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Finance Minister Arun Jaitley said on Thursday that for the period between April 1 and December 19, direct tax collections grew at a net rate of 13.6% year-on-year (y-o-y). This is lower than the net y-o-y growth of 15.1% for April 1 to November 30, the data for which were released earlier this month. There were fears with the announcement of demonetisation by Prime Minister Narendra Modi on November 8 the move would lead to a substantial fall in direct tax collections. Jaitley said all the data available, including that of indirect taxes and rabi crop sowing, showed the situation was better than what the critics of demonetisation feared. Jaitley was addressing journalists on the government’s demonetisation drive in New Delhi on Thursday, a day before the December 30 deadline for depositing old Rs 500 and Rs 1,000 notes in banks. “Direct tax figures of income tax till December 19 are now available. If one factors in very large quantum of refunds — because these days refunds are

The Financial Stability Report (FSR) published by the Reserve Bank of India (RBI) on Thursday raised red flags about the health of the banking sector as lenders struggle with rapid deterioration in asset quality at a time of lower business growth. Overall, India’s financial system remains stable, but the stress on banking sector, particularly on the public sector banks (PSBs) “remain significant”, the central bank noted. “The risks to the banking sector remained elevated due to continuous deterioration in asset quality, low profitability and liquidity,” said the biannual FSR, published by RBI after taking inputs from all financial sector regulators. Business growth in banks remained subdued, particularly in case of PSBs, which lagged their private sector counterparts. System level profit also contracted in the first half of 2016-17. Add to that, the gross non-performing advances (GNPA), or bad debts, ratio of banks increased to 9.1% at the end of September 2016 from 7.8% in M

A government-appointed panel,headed by former chief economic adviser Shankar Acharya,has recommended changing the financial year from the current April to March to thecalendaryear. But,whether or not such an over haul will be carried out depends on the comfort level of the government.No decision has been taken on it yet.There port was submitted to UnionFinanceMinisterArunJaitleyearlier thisweek. The panel members have studied the government’sBudgets and accounting,and feel that a shift is feasible.Members of the panel said they would not be able to comment on the report till the Centre decided to make it public. “Whether the proposals are accepted or not depends on the government’s comfort level with them,”said a person aware of the developments.A senior government official had told Business Standard be fore the submission ofthe “Ifonlythegovernmentchangesits financialyear,theIncome-TaxActand CompaniesActneedtobeamended.Thisis “You have to have discussions with multiand ,especi

In further relief to people hit by demonetisation, the Reserve Bank of India (RBI) on Wednesday gave borrowers another 30 days over and above 60 days for repayment of housing, car, farm and other loans worth up to Rs1 crore. “On a review, it has been decided to provide 30 days, in addition to the 60 days provided (on 21 November),” the RBI said in a notification. So, borrowers together get 90 days breather from getting the account classified under non-performing asset (NPA) category. The above dispensation will apply to dues payable between 1 November and 31 December 2016, the notification said. Following the surprise announcement made by Prime Minister Narendra Modi on 8 November to scrap Rs500 and Rs1,000 notes, the economy witnessed cash crunch leading to slowdown in businesses. As a result, the repayment capacity of the borrowers were impacted and there was fear of loan default rising. The demonetisation of higher value currency notes has affected normal banking activitie

If after March 31 next year, you still have a lot of the old series Rs 500 and Rs 1,000 notes, you might have to pay a hefty fine. According to an Ordinance, cleared by the Union Cabinet on Wednesday, people possessing more than 10 old notes — irrespective of their value — would be committing an offence. But there was no clarity on when this would come into effect. If those depositing old notes between January 1 and March 31 with the Reserve Bank of India (RBI) give wrong information, they would have to cough up a fine of Rs 5,000, or five times the amount with them. Those not submitting the banned currency even after March 31 would have to pay a fine of Rs 10,000 or five times the amount, whichever is higher. According to the Ordinance, citizens would be allowed to deposit their stash of old notes with RBI — but only at specific offices. Certain conditions, listed in the Ordinance, would also apply. Besides this, all notes not returned to the banking system by December 30 this

Direct tax collections by both Mumbai and Delhi zones of the Income Tax department were in single digit until December 24, a department official said. It is inspite of the fact that the net revenue collections were in double digit during the period not only at the national level, but also at zonal level. The Mumbai zone, which is responsible for collection of more than one-third of total tax being collected from across the country, garnered revenue amounting to Rs 1.74 trillion during the reporting period from Rs 1.59 trillion a year ago, thus showing a growth of 9 per cent, an official told PTI here today. However, the growth was in double digit in all the other parts of the country during the period. Even small places like Pune and Thane have also shown a double-digit growth in direct tax collections during the period. The department collected Rs 5.54 trillion during the reported period from across the country from Rs 4.88 trillion a year ago, thus registering an average growth

The union cabinet may consider an ordinance on Wednesday to settle all issues regarding demonetisation, clearly providing for the extinguishing of the Reserve Bank of India's liability in respect to cancelled Rs.500 and Rs.1,000 notes. The ordinance is likely to provide for a limited window to return the cancelled currency in special cases to the RBI.The old Rs.500 and Rs.1,000 notes can be deposited with banks and post offices until December 30. “The cabinet may consider an ordinance on Wednesday,“ a source told E While announcing demonetisation on ncing demonetisation on November 8, Prime Minister Narendra Modi had said the cancelled currency can be deposited with RBI till March 31, but subsequent notifications did not mention the date. The ordinance may give time till March 31 for notes to be submitted to the central bank but with stiff conditions and only for people who were abroad, armed forced personnel posted in remote areas or others who can give valid reasons for