WEEKLY FINANCIAL SNIPPETS- 29/07/2107

1. CORPORATE VENDORS UNDER I-T LENS: The Income Tax department has asked large corporate entities, including multinational firms to furnish details of employees not on the payrolls of the company who are being paid separately. This is to check whether they are filing tax returns after tax deductions at source (TDS). Many lawyers, chartered Accountants, Doctors, consultants and designers etc who are not on the payrolls of the company have not filed their I-T returns fearing they will have to disclose their full income.

2. BAD LOAN CRISIS—CRACKDOWN BY BANKS SENDS DEFAULTERSSCRAMBLING TO OFFER ONE TIME SETTLEMENT: The tough stance taken by the government and RBI to end the bad loan menace in the banking industry by instructing bankers to take extreme steps towards defaulters has caught many borrowers by surprise and they are scrambling to put together resolution plans to avoid harsher penalties including insolvency proceedings. This is a welcome change as seen by bankers as customers whose accounts are classified as Non-performing Assets are approaching bankers with proposals to resolve the issue in a time bound manner.

3. DIGITAL PAYMENTS—ONLY 7% INCREASE IN TRANSACTIONSTHROUGH DEBIT/CREDIT CARDS: Transactions through debit/credit cards rose merely by 7% post demonetization, as against a surge of  over 23% in overall cashless transactions. Bankers say that there is lot of scope for further improvement in such transactions.

4. NO GST ON HOUSING SOCIETY RWA WITH Rs 5,000/- MONTHLY SUBSCRIPTION: Services provided by housing societies resident welfare associations ( RWA) will be required to pay GST on monthly subscription/contribution charged from its members if such payment is more than Rs.5,000 per member and the annual turnover of RWA is more than Rs. 20 lakh. However, the contribution of Rs. 5,000 is exclusive of any municipal taxes.

5. AADHAAR ENROLMENT FACILITY IN BANKS TO START SOON:The Unique Identification Authority of India ( UIDAI)  has asked private as well as public sector banks to set Aadhaar enrolment facility in at least one out of 10 branches in  the coming weeks.  Suitable changes have been made recently in Aadhaar regulations to facilitate this.  There are around 1,20,000 bank branches spread across the country  and by this move 12,000 Aadhaar enrolment and updation centres will be set up.

6. 10 PUBLIC SECTOR BANKS HAVE SUBMITTED TURNAROUND PLANS: As many as 10 public sector banks have submitted their turnaround plans to the government. It is decided by the government that any future capital infusion to the banks shall be subject to achievement of select agreed upon milestones as per the turnaround plans submitted. Banks that will not be able to deliver on the agreed upon turnaround plan for a period of two years will be identified as banks eligible for alternative recourse.

7. AS COST OF EDUCATION RISES , UNPAID STUDENT LOAN SURGE: The cost of education in recent times has escalated but at the same time Non-performing assets (NPAs) within education loan book of the system as a whole has ballooned 21 % in the reporting year. Despite this increasing NPAs, banks continue to lend for higher education

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