PNB Fraud – An Overview

PNB Fraud – An Overview

pnb-fraud-tip-of-the-iceberg

What’s the scam

The two employees of the state-owned lender “Punjab National Bank” directly used SWIFT — the global financial messaging service used to move millions of dollars across borders every hour — and bypassed the core banking system (CBS) which processes daily banking transactions and posts updates.It was a ploy to avoid immediate detection: the SWIFT messages used to raise overseas credit were not readily available in PNB’s FINACLE software system as these were issued without entering into the bank’s CBS.

What Really Happened

It began with diamond firms approaching PNB for opening “letters of credit(LC)” for import of rough stones. As per the terms of the LC, a common banking tool, PNB would pay the overseas suppliers on behalf on Nirav Modi’s firms within a certain period (typically three months) and recover the money from Modi. It’s a market practice to extend the LC if the client (i.e, NM) is unable to cough up the money at the end of the LC tenure.

Fake Letter of Understanding (LOU) were issued

PNB employees issued fake LoUs, on the back of which foreign branches of a few Indian banks — including Axis and Allahabad Bank — gave dollar loans to PNB. These foreign currency loans were used to fund PNB’s Nostro accounts and from these accounts funds moved to certain overseas parties. A Nostro account is the account an Indian bank (here, PNB) has with an overseas bank.

According to the note, LoUs were opened for pearl import for which total time period allowed by RBI is 90 days. Some of the overseas branches of Indian banks overlooked the rule. PNB has alleged “clear criminal connivance” of group companies of Modi and Gitanjali with some officials of PNB and other banks.

Overall Impact

In total 30 banks are affected due to this fraud among various state owned banks and PSUs’, some private lenders are also involved such as ICICI, Axis, IndusInd and Standard Chartered Bank

Companies involved in exports sector may also get affected as lenders might do more scrutiny and be more cautious ahead while issuing LOU’s and LC’s

Advertisements

Late filing fee and penalty on delay in filing Income Tax return

Late filing fee and penalty on delay in filing Income Tax return

ITR-Filing-640x640

 

Late filing fee is going to be a reality now under Income tax. Until now even if you filed your return late, there was no mandatory late filing fee levied on your delay filing of returns.

However this has changed  from assessment year 2018-19 (financial year 2017-18) and now you have to pay late filing fee if you do not file your return within due date.

In order to make sure that people file their return on time, section 234F is introduced to levy late filing filing fee on assessee who do not file returns on time.

Minimum late filing is Rs. 1,000 and maximum is Rs. 10,000.

Who need to pay late filing fee on late filing of income tax return?

Every assessee who file his return after due date has to pay late filing fee, regardless of his tax liability. However amount of late filing fee depends on amount of total taxable income.

Fee structure depends on total income of tax payer.

For example, a taxpayer with total income below Rs. 5 lakhs has to pay Rs. 1,000 and others have to pay upto Rs. 10,000.

How much late filing will be charged on returns filed late?

The fee depends on quantum of total income and also on date the return is filed.

If return is filed after due data but before 31st December, then late filing fee will be Rs. 5,000 otherwise late filing fee will be Rs. 10,000

If you file your retrun after December then you have to pay 10,000 and if if you file your return before 31 December but after due date (31 July) then late filing fee will be Rs. 5,000.

However, if your total income is below Rs. 5 lakhs then maximum late filing fee will Rs. 1,000.

For your reference Due dates as per income tax are given below.

Particulars Due Date
Due date if books of accounts are audited 30 September
Due date if books of accounts are not audited 31 July
Due if section 92E applicable 30 November

Below is the late fee you have to pay.

Late filing date Fee to be paid
Return filed after Due date but before 31 December of year 5,000
Return filed after 31 December 10,000
If total income does not exceed 5 lakhs during the year 1,000

How to pay late filing fee?

You have to use tax payment form for paying fee. In challan you can see the penalty and fee columns, fill amount in those columns and pay the amount.

As of now it works even if we pay interest or penalty along with tax, I believe same should continue for late fee.

 

How to avoid late filing fee?

You cannot avoid late filing fee. You can avoid penalty because penalties can be removed, there is no provision to waive late filing fee by assessing officer.

The only way to avoid late filing fee is by filing your return on time.

Conclusion

It is advised that you file your returns on time to avoid any kind of fee or penalty.

Your tax liability will increase if you are not filing your IT returns on time.

Companies Amendment Act, 2017 – Simplified

Companies Amendment Act, 2017 – Simplified

Companies-Amendment-Act-2017-669x275

Dear Professional Colleagues,

Most of the Sections of the COMPANIES AMENDMENT ACT, 2017 are NOW APPLICABLE. In this Article, the Author has made an attempt to SIMPLIFY the TOP 25 NEW & AMENDED Provisions of the Companies Act, 2013 by the COMPANIES AMENDMENT ACT, 2017.

SL. NO. SECTION NAME SECTION NO. SIMPLIFIED PROVISIONS / AMENDMENTS
1. NAME AVAILABILITY 4(5)(i) For New Companies NAME APPLIED shall be Available for 20 Days & For Existing Co. 60 Days.
2. CHANGE IN REG OFF. 12(1) Companies to Notify the ROC in 30 days IN CASE OF ANY CHANGE IN REG. OFF.
3. FORMATION OF COMPANY 3A (NEW) If at any time the number of members of a company is reduced below the minimum prescribed and the company carries on business for more than six months.

 

Every member of the Company shall be PERSONALLY LIABLE FOR DEBTS DURING THAT PERIOD.

4. FINANCIAL STATEMENT 129(3) 1.     THE CFS of the company WILL INCLUDE FINANCIAL STATEMENT (FS) OF ITS SUBSIDIARIES AND ASSOCIATES.

 

2.     Listed company to place on its website, separate audited accounts of its each subsidiary.

 

3.     FORGN SUBS: If No Audit applicable in that Country Place the UNAUDITED FS for consolidation.

5. FINANCIAL STATEMENT & BOARD REPORT 134(1) 1.     CEO SHALL SIGN THE FS of the Company IRRESPECTIVE OF THE FACT IF THE CEO IS DIRECTOR IN COMPANY OR NOT.

 

2.     NO MGT – 9 REQUIRED IN BOARD REPORT. PLACE IT ON WEBSITE AND GIVE LINK IN ANNUAL REPORT (AR).

 

3.     CG TO PRESCRIBE A SIMPLER BOARD REPORT FORMAT FOR OPC & SMALL CO.

6. CSR 135(1) 1.     CO. HAVING: NET WORTH: Rs. 500 Crs.. TURNOVER: Rs. 1000 Crs. NET PROFIT: Rs. 5 Crs. DURING THE IMMEDIATELY PRECEDING FINANCIAL YEAR SHALL CONSTITUTE A CSR COMMITTEE.

 

2.     IN CASE CO. IS NOT REQUIRED TO HAVE INDEPENDENT DIRECTOR COMMITTEE SHALL HAVE 2 OR MORE DIR.

7. RIGHT OF MEMBERS TO RECV. FIN. STATEMENTS 136(1) CO. CAN SEND AUDITED FS. TO MEMBERS
8. Ratification of Auditors 139 RATIFICATION OF AUDITORS EVERY YEAR AT AGM. NOW REMOVED.
9. COMPANY INC. 7 FIRST DIR. / MEM. TO GIVE A “self declaration” INSTEAD OF ‘affidavit’ REGARDING conviction.
10. ANNUAL RETURN 92(1) DETAILS OF INDEBTNESS IN AR – OMMITTED.
11. GM 100 Unlisted company may hold its AGM / EGM anywhere in India if consented by all members in writing or in electronic mode.
12. DIR- APPOINT 160 The requirement of deposit of rupees one lakh with respect to nomination of directors REMOVED FOR ID & DIR. NOMINATED BY NRC.
13. PLACE OF KEEPING REGISTER/RETURNS 94(1) FILING OF SR in advance in respect of members approval for keeping register/returns at any other place in India then REG. OFF. – REMOVED.
14. Penal Provisions 1.     76A, 132, 140, 147 and 180 amended to reduce the penal provisions.

 

2.     Two new sections for determining the OPC and small companies are inserted.

 

3.     In case of professional or other misconduct on the part of the auditor / auditor firm, the NFRA has the power to impose penalty.

15. U.A.I.N. 153 INTRODUCTION OF U.A.I.N. – Universally Accepted Identification Number. ITS SIMILAR TO D.I.N.
16. LOAN TO DIRECTORS 185 The COMPLETE SECTION HAS BEEN CHANGED to give greater clarification and allowing genuine transactions and would be dealt with in a separate article to be published on this website.
17. MANAGERIAL REMUNERATION 197(1) 1.     The requirement of approval of the CG for Managerial Remuneration, above the prescribed limits (even exceeding 11% of net profits) has been REMOVED.

 

2.     SR by shareholders in general meeting will be sufficient.

 

3.     CG APPROVAL ONLY NEEDED IF PART – 1 OF SCH. V NOT COMPLIED WITH.

 

4.     AUD. REPORT TO INCLUDE: Payment of remuneration in conformity with the provisions of the Act.

18. FOREIGN COMPANIES 379 1.     Foreign companies having INCIDENTAL TRANSACTIONS through electronic mode ARE EXEMPTED FROM REGISTERING AND COMPLIANCE REGIME.

 

2.     Branch, Liaison or Project Offices established by foreign company in India NEEDS REGN. IN INDIA.

19. FEE FOR FILING 403 1.     Additional filing fees structure proposed to be brought in line with the LLP.

 

2.     270 days shelter removed

 

3.     FS & Annual Return WOULD BE FILED with delayed filing fees of Rs. 100/- per day

NOTE: In case of subsequent 2 or more defaults insubmission of forms, higher fees may be prescribed.

20. PVT. PLACEMENT 42 1.     The Private Placement process is simplified.

 

2.     PVT. PLACEMENT TO COVER ALL SORT OF ISSUE EXCEPT RIGHT ISSUE.

 

3.     Condensed format of private placement offer letter and application form to be made available.

 

4.     Companies would be allowed to make offer of multiple security instruments simultaneously.

 

5.     Penalty to be altered as: Twice the amount involved or 2 Crores whichever is lower.

 

6.     PAS – 3 to be filed in 15 DAYS OF ALLOTMENT. (Time limit altered).

21. Def of Associate Co. 2(6) Major Change: The existing provision of “at least 20% total share capital” amended.

 

Ø  Significant influence shall now include:

Ø  Control through total voting power only & not just by holding Sh. Capital

Ø  OR Control of or participation in business decisions under an agreement.

Ø  Agreement is essential element to establish control.

Ø  Term JV clarified – covers all partner of JV.

22. Financial year 2(41) Associate company of a company if incorporated outside India CAN ALSO APPLY TO THE TRIBUNAL FOR A DIFFERENT FINANCIAL YEAR.
23. Holding Company 2(46) 1.     Holding “company” includes any body corporate;
24. Def. of KMP 2(51) KMP MAY NOW ALSO INCLUDE: Officer not more than one level below the directors who is in whole time employment and designated as KMP by the Board.
25. Def of Subsidiary Co. 2(87) company where the holding company controls the composition of the Board of Directors or exercises or controls more than one-half of the TOTAL VOTING POWER either on its own or together with one or more of its subsidiary companies.

 

Previously it was ?total share capital.

 

DOWNLOAD The Same in PDF Format Here

DOWNLOAD NOW

 

WRITTEN BY: POOJA AGARWAL

Benefits to Senior Citizens- Budget 2018 BY CS DIVYA BAJPAI

Benefits to Senior Citizens- Budget 2018 BY CS DIVYA BAJPAI

BUDGET 2018

Budget 2018 brings so much full of bucket for the elder resident of India. Even you can say this budget as “Oldies Budget”. Now, we discuss various provisions briefly with examples.

 

  • Deduction available to senior citizens in respect of health insurance premium and medical treatment:- Under section 80 D, the monetary limit of deduction is raised from rupees 30,000 to rupees 50,000. Such deduction is allowed in respect of payments towards annual premium on health insurance policy, or preventive health check-up of a senior citizen, or medical expenditure of very senior citizens. In case of single premium health insurance policies having cover of more than 1 year, the deduction is allowed on proportionate basis for the number of years for which health insurance cover is provided. This provision is effective from 1st April, 2019 and apply to the AY 2019-20.

Comment:-Under Section 80D, the limit of deduction is increased from 30k to 50k.

For example, Mr. Rahul, aged 65 years made payment towards annual premium of rupees 40,000 per year on health insurance policy ( 5 year policy)

Thus, the deduction allowed under Section 80 D for AY 2019-20 is rupees 10,000 on proportionate basis.( Rupees 50,000/ 5 years). Total taxable amount 40,000-10,000(deduction u/s 80D on proportionate basis)= 30,000.

 

  • Deduction to senior citizens for medical treatment of specified diseases:- Under Section 80 DDB, the monetary limit of deduction is increased to rupees 1,00,000 for both senior citizen and very senior citizens. This provision is effective from 1st April, 2019 and apply to the AY 2019-20.

Comment:-Under Section 80 DDB, the limit of deduction is raised from rupees 60,000 to 1,00,000 in case of senior citizens(age of 60 years or more) and from rupees 80,000 to 1,00,000 in case of very senior citizens(age of 80 years or more).

 

  • For Example, Mr. Sukh, aged 65 year is suffering from specified disease covered under section 80 DDB, for which medical treatment amounts to rupees 2,00,000.

Mr. Sukh will get deduction of rupees 1,00,000 for AY 2019-20. The total taxable amount is equal to rupees 1,00,000 (2,00,000- 1,00,000).

 

  • What if Mr. Sukh aged 85? Will the answer be same?

Yes the answer will be the same.

 

  • Deduction in respect of interest income to senior citizen:- A new Section 80 TTB is inserted to allow deduction upto Rupees 50,000 in respect of interest income from deposits held by senior citizens. However, no deduction under section 80TTA shall be allowed in these cases. This provision is effective from 1st April, 2019 and apply to the AY 2019-20. Further as per Section 194 A, the deduction of tax at source on interest income for senior citizens is raised to rupees 50,000.This provision is effective from 1st April, 2018.

 

Comment:- A new Section is inserted 80 TTB with deduction on interest income from deposit for senior citizen upto Rupees 50,000 but then the assessee can not avail the deduction of rupees 10,000 on interest income from saving account under section 80TTA. Hence, the senior citizen can take benefit of either section 80 TTA or newly inserted section 80 TTB. It is advisable for senior citizens to take benefit of Section 80 TTB as the additional deduction of rupees 40,000 (50,000-10,0000) is available.

 

For Example, Mr. Manish, aged 62 years deposited his money in Post Office(PO) getting interest income of rupees 1,00,000 in a year. He also get interest income on Saving Bank Account(SBA) of rupees 50,000 in a year.

 

The total deduction availed by Mr. Manish for AY 2019-20 is equal to rupees 50,ooo under provisions of newly inserted Section 80 TTB. If the deduction under 80 TTB is allowed then deduction under 80 TTA can not be claimed by the assessee. The Income chargeable to tax is equal to 1,00,000 [1,00,000(PO interest) + 50,000(SBA interest) – 50,000 (deduction u/s 80 TTB)]

 

  • Standard Deduction on Salary Income:- A Standard deduction is allowed upto rupees 40,000 or amount of salary received, whichever is less. In lieu of this, the Transport Allowance(except in case of differently abled persons) and reimbursement of medical expenses is proposed to be withdrawn. However, Pension is taxable under the head salaries in your Income Tax Return. The pensioner who did not get benefit of Transport Allowance and reimbursement of medical expenses after retirement from job now get standard deduction of rupees 40,000 from his income by way of pension. This provision is effective from 1st April, 2019 and apply to the AY 2019-20

 

Comment:- The Standard Deduction of rupees 40,000 is given in lieu of transport allowance and reimbursement of medical expenses. But the senior citizens who get their pension can avail this standard deduction of rupees 40,000, as income from pension is taxable under the head Salaries under Income Tax Act.

 

For Example, Mr, Saurabh, aged 64 years retired employee getting monthly pension of rupees 3o,ooo from the organisation where he worked for more than 30 years.

 

Mr. Saurabh is a pensioner and pension is taxable under head salaries of the income tax. The total pension for AY 2019-20 is rupees 3,60,000 and the standard deduction allowed is rupees 40,000. Thus, the total taxable income is equal to Rupees 3,20,000 [3,60,000 (Annual Pension) -40,000 (Standard deduction)]

 

Disclaimer:- The Article is written only for informational purpose and prepared on the basis of information existing at the time of the preparation of the Article. LEX Diligent LLP and the Author of the Article do not constitute any liability in case of any loss/damage cause to you. The Author has undertaken utmost care to give the fair view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the information from the original sources before acting upon it.

WRITTEN BY: CS DIVYA BAJPAI. Author can be contacted at divya@lexdiligent.com