E-filing of returns: Taxpayers to get digital signatures

http://www.hindustantimes.com/business-news/e-filing-of-returns-taxpayers-to-get-digital-signatures/article1-1199134.aspx

In order to weed out the hassle of sending by post a hard copy of e-filed return, the Income Tax department has decided to bring in the facility of electronic signatures for taxpayers to endorse their bonafides.

The Central Board of Direct Taxes (CBDT), the apex office to formulate policies for the Income Tax department, has decided to implement the new mechanism by the end of the next financial year in March, 2015.

Official sources privy to the development told PTI that the CBDT will get in touch with the Union Ministries of Law and Communications and Information Technology to establish the legal position and technology requirements respectively before it operationalises the new protocols for the e-returns called 'ITRV'.

"It has to be seen what will be the procedure to obtain electronic or digital signature by the taxpayers. There should not be an additional cost or procedural burden for the taxpayer who opts to file his or her I-T return online," a senior official said.

In case of digital signatures (used by corporate entities as of now), a bonafide statement that verifies the identity of the sender, it is required to be created by paying a fee and this requires regular renewal, which is why this is being seen as a burden on salaried class and other categories of small taxpayers.

The department, within the same time-frame, is also desirous of enabling the e-filing of Tax Deducted at Source (TDS) statements through its official web portal which is used by taxpayers currently to file their electronic returns.

As per the norms in force at present, a taxpayer who files an e-return has to mandatorily send a copy of the same by post to the I-T department's Central Processing Centre (CPC) in Bengaluru.

However, in many cases the post would not reach the CPC and hence the tax department categorised the taxpayers return as null and void.

The department, sources said, wants to promote e-filing of I-T returns and it desires that e-filing should be "hassle free and sans any glitches", which will prompt more number of people to file their tax returns by this way.

The I-T department is also bolstered by the fact that more and more number of people are opting to file their returns online.

As per existing rules, the CPC, on receipt of the posted 'ITRV', sends an electronic acknowledgement to the tax return filer.

The problem arises when the document sent by post does not reach the CPC because of lapses on the part of the taxpayer or some other reason.

Banks told to remit TDS by month-end

http://www.thehindubusinessline.com/economy/deficit-worry-banks-told-to-remit-tds-by-monthend/article5801625.ece?homepage=true

In a controversial move, the Finance Ministry has advised banks to remit the tax deducted at source (TDS) on salary, rent and credit of interest on deposits to the Government account by March-end, almost a month ahead of the designated due date.

Bankers say this advisory contradicts Income Tax Rules, which allow banks time up to April 30 to deposit TDS when the income or amount liable for TDS is credited or paid during the month of March. Moreover, it could raise the hackles of bankers and minority shareholders.

Desperate move?

According to market experts, this could be a desperate move by the Ministry to ensure that the “red line” Finance Minister P Chidambaram has drawn on the fiscal deficit is not crossed. Chidambaram had said the deficit would not exceed 4.8 per cent of GDP.

The TDS advisory, coupled with the Finance Minister’s request to public sector bank chiefs in October to ensure that dividend payable to the Government in 2013-14 is not less than the ₹6,803 crore paid in 2012-13, could be aimed at shoring up Government finances.

State Bank of India, Bank of Baroda, Bank of India and Punjab National Bank had declared handsome interim dividends after announcing their third-quarter results. The Central Government, as the majority shareholder in these banks, is the main beneficiary of the dividends.

Late February, the Secretary to the Department of Financial Services had requested the Indian Banks’ Association to issue directions to all its member-banks to ensure that apart from remitting TDS on salary and rent within the current financial year, the TDS on credit of interest may be remitted to the Government account in March itself, ‘in accordance with the law.’

‘Not in line with tax rules’

Bankers point out that the Ministry’s advisory is not in accordance with Income Tax Rules.

Last week, IBA, at the Ministry’s behest, issued an advisory on TDS to its member banks for implementation.

TDS aims at collection of revenue at the very source of income. It is the amount deducted from payments of various kinds such as salary, interest, contract payment, commission, etc.

The tax amount deducted at source can be adjusted against the depositor’s tax due. The TDS rate varies from one per cent to 30 per cent depending on the nature of payment.

Float money

If banks remit TDS in March itself they will not be able to utilise the float money (which could run into a few thousand crore rupees) that is otherwise available to them (to earn returns) before actually remitting the TDS amount to the Government.

According to Shravan Sharma, Chartered Accountant: “This advisory short-changes minority shareholders of banks, especially public sector banks. Banks are losing an opportunity to earn returns and create value for their shareholders.

“One month has been given to TDS deductors such as banks under Income Tax rules to remit TDS to the Government so that they don’t make mistakes in calculation. If a bank makes excess TDS payment it will not get refund but in case of underpayment it is slapped with a penalty.”

A senior public sector bank official said that while Government-owned banks will implement the advisory, it remains to be seen if private sector and foreign banks will bite the bullet.

RBI may not hike rates in April policy review

The Reserve Bank is likely to hit the pause button in its next monetary policy review on April 1, as the decline in inflation may give the central Bank "room to pause monetary tightening," says a BNP Paribas report.

According to the financial services major, the recent decline in inflation, driven largely by food prices, gives the RBI room to pause monetary tightening.

"As per RBI guidance, we do not expect it to increase rates in April, and expect just one more 25 bps (0.25 per cent) rate hike from the RBI this policy cycle," BNP Paribas said in a research note.

Wholesale inflation eased to a seven-month low of 5.05 per cent in January, on decline in the rate of price rise in food articles, mainly vegetables.

This is the second straight month of decline in wholesale price based inflation. The WPI was at 6.16 per cent in December.

On Indian equity markets, the report said that "with external sectors looking much better and inflation under control, we believe that the next catalyst for the Indian market will be the election results (May 2014)".
According to the global brokerage firm, India's earnings environment has also improved and this coupled with a better macro outlook leads us to upgrade India to an "overweight" along with Hong Kong, Taiwan, Indonesia and Philippines.

The report further noted that actions of policymakers since September 2013 have helped the Indian currency regain investor credibility, and tight curbs on gold imports coupled with improved merchandise and service exports sharply reduced the current account deficit.

Moreover, RBI's mobilisation of forex reserves via non- resident deposits also had a salutary effect on India's external risk metrics, the report said.

Rush to spend old notes spawns new exchange business

http://www.mumbaimirror.com/mumbai/cover-story/Rush-to-spend-old-notes-spawns-new-exchange-business/articleshow/29319590.cms

 

Trust enterprising Mumbaiites to turn an adversity into a business opportunity. 

The Reserve Bank of India's decision to withdraw pre-2005 currency notes has spawned a new exchange trade in the city, involving replacement of old notes with new ones for a commission of 2 per cent. 

Despite the RBI's clarification that pre-2005 notes will remain legal tender post March 31, the central bank's deadline for withdrawing these notes from circulation, the decision has set off panic in the city and small businesses have begun reporting receiving large number of these notes. 

While the RBI has made it clear that anybody can walk into a bank and exchange pre-2005 currency notes for new ones, not many Mumbaiites took up the offer on Thursday and Friday, fearing it could set the Income Tax department after them. 

Though the RBI has not mentioned any date beyond which pre-2005 currency notes will become worthless, people believe this will happen sooner than later. 

Sauji Bachhu Patel, manager-cum-cashier at Daily Needs, a super market on Palm Beach Road, Nerul, said he asked his staff to start separating pre-2005 currency notes in the store's daily collection on Thursday. "I was surprised by the amount of pre-2005 notes in the day's collection. It's clear that people have started dumping old notes at retail outlets," he said. 

Narendra Singh, owner of Blue Star Wines, Santa Cruz, too received a large number of pre-2005 notes on Thursday and the trend continued on Friday. "I am sure it's going to become a deluge by Monday," he said. 

The buzz in the exchange trade on Friday was that the commission for exchanging pre-2005 notes could double by next month to 4 per cent and touch 10 per cent in March. 

RBI Governor Raghuram Rajan at a lecture in New Delhi on Thursday said there are security factors attached to the decision, which had nothing to do with the elections. According to RBI sources, the pre-2005 notes have fewer security features and thus their copies are easier to produce. 

While currently one can walk into a bank and exchange any amount of pre-2005 notes, from July 1, to exchange more than 10 pieces of Rs 500 and 1000 notes, non-customers will have to furnish proof of identity and residence to the bank branch in which the exchange will take place. 

SBI launches Youtube channel; Twitter is next

http://www.thehindubusinessline.com/companies/sbi-launches-youtube-channel-twitter-is-next/article5609936.ece

Nation’s largest lender State Bank of India on Thursday strengthened its social media presence with the launch of its channel on popular video sharing website Youtube and said it will also be launching its handle on the micro-logging site Twitter soon.

“The YouTube channel is another platform that will enable us to connect with our customers. SBI will continue to spread its footprint on social media through the launch of platforms like Twitter, shortly,” Chairperson Arundhati Bhattacharya said in a statement.

The YouTube channel, which follows a dedicated Facebook page launch in November, will initially have information about the bank’s products and services and its legacy to begin with and will gradually include philanthropic initiatives, it said in a statement.

SBI, has over 200 years of history. It has over 15,000 branches and over 43,000 ATMs.

The bank statement said the Youtube channel will help it connect with the young and technologically savvy customers.

9,000% dividend! Record payout from TMB

http://www.thehindubusinessline.com/industry-and-economy/banking/9000-dividend-record-payout-from-tmb/article5602547.ece

Tamilnad Mercantile Bank (TMB) has declared an interim dividend of 9,000 per cent. 

That’s actually Rs 900 per share of Rs 10 each, for the fiscal ending March 2014.

The board of this Tuticorin-headquartered bank took a decision to this effect at a meeting held on January 18.

Bank sources said this would translate into an outgo of Rs 25.6 crore (unchanged from last year).

The 9,000 per cent interim dividend is said to be the highest in the banking industry and this is the second year in a row that the bank has declared such a high dividend. It may be recalled that the bank’s board had approved a dividend of Rs 750 per share for 2008-09 and Rs 1,000 per share the following year, but could not make the payment as the annual general meetings for 2009-10 and 2010-11 were not held due to legal issues.

Bank sources said TMB’s shares continue to trade at between Rs 60,000 and Rs 65,000 a share in the informal market.

Banknotes issued prior to 2005 to be withdrawn: RBI Advisory

The Reserve Bank of India has today advised that after March 31, 2014, it will completely withdraw from circulation all banknotes issued prior to 2005. 

From April 1, 2014, the public will be required to approach banks for exchanging these notes. Banks will provide exchange facility for these notes until further communication. 

The Reserve Bank further stated that public can easily identify the notes to be withdrawn as the notes issued before 2005 do not have on them the year of printing on the reverse side.

The Reserve Bank has also clarified that the notes issued before 2005 will continue to be legal tender. 

This would mean that banks are required to exchange the notes for their customers as well as for non-customers. From July 01, 2014, however,  to exchange more than 10 pieces of `500 and `1000 notes, non-customers will have to furnish proof of identity and residence to the bank branch in which she/he wants to exchange the notes.

The Reserve Bank has appealed to the public not to panic. They are requested to actively co-operate in the withdrawal process.