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Old 28th December 2016, 13:10   #1816
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by aaggoswami View Post
The recent data of only 3.65 crore citizens filing ITR is shocking. Less than 3%. Source : Link
There are more car buyers than tax payers in India. I am aware of "loans", but then we are not taking into account the used car market which is quite large.
Corruption in govt. has to be checked first.
Though I agree with your thoughts, that article is sheer abuse of stats. Simple question - we all know agri income isn't taxed - have they discounted those? These are two different measures and cannot be compared.

Though we completely agree about people under reporting incomes, but that happens largely in the unorganized sector. Some shop, only accepting cash, would either severely under report incomes or put in bare bones so that they are taxed but very little. Salaried fellows are taxed at source, so that's one problem gone. Professionals are a big problem - Doctors, Technicians, these are people who actually earn far more than most of us, yet they severely under report their incomes.

I think what the current exercise would do, is ask questions about the severe gap in subsequent years and IT has and should ask questions.
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Old 28th December 2016, 13:12   #1817
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by sgiitk View Post
The bank chaps may have landed themselves into a bigger soup. How many banks, esp PSU renew/redo the KYCs every two years? So now if the chap is caught so will be his bank officials. I personally think KYC every two years is silly since both PAN and UID are permanent in nature, and can be verified digitally.
I found this out the hard way when I went to deposit 7K i had lying around - apparently my account was not KYC Compliant (despite me submitting KYC documents when i created the account a few years ago), and had to stand in the main queue thrice to get it deposited due to the extra paperwork.

I'm not sure why i need to resubmit my DL and PAN card every two years, unless one of them is supposed to be renewed in the interim period

Thankfully there was no panel interview - they just gave me a form which i filled up and submitted.

Last edited by greenhorn : 28th December 2016 at 13:14.
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Old 28th December 2016, 14:26   #1818
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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I'm not sure why i need to resubmit my DL and PAN card every two years, unless one of them is supposed to be renewed in the interim period
I agree it is silly, esp since both can be verified by the bank on-line. I guess it is an artifact of the bad old days.

This is one reason we keep our major accounts in an MNC bank. They keep taking care of these things by themselves, asking for us to sign some papers periodically. Also, as per the rules KYC needs to be done every ten years in most cases, which is ignored by the banks.

Last edited by sgiitk : 28th December 2016 at 14:29.
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Old 28th December 2016, 15:49   #1819
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by sgiitk View Post
I personally think KYC every two years is silly since both PAN and UID are permanent in nature, and can be verified digitally.
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Originally Posted by greenhorn View Post
I'm not sure why i need to resubmit my DL and PAN card every two years, unless one of them is supposed to be renewed in the interim period
KYC is not to be done once and forgotten. Periodic KYC allows the bank to re-classify each customer based on changing scenarios (eg: someone was high-risk because of their "unemployed" status; now reclassified as low-risk because they are working as a full-time employee for a respectable company). RBI's master circular on KYC addresses all these points rather comprehensively.

https://rbi.org.in/scripts/BS_ViewMa...s.aspx?id=8179

While the documents we submit are permanent, we ourselves aren't. Periodic KYC renewal allows banks to ensure that the account holder is still alive and it is not a third-party using the account for benami purposes. Those who collect government pensions will see the parallel with the annual ritual of appearing in person in front of a senior officer of their department.

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Originally Posted by sgiitk View Post
Also, as per the rules KYC needs to be done every ten years in most cases, which is ignored by the banks.
As per the rules, for low-risk customers KYC is to be done once every five years at least, and for medium/high risk customers once every two years at least.
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Old 28th December 2016, 15:59   #1820
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by pratyush6
Simple question - we all know agri income isn't taxed - have they discounted those?
Agri income is NOT taxed, which is right. But many of these "humble farmers" don't even submit their tax returns every year. Income being exempted from taxation, and not filing any tax returns are two different things. So now what is going too happen is that even "humble farmers" would have to prove that all their income was earned through agriculture. They may still do that, but then what happens is that that sets the bench mark. The problem is that once you file an income tax return, you will have to do it year after year (even if you have nil tax to pay). So the next time these "humble farmers" would have to show pretty much the same level of income earned through agriculture. Or else IT folks can question on what changed from last year to this year.

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I think what the current exercise would do, is ask questions about the severe gap in subsequent years and IT has and should ask questions.
Yes. What is happening now is that pretty much the entire unaccounted income of all people have now landed up in the bank. That too in accounts which can be tagged to a person. Fine, some of them will have income below the taxable levels. Some others would confess that they have income which was not accounted, will pay the tax+penalty and get away with it. Some others may be able to bribe IT officials to an extent and escape. But all the while, a "bench mark" is now being set for every person. One, their cash worth can be checked against their known source of income at any later point of time. Shops etc. which would now have to own up on their actual money, will find it tough to prove the next year that their sales were abysmally poor (when compared to last year; and with no drastic changes happening in the business world).

My gut feeling is that there would be some schemes which would ease the pain for the people on a day to day basis. So that by Jan end, the constant whine which we hear would go away. As it is I am seeing very less number of people in ATM queues when compared to three weeks back. Then over the next 1 year, there would be some periodic "bomb blasts" which would expose the masks of some people who all looked squeaky clean till Dec 31st. And there could also be political ramifications, when the exposes would be of politicians or their known "bag men".
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Old 28th December 2016, 16:20   #1821
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

I came across this article today -If what it says about the FRDIC is true, it does not inspire a lot of confidence about putting one's money in a bank
Quote:
In case a bank fails, we would lose our deposit because the bank does not give us any tangible security against this deposit. However, in India, the Deposit Insurance and Credit Guarantee Corporation insures our deposits to a maximum of Rs 100,000 per deposit account in a bank. So, if a customer has a deposit of Rs 150,000 in his bank account and the bank fails, then the excess of Rs 50,000 is uninsured and the customer has no legal remedy to recover this amount.

If the draft Financial Resolution and Deposit Insurance Bill 2016 becomes law, it would create a ‘resolution regime’ that would hurt all bank deposit account holders, even those with legitimate money. The RBI would be taking the path trodden by other central banks in the world who have sacrificed the interests of the depositors in favour of fellow banks and corporates.

First, banks use depositors funds to disburse loans without proper due diligence. Then, in case of defaults by the borrowers, the depositor is expected to make good the losses on account of the bank-business nexus.

... the money belonging to the unsecured and uninsured creditor can be used to save a bank from bankruptcy. The failing bank can be recapitalised with depositors money and without their consent as well.
https://thewire.in/89853/demonetisat...apitalisation/

Last edited by greenhorn : 28th December 2016 at 16:28.
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Old 28th December 2016, 16:24   #1822
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by sachinpk View Post
Agri income is NOT taxed, which is right. But many of these "humble farmers" don't even submit their tax returns every year. Income being exempted from taxation, and not filing any tax returns are two different things.
Actually no. If you have income only from agriculture you are not required to file income tax returns. Same about zero income. A person is required to file his returns only if his gross income without any deductions is more than the basic exemption limit.

Which means if a person has income of 1.5 lakhs in a financial year, he is not legally obliged to file his returns. Many do, but it is not mandatory.

Last edited by vibbs : 28th December 2016 at 16:31.
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Old 28th December 2016, 16:33   #1823
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Actually no. If you have income only from agriculture you are not required to file income tax returns. Same about zero income. A person is required to file his returns only if his gross income without any deductions is more than the basic exemption limit.
I don't think that is correct. If your gross income exceeds 2.5L (3L for senior citizens) then you have to file IT return irrespective of the breakup of that income, and the part of that which is exempt.
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Old 28th December 2016, 16:36   #1824
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by sgiitk View Post

This is one reason we keep our major accounts in an MNC bank. They keep taking care of these things by themselves, asking for us to sign some papers periodically. Also, as per the rules KYC needs to be done every ten years in most cases, which is ignored by the banks.
You said it. RBI master circulars on KYC are truly implemented in spirit by the MNC banks. And it is maybe partly due to their superior systems and maybe partly because they don't want to get on the wrong side of a foreign central banker.

PS: I have a Citibank A/C and a PNB A/C. There is a WORLD of a difference between doing an online transaction on Citibank and PNB. Infact, I have never visited my citibank branch (which is 2200kms away from where I live) in the last 7 years. Phone banking and the online portal have been enough.
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Old 28th December 2016, 16:39   #1825
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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I don't think that is correct. If your gross income exceeds 2.5L (3L for senior citizens) then you have to file IT return irrespective of the breakup of that income, and the part of that which is exempt.
Yes that is what I said. You have to file your returns only if your Gross income for a financial year is more than the basic exemption limit.

Not sure about the agricultural part. I believe if the income is only from Agriculture you are not mandated to file. I may be wrong on this one.

But it is factually wrong to assume that once you start filing returns, you need to keep doing so despite having zero income.
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Old 28th December 2016, 16:45   #1826
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Yes that is what I said. You have to file your returns only if your Gross income for a financial year is more than the basic exemption limit.
OK. You said "If you have income only from agriculture you are not required to file income tax returns" which I took to mean that if all your income is agricultural income then you don't have to file returns, even if the income is high (above 2.5L).

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Not sure about the agricultural part. I believe if the income is only from Agriculture you are not mandated to file. I may be wrong on this one.
The relevant section is 139(1)(b) of IT Act 1961. Every individual whose total income (before considering exemptions, that is) is more than 2.5L has to file the IT return.

Many individuals whose total income are lower than 2.5L also have to file the return.

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But it is factually wrong to assume that once you start filing returns, you need to keep doing so despite having zero income.
It is always better to do so, though. For example, if in the year in which you have 0 income, you had opened a new bank account then that is a detail you are supposed to mention in your return; not filing a return which mentions this fact then becomes an offence.
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Old 28th December 2016, 16:56   #1827
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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OK. You said "If you have income only from agriculture you are not required to file income tax returns" which I took to mean that if all your income is agricultural income then you don't have to file returns, even if the income is high (above 2.5L).
Actually I did. But I stand corrected now.


Quote:
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It is always better to do so, though. For example, if in the year in which you have 0 income, you had opened a new bank account then that is a detail you are supposed to mention in your return; not filing a return which mentions this fact then becomes an offence.
Yes it is better. But not mandatory.
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Old 28th December 2016, 19:34   #1828
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Agri income is NOT taxed, which is right. But many of these "humble farmers" don't even submit their tax returns every year. .
Irrespective of the validity of this statement and subsequent clarifications, what I wanted to point was the sheer abuse of stats in producing that connection. Number of cars Vs people paying taxes.

Another example is Pvt Companies can buy cars for the organisation which is offset in taxes (which is what is followed by large corporations).

Back to topic - I see that ATM queues are lesser now (though ATMs are still mostly out of stock). A vendor in our campus stopped using Paytm and went back to cash. I just say no now to these guys, plain and simple - to me it does not make any sense whatsoever to keep asking for cash, we all know where it goes. I mean if the veggie vendor is okay accepting both cards and e-wallets then these people need to have a bloody good reason to keep asking for cash.

I hope people start proactively using digital money, as when the consumer starts making that choice, the vendors would have to follow.

Last edited by pratyush6 : 28th December 2016 at 19:36.
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Old 28th December 2016, 19:51   #1829
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Fantastic move by Modi Government. Terrorism, Black money and fake currency are completely vanished from India and even beggars are using swiping machine.
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Old 28th December 2016, 21:06   #1830
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Fantastic move by Modi Government. Terrorism, Black money and fake currency are completely vanished from India and even beggars are using swiping machine.
The day he said that, the bubble in my mind burst.

Why? On 30th March, 2016, when I wanted to apply for a 2nd Current Account & card swiping machine, this is the response I had gotten from Canara Bank (where my family had savings account since 30 years).
Government scraps Rs 500 and Rs 1000 notes!-img_20161228_205219.jpg

They wanted 1 year statement of current account (viz atleast 2yrs old), JUST to APPLY for Credit Card POS machine.

After my reply rediculing this requirement, they replied that it's required and that they'll study the transactions and decide if they find me eligible to "grant" the swiping machine!

I refused to bow to such unfair rules and they did not budge. Imagine, banks, on record, refusing business that'll earn them deposits.

So WHO is that beggar ? Or is our PM just bluffing & deciding the country's policies after reading WhatsApp forwards ?

I plead the moderators NOT to delete or edit the above lines, because our PM, our real actual PM, has actually said that beggars have got POS machines.

Last edited by GrammarNazi : 28th December 2016 at 21:25. Reason: Appeal to moderators.
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