Banks want PAN rule relaxed for non-deduction of tax at source---K. RAM KUMAR
Banks want the revenue authorities to do their depositors, who are economically weak, aged and infirm, a good turn.
They have moved the authorities to allow them to act upon self-declarations made in Form 15G and Form 15H (for non-deduction of tax at source) by the above mentioned category of people even if they do not have a permanent account number (PAN).
Banks, under the aegis of the Indian Banks’ Association, have impressed upon the Finance Ministry (the department of revenue functions under the ministry) that such a move will alleviate the hardship caused to the economically weaker sections, the aged and the infirm.
Further, this would also reduce the administrative burden to the authorities granting income-tax refunds.
Currently, in the absence of PAN, declarations for non-deduction of tax at source in Form 15G or in Form 15H cannot be acted upon and interest earned by the economically weaker sections, the aged and the infirm becomes subject to tax deduction at the higher rate of 20 per cent.
MANDATORY
If a depositor furnishes PAN, then banks deduct tax at source at 10 per cent on the interest earned on fixed deposits, if it (the interest earned) is above Rs 10,000 a year.
PAN has been made compulsory for every transaction with the income-tax department.
The number is also mandatory for a number of other financial transactions, including opening of bank accounts, availing institutional financial credits, purchase of high-end consumer item, foreign travel, transaction of immovable properties, and dealing in securities.
IDENTIFICATION
A PAN card is a valuable means of photo identification accepted by all government and non-government institutions in the country.
Form 15G is a self-declaration form submitted by individuals below 60 years to banks stating that their income is below the taxable limit. Form 15H is submitted by those above 60.
HIKE IN TDS LIMIT
Meanwhile, banks have sought a hike in the tax deducted at source limit on interest earned on fixed deposits from Rs 10,000 to Rs 50,000 a year.
This hike in the tax deducted at source limit on interest earned on fixed deposits would be in line with rationalisation of tax slabs in the draft Direct Taxes Code and take into account the impact of inflation on returns.
Such a move would reduce considerable paperwork and manpower, both at banks and at the income-tax department.
Bank of Baroda sees no change in bad loans
MUMBAI, JAN 13:
Public sector lender Bank of Baroda doesn’t see significant improvement in the asset quality and restructured book in the near term unless growth picks up, a top bank official has said.
“We have seen some improvement on the bad asset front but not great improvement. For significant improvement to happen, we need growth to pick up,” BoB executive director P. Srinivas told PTI.
He also said the NPA (non-performing asset) numbers may be at the same level as reported in the second quarter of the current financial year.
BoB’s gross NPAs stood at 1.98 per cent in the second quarter and net NPAs at 0.82 percent.
On the restructured accounts, Srinivas said things may not significantly improve on the restructured accounts front in the third quarter as well.
The bank had restructured around Rs 950 crore of loans in the second quarter.
Credit growth
Asked about credit growth, Srinivas expressed the hope that the bank would be able to close the year with a credit growth of 19-20 per cent driven by a good show by the retail segments.
“Retail loan book will grow faster this fiscal while we expect corporate loan growth to be subdued,” Srinivas said.
The public sector lender, which has asked for Rs 1,500 crore infusion from the Government, also said there is no intimation from the Government with regard to the quantum of infusion for the bank.
“We have asked for Rs 1,500 crore for this fiscal.
But, we don’t know what will be the amount that will come in from the Government,” Srinivas said.
Late last week, the Government had announced an infusion of Rs 12,517 crore into public sector banks to boost their capital adequacy ratios and to support business growth.
Bank of Baroda posted 11.6 per cent rise in its net profit at Rs 1,301.39 crore in the July-September quarter. Its total income rose 19.6 per cent to Rs 9,550.86 crore.
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