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Showing posts with label Misc Law Amendments. Show all posts
Showing posts with label Misc Law Amendments. Show all posts

Tuesday, April 28, 2009

Prepaid Instruments-Debit/smart cards shall comply with RBI directions now

Issuance and Operation of Pre-paid Payment Instruments in India (Reserve Bank) Directions, 2009

All persons proposing to operating payment systems involved in the issuance of Pre-paid Payment Instruments shall seek authorization from the Department of Payment and Settlement Systems, Reserve Bank of India, under the Payment and Settlement System Act 2007.

 

Pre-paid Payment Instruments: Pre-paid payment instruments are payment instruments that facilitate purchase of goods and services against the value stored on such instruments. The value stored on such instruments represents the value paid for by the holder, by cash, by debit to a bank account, or by credit card.


The pre-paid instruments can be issued as smart cards, magnetic stripe cards, internet accounts, internet wallets, mobile accounts, mobile wallets, paper vouchers and any such instruments which can be used to access the pre-paid amount (collectively called Payment Instruments hereafter).


The pre-paid payment instruments that can be issued in the country are classified under the three categories viz. (i) Closed system payment instruments (ii) Semi-Closed system payment instruments and (iii) Open system payment instruments.

 

Only banks which have been permitted to provide Mobile Banking Transactions by the Reserve Bank of India shall be permitted to launch mobile based pre-paid payment instruments (mobile wallets & mobile accounts) subject to compliance of Capital Adequacy Requirements of RBI.


Non-Bank Finance Companies (NBFC) would be permitted to issue only semi-closed system pre-paid payment instruments subject to compliance of Capital Adequacy Requirements of RBI.

 

All other persons shall have a minimum paid-up capital of Rs. 100 lakhs and positive net owned funds would be permitted to issue only semi-closed system pre-paid payment instruments.

 

Persons authorized under FEMA to issue foreign exchange pre-paid payment instruments and where such persons issue such instruments as participants of payment systems authorised by the Reserve Bank of India, are exempt from the purview of these guidelines as they are subject to Current Account Transaction Rules.

 

The guidelines on Know Your Customer/Anti-Money Laundering/Combating Financing of Terrorism guidelines issued by the Reserve Bank of India to banks, from time to time, shall apply mutatis mutandis to all persons issuing pre-paid payment instruments.

 

All pre-paid payment instruments issued in the country shall have a minimum validity period of six months from the date of activation/issuance to the holder and the maximum value of any pre-paid payment instrument shall not exceed Rs 50,000/-.

Source:

RBI/2008-09/458 DPSS.CO.PD.No. 1873 /02.14.06/ 2008-09 dated 27th April, 2009

Certified Copies of Entries / Print out to Courts as Evidence by co-operative banks under Bankers Books Act

All State and Central Co-operative banks should comply with the provisions of the Bankers' Books Evidence Act, 1891 while furnishing certified copies and computer printouts to courts. In the absence of such statutory certificate, the court would not be obliged to admit the document in evidence without any further proof.

 

The Certificate shall be as prescribed under Section 2A(a) and (b) of the Act ibid (relevant extract enclosed).

 

Click here to read about Banker’s Books Evidence Act, 1891 http://yehseeyes.blogspot.com/2007/09/interesting-act-in-banking-now-you-will.html

 

Source:

RBI/2008-09/457/RPCD.CO.RF.BC.No. 100 /07.38.03/2008-09 dated 24th April 2009

Monday, April 14, 2008

Pay tax electronically, if your 4th Digit of PAN is "C" & Taxpayers know your Rights

Yes,

As CBDT mandated electronic payment of tax by Company & a person (other than a company), to whom provisions of Section 44AB are applicable [hereinafter collectively referred as "Taxpayers"], w.e.f. 1.4.2008, RBI has notified RBI/2007-08/280 DGBA.GAD. No. H. 10875 / 42.01.038/ 2007-08, by which, the banks shall not accept physical challans from such assessees across the counter.

You are a Corporate Assessee, so your 4th digit in the PAN is "C" and yes, pay tax only through electronic payment facility. The responsibility of making e- payment rests primarily with the taxpayer. Hence, the word of taxpayers should be taken as final.

Taxpayers, know your rights,

1. the acknowledgement for e-payment should be made available immediately on screen by the bank concerned. [check out your immediate acknowledgement]

2. the transaction id of e-payment should be reflected in the bank's statement. [check your bank statement for Transaction-Id]

3. each bank should prominently display on its e-payment gateway page, the official /s to be contacted in case the taxpayer faces any difficulty in making the payment, completing the e-transaction, generating the counterfoil etc. [feel free to contact the banking official for doubts]

4. also, banks are mandated to give the Income Tax Department and NSDL, a list of officials with contact particulars, to be contacted if required for any problems faced by ITD or taxpayers. [find out the name & contact details of your official from the list]

Keep payin electronically...Vj


Thursday, December 6, 2007

The Government Securities Act, 2006 will come into force W.e.f. 01-12-07

The Government of India has notified December 1, 2007 as the appointed date on which the Government Securities Act, 2006 will come into force. Government Securities Regulations, 2007 will also come into effect from the same date, i.e., December 1, 2007.

It may be recalled that with a view to consolidating and amending the law relating to Government securities and its management by the Reserve Bank of India, the Parliament had enacted the Government Securities Act, 2006 (the Act). The Act received the assent of President of India on August 30, 2006 and was published in the Gazette of India, Extraordinary, Part II – Section I on August 31, 2006 for general information.

The Act applies to Government securities created and issued, whether before or after the commencement of the Act, by the Central or a State Government. Accordingly, the Public Debt Act, 1944 will cease to apply to the Government securities. The Indian Securities Act, 1920 has been repealed.

The new Act and Regulations would facilitate widening and deepening of the Government securities market and its more effective regulation by the Reserve Bank in various ways, such as:

(i) Stripping or reconstitution of Government securities;

(ii) Legal recognition of beneficial ownership of the investors in Government securities through the Constituents' Subsidiary General Ledger (CSGL);

(iii) Statutory backing for the Reserve Bank's power to debar Subsidiary General Ledger (SGL) account holders from trading, either temporarily or permanently, for misuse of SGL account facility;

(iv) Facility of pledge or hypothecation or lien of Government securities for availing of loan;

(v) Extension of nomination facility to hold the securities or receive the amount thereof in the event of death of the holder;

(vi) Recognition of title to Government security of the deceased holder on the basis of documents other than succession certificate such as will executed by the deceased holder, registered deed of family settlement, gift deed, deed of partition, etc., as prescribed by the Reserve Bank of India.

(vii) Recognition of mother as the guardian of the minor for the purpose of holding Government Securities; and

(viii) Statutory powers to the Reserve Bank to call for information, cause inspection and issue directions in relation to Government securities


For relevant Act please go to http://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=17582

Thanks & Regards
Alagar
Karvy Investor Services Limited
Chennai - 09884731993

Monday, November 19, 2007

Stamp Duty on sale registration (SC)

The Supreme Court has held that the stamp duty on property has to be paid according to its market value on the date of registration of the sale deed.

In a ruling with wide ramifications for property buyers, a bench comprising Justices A K Mathur and Markandey Katju held that if a property is in litigation for a long time and during the pendency, if prices of the property have shot up, the buyer shall have to pay stamp duty at the enhanced market value of the property.

The bench, in its judgement dated November 16, while setting aside the judgement of the Rajasthan High Court noted, '' it is true that no one should suffer on account of the pendency of the matter, but this consideration does not affect the principles of interpretation of a taxing statute. A taxing statute has to be construed as it is in all these contingencies that the matter was under litigation and the value of the property which by that time shot up cannot be taken into account for interpreting the provisions of a taxing statute. If a taxing statute has to be construed strictly, then the plea that the incumbent took a long time to get a decree for execution against the vendor cannot weigh with the court for interpreting the provisions of taxing statutes. In this case, Khandaka Jain, jewellers in Jaipur, had purchased a property from a seller and paid an advance of Rs 20,000. The total value of the property was Rs 1,40,000. The property vendor did not execute the documents including the sale deed which prompted the buyers to file a suit for specific performance of the contract. In 1991, the suit was filed by the buyer and decreed in his favour ]on February 2, 1994. The buyer also deposited Rs 40,000 as per the directions of the court but even then, the seller did not execute the sale deed. Later, the collector issued orders making demand of additional stamp duty in view of the increased market value of the property. Jain Jewellers moved the High Court against the order of the district collector and their petition was allowed by the court holding that stamp duty was liable to be paid on the date of agreement to sale and the buyer could not be penalised for the time taken in the litigation.

The apex court, however, has taken a different view and directed the respondents, namely Jain jewellers, to pay stamp duty and surcharge as per the market value of the property determined by the collector as per the provisions of the Stamp Duty Act and allowed the appeal of the State of Rajasthan.

New ESOP Valuation Opinion

ESOP Valuation Query by Mr. Alagar:

Everyone is aware of that the Income Tax Department has Implemented ESOP Valaution rules for FBT on ESOP. This rules is applicable for vesting of options on or after 1st April 2007. My query is 4500 options were granted in year 2002 and all those options are vested by the employees before April 2007, but those options not yet exercised, it may be exercised now ( I e after implementing valuation rules). So, if options are exercised now, then it is subject to the FBT as FBT on ESOP has been implemented w.e.f 1st April 2007 vide Finance Act, 2007 and tax liability is at the time of exercise of options. Now, my question is that how to arrive value of those 4500 options for purpose of FBT.
My understanding
Valuation rules for FBT on ESOP has been implemented w.e.f 1st April 2007 vide Notification dated 23-10-2007. According to this valuation rules, the category I Merchant Banker has to give valuation certificate as on date of vesting or any date earlier than the date of the vesting of the option, not being a date which is more than 180 days earlier than the date of the vesting. But, in this particular case the vesting is already taken place, so that I understand that this valuation rules shall not be applicable for those 4500 options. If this valaution rules is not applicable, How can we arrive value for those 4500 options.
please guide me.
Relevant rules can be found in http://yehseeyes.blogspot.com/2007/10/guideline-for-fair-valuation-of-shares.html

Mr. Sukamal & his Expert Opinion

Vesing date is relevant only for valuation of shares allotted under ESOP and not for deciding from when the rule 40C of Income Tax Rules will become applicable


With regard to the query regarding ESOP I like to share with you some points which I have learnt from this issue:

1. In case of ESOP, FBT comes into the picture only when the employee exercised the option vested since the employee derived the benefits from ESOP only when he exercised such option.

2.Clause (ba) of the Section 115WC(1) of the Income Tax Act (the Act) which provides for the value of fringe benefits in respect of equity shares allotted under any ESOP, is applicable w.e.f. 1-4-2008 i.e. from the assesment year 2008-09. Accordingly Rule 40C (which provides for guidelines for computing fair market value of the shares allotted under ESOP.....) is also applicable from the same assessment year.

3. Rule 40C is applicable in case the options (already vested) exercised from and after the year 07/08 in relation to the assessment year 08/09 and subsequent years. Hence, the option exercised in the year 07/08 is subjected to FBT in the assessment year 08/09.

4. For computation of FBT, one need to know the fair market value of the equity shares allotted under ESOP and there the vesting date becomes relevant which may be a day before 1st April, 2007.

5.Hence, the applicability of the Rules does not depend upon the vesting date whereas it depends upon the exercise date which should be in the year 07/08 and thereafter.

6. Further for listed company the rule clearly guides the valuation method where the merchant bankers certificate may not be required.

7. However for unlisted company the said valuation shall be done by a merchant banker in terms of rule 40C(1),(3) AND (4)(e).

8. In terms of Section 115WB(1)(d) and 115WC(1)(ba) the value of fringe benefits for shareallotted under ESOP is the fair market value of the shares allotted under ESOP as reduced by the price paid by the concerned employee.

9. Rule 40C provides for guidilenes for computing the fair market value of shares allotted under ESOP or sweat equity for listed company as well as unlisted company.

10. In your case it is not clear whether it is a listed company or unlisted company.

11. For listed company the guidelines for computing fair market value as provided in the above rules are very specific i.e. the average of the opening price and the closing price of the shares on the vesting date............................................ (please refer rule 40C(2)

12. For unlisted company, the valuation has to be done by a merchant banker applying any recognised valuation method as on specified date which may the vesting date or any day not later than 180 days prior to the vesting date (please refer rule 40C(3).

-- Regards
Sukamal Datta
Deputy Manager - Secretarial
Bombay Stock Exchange Limited
Mobile 9920018714

Tuesday, October 16, 2007

IRDA Licensing Relaxation R5

Insurance Regulatory and Development Authority (Licensing of Insurance Agents) (Amendment) Regulations, 2007 - Amendments in regulation 5
NOTIFICATION F.NO. IRDA/REG./2/ 39/2007, DATED 8-10-2007
In exercise of the powers conferred by section 42 and section 114A of the Insurance Act, 1938 (4 of 1938), the Authority, in consultation with the Insurance Advisory Committee, hereby makes the following regulations to amend the Insurance Regulatory and Development Authority (Licensing of Insurance Agents) Regula­tions, 2000, namely :—
1. (1) These regulations may be called the Insurance Regulatory and Development Authority (Licensing of Insurance Agents) (Amendment) Regulations, 2007.
(2) They shall come into force with effect from 1st Novem­ber, 2007.
2. In the Insurance Regulatory and Development Authority (Licensing of Insurance Agents) Regulations, 2000—
(i) In sub-regulation (1) of Regulation 5 the words, "one hundred hours" and "three to four weeks" shall be substituted by the words "fifty hours" and "one to two weeks" respectively.
(ii) In the proviso to sub-regulation (1) of Regulation 5, the words, "one hundred fifty hours" and "six to eight weeks" shall be substituted by the words, "seventy five hours" and "two to three weeks" respectively.
(iii) In sub-regulation (2) of Regulation 5 the words, "fifty hours" shall be substituted by the words, "twenty five hours".
(iv) In the proviso to sub-regulation (2) of Regulation 5, the words, "seventy hours" shall be substituted by the words, "thirty five hours".


--
Vj
Trezrrr every pulsss
http://yehseeyes.blogspot.com/ thisisvj@gmail.com

CS Updatin...

See Yes -> Yes, ACS

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