Details of Electronic Bank Transfers
(19-Nov-10)
When you get funds in your bank account through electronic transfer, some banks give the details of the remitter. Others do not. It becomes difficult to find out who has sent you the money. This creates problems in accounting and accountability.
RBI has now made it compulsory for the banks to provide the name of the remitter in the passbook / bank statement. Additionally, banks are free to provide any additional details they wish. All banks are to implement this latest by January 1, 2011.
References:
- Notification No.18/12.05.001/2010-11, dtd 26/10/10. Current Taxcom News (Vol.52, Pt.III, Issue 21, p.133; 12th November, 2010).
-
Circular No. 788/04.03.01/2010-11 dtd 8th October, 2010
Collection of Third Party Account Payee Cheques
(19-Nov-10)
Collection of crossed account payee cheques through third party is not permitted under RBI guidelines. This has created difficulties in clearing cheques of members deposited by cooperative societies for collection. RBI has clarified, that banks can now collect third party account payee cheques for cooperative societies, provided:
The cheque does not exceed `50,000.
The payee is a member of the Co-operative Society.
References:
- Circular RPCD.CO.RRB.BC. No.25/03.05.33/2010-11, dtd 19th October, 2010. Current Taxcom News (vol.52, Pt.III, Issue 21, p.128; 12th November, 2010).
- Circular RPCD CO>RCBD.BCNo,24/07.38.03/2010-11,dtd 19th October, 2010.
- Circular RPCD.CO.RRB.BC.No.19/03.05.33/2009-10, dtd September 11, 2010.
Opening of Salary accounts
(19-Nov-10)
What does one need for opening a Bank Account? There is an indicative list of the documents required. When it comes to opening bank accounts for salaried employees, some banks have done this simply on the basis of a letter from the employers. RBI is worried that this can be misused to launder money. In case of Satyam, it has been alleged that many fake accounts were created in the name of employees.
RBI has now issued tougher norms for opening salary accounts.
In addition to the employer certificate, banks must also ask at least one identity document (Passport, Driving License, PAN Card or Voter’s Identity card) as provided in Prevention of Money Laundering Rules (PML).
References:
- Notification No.50/14.01.001/2010-11, dtd 26/10/10. Current Taxcom News (Vol.52, Pt.III, Issue 21, p.133; 12th November, 2010)
- Master circular on Know Your Customers, Anti Money Laundering Standards, Combating of Financing of Terrorism
- Circular on Obligations to Banks under PMLA, 2002 issued to Banks vide DBOD.AML.BC.NO.2/14.01.001/2010-11, dtd July 01,2010.
- Section 35A of the Banking Regulation Act,1949
- Rule 7 of Prevention of Money Laundering rules,2005
No Service Tax on Mid-day Meals
(1-Oct-10)
Providing outdoor catering is a service which attracts Service Tax. This also affects many NGOs providing food under the Mid-Day Meal Scheme.
The Central Government has now exempted such catering service from service tax, if provided by an NGO. However, the NGO must be one that is registered under a Central Act or State Act.
References:
· Sub-clause (zzt) of clause (105) of section 65 of the Finance Act
· Notification No. 47 of 2010, 3rd September, 2010 (F.No. 354/165/2010-TRU). Current Taxcom News (vol.51, Pt.VI, Issue 18, p.953; 27th September 2010)
CAclubindia
