:              23rd November, 2015
Last date for Member registration:                   26th November, 2015
Last Date for company registration:              20th November, 2015

Opening of database for Companies:                27th November, 2015

 

 

 

Interview Schedule

 

Centre Registration of the Companies Registration of the Members Short-listing by Companies Consent sending by

Members

Interviews
Bangalore, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi Upto 20th    November, 2015 23rd  November to 26th  November, 2015 1st December, 2015 2nd-3rd December,  2015 7th–8th December, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

Participation Fees (Rs.)

 

  Day 1

Slot 1

11.00 AM-6.00 PM IST

Day 2

Slot 1

11.00 AM-6.00 PM IST

Chennai 150,000 145,000
Bangalore 150,000 145,000
Hyderabad 150,000 145,000
Kolkata 150,000 145,000
Mumbai 190,000 185,000
New Delhi 190,000 185,000

 

Plus service tax @ 14 % applicable

 

* Charges of Psychometric test

 

For Mumbai and New Delhi:-  INR 35,000/-

For Chennai, Bangalore, Hyderabad & Kolkata:- INR 30,000/-

 

Above payment includes the facility for video conferencing arrangements in India and also include public IP or single dial out charge that will be borne by CMII of ICAI. Companies have to make their own arrangement at their end to stay connected in video conferencing mode and they can have only one dial in facility.

 

 

Payment Terms: Participation fee shall be payable by way of credit card / Cheque / Demand Draft in favour of ‘The Secretary, The Institute of Chartered Accountants of India’ payable at New Delhi and should be sent to Secretary, CMII, The Institute of Chartered Accountants of India, ICAI BHAWAN, Indraprastha Marg, New Delhi-110 002 so as to reach on or before 22nd November, 2015.

Kindly also note that the PAN No. of Institute is AAAAT7798M and Service Tax Registration No. is AAAAT7798MST003 (DL-I/ST/MP/R-II/1530/ICA/2006).

The payment may also be made through Net Banking, the details are as follows :

 

Beneficiary Name              THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

Beneficiary address           THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

‘ICAI Bhawan’, Indraprastha Marg, New Delhi- 110002

Bank Account no.             055010100242608

Bank Name                      Axis Bank

Branch address                A-13, Swasthya Vihar, Vikas Marg, New Delhi- 110092

Account Type                 saving

IFSC Code                      UTIB0000055

Norms for Allotment of Day Slots for participating companies in International Placement Programme: Allotment of slot(s) would be based on CTC and number of participants. However, it shall also be based on first come first serve basis.

 

 

GUIDELINES FOR THE PARTICIPATING ORGANISATIONS

 

Timings of the event: 11.00 a.m. to 6.00 p.m. (IST)

  1. The companies participating will have to register online on placement portal www.placement.icai.org on or before 20th November, 2015.
  2. 2.   The participation fees should be remitted at ICAI head office New Delhi. The fee is not refundable.
  3. Access to the Member database shall be allowed only after the receipt of participation fee by CMII Secretariat latest by 20th November, 2015. Fee is chargeable even in case a recruiting organization withdraws after confirming the participation and data access has been given.
  4. Final list of Members appearing for interview will be available online on placement portal www.placement.icai.org one day after consent date by Member at respective centres.
  5. Shortlisting by individual recruiting entities shall be restricted to maximum fifteen times of the number of vacancies in that particular organisation, which are expected to be filled up from a particular Placement Programme centre.
  6. The companies participating have to offer The minimum take home salary INR 1.50 lac per month to the Members in International Placements.
  7. 7.   Kindly note that no Written Test/GD can be conducted. However Psychometric test can be conducted on chargeable basis.
  8. The entire process above would be done online on placement portal www.placement.icai.org and in video conferencing mode.
GUIDELINES FOR THE MEMBERS

 

Timings of the event: 1100 a.m. to 6.00 p.m. (IST)

 

  • The Members have to register online with Placement portal www.placement.icai.org .
  • A Member can opt for only one centre for appearing in the interview.
  • There is no participation fee for Members.
  • There is no restriction on the number of interviews a Member can attend at selected centre.
  • Once finally selected by any company and accepting the offer by signing the offer letter, the Member cannot appear for any other interview or accept job from the other recruiting organisations that have interviewed him/her earlier through this International Placement.
  • The entire process above would be done online on placement portal www.placement.icai.org and interviews will be in video conferencing mode only.

 

CA. Charanjot Singh Nanda

Chairman

Committee for Members in Industry 

The Institute of Chartered Accountants of India

 

Official Contact

CMII
Tel: +91 (11) 30110491/526/548/549

Email: placements@icai.in, campus@icai.in

 

 

 

Basic Terms:

ICAI does not guarantee that the Members who have filled in the data will be actually present in the interview or after selection he would join the organization. Disclaimer: The CMII of ICAI reserves the right to change its policy or change the programme at any point of time at  its discretion.

 

 


Annexure ‘I’

Steps for registration of companies for International Placement interviews

Step1: Please fill following proforma for participation in International Placement Programme and send it to placements@icai.in and campus@icai.in

Sl.No.

Questions

Responses

1. No. of Recruitments to be done centrewise by your organization.  
2. CTC (in INR) to be offered to the Chartered Accountants *  
3. Minimum take-home monthly salary *  
4. Break -up of CTC * :  
5. Job Profile to be provided to the Chartered Accountants along with likely place of posting in Department.  
6. Working Timing -Whether during the normal working hours or otherwise of the shifts i.e US ,UK or India  
7. Age limit of the Chartered Accountants to be recruited.  
8. Required Cut off for percentage of Marks/attempt in CA Foundation/Inter/Final, if any.  
9. Requirement of Bond, if any-  
10. Source of information about the ICAI Placement Programme (please tick mark)

  Based on previous participation

  Advertisement in the Chartered Accountant Journal

  Campus Brochure from ICAI

  Telephone call/Email  from ICAI Officers

 
11. Centre of Participation  

 

Step 2: On receipt of the responses to the above questions, the CMII Secretariat would allot the Day Slots to the organization for the respective centres based on norms of Priority and availability.

Step 3: After the allotment of day slots, the organization is required to remit the participation fees accordingly.

Step 4: The participating entity is required to do the online registration on www.placement.icai.org and fill up the Proforma & payment Form and upload their presentation in their login for the information of the Members.

Step 5: On the completion of online registration and the receipt of the participation fees the CMII Secretariat would provide the online access to the database of the Members for shortlisting.

Step 6: The recruiting entity is required to do the online shortlisting of the Members within the specified time frame for the respective centres as per the schedule of placement programme.

 

List of candidates selected in Campus Placement Programme, August-September, 2015

Result- List of candidates selected in Campus Placement

 Programme, August-September, 2015

 

  1. The following candidates have been selected by NATIONAL TEXTILE CORPORATION LTD subject to satisfactory medical examination and submission of all necessary certificates/documents regarding age proof, qualification etc duly attested by competent authority for issue of offer letter, in the Campus Placement Programme August-September, 2015 held at Bangalore & Delhi centre :

 

 

Sl. No.

Code Name

1

DEL-1004 AMIT KUMAR AGARWAL

2

DEL-1056 NIKITA ARORA

3

DEL-1464 SUMIT

4

DEL-1578 VISHAL YADAV

5

DEL-1653 PRADEEP DAIYA

6

DEL-2160 ANKITA JAIN

7

DEL-2427 PANKHURI GUPTA

8

DEL-25 NISHANT KUMAR

9

DEL-402 RITIKA AGARWAL

10

DEL-660 VINOD

11

DEL-772 PUNEET GUPTA

12

DEL-840 RAMESH CHOUDHARY

13

DEL-922 SHUBHAM SINGH

14

DEL-933 NITIN TAILOR

15

BLR-327 PRANAYA KUMAR MONDAL

16

BLR-385 URVASHI VERMA

17

BLR-439 KIRAN KUMAR CHALLA

18

BLR-664 PUROHIT PARESH PRAKASHBHAI

19

BLR-701 VIKRAM CHANDRAKAR

20

BLR-855 MUPPALLA RAMANJANEYULU

 

 

 

Selected candidates who are interested to join the company should send scanned copy of the duly signed and filled up declaration form (given at the end of this document) as an acceptance of Job Offer which should reach us via email at campus@icai.in latest by 30th October, 2015 (02:00 PM) to enable us to inform the company for sending the offer letter.

 

 

 

Declaration form for the Candidates for not attending the interviews in the Campus Placement Programme August-September, 2015 after receiving the first offer letter

 

DECLARATION

I Have accepted the offer of appointment in “_______________________________”,. Now I undertake that having accepted this offer, I shall not participate in the Campus Placement Programme that will be conducted here-in-after or accept jobs in any of the interviews that have already taken place.

 

CA Final Roll Number:

NAME                    :

Gender              :

                        Centre Code No.

Signature   :

Dated:  ______________

Rate of exchange of conversion of the foreign currency with effect from 6th November,

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

(CENTRAL BOARD OF EXCISE AND CUSTOMS)

Notification No. 106/2015 – Customs (N.T.)

Dated the 05th November, 2015

In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in super session of the notification of the Central Board of Excise & Customs No.101/2015-CUSTOMS (N.T.), dated 15th October, 2015, except as respects things done or omitted to be done before such supersession, the Central Board of Excise & Customs hereby determines that the rate of exchange of conversion of each of the foreign currencies specified in column (2) of each of Schedule I and Schedule II annexed hereto, into Indian currency or vice versa, shall, with effect from 6th November, 2015, be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the said section, relating to imported and export goods.

SCHEDULE-I

Sl. No. Foreign Currency Rate of exchange of one unit of foreign currency equivalent to Indian rupees

(1)    

(2)

(3)

(a)

 (b)

(For Imported Goods)

  (For Export Goods)

1.

Australian Dollar

47.65

46.25

2.

Bahrain Dinar

179.40

169.00

3.

Canadian Dollar

50. 50

49.35

4.

Danish Kroner

9.70

9.45

5.

EURO

72.30

70.50

6.

Hong Kong Dollar

8.55

8.40

7.

Kuwait Dinar

223.05

210.70

8.

New Zealand Dollar

43.85

42.65

9.

Norwegian Kroner

7.70

7.50

10.

Pound Sterling

102.10

99.85

11.

Singapore Dollar

47.25

46.30

12.

South African Rand

4.85

4.60

13.

Saudi Arabian Riyal

18.00

17.05

14.

Swedish Kroner

7.70

7.50

15.

Swiss Franc

67.00

65.30

16.

UAE Dirham

18.40

17.40

17.

US Dollar

66.20

65.15

SCHEDULE-II

Sl. No.

Foreign Currency

Rate of exchange of 100 units of foreign currency equivalent to Indian rupees

(1)    

(2)

(3)

(a)

(b)

(For Imported Goods)

  (For Export Goods)

1.

Japanese Yen

54.65

53.45

2.

Kenya Shilling

66.25

62.55

[F. No. 468/01/2015-Cus.V]

(Kshitendra Verma)

Under Secretary to the Govt. of India

Sri S. N. Wadiyar (Dead) Through LR vs. CWT (Supreme Court) Posted on September 28, 2015 — No Comments ↓

The Supreme Court had to consider whether for the purposes of Wealth Tax Act, the market value of the vacant land belonging to the assessee should be taken at the price which is the maximum compensation payable to the assessee under the Urban Land Ceiling Act, 1962?

The factual position is as follows:

(i) The Assessment Years in respect of which question was to be determined were 1977-1978 to 1986-1987.

(ii) Ceiling Act had come into force w.e.f. 17.02.1976 and was in operation during the aforesaid Assessment Years.

(iii) The Competent Authority under the Ceiling Act had passed orders to the effect that as per Section 11(6) of the Ceiling Act, the maximum compensation that could be received by the assessee was Rs.2 lakhs. In accordance with Section 30 of the Ceiling Act, the declaration dates back to 17.02.1976 on which date the Ceiling Act was promulgated in Karnataka.

(iv) The order of the Competent Authority was challenged by the assessee by filing appeal before the Karnataka Appellate Tribunal. This appeal was, however, dismissed on 15.07.1998.

Against that order, writ petition was filed wherein provisions of the
Ceiling Act were also challenged. Because of the pendency of these proceedings or due to some other reason, notification under Section 10(1) of the Ceiling Act was not passed.

(v) In the year 1999, Ceiling Act was repealed. At that stage, the writ petition filed by the assessee was still pending. The effect of this Repealing Act was that the Property in question remained with the assessee and was not taken over by the Government.

HELD by the Supreme Court:

(i) It is clear that the valuation of the asset in question has to be in the manner provided under Section 7 of the Act. Such a valuation has to be on the valuation date which has reference to the last day of the previous year as defined under Section 3 of the Income Tax Act if an assessment was to be made under that Act for that year. In other words, it is 31st March immediately preceding the assessment year. The valuation arrived at as on that date of the asset is the valuation on which wealth tax is assessable. It is clear from the reading of Section 7 of the Act that the Assessing Officer has to keep hypothetical situation in mind, namely, if the asset in question is to be sold in the open market, what price it would fetch. Assessing Officer has to form an opinion about the estimation of such a price that is likely to be received if the property were to be sold. There is no actual sale and only a hypothetical situation of a sale is to be contemplated by the Assessing Officer.

(ii) Thus, the Tax Officer has to form an opinion about the estimated price if the asset were to be sold in the assumed market and the estimated price would be the one which an assumed willing purchaser would pay for it. On these reckoning, the asset has to be valued in the ordinary way.

(iii) The High Court has accepted, and rightly so, that since the Property in question came within the mischief of the Ceiling Act it would have depressing effect insofar as the price which the assumed willing purchaser would pay for such property. However, the question is as to what price the willing purchaser would offer in such a scenario?

(iv) The combined effect of the aforesaid provisions, in the context of instant appeals, is that the vacant land in excess of ceiling limit was not acquired by the State Government as notification under Section 10(1) of the Ceiling Act had not been issued. However, the process had started as the assessee had filed statement in the prescribed form as per the provisions of Section 6(1) of the Ceiling Act and the Competent Authority had also prepared a draft statement under Section 8 which was duly served upon the assessee. Fact remains that so long as the Act was operative, by virtue of Section 3 the assessee was not entitled to hold any vacant land in excess of the ceiling limit. Order was also passed to the effect that the maximum compensation payable was Rs.2 lakhs. Let us keep these factors in mind and on that basis apply the provisions of Section 7 of the Wealth Tax Act.

(v) One has to assume that the property in question is saleable in the open market and estimate the price which the assumed willing purchaser would pay for such a property. When the asset is under the clutches of the Ceiling Act and in respect of the said asset/vacant land, the Competent Authority under the Ceiling Act had already determined the maximum compensation of Rs.2 lakhs, how much price such a property would fetch if sold in the open market? We have to keep in mind what a reasonably assumed buyer would pay for such a property if he were to buy the same. Such a property which is going to be taken over by the Government and is awaiting notification under Section 10 of the Act for this purpose, would not fetch more than Rs.2 lakhs as the assumed buyer knows that the moment this property is taken over by the Government, he will receive the compensation of Rs.2 lakhs only. We are not oblivious of those categories of buyers who may buy “disputed properties” by taking risks with the hope that legal proceedings may ultimately be decided in favour of the assessee and in such a eventuality they are going to get much higher value. However, as stated above, hypothetical presumptions of such sales are to be discarded as we have to keep in mind the conduct of a reasonable person and “ordinary way” of the presumptuous sale. When such a presumed buyer is not going to offer more than Rs.2 lakhs, obvious answer is that the estimated price which such asset would fetch if sold in the open market on the valuation date(s) would not be more than Rs.2 lakhs. Having said so, one aspect needs to be pointed out, which was missed by the Commissioner (Appeals) and the Tribunal as well while deciding the case in favour of the assessee. The compensation of Rs.2 lakhs is in respect of only the “excess land” which is covered by Sections 3 and 4 of the Ceiling Act. The total vacant land for the purpose of Wealth Tax Act is not only excess land but other part of the land which would have remained with the assessee in any case. Therefore, the valuation of the excess land, which is the subject matter of Ceiling Act, would be Rs.2 lakhs. To that market value of the remaining land will have to be added for the purpose of arriving at the valuation for payment of Wealth Tax. Ahmed G.H. Ariff v. Commissioner of Wealth Tax 76 ITR 471 and Commissioner of Wealth Tax v. Prince Muffkham Jah Bahadur Chamlijan 247 ITR 351 referred)

Appoints the Additional Commissioner of Customs New Delhi

Government of India

Ministry of Finance

(Department of Revenue)

Notification No. 104/ 2015-Customs (N.T.)

New Delhi, the 3rd November, 2015

S. O.  (E). - In exercise of the powers conferred by sub-section (1) of section 4 and sub-section (1) of section 5 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs hereby appoints the Additional Commissioner of Customs (Export), Inland Container Depot, Tughalakabad, New Delhi to act as a Common Adjudicating Authority to exercise the powers and discharge the duties conferred or imposed on-

(i)  the Additional Commissioner of Customs (Export), Inland Container Depot, Tughalakabad, New Delhi;

(ii) the Additional Commissioner of Customs (Import), Inland Container Depot, Tughalakabad, New Delhi ,

for the purpose of adjudicating the matters relating to show cause notice pertaining to  M/s  K.K. Traders, 138, Master Tara Singh Nagar Market, Jalandhar and others issued vide,  F.No.DRI/DZU/23/Enq-07/2015/4167 to 4171,  dated the  27th July, 2015  by the Additional Director, Directorate of Revenue Intelligence, Delhi  Zonal Unit, New Delhi.

[F. No. 437/29/2015-Cus IV]

(Anurag Sehgal)

Under Secretary to the Government of India

Appoints the Joint or Additional Commissioner of Customs, Chennai

Government of India

Ministry of Finance

(Department of Revenue)

Notification No. 105/2015-Customs (N.T.)

New Delhi, the 3rd November, 2015

S. O.   (E). –- In exercise of the powers conferred by sub-section (1) of section 4 and sub-section (1) of section 5 of the Customs Act, 1962 (52 of 1962),, the Central Board of Excise and Customs hereby appoints the Joint or Additional Commissioner of Customs, Office of the Commissioner of Customs (Port), Chennai-II Custom House, 60, Rajaji Salai, Chennai to act as a Common Adjudicating Authority to exercise the powers and discharge the duties conferred or imposed on-

(i) the Joint  or Additional Commissioner of Customs (Port-Import), Custom House, 60, Rajaji Salai, Chennai;

(ii) the Joint or Additional Commissioner of Customs, (Port-Import), Inland Container Depot, Whitefield, Bangalore-560066,

for the purpose of adjudicating the matters relating to show cause notice  pertaining to M/s  Master Mining Equipment, 1st ‘C’ Main Road, 3rd Cross, 2nd Phase, Peenya Industrial Area, Bangalore-560058   issued vide DRI F.No. VIII/26/12/2013-DRI-HRU (A), dated the 6th June, 2014 by the Deputy Director, Directorate of Revenue Intelligence, Regional Unit, Hyderabad, read with the Corrigendum dated 22nd August, 2014 to the Show Cause Notice, dated the 6th June, 2014 issued by the Deputy Director, Directorate of Revenue Intelligence, Regional Unit, Hyderabad.

[F. No. 437/125/2014-Cus IV]

(Anurag Sehgal)

Under Secretary to the Government of India

RBI imposes Monetary Penalty on The Madanapalle Co-operative Town Bank Ltd. Madanapalle, Chittor District, Andhra Pradesh

The Government of India has announced the sale (re-issue) of the Government Stock through auctions to be held on November 6, 2015.

As per revised scheme of underwriting, dated November 14, 2007, the amounts of Minimum Underwriting Commitment (MUC) and the minimum bidding commitment under Additional Competitive Underwriting (ACU) for the underwriting auctions, per Primary Dealer (PD), are as under:

(₹ in crore)
Nomenclature of the Security Notified Amount MUC amount per PD Minimum bidding commitment per PD under ACU auction
7.68% GS 2023 2,000 48 48
7.59% GS 2029 7,000 167 167
7.73% GS 2034 3,000 72 72
8.17% GS 2044 2,000 48 48
7.72% GS 2055 1,000 24 24

The underwriting auctions will be conducted using multiple price based auction method on November 5, 2015 (Thursday). PDs may submit their bids for ACU auctions electronically through Core Banking Solution (E- Kuber) System between 10.30 a.m. and 12.00 noon on the date of underwriting auction.

The underwriting commission will be credited to the current account of the respective PDs at the RBI, Fort, Mumbai on the date of issue of securities.

Anirudha D. Jadhav
Assistant Manager

Press Release : 2015-2016/1075

ICAI Proposal To Least Developed Countries (LDCs) For Developing And/Or Strengthening The Accounting Profession

ICAI PROPOSAL TO LEAST DEVELOPED COUNTRIES (LDCS) FOR DEVELOPING AND/OR STRENGTHENING THE ACCOUNTING PROFESSION

Aiding transition and emerging economies, ICAI has been advocating the need for creating a sustainable framework of accounting in countries lacking accounting Infrastructure/where accountancy profession is evolving for creating a cadre of accounting professional who are able to support the evolution of Industry by propagating and putting in place a compliance regime and sound framework for reporting practices.

A very strong role is played by accountancy institutes in economic growth of countries and in capacity building. It is important to have a well developed accounting institute which would help in developing competent accounting professionals and in promoting strong professional and ethical standards.

ICAI’s endeavor is to help Least Developing Countries (LDC’s) to establish Accounting Institute in those economies where the same does not exist and in further strengthening the accounting infrastructures in those countries where the same exists. ICAI proposes to undertake off- site and if required on-site study of the accounting profession in the relevant LDC in order to design its methodology and approach to carry forward the overall project.

For further details, please contact:
Secretariat of the International Affairs Committee,
The Institute of Chartered Accountants of India,
ICAI Bhawan, PB No. 7100, Indraprastha Marg,
New Delhi – 110 002, India.
Ph +91 11 30110443,448, 39893989 (Extn. 443,448),
E Mail : ia@icai.inrakeshsehgal@icai.in

RBI launches Quarterly Industrial Outlook Survey (IOS): October-December 2015 (Round 72)

The Reserve Bank of India has launched the 72nd round of the quarterly Industrial Outlook Survey (IOS) for reference period October-December 2015 (Q3:2015-16). The survey with a good size/industry representation gives an insight into the perception of the public and private limited companies engaged in manufacturing activities about their own performance and prospects. The assessment of business sentiments for the current quarter and expectations for the ensuing quarter are based on qualitative responses to 23 major parameters covering overall business situation, financial situation, demand indicators, price and employment expectations, profit margins, etc. The survey provides useful forward looking inputs for policymakers, analysts and business alike.

detailed article based on the results of four quarters for FY: 2014-15 was published in June 2015 issue of the RBI monthly Bulletin. The results for the 71st round (Q2:2015-16) were released on the RBI website on September 29, 2015.

M/s Centre for Research Planning and Action (CERPA), New Delhi has been authorised to conduct the survey for this quarter on behalf of the Reserve Bank of India. Select manufacturing companies will be approached by this agency during the quarter. However, other manufacturing companies, that are not approached by the agency, may also participate in this survey by downloading the survey schedule from the Reserve Bank’s website www.rbi.org.in. The survey schedule is placed under the head ‘Forms’ (available in the ‘More Links’ at the bottom of the home page) and sub-head ‘Survey’. The duly authenticated filled-in survey schedule may be e-mailed or faxed as per contact details given in the survey schedule.

In case of any query/clarification, kindly contact at the following address:

The Director, Division of Enterprise Surveys, Department of Statistics and Information Management, Reserve Bank of India, C-8, 2nd  floor, Bandra-Kurla Complex, Bandra (East), Mumbai-400 051. Phone -022-26578235, 022-26578664. Fax-022-26571555 E-mail.

Sangeeta Das
Director

Press Release : 2015-2016/1026

RBI-Tolerance and Respect for Economic Progress (Convocation address by Dr. Raghuram Rajan, Governor, Reserve Bank of India at the IIT Delhi Convocation, October 31, 2015)

Thank you very much for inviting me back to the Institute to deliver the convocation address. I graduated with a degree in Electrical Engineering 30 years ago. I was overly anxious then about what the future held for me, because I did not realize that the Institute had prepared me so well for what lay ahead. Our professors – and I will not single out any to avoid a disservice to those I do not name – were dedicated professionals. They asked a lot of us, knowing that in challenging us they allowed us to learn what we were capable of. Equally important, our Electrical Engineering class – in those days, Computer Science was part of Electrical Engineering in IIT Delhi — had some of the smartest people it has been my privilege to know. After working with them as colleagues, and competing with them for grades, I learned what it took to succeed in the fiercest environments; very hard work, friendship, and boatloads of luck. Those lessons have stayed with me since.

IIT Delhi then, as I am sure it is now, was not only about studies – it was about growing up. We were, with a few notable exceptions, the proverbial school nerds who had been excluded from all school sports by the macho sports cases. With almost everyone in the same boat at IIT, for the first time in our lives we got a chance to bat and bowl at the nets, instead of being posted at deep long on to retrieve the odd six by the stars. Everyone did something, ranging from photography to publishing. Of course, we all aspired to join dramatics, where you got to spend long hours with members of the opposite sex. Unfortunately, I was no good at acting, so I had to look for self-actualization elsewhere. But there were enough places to look.

Student politics was vibrant, with plenty of scheming, strategizing, and back-stabbing. It was an intellectual pastime, however, without the violence and corruption that plagues student politics elsewhere in our country. You had to convince the small intelligent electorate to vote for you, and in figuring out how to get that vote, we all learnt the art of persuasion.

So we grew up in the classrooms, in the squash courts at the RCA, in the civilizing SPIC Mackay overnight classical music concerts and in the over-crowded rock concerts at the OAT. Some of us spent long hours waiting hopefully outside Kailash Hostel, and when occasionally our wait was rewarded, beautiful autumn nights with our friends, chatting and gazing at the stars while sitting on the roof of Convocation Hall. The Institute replaced our naivety with a more confident maturity. We came in as smart boys and girls and left as wiser young men and women. I am confident that the Institute has done to you what it did to us. You will thank it in the years to come for that.

In speaking here today, I am aware that most convocation addresses are soon forgotten. That creates a form of moral hazard for the speaker. If you are not going to remember what I say, I don’t have the incentive to work hard at crafting my words. The net effect is what economists refer to as a bad equilibrium; my speech is forgettable, and you therefore forget it soon. If so, we are all probably better off with me skipping the rest of the speech, and all of us going on to other pressing duties.

Nevertheless, I am going to look beyond my personal incentives and fulfil my dharma as Chief Guest. I will speak on why India’s tradition of debate and an open spirit of enquiry is critical for its economic progress. Let me explain.

Robert Solow, won the Nobel Prize in Economics for work that showed that the bulk of economic growth did not come from putting more factors of production such as labour and capital to work. Instead, it came from putting those factors of production together more cleverly, that is, from what he called total factor productivity growth. Put differently, new ideas, new methods of production, better logistics – these are what lead to sustained economic growth. Of course, a poor country like ours can grow for some time by putting more people to work, by moving them from low productivity agriculture to higher value added industry or services, and by giving them better tools to do their jobs. As many of you who have taken economics will recognize, we in India are usually far from the production possibility frontier, so we can grow for a long while just by catching up with the methods of industrial countries.

But more intelligent ways of working will enable us to leapfrog old methods and come more quickly to the production possibility frontier – as for example, we have done in parts of the software industry. And, of course, once you are at the frontier and using the best methods in the world, the only way to grow is to innovate and be even better than others in the world. This is what our software firms are now trying to do.

Our alums, whom you students will shortly join, are leading India’s charge to the frontier and beyond. Take the fantastic developments in E-commerce, ranging from the creation of electronic market places to new logistics networks and payments systems. Today, a consumer in a small town can have the same choice of clothing fashions that anyone from the large metros enjoy, simply because the Internet has brought all the shops in India to her doorstep. And while her local shop no longer can sell shoddy apparel, it now focuses on the perishable items she needs in a hurry, even while sub-contracting to provide the last leg of the logistic network that reaches her. Economic growth through new ideas and production methods is what our professors and alums contribute to the nation.

So what does an educational institution or a nation need to do to keep the idea factory open? The first essential is to foster competition in the market place for ideas. This means encouraging challenge to all authority and tradition, even while acknowledging that the only way of dismissing any view is through empirical tests. What this rules out is anyone imposing a particular view or ideology because of their power. Instead, all ideas should be scrutinized critically, no matter whether they originate domestically or abroad, whether they have matured over thousands of years or a few minutes, whether they come from an untutored student or a world-famous professor.

I am sure many of you have come across Richard Feynman’s Lectures on Physics, a must-read when we were at IIT. The Nobel prize-winning physicist was one of the giants of the twentieth century. In his autobiography, though, he writes how he found the atmosphere at the Institute of Advanced Studies at Princeton stultifying. Now, as you know, the Institute of Advanced Studies brings together some of the finest scholars in the world to ponder problems in a multi-disciplinary environment. But he found the atmosphere sterile because there were no students to ask him questions, questions that would force him to rethink his beliefs and perhaps discover new theories. Ideas start with questioning and alternative viewpoints, sometimes seemingly silly ones. After all, Einstein built his theory of relativity pondering the somewhat wacky question of what someone travelling in a train at the speed of light would experience. So nothing should be excluded but everything should be subject to debate and constant testing. No one should be allowed to offer unquestioned pronouncements. Without this competition for ideas, we have stagnation.

This then leads to a second essential: Protection, not of specific ideas and traditions, but the right to question and challenge, the right to behave differently so long as it does not hurt others seriously. In this protection lies societal self-interest, for it is by encouraging the challenge of innovative rebels that society develops, that it gets the ideas that propel Solow’s total factor productivity growth. Fortunately, India has always protected debate and the right to have different views. Some have even embedded these views in permanent structures. Raja Raja Chola, in building the magnificent Brihadeeswara Shaivite temple at Thanjavur, also incorporated sculptures of Vishnu as well as the meditating Buddha thus admitting to alternative viewpoints. When Shahenshah Jalaluddin Muhammad Akbar invited scholars of all manner of persuasion to debate the eternal verities at his court, he was only following older traditions of our Hindu and Buddhist kings, who encouraged and protected the spirit of enquiry.

What then of group sentiment? Should ideas or behaviour that hurt a particular intellectual position or group not be banned? Possibly, but a quick resort to bans will chill all debate as everyone will be anguished by ideas they dislike. It is far better to improve the environment for ideas through tolerance and mutual respect.

Let me explain. Actions that physically harm anyone, or show verbal contempt for a particular group so that they damage the group’s participation in the marketplace for ideas, should certainly not be allowed. For example, sexual harassment, whether physical or verbal, has no place in society. At the same time, groups should not be looking for slights any and everywhere, so that too much is seen as offensive; the theory of confirmation bias in psychology suggests that once one starts looking for insults, one can find them everywhere, even in the most innocuous statements. Indeed, if what you do offends me but does not harm me otherwise, there should be a very high bar for prohibiting your act. After all, any ban, and certainly any vigilante acts to enforce it, may offend you as much, or more, than the offense to me. Excessive political correctness stifles progress as much as excessive license and disrespect.

Put differently, while you should avoid pressing the buttons that upset me to the extent possible, when you do push them you should explain carefully why that is necessary so as to move the debate forward, and how it should not be interpreted as a personal attack on me. You have to tread respectfully, assuring me that a challenge to the ideas I hold is necessary for progress. At the same time, I should endeavour to hold few ideas so closely intertwined with my personality that any attack on them is deemed an intolerable personal affront. Tolerance means not being so insecure about one’s ideas that one cannot subject them to challenge – it implies a degree of detachment that is absolutely necessary for mature debate. Finally, respect requires that in the rare case when an idea is tightly associated with a group’s core personality, we are extra careful about challenging it.

Tolerance can take the offense out of debate, and indeed instil respect. If I go berserk every time a particular button is pressed, rebels are tempted to press the button, while mischief-makers indeed do so. But if I do not react predictably, and instead ask button pressers to explain their concerns, rebels are forced to do the hard work of marshalling arguments. So, rebels do not press the button frivolously, while the thuggish mischief makers who abound in every group are left without an easy trigger. Tolerance and respect then lead to a good equilibrium where they reinforce each other.

For example, rebellious youth in the United States used to burn the American flag. It was calculated to upset the older generation that had fought in America’s wars, for the flag was a symbol of all they had fought for. And the police, many of whom were veterans, used to react with violence, which was precisely the reaction the rebels sought to further their cause. Over time, though, U.S. society has become more tolerant of flag-burning. Because it no longer triggers a reaction, it is no longer used as an instrument to shock. In sum, if group sentiment becomes more tolerant and less easily hurt, the actions that try to hurt it will diminish. As Mahatma Gandhi said “The golden rule of conduct is mutual toleration, seeing that we will never all think alike and we shall always see Truth in fragments and from different points of vision.”

Let me conclude. IITans like you will lead India’s race for ideas. The India that you will graduate into is much more capable of using your technological prowess than the India we graduated into. I wish you unlimited ambition, and forecast great success for those of you who continue thinking and challenging. But as you go out in the world, remember our tradition of debate in an environment of respect and tolerance. By upholding it, by fighting for it, you will be repaying your teachers in this great institution, and your parents who worked so hard to send you here. And you will be doing our country a great patriotic service. Thank you and good

Observations of the Candidates on the Question Papers of CA Examinations-November, 2015

1st November, 2015

It is hereby informed that candidates can bring to the notice of the Examination Department, their observations, if any, on the question papers relating to CA Examinations being held in November 2015, by e-mail at examfeedback@icai.in or by way of a letter, sent by Speed Post, at the following address, so as to reach us not later than one week from the date of the last examination, i.e. 30th November, 2015.

The Deputy Secretary (Exams)
The Institute of Chartered Accountants of India
ICAI Bhawan
Indraprastha Marg
New Delhi 110 002.

ICAI EXAMINATION DEPARTMENT

Exposure Draft on IFRS Practice Statement: Application of Materiality to Financial Statements

Exposure Draft published by the International Accounting Standards Board (IASB) for comment only. Comments on the Exposure Draft need to be received by January 08, 2016.

The International Accounting Standards Board (IASB) has published draft guidance to help company management determine whether information is material. The guidance is part of the IASB’s wider initiative to improve disclosures.

The concept of materiality acts as a filter through which management sifts information to ensure that financial statements include all the financial information that could influence users’ investment decisions. It also enables management to present material information in a clear and effective way, excluding information that is not material.

The draft guidance, in the form of a draft Practice Statement, has been developed in response to concerns that management are often uncertain about how to apply the concept of materiality and therefore use the disclosure requirements in the Standards as a checklist. This can result in excessive disclosure of immaterial information that can obscure useful information and also make financial statements cluttered and less understandable. It can also lead to useful information being left out.

Whether information is material or not depends on a range of factors and entity-specific circumstances, and is a matter of judgement. Determining what information is material also requires an understanding of the users of the financial statements and the decisions that they make based on those financial statements.

Hans Hoogervorst, IASB Chairman, commented

Financial statements are meant to be a means of communication, and should not be viewed as a mere compliance exercise. Management needs to take a step back and consider whether they are providing the right level of information in the financial statement and whether it is useful.

The Practice Statement should help guide management’s judgment, encouraging them to remove repetitive and uninformative wording and improve the overall quality of financial statements.

Improving the quality and quantity of disclosures requires joint efforts by auditors, regulators, companies and standard-setters. The IASB has therefore consulted with the International Auditing and Assurance Standards Board (IAASB) and the International Organization of Securities Commissions (IOSCO) during the development of the draft Practice Statement.

The draft guidance on materiality complements an amendment made to IAS 1 Presentation of Financial Statements by the IASB in 2014, which clarified that companies do not need to apply the specific disclosure requirements in Standards if the related information is not material. It also specified that a company should consider whether to provide additional disclosures when compliance with the specific requirements would be insufficient in disclosing material information.

Comments are invited on the proposals in this Exposure Draft, particularly on the question set out in the Exposure Draft.

Invitation to comment

ASB invites comments on the Exposure Draft from the public. The downloadable version of the draft is available at:
http://www.ifrs.org/Current-Projects/IASB-Projects/Disclosure-Initiative/Materiality/Exposure-Draft-October-2015/Documents/ED_IFRSPracticeStatement_OCT2015_WEBSITE.pdf

How to comment

Comments should be submitted using one of the following methods:

1. Electronically: Click on the below mentioned option to submit a comment letter or Visit at the following link (Preferred method):
http://www.icai.org/comments/asb/
2. Email: Comments can be sent to: commentsasb@icai.in
3. Postal: Secretary, Accounting Standards Board,
The Institute of Chartered Accountants of India,
ICAI Bhawan, Post Box No. 7100,
Indraprastha Marg,
New Delhi 110 002

Further clarifications on this exposure draft may be sought by e-mail to geetanshu.bansal@icai.in

Amendment to Prevention of Money Laundering (Maintenance of Records) Rules, 2005 – Submitting ‘Officially Valid Documents’ – Change in name on account of marriage or otherwise

RBI/2015-16/213
DBR. AML.BC. No. 46/14.01.001/2015-16

October 29, 2015

The Chairpersons/ CEOs of all Scheduled Commercial Banks/ Regional Rural Banks/ Local Area Banks/ All India Financial Institutions/ all NBFCs/ All Primary (Urban) Co-operative Banks /State and Central Co-operative Banks (StCBs / CCBs) /All Payment System Providers/ System Participants and Prepaid Payment Instrument Issuers/ All authorised persons including those who are agents of Money Transfer Service Scheme

Dear Sir /Madam,

Amendment to Prevention of Money Laundering (Maintenance of Records) Rules, 2005 – Submitting ‘Officially Valid Documents’ – Change in name on account of marriage or otherwise

Please refer to paragraph 3.2.2.I.A of our Master Circular DBR.AML.No. 15/14.01.001/2015-16 dated July 1, 2015 on KYC/AML/CFT specifying Customer Due Diligence requirements (CDD) while opening accounts of individuals.

2. Reserve Bank has been receiving references/representations from banks and individuals regarding the problems faced by persons who change their name due to marriage or otherwise, in submitting an ‘Officially Valid Document’ (OVD) while opening a new bank account or during periodic updation exercise or incorporating the name change in the existing accounts. The OVD issued in the original name, which is not updated due to various reasons, still show the maiden/ previous name of such persons.

3. The Government, in consultation with the Reserve Bank has since amended the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 and issued a gazette notification G.S.R.730(E) dated September 22, 2015 regarding Prevention of Money Laundering (Maintenance of Records) (PML) Third Amendment Rules, 2015 (copy enclosed).

4. In terms of clause 2 of the PML third amendment rules, an explanation has been inserted in the clause (d) of Rule 2. Sub rule (1) which reads as under:

“Explanation: For the purpose of this clause, a document shall be deemed to an “officially valid document” even if there is a change in the name subsequent to its issuance, provided it is supported by a marriage certificate issued by the State Government or a Gazette notification, indicating such a change of name”.

5. Accordingly, regulated entities are advised that they may accept a copy of marriage certificate issued by the State Government or Gazette notification indicating change in name together with a certified copy of the ‘officially valid document’ in the existing name of the person while establishing an account based relationship or while undergoing periodic updation exercise.

6. Further, Amendment to Rule 7 (3) and 7(4) has also been notified which reads as under:

(7)(3): Every reporting entity shall evolve an internal mechanism having regard to any guidelines issued by the director in consultation with its regulator, for detecting the transactions referred to in clauses (A), (B), (BA), (C), (D), (E) and (F) of sub-rule (1) of rule 3 and for furnishing information about such transactions in such form as may be directed by the director in consultation with its Regulator.

(7)(4): It shall be the duty of every reporting entity, its designated director, officers and employees to observe the procedure and the manner of furnishing information as specified by the director in consultation with its Regulator.”

7. Regulated entities may revise their KYC policy in the light of the above instructions and ensure strict adherence to the same.

Yours faithfully,

(Lily Vadera)
Chief General Manager

Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders: Framework for Revitalising Distressed Assets in the Economy – Review of the Guidelines on Joint Lenders’ Forum (JLF) and Corrective Action Plan (CAP)

RBI/2015-16/214
DNBR.CC.PD.No. 070/03.10.01/2015-16

October 29, 2015

To

All Non-Banking Financial Companies (NBFCs)

Madam/ Sir,

Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders: Framework for Revitalising Distressed Assets in the Economy – Review of the Guidelines on Joint Lenders’ Forum (JLF) and Corrective Action Plan (CAP)

The Framework for Revitalising Distressed Assets in the Economy was issued by the Reserve Bank on January 30, 2014. To the extent applicable, the said Framework was made applicable to NBFCs vide circular dated March 21, 2014. Subsequently the reviews carried out by the Department of Banking Regulation vide circulars dated October 21, December 22, 2014 and June 8, 2015 were made applicable to NBFCs vide Circular DNBR.CC.PD.No.066/ 03.10.01/2015-16 dated July 23, 2015.

2. The Department of Banking Regulation, Reserve Bank has made certain modifications to the Framework vide circulars DBR.BP.BC.No.39/21.04.132/2015-16and DBR.BP.BC.No.41/21.04.048/2015-16 dated September 24, 2015. It has been decided that the modifications made in the Framework vide the above mentioned circulars shall also be, mutatis mutandis, applicable to NBFCs.

Yours faithfully

(C.D.Srinivasan)
Chief General Manager

AASB – Residential Orientation Programme for the Faculty – “Reporting On Internal Financial Controls Over Financial Reporting and Reporting On Fraud Under The Companies Act, 2013″

Residential Orientation Programme For the Faculty
“Reporting On Internal Financial Controls Over Financial Reporting And Reporting On Fraud Under The Companies Act, 2013”

The Companies Act, 2013 and the Rules thereunder have cast onerous responsibilities on the statutory auditors of the Companies. These include reporting on the adequacy and operating effectiveness of the internal financial controls in the auditor’s report and reporting on frauds to the Central Government. The Auditing and Assurance Standards Board (“the Board”) has already released Guidance Notes on these matters.

To create awareness about the changes and to provide the members with adequate guidance on the aforesaid aspects, the Board is proposing to organise workshops/ training programmes across the country and for doing so, create a pool of resources who would act as faculty for such workshops/ training programmes. For this purpose, the Board is organising a “Residential Orientation Program for the Faculty – Reporting on Internal Financial Controls over Financial Reporting and Reporting on Fraud under The Companies Act, 2013”.

The schedule of the Programme is as follows:

  • Date: 24th and 25th November’2015
  • Venue: The Retreat Hotel and convention Centre, Madh Island, Mumbai

Interested Members who:

  • Are keen to be a part of the aforesaid workshops/ training programmes
  • Have time for addressing such programmes
  • Possess at least ten years’ post qualification experience
  • Have adequate domain expertise
  • Are willing to travel across the country

may apply by filling up the enclosed Application Form. Click here for the Application Form.

The duly filled in Application Form should be mailed to aasb@icai.in by 2nd November, 2015 (end of day).

Members may also note that:

  • Only interested members with the above pre-requisites may apply.
  • No applications will be entertained after the aforementioned date.
  • This Programme is by Invitation only and hence sending an application would not, by itself, confirm registration thereat.
  • The Board will contact only the selected applicants.

For any further information/ clarification, you may contact the Secretariat of the Auditing and Assurance Standards Board at 0120-3045920 or at aasb@icai.in.

(CA ABHIJIT BANDYOPADHYAY)
Chairman, Auditing & Assurance Standards Board
The Institute of Chartered Accountants of India

26th October, 2015

Tentative dates of forthcoming Information Systems Audit (Assessment Test)-(ISA-AT)

26th October 2015

ISA-AT for members is held twice a year in the month of June and December.

The tentative dates of the forthcoming ISA-ATs are as follows:

26th December 2015

25th June 2016

24th December 2016

It may be please be noted that the dates mentioned above are tentative dates based on past trend and may change depending on unforeseen situations that may emerge.

Members may kindly note.

Examination Department

Central Excise – Guidelines for launching of Prosecution under the Central Excise Act, 1944 and Finance Act, 1994 regarding Service tax

F. No. 96/54/2014-CX.1

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

 

New Delhi, dated the 23rd October, 2015

To

 

Principal Chief Commissioner/ Chief Commissioner of Central Excise (All),

Principal Chief Commissioner/ Chief Commissioner of Central Excise and Service Tax (All),

Madam/ Sir,

Sub:   Central Excise – Guidelines for launching of Prosecution under the Central Excise Act, 1944 and Finance Act, 1994 regarding Service tax-reg.

I am directed to refer to following circulars/instructions issued by the Board regarding guidelines for launching of prosecution under the Central Excise Act, 1944 and the Finance Act, 1994:

(1)    Circular No. 15/90-CX.6 dated 09.08.1990 issued from F. No.  218/7/89-CX.6.

(2)    Circular No. 30/30/94-CX dated 04.04.1994 issued from F. No. 208/20/93/CX.6.

(3)    Letter F. No. 208/31/97-CX.6 dated 04.04.1994 regarding enhancement of monetary limit.

(4)   Circular No. 35/35/94-CX dated 29.04.1994 issued from F. No. 208/22/93-CX.6.

(5)   Letter F. No. 203/05/98-CX.6 dated 06.04.1998 regarding making DG, CEI competent authority to sanction prosecution in respect of cases investigated by DGCEI.

(6)    Letter F. No. 208/05/98-CX.6 dated 20.10.1998.

(7)   Letter F. No. 208/21/2007-CX.6 dated 15.06.2007.

(8)   Circular no 140/9/2011-Service Tax dated 12-5-2011.

 

  1. In supersession of these instructions and circulars, following consolidated guidelines are hereby issued for launching prosecution under the Central Excise Act, 1944 and the Finance Act, 1994.
  2. 3.         Person liable to be prosecuted

3.1       Whoever commits any of the offences specified under sub-section (1) of Section 9 of the Central Excise Act, 1944 or sub-section (1) of section 89 of the Finance Act, 1994, can be prosecuted. Section 9AA (1) of Central Excise Act, 1944 provides that where an offence under this Act has been committed by a company, every person who, at the time offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Section 9AA (2) of Central Excise Act, 1944 provides that where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation to Section 9AA provides that (a) “Company” means anybody corporate and includes a firm or other association of individuals and (b) “director” in relation to a firm means a partner of the firm. These provisions under Section 9AA of Central Excise Act, 1944 have been made applicable to Service Tax also vide Section 83 of the Finance Act, 1994.

4.1 Monetary Limit: In order to optimally utilize limited resources of the Department, prosecution should normally not be launched unless evasion of Central Excise duty or Service Tax, or misuse of Cenvat credit in relation to offences specified under sub-section (1) of Section 9 of the Central Excise Act, 1944 or sub-section (1) of section 89 of the Finance Act, 1994 is equal to or more than Rs. One Crore.

4.2 Habitual evaders: Notwithstanding the above limits, prosecution can be launched in the case of a company/assessee habitually evading tax/duty or misusing Cenvat Credit facility.  A company/assessee would be treated as habitually evading tax/duty or misusing Cenvat Credit facility, if it has been involved in three or more cases of confirmed demand (at the first appellate level or above) of Central Excise duty or Service Tax or misuse of Cenvat credit involving fraud, suppression of facts etc. in past five years from the date of the decision such that the total duty or tax evaded or total credit misused is equal to or more than Rs. One Crore. Offence register (335J) may be used to monitor and identify assessees who can be considered to be habitually evading duty.

4.3 Sanction of prosecution has serious repercussions for the assessee and therefore along with the above monetary limits, the nature of evidence collected during the investigation should be carefully assessed. The evidences collected should be adequate to establish beyond reasonable doubt that the person, company or individual had guilty mind, knowledge of the offence, or had fraudulent intention or in any manner possessed mens-rea (guilty mind) for committing the offence.

5.  Authority to sanction prosecution

5.1     The criminal complaint for prosecuting a person should be filed only after obtaining the sanction of the Principal Chief/Chief Commissioner of Central Excise or Service Tax as the case may be.

5.2       In respect of cases investigated by the Directorate General of Central Excise Intelligence (DGCEI), the criminal complaint for prosecuting a person should be filed only after obtaining the sanction of Principal Director General/ Director General, CEI.

5.3       An order conveying sanction for prosecution shall be issued by the sanctioning authority and forwarded to the Commissionerate concerned for taking appropriate action for expeditious filing of the complaint.

  1. 6.         Procedure for sanction of prosecution

6.1       Prosecution proposal should be forwarded to the Chief Commissioner / Principal Chief Commissioner or Director General / Principal Director General of DGCEI ( in respect of cases booked by DGCEI) after the case has been carefully examined by the Commissioner/ Principal Commissioner or Additional Director General /Principal Additional Director General of  DGCEI who has adjudicated the case. In all cases of arrest, examination of the case to ascertain fitness for prosecution shall be necessarily carried out.

 

6.2    Prosecution should not be launched in cases of technical nature, or where the additional claim of duty/tax is based totally on a difference of opinion regarding interpretation of law. Before launching any prosecution, it is necessary that the department should have evidence to prove that the person, company or individual had guilty knowledge of the offence, or had fraudulent intention to commit the offence, or in any manner possessed mens rea (guilty mind) which would indicate his guilt. It follows, therefore, that in the case of public limited companies, prosecution should not be launched indiscriminately against all the Directors of the company but it should be restricted to only against persons who were in charge of day-to-day operations of the factory and have taken active part in committing the duty/taxevasion or had connived at it.

 

6.3    Prosecution should not be filed merely because a demand has been confirmed in the adjudication proceedings particularly in cases of technical nature or where interpretation of law is involved. One of the important considerations for deciding whether prosecution should be launched is the availability of adequate evidence. The standard of proof required in a criminal prosecution is higher as the case has to be established beyond reasonable doubt whereas the adjudication proceedings are decided on the basis of preponderance of probability. Therefore, even cases where demand is confirmed in adjudication proceedings, evidence collected should be weighed so as to likely meet the test of being beyond reasonable doubt for recommending prosecution. Decision should be taken on case-to-case basis considering various factors, such as, nature and gravity of offence, quantum of duty/tax evaded or Cenvat credit wrongly availed and the nature as well as quality of evidence collected.

 

6.4   Decision on prosecution should be normally taken immediately on completion of the adjudication proceedings. However,  Hon’ble Supreme Court of India in the case of Radheshyam Kejriwal [2011(266)ELT 294 (SC)] has interalia, observed the following :- “(i) adjudication proceedings and criminal proceedings can be launched simultaneously; (ii) decision in adjudication proceedings is not necessary before initiating criminal prosecution; (iii) adjudication proceedings and criminal proceedings are independent in nature to each other and (iv) the findings against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution.” Therefore, prosecution may even be launched before the adjudication of the case, especially where offence involved is grave, qualitative evidences are available and it is also apprehended that party may delay completion of adjudication proceedings.

6.5  Principal Commissioner/Commissioner or ADG (Adjudication) acting as adjudicating authority should indicate at the time of passing the adjudication order itself whether he considers the case to be fit for prosecution so that it can be further processed and  sent to Principal Chief Commissioner/ Chief Commissioner or Principal Director General/ Director General of DGCEI, as the case may be, for sanction of prosecution. Where at the time of adjudication proceedings no view has been taken on prosecution by the Adjudicating Authority then the adjudication wing shall re-submit the file within 15 days from the date of issue of adjudication order to the Adjudicating Authority to take view of prosecution. Where, prosecution is proposed before the adjudication of the case, Commissioner/Principal Commissioner or Principal Additional Director General/Additional Director General, DGCEI who supervised the investigation shall record the reason for the same and forward the proposal to the sanctioning authority. The adjudicating authority shall also be informed of the decision to forward the proposal so that there is no need for him to examine the case at the time of passing of adjudication order from the perspective of prosecution. Principal Chief Commissioner/ Chief Commissioner or Principal Director General/ Director General of DGCEI may on his own motion also, taking into consideration the seriousness of an offence, examine whether the case is fit for sanction of prosecution irrespective of whether the adjudicating authority has recommended prosecution.

6.6      In respect of cases investigated by DGCEI, the adjudicating authority would intimate the decision taken regarding fitness of the case for prosecution to the Principal Additional Director General/ Additional Director General of the Zonal Unit or Headquarters concerned, where the case was investigated and show cause notice issued. The officers of unit of Directorate General of Central Excise Intelligence concerned would prepare an investigation report for the purpose of launching prosecution, within one month of the date of receipt of the decision of the adjudicating authority and would send the same to the Director General, CEI for taking decision on sanction of prosecution. The format of investigation report is annexed as Annexure-I to this Circular.

6.7       In respect of cases not investigated by DGCEI, where the Principal Commissioner/Commissioner who has adjudicated the case is satisfied that prosecution should be launched, an investigation report for the purpose of launching prosecution should be carefully prepared within one month of the date of issuance of the adjudication order . Investigation report should be signed by an Assistant/Deputy Commissioner, endorsed by the jurisdictional Principle Commissioner/Commissioner and sent to the Principal Chief/ Chief Commissioner for taking a decision on sanction for launching prosecution. The format of investigation report is annexed as Annexure-I to this circular. A criminal complaint in a court of law should be, filed by the jurisdictional Commissionerate only after the sanction of the Principal Chief / Chief Commissioner or Principal Director General/Director General of DGCEI has been obtained.

6.8   Principal Commissioner/Commissioner or Additional Director General (Adjudication) shall submit a report by 10th of every month to the Principal Chief /Chief Commissioner or the Principal Director General/ Director General of CEI, who is the sanctioning authority for prosecution, conveying whether a view on launching prosecution has been taken in respect of adjudication orders issued during the preceding month.

6.9    Once the sanction for prosecution has been obtained, criminal complaint in the court of law should be filed as early as possible by an officer of the jurisdictional Commissionerate authorized by the Commissioner.

6.10     It has been reported that delays in the Court proceedings are often due to non-availability of the records required to be produced before the Magistrate or due to delay in drafting of the complaint, listing of the exhibits etc. It shall be the responsibility of the officer who has been authorized to file complaint, to take charge of all documents, statements and other exhibits that would be required to be produced before a Court. The list of exhibits etc. should be finalized in consultation with the Public Prosecutor at the time of drafting of the complaint. No time should be lost in ensuring that all exhibits are kept in safe custody. Where a complaint has not been filed even after a lapse of three months from the receipt of sanction for prosecution, the reason for delay shall be brought to the notice of the Principal Chief/ Chief Commissioner or the Principal Director General or Director General of DGCEI by the Principal Commissioner/ Commissioner in charge of the Commissionerate responsible for filing of the complaint.

7.1       Prosecution, once launched, should be vigorously followed. The Principal Commissioner/Commissioner of Central Excise/Service Tax should monitor cases of prosecution at monthly intervals and take the corrective action wherever necessary to ensure that the progress of prosecution is satisfactory. In DGCEI, an Additional/ Joint Director in each zonal unit and DGCEI (Hqrs) shall supervise the prosecution related work. For keeping a track of prosecution cases, a prosecution register in the format enclosed as Annexure-II to this Circular should be maintained in the Prosecution Cell of each Commissionerate. The register shall be updated regularly and inspected by the Principal Commissioner/Commissioner at least once in every quarter of a financial year.

7.2       For keeping a track of prosecution cases, a prosecution register in the format enclosed as Annexure-III to this Circular should be maintained in the Zonal Units of DGCEI and DGCEI (Hqrs.) pertaining to cases investigated by them.

  1. :

8.1       Principal Commissioner/Commissioner responsible for the conduct of prosecution or Principal Additional Director General or Additional Director General of DGCEI (in respect of cases booked by DGCEI), should study the judgement of the Court and, where it appears that the accused person have been let off with lighter punishment than what is envisaged in the Act or has been acquitted despite the evidence being strong, appeal should be considered against the order. Sanction for appeal in such cases shall be accorded by Principal Chief/ Chief Commissioner or Principal Director General/ Director General of DGCEI.

9.         Publication of names of persons convicted:

9.1       Section 9B of the Central Excise Act, 1944 also made applicable to Service Tax vide section 83 of the Finance Act,1994 grants  power to publish name, place of business etc. of the person convicted under the Act by a Court of Law. The power is being exercised very sparingly by the Courts. It is directed that in deserving cases, the department should make a prayer to the Court to invoke this section in respect of all persons who are convicted under the Act.

  1. :

10.1     Procedure for withdrawal of sanction-order of prosecution

10.1.1  In cases where prosecution has been sanctioned but complaint has not been filed and new facts or evidences have come to light necessitating review of the sanction for prosecution, the Commissionerate or the DGCEI unit concerned should immediately bring the same to the notice of the sanctioning authority. After considering the new facts and evidences, the sanctioning authority namely Principal Chief/ Chief Commissioner or Principal Director General or Director General of DGCEI, if satisfied, may recommend to the Board (Member of the policy wing concerned) that the sanction for prosecution be withdrawn.

10.2     Procedure for withdrawal of Complaint already filed for prosecution

10.2.1  In cases where the complaint has already been filed complaint may be withdrawn as per Circular No. 998/5/2015-CX dated 28.02.2015 which provides that where on identical allegation a noticee has been exonerated in the quasi-judicial proceedings and such order has attained finality, Principal Chief Commissioner/ Chief Commissioner or the Principal Director General/ Director General of DGCEI shall give direction to the concerned Commissionerate to file an application through Public Prosecutor requesting the Court to allow withdrawal of the Prosecution in accordance with law.

  1. 11.   Transitional Provisions

11.1 All cases where sanction for prosecution is accorded after the issue of this circular shall be dealt in accordance with the provisions of this circular irrespective of the date of the offence. Cases where prosecution has been sanctioned but no complaint has been filed before the magistrate shall also be reviewed by the prosecution sanctioning authority in light of the provisions of this circular.

  1. 12.       Compounding of offences

12.1     Section 9A(2) of the Central Excise Act, 1944 also made applicable to Service Tax vide section 83 of the Finance Act,1994 provides for compounding of offences by the Principal Chief/ Chief Commissioner on payment of compounding amount. Circular no. 54/2005-Cus dt 30-12-2005 and Circular no 862/20/2007-CX-8 dated 27-12-2007 on the subject of compounding of offences may be referred in this regard which inter alia provides that all persons against whom prosecution is initiated or contemplated should be informed in writing, the offer of compounding.

  1. 13.       Inspection of prosecution work by the Directorate of Performance Management:

13.1  Director General, Directorate of Performance Management and Chief Commissioners, who are required to inspect the Commissionerates, should specifically check whether instruction contained in this Circular are being followed scrupulously and to ensure that reasons for pendency and non-compliance of pending prosecution cases are looked into during field inspections apart from recording of statistical data.

14.  The field formations may suitably be informed. Receipt of this Circular may please be acknowledged. Hindi version will follow.

Yours faithfully,

 

 

(ROHAN)

Under Secretary to the Govt. of India

 

            Annexure-I

F. No.               

INVESTIGATION REPORT FOR THE PURPOSE OF LAUNCHING PROSECUTION AGAINST ……………………………………………………………..

COMMISSIONERATE …………………………DIVISION …………………………………..           

  1. Name & address of the person(s) (including legal person(s):
  2. Central Excise/Service Tax Registration No.(If any):
  3. Nature of offence including commodity:
  4. Charges:
  5. Period of offence:
  6. Amount of evasion involved
  7. Particular of persons proposed to be prosecuted :

(a)    Name:

(b)   Father’s Name:

(c)    Age :                                 Sex:

(d)   Address:

(e)    Occupation:

(f)    Position held in the Company/Firm:

(g)   Role played in the offence :

(h)   Material evidence available against the accused (please indicate separately documentary and oral evidence).

(i)     Action ordered against the accused in adjudication.

 

  1. Brief note why prosecution is recommended :

(Deputy/Assistant Commissioner                  or Deputy/ Assistant Director, DGCEI)

Place

Date

 

  1. I have carefully examined the Investigation Report and find it in order for filling criminal complaint under Section 9 and 9AA of the Central Excise Act, 1944.

 

 

(Commissioner, Central Excise_________)/                                                                  (Additional Director General, DGCEI——-)

Place

Date

  1. The proposal should be made in the above form in conformity with the guidelines issued by the Ministry. With regard to column 4 above, all the charging sections in the Central Excise Act/Service Tax and other allied Acts should be mentioned. With regard to column 7, information should be filled separately for each person sought to be prosecuted.
  2. A copy of the Show Cause Notice as well as the Order of Adjudication (Wherever adjudication has been issued) should be enclosed with this report.
  3. If any appeal has been filed, then this fact should be specifically stated.

 

 

 

 

 

 

 

 

 

 

 

           

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annexure-II

 

FORMAT OF PROSECUTION REGISTER

 

Sl.
No.
Case investigated by Division/
Range
File no. Criminal complaint no. Date of detection Name of assessee and address Registration no. Nature of offence
1 2 3 4 5 6 7 8 9

 

Amount of tax/duty  confirmed Period of evasion Name of accused person (s) Date of sanction of prosecution Date of compounding offer Date of filing of complaint
10 11 12 13 14 15

 

Name, address and phone no of the counsel Date of judgement Appeal status- date/ court in which filed Date of hearing Remarks/sign with name and date (Officer filing the information)
16 17 18 19 20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANNEXURE-III

 

 

FORMAT OF PROSECUTION REGISTER TO BE MAINTAINED BY DGCEI

 

Sl.No. Date of Receipt of O-in-O in DGCEI Date of submission of Investigation report Date of Receipt of Sanction Order from DG,CEI Sanction Order No. & Date
1 2 3 4 5

 

Date of filing of Complaint in Court Criminal Complaint No. File No. of Commission -     -erate Name of Commiss-       -ionerate Details of Order passed by Court
6 7 8 9 10

 

 

 

 

 

 

 

Revised monetary limits for arrest in Central Excise and Service Tax

F. No. 96/54/2014-CX.1

Government of India

Department of Revenue

Central Board of Excise & Customs

New Delhi

New Delhi, the 23rd October, 2015

All Principal Chief/Chief Commissioners of Central Excise & Customs,

All Principal Chief/Chief Commissioners of Central Excise,

All Principal Chief/Chief Commissioners of Service Tax,

All Principal Director/Directors General.

 

Sir/Madam,

Sub: Revised monetary limits for arrest in Central Excise and Service Tax – reg.

Kind attention is invited to circular number 1009/16/2015-CX dated 23.10.2015 on the subject of prosecution under the Central Excise Act, 1944 and the Finance Act, 1994 (Service Tax cases). Revised monetary limits have been prescribed in the circular for launching prosecution. Prosecution can now be launched where evasion of Central Excise duty or Service Tax or misuse of Cenvat Credit in relation to offences specified under sub-section (1) of Section 9 of the Central Excise Act, 1944 or sub-section (1) of section 89 of the Finance Act, 1994  is rupees one crore or more.

2.     Consequently, it has been decided to revise the limits for arrests in Central Excise and Service tax. Henceforth, arrest of a person in relation to offences specified under clause (a) to (d) of sub-section (1) of Section 9 of the Central Excise Act, 1944 or under clause (i) or (ii) of sub-section (1) of section 89 of the Finance Act, 1994, may be made in cases where the evasion of Central Excise duty or Service Tax or the misuse of Cenvat Credit is equal to or more than rupees one crore. Central Excise circular no. 974/08/2013-CX and Service Tax circular no. 171/6 /2013-ST both dated 17-09-2013 stand amended accordingly.   

3.      Difficulty if any, in the implementation of the circular should be brought to the notice of the Board. Hindi version would follow.

Yours faithfully,

 

(ROHAN)

Under Secretary to the Govt. of India

 

Filing of Service Tax Returns

Every person liable to pay service tax has to submit half yearly return in form ST-3 within 25 days of the end of the half-year, as per rule 7 of Service Tax Rules, 1994, read with section 70(1) of Finance Act, 1994. Similarly, Input Service Distributor (ISD) is also required to file half yearly return, even if he is not liable to pay service tax.

Automation of Central Excise and Service Tax (ACES): - In continuation of its efforts for trade facilitation, Central Board of Excise and Customs (CBEC) had rolled-out a new centralized, web-based and workflow-based software application called Automation of Central Excise and Service Tax (ACES) in the year 2009. ACES has automated the major processes of Central Excise and Service Tax – registration, returns, accounting, refunds, dispute resolution, audit, provisional assessment, exports, claims, intimations and permissions. The ACES application has interface for Central Excise Assessees, Service Tax Assessees, Central Excise Departmental Officers and Service Tax Departmental Officers.

Registration in ACES: - To transact business online under ACES, all users have to first register with ACES. To register under ACES, the assessee needs to log onto the system, through internet at http://www.aces.gov.in. Registration in ACES is a onetime affair.

Steps for preparing and filing returns: - E-filing of return is mandatory w.e.f. 1st October, 2011 in respect of all assessees as per Rule 7(3) of Service Tax Rules, 1994. The assesses can electronically file statutory returns of Central Excise and Service Tax either online or through off-line return utilities which can be filled-in-off-line and uploaded to the system through the internet. Few steps for filing of returns are mentioned below:

  1. Returns can be prepared and filed online by selecting the ‘’File Return’’ option under RET module after logging into the ACES.
  2. Returns can also be prepared and filed off-line. The Assessee needs to download the Offline return preparation utility available at http://www.aces.gov.in (Under Download) and prepare the return offline using this utility.
  3. Selects RET from the main menu and uploads the return.
  4. Returns uploaded through this procedure are validated by the ACES before acceptance into the system which may take up to one business day.
  5. The status will appear as “uploaded” meaning under process by ACES, “Filed” meaning successfully accepted by the system or “Rejected” meaning the ACES has rejected the return due to validation error. The rejected returns can be resubmitted after corrections.
  6. On the successful submission of a return, an acknowledgment with a number in the format ‘’registration number_Type of return_Month and Year of the return’’ will be shown.
  7. The Service Tax revised returns can be filed once as per rules up to 90 days from the date of filing the initial return.
  8. There is no provision for submission of revised return after 90 days. In such cases, if assessee finds that he has made some mistake, he should pay the amount by GAR-7 challan with Interest and inform department suitably.

Responsibility of the Assessee: - It is the legal responsibility of the assessees, who are required to file returns, to file it within the due date as prescribed under law. It may, however, be noted that merely uploading the returns will not be considered as returns having been filed with the department. A return will be considered as filed, when the same is successfully accepted by the application as “Filed” and the relevant date for determining the date of filing of return will be the date of uploading of such successfully “filed” returns. In case a return is “rejected” by the application, the date of uploading of the rejected return will not be considered as the date of filing, rather the date of uploading of the successfully “filed”, return (after the assessee carries out necessary corrections and uploads it again) will be considered as the actual date of filing.

Even if there was no business during the period, assessee will have to file ‘NIL’ return as long as registration certificate is valid.

Late fee and penalty for filing late return: - Section 70(1) of Finance Act, 1994, as amended w.e.f. 08.04.2011 provides that in cases where returns are filed after due date, late fees not exceeding ₹ 20,000/- is payable for delayed filing of return, as may be prescribed. The late fee payable is as follows – (a) Delay up to 15 days – ₹ 500/- (b) Beyond 15 days and up to 30 days – ₹ 1000/- (c) Delay beyond 30 days – Rs,1000 plus ₹ 100 per day of delay beyond 30 days, from 31st day onwards. This ₹ 100 per day continues till limit of ₹ 20,000 is reached.

If return of Service Tax is not filed within prescribed period, penalty is leviable u/s 77(2) which can be up to ₹ 10000/-. If late fee is paid, penalty will not be imposed.

Help for Assessees: - CBEC has set up a Service Desk with National toll-free No. 1800 425 4251, which can be accessed by between 9 AM to 7 PM on all working days (Monday to Friday). Besides, e-mails can be sent toaces.servicedesk@icegate.gov.in . All the calls/emails will be issued a unique ticket number, which will be attended to by the Service Desk agents for appropriate response.

The time has come for filing of first half-yearly Service Tax return i.e. April, 2015 to September, 2015. It is therefore, vide this article, has tried to emphasize the assessee the importance of filing of Service Tax return within due date.

Withdrawal of five Guidance Notes on Accounting

The Council, at its Special (347th) meeting, held on October 14, 2015, has decided to withdraw the following five Guidance Notes on Accounting as the same are no longer relevant in the present day context in view of the requirements of the Companies Act, 2013:

  • GN(A) 3 (Issued 1982) – Guidance Note on Treatment of Reserve Created on Revaluation of Fixed Assets
  • GN(A) 7 (Issued 1989) – Guidance Note on Accounting for Depreciation in Companies
  • GN (A) 8 (Issued 1994) Guidance Note on Some Important Issues Arising from the Amendments to Schedule XIV to the Companies Act, 1956
  • GN (A) 26 (Issued 2008) Guidance Note on Applicability of Accounting Standard (AS) 20, Earnings Per Share
  • GN (A) 27 (Issued 2008) Guidance Note on Remuneration Paid to Key Management Personnel-Whether a Related Party Transaction

Shabina Abraham & Ors vs. Collector of Central Excise (Supreme Court)

The Supreme Court had to consider whether a dead person’s property, in the form of his or her estate, can be taxed without the necessary machinery provisions in a tax statute. The question was whether an assessment proceeding under the Central Excises and Salt Act, 1944, can continue against the legal representatives/estate of a sole proprietor/manufacturer after he is dead. HELD by the Supreme Court:

(i) The individual assessee has ordinarily to be a living person and there can be no assessment on a dead person and the assessment is a charge in respect of the income of the previous year and not a charge in respect of the income of the year of assessment as measured by the income of the previous year. Wallace Brothers & Co. Ltd. v Commissioner of Income-tax. By section 24B of the Income-tax Act the legal representatives have, by fiction of law, become assessees as provided in that section but that fiction cannot be extended beyond the object for which it was enacted. As was observed by this Court in Bengal Immunity Co. Ltd. v. State of Bihar legal fictions are only for a definite purpose and they are limited to the purpose for which they are created and should not be extended beyond that legitimate field. In the Income-tax Act the fiction is limited to the cases provided in the three sub sections of section 24B and cannot be extended further than the liability for the income received in the previous year.

(ii) A reading of Sections 2(f), (3), Section 4(3)(a), Section 11 and 11A as they stood at the relevant time would show that unlike the provisions of the Income Tax Act, there is no machinery provision in the Central Excises and Salt Act for continuing assessment proceedings against a dead individual. An assessee under the said Act means “the person” who is liable to pay the duty of excise under this Act and further stressed the fact that in cases of short levy, such duty can only be recovered from a person who is chargeable with the duty that has been short levied. Under the Central Excise Rules and Rules 2(3) and 7 in particular, there is no machinery provision contained either in the Act or in the Rules to proceed against a dead person’s legal heirs.

Mangalore Ganesh Beedi Works vs. CIT (Supreme Court)

The Supreme Court had to consider whether in AY 1995-96, when s. 32 did not make any distinction between tangible and intangible assets, the Assessee was entitled to any benefit under Section 32 of the Act read with Section 43(3) thereof for the expenditure incurred on the acquisition of trademarks, copyrights and know-how. HELD by the Supreme Court upholding the claim:

(i) The definition of ‘plant’ in Section 43(3) of the Act is inclusive. A similar definition occurring in Section 10(5) of the Income Tax Act, 1922 was considered in Commissioner of Income Tax v. Taj Mahal Hotel (1971) 3 SCC 550 wherein it was held that the word ‘plant’ must be given a wide meaning. The question is, would intellectual property such as trademarks, copyrights and know-how come within the definition of ‘plant’ in the ‘sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it’? In our opinion, this must be answered in the affirmative for the reason that there can be no doubt that for the purposes of a large business, control over intellectual property rights such as brand name, trademark etc. are absolutely necessary. Moreover, the acquisition of such rights and know-how is acquisition of a capital nature, more particularly in the case of the Assessee. Therefore, it cannot be doubted that so far as the Assessee is concerned, the trademarks, copyrights and know-how acquired by it would come within the definition of ‘plant’ being commercially necessary and essential as understood by those dealing with direct taxes.

(ii) Section 32 of the Act as it stood at the relevant time did not make any distinction between tangible and intangible assets for the purposes of depreciation. The distinction came in by way of an amendment after the assessment year that we are concerned with. That being the position, the Assessee is entitled to the benefit of depreciation on plant (that is on trademarks, copyrights and know-how) in terms of Section 32 of the Act as it was at the relevant time. We are, therefore, in agreement with the view taken by the Tribunal in this regard that the Assessee would be entitled to the benefit of Section 32 of the Act read with Section 43(3) thereof;

(iii) The Act does not clothe the taxing authorities with any power or jurisdiction to re-write the terms of the agreement arrived at between the parties with each other at arm’s length and with no allegation of any collusion between them. ‘The commercial expediency of the contract is to be adjudged by the contracting parties as to its terms.’ (D. S. Bist & Sons v. CIT [1984] 149 ITR 276 (Delhi) referred);

(iii) There is a clear finding of fact by the Tribunal that the legal expenses incurred by the Assessee were for protecting its business and that the expenses were incurred after 18th November, 1994. There is no reason to reverse this finding of fact particularly since nothing has been shown to us to conclude that the finding of fact was perverse in any manner whatsoever. That apart, if the finding of fact arrived at by the Tribunal were to be set aside, a specific question regarding a perverse finding of fact ought to have been framed by the High Court. The Revenue did not seek the framing of any such question. The High Court was not justified in upsetting a finding of fact arrived at by the Tribunal, particularly in the absence of a substantial question of law being framed in this regard (K. Ravindranathan Nair v. Commissioner of Income Tax [2001] 247 ITR 178 (SC) followed)

Inviting Suggestions on drafted Background Material of Certificate Course on Forex and Treasury Management

Committee on Financial Markets and Investors’ Protection of ICAI is conducting Certificate course on Forex and Treasury Management from the year 2009.With the continuous overwhelming response of members,Committee is able to successfully complete 31st batches till date.

With a view to deliver the members a good quality education in the same field, committee has decided to review its existing course curriculum and redesign the course curriculum and develop the comprehensive Background Material of the Forex and Treasury Management course. The restructured course curriculum contains Module – 1, 2 & 3.

The draft Background Material of Module -1 is available on the following link:

Module-1“Theory and Practice of Forex and Treasury Management” (PDF)

Suggestions are invited on the drafted BGM of Module-1 from the members/professionals who are experts in the subject matter. Interested persons are requested to send their suggestions/comments to: cfmip@icai.in, mark cc to: akagrawal@icai.in or Contact at 0120-3045945.

Thanks and Regards,

CA. Anuj Goel,
Chairman,Committee on Financial Markets
and Investors’ Protection,ICAI

Hosting of exemption(s) in a paper(s) granted in Intermediate (IPC) and Final examinations, valid for November, 2015

Re: Hosting of exemption(s) in a paper granted in Intermediate and Final examinations, valid for November 2015.

Exemption(s) in a paper(s) are granted to candidates of Intermediate and Final examinations, in terms of Regulation 37C(8) and Regulation 38C(6), respectively, of the Chartered Accountants Regulations 1988.

The rules in this regard are provided in the Guidance Notes made available to the candidates along with the examination forms and hosted on http://icaiexam.icai.org. The related FAQs are also hosted on www.icai.org.

However, in spite of the information already made available, it is seen that some of the candidates carry a mistaken notion that they enjoy an exemption in a paper(s) whereas in reality they do not and end up absenting themselves in the said paper, resulting in avoidable hardships.

To avoid this kind of situation, exemption(s) granted in a paper(s) which are valid for November 2015 examination are hosted on http://exemptions.icaiexam.icai.org, so that candidates can check their exemption status before the exams and take necessary action.

Date of hosting the exemption data : 15th October 2015
Last date for emailing discrepancy, if any : 25th October 2015

Hence, candidates are advised to check the details more particularly, the month and year of exam and roll number indicated on the said site, with those contained on the relevant Statement of marks issued to them. Exemptions granted in a paper(s) are indicated by way of “#” against the marks awarded thereon and the Result of the relevant Group is indicated as “F-EX”, in the Statement of Marks.

In case of discrepancy, if any, candidates are advised to write to Exam Dept. immediately, in any case not later than 25th October 2015, at the e-mail address provided herein below, enclosing scanned copy of the relevant mark sheet in which exemption was granted. 

Final candidates : final.exemption@icai.in
Intermediate(IPC) candidates : inter.exemption@icai.in

Exam Dept. will respond, within 7 days of the receipt of the e-mail. In case you do not receive any response within 7 days, write to:

Final candidates : final2@icai.in
Intermediate(IPC) candidates : inter7@icai.in

Examination Department

Submission of fictitious/forged documents by students and candidates for Institute’s examinations – attestation by members thereof.

ANNOUNCEMENT
For attention of Members

Submission of fictitious/forged documents by students and candidates for Institute’s examinations – attestation by members thereof

The Institute has observed certain instances where students and candidates for Institute’s examination have submitted fictitious / forged documents to the Institute duly attested by members. While the Executive Committee of the Institute has decided that such students/ candidates be debarred from pursuing the Chartered Accountancy course permanently and be not registered in any stream of the Course and further that the course fee deposited by such students/ candidates be forfeited, it has been decided that a general advisory be issued to the members cautioning them to be careful while attesting the documents, lest they might attract the provisions of disciplinary mechanism.

All members are, therefore, advised to be more careful while attesting documents of students and candidates for Institute’s examinations, in order to avoid any unpleasant situation thereafter.

V. Sagar
Secretary
Date: 14th October, 2015
ANNOUNCEMENT
For attention of students and candidates for Institute’s examinations

RBI Working Paper Series No. 5: Natural Interest Rate: Assessing the Stance of India’s Monetary Policy under Uncertainty

The Reserve Bank of India today placed on its website a Working Paper titled Natural Interest Rate: Assessing the Stance of India’s Monetary Policy under Uncertainty under the Reserve Bank of India Working Paper Series*. The Paper is co-authored by Harendra Kumar Behera, Sitikantha Pattanaik and Rajesh Kavediya.

The conduct of monetary policy has to often contend with uncertainties surrounding the evolution of the natural interest rate over time. The appropriateness of a monetary policy stance relative to its stated ultimate goals is commonly assessed by comparing the nominal policy interest rate against a Taylor type rule guided interest rate path. This, however, implicitly assumes the underlying natural interest rate as constant. The paper uses a theoretical framework that combines the essence of Ramsay’s growth model and the New-Keynesian macro-dynamics, and application of the Kalman filter estimation technique. The paper finds that India’s natural real interest rate in Q4 of 2014-15 was in a range of 0.6 per cent to 3.1 per cent, even though core estimates point to a narrower range of 1.6 per cent to 1.8 per cent.

The evolution of the natural rate is primarily conditioned by structural determinants such as productivity, population growth and saving rate (or households’ time preference). Over time, however, empirical literature points to the role of other determinants, including fiscal/ financial/ structural/ institutional reforms. The natural rate can change when the underlying determinants change. Among all possible determinants, some may be more permanent and others transitory, and importantly, some factors that just work towards pushing the actual real rates away from the natural rate may be wrongly viewed as determinants. Realistic assessment of the natural rate amid heightened uncertainty, therefore, would continue to be a major challenge for monetary policy.

Other major findings of the paper are:

a) the estimated natural interest rate in India is time-varying, as in other advanced and emerging economies;

b) the estimated natural interest rate has declined after the global crisis;

c) the estimates are highly sensitive to the choice of methodology, the measure of inflation expectations (both ex-ante and ex-post) used for deflating the nominal interest rate, and the nature of other data used in the model;

d) the real interest rate gap (i.e., the real policy rate minus the estimated time varying natural rate) remained negative for a major part of the last decade, indicating that monetary policy stance of the Reserve Bank was largely accommodative rather than anti-inflationary; and

e) the real interest rate gap has almost closed and turned marginally positive since the second half of 2014-15. When projected inflation remains above the inflation target, the real interest rate gap must remain positive, notwithstanding uncertainty associated with the precise estimation of the level of natural interest rate at any point in time.

* The Reserve Bank of India introduced the RBI Working Papers series in March 2011. These papers present research in progress of the staff members of the Reserve Bank and are disseminated to elicit comments and further debate. The views expressed in these papers are those of authors and not of the Reserve Bank of India. Comments and observations may kindly be forwarded to authors. Citation and use of such papers should take into account its provisional character.

Sangeeta Das
Director

Press Release : 2015-2016/902

RBI-Performance of the Private Corporate Business Sector during the First Quarter of 2015-16 – Data Release

The Reserve Bank of India today released on its website the data on the performance of non-financial private corporate business sector during the first quarter of 2015-16 (April – June 2015).

The data compiled are based on the abridged financial results of 2,723 listed non-government non-financial companies. To enable comparison, similar data pertaining to Q4:2014-15 and Q1:2014-15 are also presented. Coverage of companies in different quarters varies to some extent, depending on the date of declaration of quarterly results; however, it is not expected to alter the aggregate position significantly. ‘Explanatory Notes’ containing the brief methodology followed for compilation of data and the glossary of terms are given at the end. The list of tables is given below:

List of Tables
Table No. Title
1 A Performance of Non – Government Non-Financial Companies Growth Rates
B Select Ratios
2 A Performance of Non-Government Non-Financial Companies – Sector – wise Growth Rates
B Select Ratios
3 A Performance of Non-Government Non-Financial Companies according to Size of Paid-up-Capital Growth Rates
B Select Ratios
4 A Performance of Non-Government Non-Financial Companies according to Size of Sales Growth Rates
B Select Ratios
5 A Performance of Non-Government Non-Financial Companies according to Industry Growth Rates
B Select Ratios
Explanatory Notes
Glossary

Highlights

Sales

  • Aggregate sales contracted primarily due to a sharp contraction of 31.4 per cent (Y-o-Y) in the sales of ‘Petroleum Products’ industry group (Table 1A, 5A).
  • Sales in the manufacturing sector also contracted by 4.8 per cent. The services (other than IT) sector decelerated and the IT sector recorded improvement in comparison with the previous quarter (Table 2A).

Expenditure

  • Expenditure contracted at a higher rate than sales at the aggregate level (Table 1A).
  • Cost of raw-materials to sales ratio declined from 55.9 per cent in Q1:2014-15 to 51.6 per cent in Q1:2015-16 (Table 1B).

EBITDA (Earnings before Interest, Tax, Depreciation and Amortization)

  • At the aggregate level a Y-o-Y EBITDA growth of 3.7 per cent was recorded in Q1:2015-16 with an improvement observed for the manufacturing sector. This was primarily on account of ‘Petroleum Products’ industry which showed a 25.2 per cent Y-o-Y growth in EBITDA (Table 1A, 2A, 5A).
  • However, contracting EBITDA was observed in many major industries such as ‘Iron and Steel’ and ‘Parts, Accessories and Other Transport Equipments’ in the manufacturing sector and ‘Construction’ and ‘Real Estate’ industries (Table 5A).
  • IT sector recorded lower EBITDA growth in two consecutive quarters compared to Q1:2014-15 (Table 2A).

Interest

  • Y-o-Y growth in interest expenses increased in Q1:2015-16 to 9.5 per cent at the aggregate level (Table 1A).
  • Interest coverage ratio (Earnings before Interest and Tax/Interest expenses) showed no improvement in Q1:2015-16 over the previous quarter at the aggregate level. However, marginal improvement was noticed in the manufacturing sector (Table 1B, 2B).

Net Profit

  • Net Profit continued to contract in Q1:2015-16 at the aggregate level (Table 1A), due to a contraction in the manufacturing sector (Table 2A).
  • IT Sector showed a very low but positive Y-o-Y growth in net profit against a contraction in Q4:2014-15 (Table 2A).

Pricing power

  • Pricing power as measured by EBITDA margin increased at the aggregate level as well as across sectors aided by lower expenditure outgo (Table 1B, 2B).

Sangeeta Das
Director

Press Release : 2015-2016/900

Links to Previous Data Releases

Income-tax (15th Amendment) Rules, 2015

Government of India

Ministry of Finance

Department of Revenue

(Central Board of Direct Taxes)

(Income-tax)

NOTIFICATION NO. 78/2015

New Delhi, the 12th October, 2015

S.O. 2791(E). – In exercise of the powers conferred by section 295, read with section 80DDB of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1.       (1) These rules may be called the Income-tax (15th Amendment) Rules, 2015.

(2) They shall come into force on the date of publication in the Official Gazette.

2.       In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), in rule 11DD, for sub-rules (2) and (3), the following sub-rules shall be substituted, namely:-

“(2) The prescription in respect of the diseases or ailments specified in sub-rule (1) shall be issued by the following specialists:-

(a) for diseases or ailments mentioned in clause (i) of sub-rule (1) – a Neurologist having a Doctorate of Medicine (D.M.) degree in Neurology or any equivalent degree, which is recognised by the Medical Council of India;

(b) for diseases or ailments mentioned in clause (ii) of sub-rule (1) – an Oncologist having a Doctorate of Medicine (D.M.) degree in Oncology or any equivalent degree which is recognised by the Medical Council of India;

(c) for diseases or ailments mentioned in clause (iii) of sub-rule (1) – any specialist having a post-graduate degree in General or Internal Medicine, or any equivalent degree which is recognised by the Medical Council of India;

(d) for diseases or ailments mentioned in clause (iv) of sub-rule (1) – a Nephrologist having a Doctorate of Medicine(D.M.) degree in Nephrology or a Urologist having a Master of Chirurgiae(M.Ch.) degree in Urology or any equivalent degree, which is recognised by the Medical Council of India;

(e) for diseases or ailments mentioned in clause (v) of sub-rule (1) – a specialist having a Doctorate of Medicine (D.M.) degree in Hematology or any equivalent degree, which is recognised by the Medical Council of India:

Provided that where in respect of any diseases or ailments specified in sub-rule (1), the patient is receiving the treatment in a Government hospital, the prescription may be issued by any specialist working full-time in that hospital and having a postgraduate degree in General or Internal Medicine or any equivalent degree, which is recognised by the Medical Council of India.

(3) The prescription referred to in sub-rule(2) shall contain the name and age of the patient, name of the disease or ailment along with the name, address, registration number and the qualification of the specialist issuing the prescription:

Provided that where the patient is receiving the treatment in a Government hospital, such prescription shall also contain the name and address of the Government hospital.”

3.       In the said rules, in Appendix-II, Form No. 10-I shall be omitted.

[F. No.142/20/2015-TPL]

(Arju Garodia)

Under Secretary (TPL)

Note .-The principal rules were published in the Gazette of India vide notification number S.O. 969(E), dated the 26th March, 1962, and was last amended by vide notification number .S.O. 2663(E), dated the 29th October, 2015.

Extend the last date for filing of online returns for the 1st and 2nd quarters of the year 2015-16,

GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI

DEPARTMENT OF TRADE & TAXES

VYAPAR BHAWAN: I.P. ESTATE: NEW DELHI -110002

No.F.3(515)/Policy/VAT/2015/870-81

Dated 12/10/2015

NOTIFICATION

In partial modification of Notification No.F.3(515)/Policy/VAT/2015/805-816 dated 29/09/2015, I, Vijay Kumar, Commissioner, Value Added Tax in exercise of the powers conferred under section 27 of the Delhi Value Added Tax Act,2004, do hereby extend the last date for filing of online returns for the 1st and 2nd quarters of the year 2015-16, in Forms EC-II and EC-III to 16/11/2015.

(Vijay Kumar)

Commissioner, VAT

Invitation for developing Study Material for different modules of Certificate Course on Financial Markets and Securities Laws.

Committee on Financial Markets and Investors Protection’ (CFMIP) of ICAI is launching a new Certificate Course on Financial Markets and Securities Laws. CFMIP invites expression of interest from the Resource persons of respective fields to contribute in developing Study Materials for different Modules and for taking up the sessions. Detailed course curriculum is available on the following link:

Certificate Course on Financial Markets and Securities Laws (PDF)

For further correspondence,the interested persons are requested to send us their brief profile for acting as a Resource person for developing the modules /taking up the sessions to fmsl@icai.inmark cc to akagrawal@icai.in. Contact details: 0120-3045945,08130567979, 08130527979

Thanks and Regards,
CA. Anuj Goel,
Chairman, Committee on Financial Markets
and Investors Protection’

Invitation for developing Study Material for different modules of Certificate Course on Fundamental and Technical Analysis of Stocks including Equity Research.

Committee on Financial Markets and Investors Protection’ (CFMIP) of ICAI is launching a new Certificate Course on Fundamental and Technical Analysis of Stocks including Equity Research. CFMIP invites expression of interest from the Resource persons of respective fields to contribute in developing Study Materials for different Modules and for taking up the sessions.

Detailed course curriculum is available on the following link:

Certificate Course on Fundamental and Technical Analysis of Stocks including Equity Research (PDF)

For further correspondence, the interested persons are requested to send us their brief profile for acting as a Resource person for developing the modules /taking up the sessions to fata@icai.inmark cc to akagrawal@icai.in. Contact details: 0120-3045945,08130567979, 08130527979

Thanks and Regards,
CA. Anuj Goel,
Chairman, Committee on Financial Markets
and Investors Protection’

Implementation of Section 51-A of Unlawful Activities Prevention Act (UAPA), 1967 – Update dated September 30, 2015 and October 2, 2015 of Al-Qaida Sanctions List

RBI/2015-16/199
DBR.AML.No. 4897/14.06.001/2015-16

October 7, 2015

The Chairpersons/ CEOs of all Scheduled Commercial Banks/
Regional Rural Banks/ Local Area Banks/ All India Financial Institutions/
all NBFCs/ All Primary (Urban) Co-operative Banks /State and Central Co-operative Banks (StCBs / CCBs) /
All Payment System Providers/ System Participants and Prepaid Payment Instrument Issuers/
All authorised persons including those who are agents of Money Transfer Service Scheme

Dear Sir/ Madam,

Implementation of Section 51-A of Unlawful Activities Prevention Act (UAPA), 1967- Update dated September 30, 2015 and October 2, 2015 of Al-Qaida Sanctions List

Please refer to our circular DBR.AML.No.3906/14.06.001/2015-16 dated September 18, 2015 on the captioned subject releasing the update issued vide press release No. 12037 dated September 9, 2015 regarding UNSCR 1267(1999)/ 1989(2011) Committee’s Al Qaida Sanctions List.

2. Ministry of External Affairs (MEA), UNP Division has forwarded press release No. 12066 dated September 30, 2015 regarding addition of one entry to Al Qaida Sanction List and another press release No. 12067 dated October 2, 2015 regarding addition of six entries, issued by the United Nations Security Council (UNSC) Committee established pursuant to Resolutions 1267 (1999) and 1989 (2011) (copies enclosed). Press release pertaining to the update is available at:
http://www.un.org/press/en/2015/sc12066.doc.htm and http://www.un.org/press/en/2015/sc12067.doc.htm.

A link to updated list of individuals and entities linked to Al Qaida is available at: http://www.un.org/sc/committees/1267/1267.pdf

3. Regulated Entities (REs) are required to update the list of individuals/entities as circulated by Reserve Bank and before opening any new account, it should be ensured that the name/s of the proposed customer does not appear in the list. Further, banks should scan all existing accounts to ensure that no account is held by or linked to any of the entities or individuals included in the list.

4. REs are advised to strictly follow the procedure laid down in the UAPA Order dated August 27, 2009 enclosed to our circular DBOD.AML.BC.No.44/14.01.001/2009-10 dated September 17, 2009 and ensure meticulous compliance to the Order issued by the Government.

5. As far as freezing of funds, financial assets or economic resources or related services held in the form of bank accounts of the designated individuals/entities are concerned, action should be taken as detailed in paragraph 6 of the circular dated September 17, 2009, mentioned above.

6. A link of press releases in which the relevant changes to the list are announced are posted on the Committee’s website at the following URL:
http://www.un.org/sc/committees/1267/pressreleases.shtml

Yours faithfully,

(Lily Vadera)
Chief General Manager

Encl.: as above

Regarding Service tax levy on services provided by a Goods Transport Agency

F. No. 354 / 98 /20015-TRU

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

*****

New Delhi, dated 5th October, 2015

To,

Principal Chief Commissioner / Chief Commissioner of Central Excise, Service Tax and Customs (All),

Director General of Service Tax

Director General of Audit

Director General of Central Excise Intelligence Principal Principal Commissioners of Service Tax (All)

Commissioners of Service Tax (All)

Commissioner (DPPR)

webmaster@cbec.gov.in

 

Sir/ Madam,

Subject: – Service tax levy on services provided by a Goods Transport Agency -reg.

 

The All India Transport Welfare Association (AITWA) has represented regarding the difficulties being faced by the Goods Transport Agencies (GTAs) in respect of service tax levy on the services of goods transport. Doubts has been raised by the All India Motor Transport Congress (AIMTC) regarding treatment given to various services provided by GTAs in the course of transportation of goods by road.
2.  The issue has been examined.  Since July 1, 2012, service tax has shifted to a negative list regime, by which all the services except those covered in negative list as mentioned in section 66D of the Finance Act, 1994 or those exempted by notification are chargeable to service tax.
3.  Goods Transport Agency (GTA) has been defined to mean any person who provides service to a person in relation to transport of goods by road and issues consignment note, by whatever name called.  The service provided is a composite service which may include various ancillary services such as loading/ unloading, packing/unpacking, transshipment, temporary storage etc., which are provided in the course of transportation of goods by road. These ancillary services may be provided by GTA himself or may be sub-contracted by the GTA. In either case, for the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of ancillary services provided in the course of transportation of goods by road. These services are not provided as independent activities but are the means for successful provision of the principal service, namely, the transportation of goods by road.

4.   A single composite service need not be broken into its components and considered as constituting separate services, if it is provided as such in the ordinary course of business. Thus, a composite service, even if it consists of more than one service, should be treated as a single service based on the main or principal service.   While taking a view, both the form and substance of the transaction are to be taken into account. The guiding principle is to identify the essential features of the transaction. The interpretation of specified descriptions of services in such cases shall be based on the principle of interpretation enumerated in section 66 F of the Finance Act, 1994. Thus, ifancillary services are provided in the course of transportation of goods by road and the charges for such services are included in the invoice issued by the GTA, and not by any other person, such services would form part of GTA service and, therefore, the abatement of 70%, presently applicable to GTA service, would be available on it.

5.   It is also clarified that transportation of goods by road by a GTA, in cases where GTA undertakes to reach/deliver the goods at destination within a stipulated time,  should be considered as ‘services of goods transport agency in relation to transportation of goods’ for the purpose of notification No. 26/2012-ST dated 20.06.2012, serial number 7, so long as (a) the entire transportation of goods is by road; and (b) the GTA issues a consignment note, by whatever name called.

6.   Pending disputes on the above issues may accordingly be decided expeditiously.

7.    Trade & field formations may be informed suitably.

8.   Hindi version will follow.

Yours faithfully,

 

(Dr. Ravindra Kumar)

Technical Officer, TRU-II

Master Circular- Guarantees, Co-Acceptances & Letters of Credit – UCBs

RBI/2015-16/6
DCBR.BPD. (PCB) MC No.8/09.27.000/2015-16

July 1, 2015

The Chief Executive Officers
All Primary (Urban) Co-operative Banks

Dear Sir/ Madam,

Master Circular- Guarantees, Co-Acceptances & Letters of Credit – UCBs

Please refer to our Master Circular UBD. BPD (PCB) MC. No.4/09.27.000/14-15 dated July 1, 2014 on the captioned subject (available at RBI websitewww.rbi.org.in). The enclosed Master Circular consolidates and updates all the instructions / guidelines on the subject issued up to June 30, 2015 as listed in theAppendix.

Yours faithfully

(Suma Varma)
Principal Chief General Manager

Encl: as above


Master Circular- Guarantees, Co-Acceptances & Letters of Credit

Contents
1. Guarantees
1.1 Issue of Guarantees
1.1.1 Broad Guidelines
1.1.2 Purpose
1.1.3 Maturity
1.1.4 Volume
1.1.5 Secured Guarantees
1.1.6 Unsecured Guarantees
1.1.7 Deferred Guarantees
1.2 Guarantees in respect of Commodities covered under Selective Credit Controls
1.3 Safeguards in Issuance of Guarantees
1.4 Payment under Bank Guarantees – Immediate Settlement of Cases
1.5 Delay in Obtaining Certified Copies of Judgments
1.6 Correspondence with Government Departments
2. Co-acceptance of Bills
2.1 Irregularities in Co-acceptance of Bills
2.2 Safeguards
3. Letter of Credit
3.1 Guidelines for Grant of LCs facility
3.2 LCs for Commodities Covered under Selective Credit Controls
3.3 Safeguards in Opening of LCs
3.4 Payment under LCs – Immediate Settlement of Claims
4. Other Common Guidelines
4.1 Credit Exposure Norms and Statutory / Other Restrictions on Non-fund Based Limits
Appendix

Master Circular
Guarantees, Co-Acceptances & Letters of Credit – UCBs

1. Guarantees

1.1 Issue of Guarantees

1.1.1 Broad Guidelines

In view of the risks involved in the business of issuance of guarantees, the Primary (Urban) Co-operative Banks (PCBs) should extend guarantees within restricted limits so that their financial position is not impaired. The banks should follow certain broad guidelines in respect of their guarantee business as indicated in the following paragraphs.

1.1.2 Purpose

(i) As a general rule, banks may provide only financial guarantees and not performance guarantees.

(ii) However, scheduled banks may issue performance guarantees on behalf of their constituents subject to exercising due caution in the matter.

1.1.3 Maturity

It would be desirable for PCBs to confine their guarantees to relatively short-term maturities. Guarantees should not be issued for periods exceeding ten years in any case.

1.1.4 Volume

The total volume of guarantee obligations outstanding at any time may not exceed 10 per cent of the total owned resources of the bank comprising paid up capital, reserves and deposits. Within the overall ceiling, proportion of unsecured guarantees outstanding at any time may be limited to an amount equivalent to 25% of the owned funds (paid up capital + reserves) of the bank or 25% of the total amount of guarantees, whichever is less.

1.1.5 Secured Guarantees

Banks should preferably issue secured guarantees. A secured guarantee means a guarantee made on the security of assets (including cash margin), the market value of which will not at any time be less than the amount of the contingent liability on the guarantee, or a guarantee fully covered by counter guarantee/s of the Central Government, State Governments, public sector financial institutions and / or insurance companies. Banks should generally provide deferred payment guarantees backed by adequate tangible securities or by counter guarantees of the Central or the State Government or public sector financial institutions or of insurance companies and other banks.

1.1.6 Unsecured Guarantees

Banks should avoid undue concentration of unsecured guarantee commitments to particular groups of customers and / or trades. The banks’ Board of Directors should fix suitable proportions for issuance of unsecured guarantees on behalf of any individual constituent so that these guarantees do not exceed a -

(a) reasonable proportion of the total obligations in respect of unsecured guarantees provided by the bank to all such constituents at any time, and

(b) reasonable multiple of the shareholdings in the bank.

1.1.7 Deferred Guarantees

(i) Banks, which intend to issue deferred payment guarantees on behalf of their borrowers for acquisition of capital assets should ensure that the total credit facilities including the proposed deferred payment guarantees do not exceed the prescribed exposure ceilings

(ii) The proposals for deferred payment guarantees should be examined having regard to the profitability / cash flows of the project to ensure that sufficient surpluses are generated by the borrowing unit to meet the commitments as a bank has to meet the liability at regular intervals in respect of the instalments due. The criteria generally followed for appraising a term loan proposal for acquisition of capital assets should also be applied while issuing deferred payment guarantees.

1.2 Guarantees in respect of Commodities covered under Selective Credit Controls

PCBs should not issue, either to a Court or to Government, or any other person, a guarantee on behalf of or on account of any importers guaranteeing payment of customs duty and / or import duty, or other levies, payable in respect of import of essential commodities without taking, as security for issue of such guarantees, a cash margin equivalent to at least one half of the amount payable under the guarantee. The term “essential commodities” shall mean such commodities as may be specified by the Reserve Bank of India from time to time.

1.3 Safeguards in Issuance of Guarantees

While issuing financial guarantees, banks should observe the following safeguards:

(i) Bank guarantees should be issued in security forms serially numbered to prevent issuance of fake guarantees.

(ii) Guarantees above a particular cut off point, as may be decided by each bank, should be issued under two signatures in triplicate, one copy each for the branch, beneficiary and Controlling Office / Head Office. It should be binding on the part of the beneficiary to seek confirmation of the Controlling Office / Head Office as well for which a specific stipulation be incorporated in the guarantee itself.

(iii) The guarantees should not normally be allowed to the customers who do not enjoy credit facilities with the banks but only maintain current accounts. If any requests are received from such customers, the banks should subject the proposals to thorough scrutiny and satisfy themselves about the genuine need of the customers. Banks should be satisfied that the customers would be in a position to meet the claims under the guarantees, when received, and not approach the bank for credit facility in this regard. For this purpose the banks should enquire into the financial position of the customers, the source of funds from which they would be in a position to meet the liability and prescribe a suitable margin and obtain other security, as necessary. The banks may also call for the detailed financial statements and Wealth-tax / Income-tax returns of the customer to satisfy themselves of their financial status. The observations of the banks in respect of all these points should be recorded in banks’ books.

(iv) Where the customers enjoy credit facilities with other banks, the reasons for their approaching the bank for extending the guarantees should be ascertained and invariably, a reference should be made to their existing bankers with whom they are enjoying credit facilities.

(v) Banks, when approached to issue guarantees in favour of other banks for grant of credit facilities by another bank, should examine t