RBI Asks Income Tax Assessees to Pay Dues in Advance

RBI Asks Income Tax Assessees to Pay Dues in Advance
Mumbai: The Reserve Bank of India (RBI) on Monday appealed to income tax assessees to pay dues ahead of the due date as well use alternate channels of authorised banks to avoid the rush during end of March.

“Pay I-T (income tax) dues in advance at RBI or at authorised bank branches. Appeal to income tax assessees to remit their income tax dues sufficiently in advance of the due date,” the central bank said in a release.

“It is observed that the rush for remitting Income-Tax dues through the RBI has been far too heavy towards the end of March every year and it becomes difficult for the RBI to cope with the pressure of issuing receipts although additional counters to the maximum extent possible are provided for the purpose”, it said.

The RBI said assessees can use alternate channels like select branches of agency banks or the facility of online payment of taxes offered by these banks.

A total of 29 agency banks have been authorised to accept payments of income tax dues.

The authorised banks include SBI (State Bank of India) and its five associates, HDFC Bank, ICICI Bank, Axis, Bank, Punjab National Bank, Bank of Baroda, Bank of India, Indian Overseas Bank.

Among others are Corporation Bank, Dena Bank, Canara Bank, Central Bank of India and Syndicate Bank.

The RBI said that remitting dues at the designated banks will obviate the income tax assessess’ inconvenience in standing in long queues at RBI offices.


Regulator Seeks Complete Tax Exemptions for NPS

Regulator Seeks Complete Tax Exemptions for NPSNew Delhi: With an aim to increase its customer base, Pension Fund Regulatory and Development Authority (PFRDA) Chairman Hemant Contractor on Wednesday urged the government to provide ‘Triple E’ benefits to the schemes under the National Pension System (NPS) to bring them at par with EPFO and PPF where the maturity amount is not taxed.

“Our request to the government is with regard to making NPS a Triple E product,” Mr Contractor said on his expectations from the Union budget to be presented by Finance Minister Arun Jaitley on February 29.

Under the ‘Triple E’ category investment, all three accrued interest and withdrawal are exempt from tax.

Talking to reporters, he said making the NPS an ‘exempt-exempt-exempt’ product would go a long way in increasing the customer base of PFRDA.

“If this happens then our customer base will surely increase and it will help raise our corpus substantially,” he said.

He said as compared to other pension schemes, NPS is a bit disadvantageous as both EPFO and PPF enjoy the ‘Triple E’ benefit.

“If our schemes too offer such facility, we think this will help us make join in a large number with our scheme,” Mr Contractor said.

The retirement saving scheme NPS falls under EET (exempt-exempt-taxable) category, wherein investment gets deduction in the taxable income and also income/interest/gains are not taxed. However, maturity proceeds are taxable.

The Pension Fund Regulatory and Development Authority runs the NPS.

Mr Contractor further said PFRDA has urged the government for continuation of the additional deduction of Rs.50,000 for contribution towards the NPS under Section 80CCD.

The PFRDA is also demanding that service tax on purchase of annuity should be removed.

In order to reduce cost and time of operation and ensure wider coverage of old age income security schemes, PFRDA has also modified e-NPS platform to accept PAN and bank e-Aadhaar as the KYC document for online registration of subscribers under NPS.

“PFRDA has accordingly revisited the issue and believes that enabling e-Aadhaar in addition to PAN and bank account based KYC for the e-NPS platform can reduce the cost and time of operation and ensure wider coverage to the citizens,” it said in a statement.

It said with the operationalisation of this modified e-NPS platform, the subscriber will now have various options for opening of account.

They can open account through points-of-presence-service provider (POP-SP), use online PAN and net banking of selected banks.

Besides, they would also be able to open account online using Aadhaar number, it said.

To instill the habit of saving for older age by pension contribution, PFRDA is also planning to introduce a ‘soft compulsion’ approach for the unorganised sector, wherein subscribers will be given voluntary choice to join a pension scheme when they join a job.

There has to be some element of soft compulsion to join pension schemes. We are working on that. It is successful model in other countries, so we want it to work here also,” Mr Contractor added.


Expecting Income Tax Incentives On Bank Deposits: Mukesh Butani

Mr Butani expects the finance minister to announce some changes in the indirect tax regime to usher in GSTFinance Minister Arun Jaitley will focus on three to four broad themes in this year’s budget, says Mukesh Butani, managing partner at BMR Legal. Tax benefit to deal with inflation, rejigging of threshold and slab rates and tax relief on interest earned from bank deposits could be announced in budget, he added.

“There could be some form of incentive for garnering greater degree of deposits in the banking sector. He (Jaitley) could raise the limit on interest deduction on interest from bank is concerned,” Mr Butani told NDTV Profit. (Watch)

According to the current tax laws, if the total interest on bank deposits in a financial year crosses the threshold limit of Rs 10,000, tax deducted at source (TDS) is applied on the interest earned.

In the previous year’s budget, Mr Jaitley had announced the government’s intention to reduce corporate tax from 30 per cent to 25 per cent over the next four years. Mr Butani expects the finance minister to outline a roadmap for lowering of corporate tax rate.

“The primary agenda would be how the corporate tax rate would be lowered over the next 4 years, including the phase-out programs for various exemptions.”

Indirect tax

Mr Butani expects the finance minister to announce some changes in the indirect tax regime to usher in GST (goods and services tax).

“In the light of Parliament logjam on GST, people would be wondering what is the finance minister is going to do as far as GST is concerned. Taking away of the central sales tax (CST) will be important signal for the GST,” he said. “The government is well within its realm to carry out the requisite amendments for indirect tax central sales tax levies for seamless credits. That will ease pressure and signal that the central part of GST is concerned, at least seamless credits are available.”

CST is levied on goods in inter-state trade. Under the proposed GST regime, major central and state taxes will get subsumed into GST to bring in a uniform tax regime across the country. In anticipation of implementation of GST, the central sales tax goods was brought down from 4 per cent to 2 per cent in two phases in 2007-2009 but this tax has not yet been fully phased out yet.

Mr Butani also expects the government to address the inverted duty structure issue in some sectors. Under the inverted duty structure, the import duty on the raw material is more than the import duty on the same finished product, a taxation structure the hurts the competitiveness of domestic manufacturing industry.

“You could also very well see, the continuing efforts of successive governments, including this government, to address the inverted duty structure in certain industries in which it is still around,” he said.

Mr Bhutani also expects the finance minister to announce administrative tax reforms to increase the ease of doing business in India and also defer the general anti-avoidance rule (GAAR) for another year. (Read: 5 facts about GAAR)