Dear Sri Raithatha, GS, UNION BANK RETIRED EMPLOYEES ASSOCIATION,RAJKOT
1)I
read ur circular re Bank having issued to many pensioners too ,where
they found that Rs 50,000 ---Rs 2,50,000 was deposited in their SB Ac.U
have rightly taken up the cause of protecting pensioners, as this highly
inflammatory letter from Banks to pensioners jeopardises Hon PMs
assurance ,followed by FMs instructions that ONLY those remitting above
Rs 2,50,000 before 31 dec 2016 will have to adduce proper reasons.
Whatever
it is, when whole system of banking virtually collapsed under the
strain of flip flop orders, contradictory, sometimes supplementary from
FM sources & RBI, it is said such orders exceeded 100 in record time
with ever so many amendments,that not only Bankers & Staffers there
were unaware & constantly under tension,the easy way being to
reject customer requests, exchange of old notes to New became so
difficult, the daily sustenance package was so rudimentary to upset all
domestic chores or happiness of the family, friction & anger
everywhere, tremendous stress & strain for banks &citizens, that
NOW to instruct bank to issue such letters, calling for explanations
& keeping them under tenterhooks, smoothness & more calm &
comfortable package could have been pre-planned, & not designed 'AS
YOU GO ON basis,'causing untold damage to peace &tranquillity.More
so when we learn, in reality, 7 months may be needed to bring calm by
way of adequate New notes & replenishing Rs2000 denomination new
notes &other smaller denominations in Banks for customers to be well
at ease.That only less than 20 % ATMs had storage of cash & all was
dry ,was enough proof of the Govt hastening, even if Confidential
sudden Orders became necessary with a broad objective , yet BASICS &
FUNDAMENTALS exercise earlier would have minimized incalculable harm
caused, ever since Nov 8.
2)Be that as it may, it s desirable citizens are forearmed & so forewarned.
I
came across this Article in Business Standard & I thought it fit to
bring to ur kind notice ,so that u may circulate, for what it is
worth,& more such dissection by CAs & Auditors will come gushing
,when more IT Orders, Notices, Penalties, imprisonment et all will pop
up, to the annoyance of ordinary citizens, well-meaning individuals,
pensioners, who are craving for enhancing ITExemption limit to Rs 5
lacs & Sec 80C to be enhanced to Rs 2.50 lacs. a desirable
proposition & so all must, from now on be mentally prepared , , to
defend themselves solidly with reasonable proof & evidence
,satisfactory to IT authorities
No
doubt, as u have rightly claimed , when ONLY more than Rs2.50.000 lacs
was deposited was questionable for violation,such letters even cause
damage to Fundamental Rights of liberty.
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HERE IS THAT ARTICLE
Black money chase: Don't panic if you receive a tax notice
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Prepare your replies with expert help and keep relevant documents ready to support your replies
Sanjay Kumar Singh January 2, 2017 Last Updated at 09:50 IST
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The government has asked banks to provide information to the Income-Tax (I-T) Department about savings accounts where deposits have exceeded Rs 2.5 lakh (Rs 12.5 lakh in the case of current accounts) after November 8. If the deposits are higher than past levels or deviate significantly from what a person’s savings are expected to be, based on the I-T returns he has filed in the past, he could receive a notice from the tax department. As the government has gone into overdrive against black money, many more notices are expected this year.
Type of notice received
First, you determine the type of notice you have received. Sometimes the tax department sends enquiry notices, where the officer asks for specific information. A tax scrutiny notice is for examining your I-T return in great detail. “For black money-related cases, the department could issue enquiry notices anytime, asking people to explain the source of large deposits in their savings accounts. Scrutiny notices will be issued only after the return is filed,” says Rahul Jain, partner-direct taxation, Nangia & Co.
The seriousness of your problem also depends on whether you have received a limited or detailed scrutiny notice. In the former, the officer can ask you to provide information only regarding limited points, say, about a mismatch between the tax return you have filed and the Annual Information Return (AIR) filed by a bank or mutual fund (MF) house for high-value transactions. A detailed scrutiny is a more holistic investigation. “A tax officer can convert a limited scrutiny into a complete scrutiny but not merely on the basis of suspicion or guesswork. He can do so, with the approval of a high-rank officer, only if he forms a reasonable view to believe income exceeding Rs 5 lakh (Rs 10 lakh in a metro) has escaped assessment,” says Kuldip Kumar, partner and leader (personal tax), PwC India.
What should you do?
Just because you have received a notice does not imply wrongdoing on your part. Instead, you should set about dealing with it methodically. First, understand the objective of the notice: Is it a scrutiny notice or only asking for specific information? Next, establish whether it is a valid notice and if the tax officer has the jurisdiction or power to issue it. “The notice ought to specify the nature of proceeding and relevant provision under which the information is being requested. Additionally, it needs to be checked whether the tax officer has appropriate jurisdiction to inquire about transactions of the taxpayer,” says Jiger Saiya, partner — direct tax, BDO India.
Next, prepare your replies and provide relevant documents to support your claim. The notice usually specifies the information you have to provide. If required, seek the guidance of a chartered accountant.
Under a new scheme that is being optionally tried out in seven cities, you can respond by e-mail. The taxpayer can also choose to respond and give supporting documents in physical form. Information should be properly vetted and only then submitted. Some notices require a personal hearing, where you are called upon to explain the submissions made. “The taxpayer needs to ensure he replies to the notice within the stipulated time. If he fails to do so, there could be a penalty. The tax officer also has the power to make a best-judgement assessment and there are also provisions for prosecution,” says Saiya.
After you have prepared and filed your returns for a year, store all the relevant documents, so that you can produce these in case of a scrutiny. “How long you need to preserve these documents depends on the source of income and limitation period to reopen assessments. In the case of income from foreign assets, you have to maintain records for 16 years. In case the of income from a domestic source, where the income escaped is more than Rs 1 lakh, you have to preserve these documents for six years. In other cases, it is for four years,” says Kumar.
Get the paperwork right
- Maintain books of accounts. Keep documents to show vendors’ genuineness
- Those who file returns under presumptive tax should preserve proof of sales and service tax paid
- To justify inventory, have purchase bills, sales invoices, record of opening and closing stock
- PPF passbook, mutual fund and home loan statements serve as proof for Section 80C deductions
- For significant transactions like property purchase, preserve sale deed
- Always keep a copy of your bank statement for the year
- Ensure gift deeds are in place for large gifts
------------------------------ ------------------------------ ------------------------------ ------------------------------ ------------------------------ ----------------3)I also thought it fit to send Quantum information Services --Financially Simplified-- relevant to this topic'
Many citizens held their breath before the "Mitron" speech began at 7.30 pm on New Year eve. No party may have started before 8.30; any untoward surprise in Mr Modi's address would have cured their hangover even before the celebrations begun. However, Prime Minister, Mr Modi offered some goodies to eager Indians, one positive in the aftermath of national demonetisation. To add to that, the Government has displayed more flip flops on policy decisions—for good reasons though this time. Overall, the Government seems to have set the perfect tone for the entire year.
A few changes in the demonetisation ordinance...
To restrict RBI’s liability and that of the Government on Scrapped Bank Notes (SBN), the Government had issued an ordinance. The ordinance not only made holding SBN over 10 pieces after March 31, 2017, a criminal offence but also put a restriction on who can exchange notes between January 01, 2017 and March 31, 2017, at select offices of RBI. The Government has released more clarification on this topic.
It has extended the timeline for NRIs to June 30, 2017. However, there would be a limit of Rs 25,000 per person as per Foreign Exchange Management Act (FEMA) guidelines. This limit won’t apply to resident Indians, who can exchange their SBN only until March 31.
Unlike determined earlier, there won’t be any four-year jail term for holding SBN over 10 pieces. The Government has also clarified that the minimum penalty for those holding old SBN would be Rs 10,000. The maximum penalty can go upto 5 times the contested amount. Further, furnishing wrong information while depositing money between January 01, 2017 and March 31, 2017, would also attract a fine of Rs 5,000 or 5 times the amount exchanged, whichever is higher. It’s noteworthy that the research scholars can hold upto 25 pieces of SBN without being asked any question.
Daily cash withdrawal limit goes up
In another notification, the RBI has also hiked the daily withdrawal limit at ATMs from Rs 2,500 to Rs 4,500 effective from January 01, 2017. However, the bankers have already predicted that it might take longer before restrictions on withdrawals are lifted.
Prime Minister, Mr Modi in his speech on New Year's eve, made some citizen-friendly announcements and appeals. They include:
- The credit guarantee of Micro Small and Medium Enterprises (MSME) by the Government shall be hiked from Rs 1 crore at present to Rs 2 crore. This is aimed at helping MSMEs borrow more funds and at a reasonable cost.
- The Government urged banks to enhance the overdraft limit from 20% to 25% of the sales for small businesses and to hike the limit of working capital finance from 20% to 30% of the turnover.
- Affordable housing to get a big push with home loans of upto Rs 9 lakh will get 4% exemption in the interest and 3% exemption in the loans upto Rs 12 lakh.
- The Government will bear the interest cost on farm loans for the period of 60 days, if they have been taken from district co-operative banks and primary societies. This move is aimed at providing relief to farmers from the ill-effects of demonetisation.
- The Government is likely to issue 3 crore Kisan Credit Cards within next 3 months.
- Pregnant women will receive Rs 6,000-aid from the Government.
While these moves were aimed at lifting the sentiments of certain sections that have been experiencing the intense pain of demonetisation, Mr Modi didn’t make any announcement on the personal income tax rates, which was much awaited. But, none of those above decisions may have any substantial (positive or negative) impact on Government finances. Having said that, these announcements suggest that the Union Budget 2017-18 may be the most populist budget in recent times. Going by the announcements of the Government, it seems banks would be under pressure to serve the Government’s agenda on providing subsidised loans. It remains to be seen to what extent the Government influences the autonomy of banks. SBI has slashed home loan rates by as much as 0.90%. This was in response to the Government’s appeal. If inflation falls further and the banks maintain the transparency in passing on the benefits of previous rate cuts to the borrowers, RBI at some point may consider slashing policy rates.
It’s still unclear how much the demonetisation will shore up Government’s revenue, and there’s still no word on the revision of fiscal deficit target. In other words, the Government is still aiming to curtail fiscal deficit to 3.5% in FY17 3.0% of GDP in FY18.
As per the finance ministry figures, there has been a 13.6% jump in the net income tax collections upto December 19, 2016, 26.2% rise in the central indirect taxes until November 30, 2016.
For now, Mr Modi has spared his ‘brothers and sisters’ from any dreadful announcement. Hope this chain won’t break in the Budget 2017. What’s still unknown is how much black money demonetisation managed to dig out. The citizens may expect the Government to share more data on this.Yours sincerely,RBKISHOREVP,AIRIEF
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