The Income Declaration Scheme 2016 to open from 1st June 2016.

The Income Declaration Scheme, 2016 incorporated as Chapter IX of the Finance

Act 2016 provides an opportunity to all persons who have not declared income
correctly in earlier years to come forward and declare such undisclosed income(s).
Under the Scheme, such income as declared by the eligible persons, would be taxed
at the rate of 30% plus a Krishi Kalyan Cess of 25% on the taxes payable and a
penalty at the rate of 25% of the taxes payable, thereby totalling to 45% of the
income declared under the scheme.
The scheme shall remain in force for a period of 4 months from 1st June,
2016 to 30th September, 2016 for filing of declarations and payments towards
taxes, surcharge & penalty must be made latest by 30th November,
2016. Declarations can be filed online or with the jurisdictional Pr. Commissioners
of Income-tax across the country.

The scheme shall apply to undisclosed income whether in the form of investment in
assets or otherwise, pertaining to Financial Year 2015-16 or earlier.

Where the declaration is in the form of investment in assets, the Fair Market Value of
such asset as on 1st June 2016 shall be deemed to be the undisclosed income under the
Scheme. However, foreign assets or income to which the Black Money Act 2015
applies are not eligible for declaration under this scheme.

Assets specified in the declaration shall be exempt from Wealth tax.

No Scrutiny and enquiry under the Income-tax Act or the Wealth tax Act shall be
undertaken in respect of such declarations.

Immunity from prosecution under the Income-tax Act and Wealth Tax Act is also
provided along with immunity from the Benami Transactions (Prohibition) Act, 1988
subject to transfer of asset to actual owner within the period specified in the Rules.

Non-payment of total taxes, surcharge & penalty in time or declaration by

misrepresentation or suppression of facts shall render the declaration void.

The circumstances in which the Scheme shall not apply or where a person is held to
be ineligible are specified in section 196 (Chapter IX) of the Finance Act, 2016.

Non declaration of undisclosed income under the Scheme, will render such
undisclosed income liable to tax in the previous year in which it is detected by the
Income tax Department. Other penal consequences will also follow accordingly.

The
full
text
of
the
Scheme
is
available
on
the
websitewww.incometaxindia.gov.in for viewing. The relevant rul

departmental

Looking at the multi-dimensional aspects of the Fake Indian Currency Notes (FICNs)
menace, several stakeholders like the Ministry of Finance, Ministry of Home Affairs,
Reserve Bank of India, Security and Intelligence Agencies at the Centre and States
are making efforts to curb the illegal activities related to FICNs.
A special FICN Co-ordination (FCORD) Group has been formed in the Ministry of
home Affairs (MHA) to share intelligence/information amongst the different Security
Agencies of States/Centre to counter the menace of circulation of Fake Currency
Notes
in
the
country.
The Government has also constituted a Terror Funding & Fake Currency Cell (TFFC)
in National Investigation Agency (NIA) to investigate Terror Funding and Fake
Currency
cases.
The legal regime has been strengthened by amendments in the section 15 of the
Unlawful Activities (Prevention) Act, 1967 (UAPA) (effective from 01.02.2013),
wherein the damage to the monetary stability of India by way of production or
smuggling or circulation of High Quality Fake Indian Paper currency, coin or any
other material has been declared as a "terrorist act".

The broad recommendations inter-alia include changes in structure, improvement

in taxpayers service, enhanced use of information and Communication Technology,
exchange of information with other agencies, strengthening of human resource
management, Key Internal Processes, Customs Capacity Building, Impact
assessment, Expansion of Base, Compliance Management, Revenue Forecasting,
Predictive
Analysis
and
Research
for
tax
Governance
etc.
Two new bodies namely Tax Policy Council (TPC) and Tax Policy Research Unit (TPRU)
have been set up for making recommendations on tax policies and other policy
matters. Vide the Department of Revenues Office Order dated 02.02.2016, the
Government has set up a ten Member Tax Policy Council (TPC) under the
Chairmanship of Honble Finance Minister with an aim to have a consistent and
coherent approach to the issue of tax policy and having regard for need to have an
inter-disciplinary approach. The Council will look into all research finding of the Tax
Policy Research Unit (TPRU) and suggest broad policy measures for taxation. The
Council will be advisory in nature and will help the Government in identifying key
policy
decisions
for
taxation.
Vide the Department of Revenues Office Order dated 02.02.2016, the Government
has also created the Tax Policy Research Unit (TPRU) under the direct supervision of

Revenue Secretary to carry out the research on the basis of empirical data. The
TPRU will carry out studies on various topics of fiscal and tax policies referred to it
by CBDT and CBEC and will provide independent analysis on such topics, prepare
and disseminate policy papers and background papers on various tax policy issues,
assist TPC in taking appropriate tax policy decisions and liaise with State
Commercial
Tax
Departments.
As per the terms of reference, these bodies are permanent bodies and no periodic
reports are expected.

Central Government decides to simplify the consent mechanism for Open Market
Borrowings (OMBs) under Article 293(3) of the Constitution of India for raising OMBs by
the States.
In the spirit of Co-operative federalism and in order to bring-in the transparency and
predictability in the Open Market Borrowings (OMBs) by the States, the Central Government
has decided to simplify the consent mechanism for OMBs under Article 293 (3) of the
Constitution.
Till now, the States were required to obtain quarterly consent from the Central Government for
raising OMBs within the Net Borrowing Ceiling (NBC) fixed for each of the States as per the
formula prescribed by the Fourteenth Finance Commission (FFC). The simplified mechanism
would, however, allow the States to prepare their borrowing calendar for the first nine months
and seek one-time consent for raising OMBs during the first nine months of the Financial Year.
Thereafter, based on the assessment of details of borrowings and repayment thereof (actuals for
first 3 quarters and estimates for last quarter), consent for the first two months of Fourth Quarter
will be given. The consent for the last month i.e. March will be given based on the re-assessment
of
actual
borrowings
for
the
first
11
months
by
the
States.
Thus, the simplified procedure will ensure that consent under Article 293(3) is issued only on
three occasions during the year, one in the month of April for first nine months after fixation of
borrowing ceilings, second in the month of December for the first two months of the fourth
quarter and last in the month of March after the assessment of actual borrowings by the States.
Government accepts the recommendations of Sub-Committee of the High Level Committee
to interact with Trade & Industry on Tax Laws on issues relating to compliance procedure
for the excise duty,records to be maintained and other relevant administrative issues.
Government has also decided to increase the SSI Eligibility limit and SSI Exemption limit for
manufacturers of articles of jewellery or parts of articles of jewellery or both.
In this years Budget, a nominal excise duty of 1% [without input and capital goods credit] or
12.5% [with input tax credit] has been imposed on articles of jewellery with simplified
procedures.
In this connection, the Central Government had constituted a Sub-Committee of the High Level
Committee to interact with Trade & Industry on Tax Laws to interact with trade and industry on

issues relating to compliance procedure for the excise duty, including records to be maintained
and any other administrative issues that may be relevant.
Since then, the said Sub-Committee has submitted its report on 23.06.2016, and interalia
recommended the following:
a) no requirement to submit any ground plan of the premises for taking Excise registration;
b) excise duty on jewellery is payable atfirst sale invoice value;
c) in case the invoice does not show excise duty separately, the value for VAT will be treated as
cum duty value [value + excise duty];
d) no excise duty may be payable on the sale of traded goods;
e) records maintained for State VAT and other private records, showing details of inputs, stocks,
manufactured goods, sold/exported goods, etc. to be accepted for excise purposes. Stock details
to be maintained on weight and caratage basis;
f) movement of jewellery, which does not involve sale, for example, movement of jewellery, to
be shown as samples, branch transfers not involving sale, for display in exhibition, for
hallmarking, and for approval before sale, may not be liable to excise duty. No transit checks by
excise officers;
g) when a retail customer brings jewellery [other than in form of gold or any precious metal] to a
jeweller which is converted into new jewellery by the jeweller or a job worker of such jeweller,
excise duty will be payable only on value addition, including cost of additional materials and
labour charges charged, subject to the maintenance of certain records;
h) Repairs and alterations, which do not change the identity, character and use of the goods and
do not result in a new item is not manufacturing and may not attract excise duty;
i) excise duty of 1 % without input and capital goods tax credit or 12.5 % with credit may apply
to parts of articles of jewellery, made of platinum, gold and silver;
j) an optional scheme may be prescribed for jewellers who are not able to maintain separate
physical stocks and / or records of manufactured and traded goods. For availing the optional
scheme, a principal manufacturer of jewellery shall maintain separate stocks on weight and/or
carat basis separately for:
Silver studded jewellery;
Gold or platinum jewellery studded with diamonds; and
Other gold or platinum jewellery [that is other than gold or platinum jewellery studded with
diamonds];

k) no excise audit may be carried out, for the first two years, for units whose duty payment (cash
plus credit) is less than Rs. 1 crore, [that is turnover of manufactured goods less than Rs. 100
crore.]
l) no visit, search and seizure at job workers premises;
m) no visit to premises of the principal manufacturer [jeweller], except on the basis of specific
intelligence and with the approval of Commissioner or equivalent rank officer
n) summons may be issued only with the approval of Commissioner;
All these recommendations have been accepted by the Government.
In this context, independent of Committees recommendations, the Government has also decided
to increase for manufacturers of articles of jewellery or parts of articles of jewellery or both:
a) the SSI Eligibility limit from fromRs. 12 Crore to Rs. 15 Crore;
b) the SSI Exemption limit from Rs. 6 Crore to Rs. 10 Crore in a financial year and Rs. 85 lakh
for the Month of March, 2016;
Rs 100 crore released towards Government of India co-contribution in Atal Pension
Yojana
Atal Pension Yojana is being implemented through the APY Service Providers comprising of
Public Sector Banks, Private Sector Banks, Regional Rural Banks, Cooperative Banks and
Department of Post both in urban and rural areas across the country. The total number of
subscribers registered under APY as on 30th June 2016 has crossed 30 lakh and every day nearly
5000
new
subscribers
are
added.
The scheme provides for a co-contribution from Government of India for those who have
registered before 31/3/2016 with an amount of 50% of the subscribers contribution up-to a
maximum of Rs. 1000/- and these subscribers will be eligible for co-contribution for a period of
5 years from 2015-16 to 2019-20. Only those subscribers who are not income tax payers and not
part of any other social security schemes are eligible for Government of India co-contribution.
Keeping in view the above, Government of India through PFRDA has released co-contribution
for the FY 2015-16 for 16.96 lakh eligible subscribers amounting to Rs. 99.57 crores. The
Subscribers who have any pending contributions in their APY account till March 2016 won't be
paid with co-contribution. They have been advised by PFRDA to regularize their APY account so
as to get Government of India co-contribution in the month of September. Government of India
co-contribution is payable only when accounts are regular and the admissible Government of
India co-contribution is paid into the Savings Bank account of the Subscribers.
Atal Pension Yojana, provides minimum guaranteed pension ranging between Rs. 1000/- to Rs.
5000/- per month for the subscriber from the age of 60 years. The Same amount of pension is

paid to the spouse in case of subscribers demise. After the demise of both i.e. Subscriber &
Spouse, the nominee would be paid the pension corpus. There is also option for Spouse to
continue to contribute in APY account of subscriber for balance period, on premature death of
subscriber before 60 years, so that pension can be availed by Spouse. Also, if the actual returns
on the pension contributions during the accumulation phase is higher than the assumed returns
for the minimum guaranteed pension, such excess returns are passed on to the subscriber,
resulting in enhanced scheme benefits.

Recommendations of SIT on Black Money as Contained in the Fifth SIT Report

The Fifth SIT report has been submitted before the Honble Supreme Court by the SIT.
An extract of the report has been uploaded on Department of Revenue website www.dor.gov.in.
The SIT has made the following recommendations in the Fifth Report:
Cash transactions : The SIT has felt that large amount of unaccounted wealth is stored and used
in form of cash. Having considered the provisions which exist in this regard in various countries
and also having considered various reports and observations of courts regarding cash transactions
the SIT felt that there is a need to put an upper limit to cash transactions. Thus, the SIT has
recommended that there should be a total ban on cash transactions above Rs. 3, 00,000 and an
Act be framed to declare such transactions as illegal and punishable under law.
Cash holding : The SIT has further felt that, given the fact of unaccounted wealth being held in
cash which are further confirmed by huge cash recoveries in numerous enforcement actions by
law enforcement agencies from time to time, the above limit of cash transaction can only succeed
if there is a limitation on cash holding, as suggested in its previous reports. SIT has suggested an
upper limit of Rs. 15 lakhs on cash holding. Further, stating that in case any person or industry
requires holding more cash, it may obtain necessary permission from the Commissioner of
Income tax of the area.
recent media reports have quoted Zurich based Swiss National Bank as saying that
money held by Indians in Swiss banks has fallen by nearly one-third.
The Government had commissioned a study, inter alia, on estimation of
unaccounted income and wealth inside and outside the country, through National
Institute of Public Finance and Policy (NIPFP), National Council of Applied Economic
Research (NCAER) and National Institute of Financial Management (NIFM). Reports
received from these Institutes are under examination of the Government and the
same is expected to be completed within next few weeks.

Brexit
Government has assessed the impact of Brexit on the Indian economy. Thus far, India has not
only avoided adverse impacts, it has in fact emerged as a safe haven for investors around the
world.
For example, the rupee depreciated against the US dollar by around 1 per cent for one day post-

Brexit referendum, while currencies of other emerging markets depreciated for many days. But
on a cumulative basis, the rupee has actually appreciated by 0.3 per cent on 19th July 2016 over
23rd June 2016. Similarly, the Sensex fell only on one day by around 2 per cent while the equity
index of many other developed and developing countries fell by a higher percentage for many
days after Brexit referendum. On cumulative basis, the Sensex has risen by 2.9 per cent on 19th
July 2016 over 23rd June 2016. The G-sec rate has also declined from 7.48 per cent to 7.28 per
cent over this period. By virtue of its domestic policies, India is seen as a haven of stability and
opportunity
in
these
turbulent
times.
As a part of the global economy, India will obviously be affected if there is slowdown in growth
in the UK and EU following Brexit. Indias exports in goods to the UK and EU (including UK)
have been around 3 per cent and 17 per cent of our total exports. India also exports roughly $10
billion in software to both the UK and EU. Overall though, Indias exports to both UK and
Europe have been on a downtrend in the past two years on account of subdued demand led by a
frail and scattered recovery in the region. The forecast of global growth for 2016 has also been
revised downward by the IMF from 3.2 per cent to 3.1 per cent in the aftermath of Brexit.
However, these potential effects on Indias growth could be offset by the weaker price of oil,
which will help maintain macro-stability, and by the likelihood of more policy support in the
advanced economies. Moreover, the impact of Brexit on trade, if any, in the medium term, would
also depend on bilateral trade negotiations that will determine Indias future market access to
these
countries.
While the Government and the RBI are closely monitoring the situation, Indias macroeconomic
fundamentals are strong. Besides, the strong forex reserves position can provide a buffer against
any temporary episodes of volatility in the domestic foreign exchange market. Further, RBIs
proactive liquidity management could ensure stability and calm in money markets. As regards
the stock market, the Government and Securities and Exchange Board of India (SEBI) are
keeping a constant vigil. SEBI has laid down various regulations and guidelines for protecting
investors interest and ensuring orderly functioning of the stock market.
This information was given by Union Minister for Finance Shri. Arun Jaitley today in reply to a
Lok Sabha question.

The Government has undertaken a number of measures to curb inflation, in

particular, food inflation. The steps taken, inter alia, include, (i) increased allocation
of Rs 900 crore for Price Stabilization Fund in the budget 2016-17 to check volatility
of prices of essential commodities, in particular of pulses. (ii) decision taken to
create buffer stock of Kharif and Rabi pulses through domestic procurement and
imports; (iii) announced higher Minimum Support Prices so as to incentivize
production; (iv) issued advisory to States/UTs to take strict action against hoarding
and black marketing under the Essential Commodities Act 1955 and the Prevention
of Black-marketing and Maintenance of Supplies of Essential Commodities Act,

1980; (v) The Government has taken necessary steps to maintain sufficient stocks
of sugar in the country. It has imposed 20 per cent duty on export of sugar and has
empowered state governments to impose stockholding limits on traders to ensure
availability of sugar at reasonable prices.

Synchronisation of financial accounting year with calendar year

Government has constituted a Committee to examine the desirability and feasibility of having a
new financial year and give its recommendations by 31st December, 2016.
The

terms

of

reference

(ToR)

of

the

Committee

are

as

under:

Examine the merits and demerits of various dates for the commencement of the financial year
including the existing date, taking into account, inter-alia, the following:
(i) The genesis of the current financial year and the studies made in the past on the desirability of
change
in
financial
year;
(ii)

The

suitability

of

the

financial

year

from

the

point

of

view

of

a. correct estimation of receipts and expenditure of Central and State Governments;

b.
the
effect
of
the
different
agricultural
crop
periods;
c.
the
relationship
of
financial
year
to
the
working
season;
d.
impact
on
businesses;
e.
taxation
systems
and
procedures;
f.
statistics
and
data
collection;
g. the convenience of the legislatures for transacting budget work; and
h.

other

relevant

matters.

The Committee may, after due examination of all relevant factors, recommend the date of
commencement of the financial year which in its view is the most suitable for the country.
In case a change in the financial year is recommended, the Committee may also work out the
modalities
for
effecting
the
change.
This
would
inter-alia
include:
(i)
appropriate
timing
of
change;
(ii)
the
determination
of
a
transitional
period;
(iii)
the
change
in
tax
laws
during
the
transitional
period;
(iv)
the
amendments
that
may
be
required
in
various
statutes;
and
(v) changes in the coverage of the recommendations of the Finance Commission.
The Committee may interact with experts, institutions, Government Departments and others as
deemed necessary.The Committee is expected to soon convene its first meeting.
This information was given by Union Finance Minister Shri. Arun Jaitley today in reply to a
Rajya Sabha question.

Merger of Nationalised banks

The guiding principle for the consolidation process of banking in India was suggested by
Narasimham Committee. According to which any initiative with respect to merger of public
sector banks has to come from the Boards of the banks concerned, the extant legal framework,
keeping in view the synergies and benefits of merger and their commercial judgment.
Governments / Reserve Bank of Indias role in the merger of banks would be that of a
facilitator.
The Cabinet in its meeting on dated 15th June 2016 has approved the proposal of acquisition of
assets and liabilities of subsidiary banks i.e. State Banks of Bikaner & Jaipur, State Bank of
Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore and Bhartiya
Mahila
Bank
(BMB).
The benefits for attempting the merger of 5 subsidiary banks and BMB with SBI include
rationalization of resources, reduction of costs, better profitability, lower cost of funds leading to
better rate of interests for public at large, improved productivity and customer services. Merger
will also ensure that due to size and scale of economy, SBI will be able to better handle ensuing
competition from new Banks.
Workshop for Banking Correspondents (BCs) for implementation of Atal Pension Yojana
(APY) held on 19th July 2016
A workshop for Business Correspondents (BCs) was organised by PFRDA on 19th July 2016 at
New Delhi to discuss the implementation of Atal Pension Yojana and increasing Bank
Correspondents role in bringing more beneficiaries to the APY fold. Around 60 BC
representatives, officials from SIDBI, Access Assist, some major banks and Dr. Anand Srivastav,
Chairman, Business Correspondents Federation of India (BCFI) were present in the workshop.
Shri Hemant Contractor, Chairman, PFRDA in his keynote address emphasised on the need of
creating a pensioned society. He said that only 9-10% of the people in the country are covered
under some type of pension benefits. The vast majority of the population in the unorganised
sector are not covered by any type of pension. This ratio needs to be reversed so that more people
are enrolled in pension products. APY caters to low and medium income segment people to
provide old age income security and it also fulfils the objective of the government to convert a
pension less society to a pensioned society. APY is different from Swavalamban due to the fact
that it has a minimum guaranteed pension component. It is ideal for those people who have low
savings
capacity.
The BC model in the banking sector has been very successful in opening large number of
accounts under Jan Dhan Yojana by reaching out to 5 lakh villages in India, and banks should
build on this large base of customers for distribution of APY to eligible subscribers. He also
asserted the fact that PFRDA, in collaboration with SIDBI and DFID under PSIG programme
would provide necessary push to APY to make it more visible in the rural / urban areas in the
States of Madhya Pradesh, Odisha, Bihar and Uttar Pradesh. PFRDA will provide necessary
support in capacity building and in supplying publicity materials to help BCs to enrol subscribers
under
APY.

Dr B S Bhandari, Whole Time Member (Economics) spoke on the importance of the Banking
Correspondents in the country and their role in last mile connectivity/access for financial
inclusion in the country. He appealed to the banking correspondents fraternity to initiate
necessary steps to promote and distribute the APY. He also urged the banks to enrol the
employees and agents of BCs under APY so that they understand the product and process better
and
in
turn
propagate
the
message
to
their
customers.
Dr Anand Srivatava, Chairman, BCFI expressed that the importance of Business Correspondents
has been recognised across various forums. He also talked about the inter-operability of BCs and
asserted that this would help in enrolment and collection process under APY. He also emphasised
on the fact that if the product is properly positioned and the BCs are educated in the right earnest
it would help in the distribution of the product further. He said that BCFI would make all efforts
to reach out to the BC community for educating and creating awareness of APY to bring more
number
of
people
under
APY
in
the
society.
Currently over 30.75 lakh subscribers have joined Atal Pension Yojana.
First Annual Meeting of the Board of Governors of BRICS New Development Bank (NDB)
held yesterday at Shanghai; India to Chair the next Meeting of Board of Governors of NDB
in 2017.
The First Annual Meeting of the Board of Governors of the BRICS New Development Bank was
held
yesterday
at
Shanghai,
China.
The New Development Bank (NDB) has completed one year since its establishment in 2015.
Since its establishment, the policies of operations have been put in place, projects for all five
member countries have been approved and the Bank has completed an issuance of Green Bonds.
During the meeting of the Board of Governors of the NDB, it was decided that India will be the
Chair of the Board of Governors of the Bank and the second Annual meetings of NDB will be
held
in
India
in
2017.
Mr Raj Kumar, Joint Secretary, Department of Economic Affairs, Government of India
represented the Finance Minister of India and delivered the Governors Statement on his behalf.
The Governors Statement read by Mr. Raj Kumar, Joint Secretary, Department of Economic
Affairs,
Ministry
of
Finance
is
given
below:
At the outset, we thank the Government of Peoples Republic of China for their wonderful
hospitality and excellent arrangements for hosting us on this historic milestone of the New
Development
Bank.
The first Annual Meeting of the NDB is a landmark in the advancement of the vision of the
establishment of the Bank. It embodies the considerable progress and achievements of the past
one year in setting up and operationalisation of the Bank. During the year, policies have been put
in place and approvals have been given for financing renewable energy projects. We congratulate
President Kamath and the management team for steering the Bank with speed, skill and strategy.
The first Annual Meeting also marks the commencement of the phase of immense work for
realization of NDBs vision of providing catalytic resources for sustainable infrastructure to the

founder

members

and

other

emerging

and

developing

economies.

The challenges that lie before us are significant. The current global economic context is far
from being robust and is marked by a modest pickup in some advanced economies from their
low levels of growth; decline in growth in emerging market and developing economies;
increased financial sector volatility; and, in general, a downward revision of global growth
projections by the International Monetary Fund. BREXIT has further heightened uncertainty,
market
volatility
and
risk-averse
behavior.
The structural problems of Emerging Markets and Developing Economies (EMDEs)
continue to affect their growth. The sluggish global trade and low commodity prices have also
adversely affected commodity-exporting EMDEs, by aggravating their corporate and other
economic
vulnerabilities.
Governments, Central Banks and regulators have to mitigate the pressure of such vulnerabilities
through judicious mix of fiscal, monetary and structural policies. We, in India, are following the
approach of Reform to Transform through far reaching Structural Reforms. We have taken
several initiatives to boost investment climate and improve the ease of doing business. National
Infrastructure Investment Fund has been set-up to stimulate investment in Infrastructure.
Likewise, Insolvency and Bankruptcy code 2016 has been passed by the Parliament to deal with
insolvency of corporate, individuals, partnerships and other entities. Initiatives such as Make in
India, Start-up India, and Skill India are focused at encouraging innovations, entrepreneurship
and job creation. Our government has launched a massive financial inclusion programme. More
than 200 million bank accounts have been opened for the unbanked persons. We are now using
Aadhaar, a unique identification system with statutory backing, as backbone for targeted delivery
of
financial
and
other
subsidies,
benefits
and
service.
In such a scenario, investments in sustainable infrastructure play a catalytic role in
anchoring a more resilient recovery, improving potential growth and fostering inclusive
growth in the countries. This is also the niche area of focus of the New Development Bank.
True to its nomenclature, the New Development Bank has to focus on financing demonstrable
projects with innovative approaches and instruments for speedy creation of infrastructure. We
urge
that
this
focus
should
be
on:
o Energy generation projects, both renewable and non renewable energy projects, which utilize
cost
effective
and
clean
technologies;
o Transport projects, which have a significant impact on reduction in regional and spatial
inequalities
and
promote
inclusive
growth;
and,
o Urban sector infrastructure projects, which enhance the livelihood potential and improve the
quality
of
life
of
the
people.
While commencing operations in earnest, the NDB must draw upon its core strengths and

uniqueness. As a top-class financial institution, it must develop a strong pipeline of projects and
respond in a fast and flexible manner to further the aspirations and interests of its members.
Economic growth
World Banks Report on Global Economic Prospects, published in June 2016, projected that
Indias growth will be 7.6 per cent in 2016-17 and will improve to 7.7 per cent in 2017-18. The
International Monetary Fund (IMF), in its World Economic Outlook (WEO), published in July
2016, has projected that India will grow by 7.4 per cent in 2016-17, which would be one of the
highest growth among the major world economies. Indias growth is projected by the IMF to
improve
gradually
in
the
coming
years.
The IMF has indicated that Indias growth will continue to be driven by private consumption,
which has benefited from lower energy prices and higher real incomes. The Global Economic
Prospects of the World Bank also indicated that economic activity in India has remained robust,
supported mainly by domestic demand. The World Bank has also observed that an
accommodative monetary stance, public investments in infrastructure, and progress on structural
reforms, including new bankruptcy laws, should support a pickup in private investment.
There is a broad consensus that the Goods and Services Tax is a major reform initiative that will
subsume several indirect taxes eliminating their cascading impact, help widen the tax base,
integrate the goods and services market and thereby yield higher growth. Hence, the passing of
the Goods and Services Tax Bill will pave the way for an improvement in the overall economic
outcome.
The Government of India has taken various initiatives to boost the growth of the economy which,
inter alia, include; fillip to manufacturing and infrastructure through fiscal incentives and
concrete measures for transport, power, and other urban and rural infrastructure; substantive
reforms and liberalization of foreign direct investment in major sectors; measures to debottleneck
the supply of key raw materials; Skill India and Digital India initiatives; Make in India
initiative along with the attendant facilitatory measures for a more conducive environment for
investment; the new insolvency and bankruptcy related legislation; Start-up India Initiative to
boost entrepreneurship and creation of jobs; Stand Up India Scheme to promote
entrepreneurship among SC/ST and women entrepreneurs; boost to agricultural sector with focus
on micro irrigation, watershed development, soil conservation and credit; and, various measures
to improve clarity and transparency in economic policy-making. Undertaking measures to
stabilize and promote economic growth on a continued basis is high on the agenda of the
Government. Its focus on growth-promoting economic reforms and the commitment to improve
the ease of doing business and investment is likely to combat the adverse spillovers from global
slowdown.
Funds for Startups
Government has approved the setting up of Fund of Funds for Startups (FFS) with a corpus of
Rs. 10000 crore. Rs.500 crore have been released in the Financial Year 2015-16 to Small
lndustries Development Bank of India (SIDBI) to start its operations and Rs.600 crore has been
earmarked for Financial Year 2016-17. As a Fund of Funds, FFS would not invest directly in
Startups, but would participate in the capital of Securities and Exchange Board of India (SEBI)
registered Alternate Investment Funds (AIF). FFS is designed to support l8 lakh jobs at full

deployment. FFS would be sector agnostic enabling it to support a broad mix of startups set up
by all categories of people. The Startup will act as a catalyst to attract private capital by way of
equity, quasi-equity, soft loans and other risk capital for start-up companies.
Cabinet approves Bilateral Investment Treaty between India and Cambodia to boost
investment
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved Bilateral
Investment
Treaty
(BIT)
between
India
and
Cambodia.
The Treaty seeks to promote and protect investments from either country in the territory of the
other country with the objective of increasing bilateral investment flows. The Treaty encourages
each country to create favourable conditions for investors of the other country to make
investments in its territory and to admit investments in accordance with its laws.
The Treaty is the first Bilateral Investment Treaty in accordance with the text of the Indian
Model BIT, approved by the Cabinet in December, 2015.
Cabinet increases the limit for foreign investment in Stock Exchanges from 5% to 15%
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for
raising foreign shareholding limit from 5% to 15% in Indian Stock Exchanges for a stock
exchange, a depository, a banking company, an insurance company, a commodity derivative
exchange. The Cabinet has also approved the proposal to allow foreign portfolio investors to
acquire shares through initial allotment, besides secondary market, in the stock exchanges.
The move will help in enhancing global competitiveness of Indian stock exchanges by
accelerating/facilitating the adoption of latest technology and global best practices which will
lead to overall growth and development of the Indian Capital Market.
The approval is in pursuance of implementation of the Budget Announcement made by the
Finance Minister Shri Arun Jaitley while presenting the Union Budget 2016-17 regarding
reforms in FDI Policy with respect to enhancement of investment limit for foreign entities in
Indian stock exchanges from 5% to 15% on par with domestic institutions.

Finance Minister participates in the First Annual General Meeting of Asian

Infrastructure Investment Bank (AIIB) at Beijing, China yesterday; Addressing
Board of Governors
Session of AIIB, FM said that India has a huge unmet demand for investment in
infrastructure and is preparing basket of projects worth US$ 2-3 billion for AIIB
funding in the areas of Urban Development (including Smart Cities), Energy, Urban
Transport, Railways, Inland Waterways and Water Supply; Finance Minister offers
Indias support in establishment of a Regional Office of AIIB in New Delhi
The Union Finance Minister Shri ArunJaitley, participated in the First Annual General
Meeting of Asian Infrastructure Investment Bank (AIIB) held at Beijing, China yesterday.
Addressing the Board of Governors Session of the Annual General Meeting, the Finance

Minister Shri Jaitley stated that the new Bank has come-up amidst huge expectations in a
difficult time for the global economy. He said that the overall recovery of the global
economy remains very modest and global growth rate projections have been revised
downwards, even though the Asia-Pacific region remains the growth engine for the
world. Notwithstanding the global headwinds, however, India continues to maintain a
high growth rate at 7.6% in 2015-16 compared to 7.2% in the previous year, Shri Jaitley
added. Outlining Indias development paradigm, the Finance Minister Shri Jaitley said
that India has undertaken reforms in FDI and initiated large investments in rural
infrastructure, national highway, inland waterways, shipping, power sector and smart
cities
etc.
Speaking on the role of AIIB, the Finance Minister Shri Jaitley said AIIB presents a
much needed additional financing window dedicated to infrastructure projects and
meeting the financing gap that may be beyond the capacity of the individual countries
and the existing MDBs. India has a huge unmet demand for investment in infrastructure
and is preparing basket of projects worth US$ 2-3 billion for AIIB funding in the areas of
Urban Development (including Smart Cities), Energy, Urban Transport, Railways, Inland
Waterways and Water Supply. The Finance Minister Shri Jaitley offered Indias support
in establishment of a Regional Office of AIIB in New Delhi to effectively cater to this
potentially large portfolio and speed up the process of project development, monitoring
and
implementation.
The Finance Minister, Shri Jaitley also met Mr. Lou Jiwei, Finance Minister of China
yesterday and had talks on bilateral economic cooperation, upcoming G20 Summit in
Hangzhou and the BRICS Summit in India. Both sides shared views on the global
macroeconomic situation and agreed on the need to further coordinate in order to enhance
economic
growth.
On the sidelines of AGM, the Finance Minister Shri Jaitley had a bilateral meeting with
Mr. Jin Liqun, President AIIB. The Finance Minister also met with executives of Alibaba
ANT
enterprises.
As informed earlier, the Finance Minister Shri Jaitley is currently on a five day official
visit to China.
Establishment of Fund of Funds for funding support to Start-ups
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the
establishment of "Fund of Funds for Startups" (FFS) at Small Industries Development Bank of
India (SIDBI) for contribution to various Alternative Investment Funds (AIF), registered with
Securities and Exchange Board of India (SEBI) which would extend funding support to Startups.
This is in line with the Start up India Action Plan unveiled by Government in January 2016.
The corpus of FFS is Rs.10,000 crore which shall be built up over the 14th and 15th Finance
Commission cycles subject to progress of the scheme and availability of funds. An amount of

Rs.500 crore has already been provided to the corpus of FFS in 2015-16 and Rs.600 crore
earmarked in the 2016-17. The Fund is expected to generate employment for 18 lakh persons on
full
deployment.
Further provisions will be made as grant assistance through Gross Budgetary Support by
Department of Industrial Policy and Promotion (DIPP) which will monitor and review
performance
in
line
with
the
Start
up
India
Action
Plan.
The FFS emanates from the Start up India Action Plan, an initiative of Department of Industrial
Policy & Promotion (DIPP). The expertise of SIDBI would be utilized to manage the day to day
operations of the FFS. The monitoring and review of performance would be linked to the
implementation of the Start Up Action Plan to enable execution as per timelines and milestones.
A corpus of Rs. 10,000 crore could potentially be the nucleus for catalyzing Rs. 60,000 crore of
equity investment and twice as much debt investment. This would provide a stable and
predictable source of funding for Start up enterprises and thereby facilitate large scale job
creation.
Background:
Accelerating innovation driven entrepreneurship and business creation through Start-ups is
crucial for large-scale employment generation. An expert committee on Venture Capital (VC) has
opined that "India has the potential to build about 2500 highly scalable businesses in the next 10
years, and given the probability of entrepreneurial success that means 10000 Start ups will need
to
be
spawned
to
get
2500
large
scale
businesses".
Start-ups face several challenges - limited availability of domestic risk capital, constraints of
conventional bank finance, information asymmetry and lack of hand holding support from
credible agencies. A large majority of the successful Start-ups have been funded by foreign
venture funds and many of them are locating outside the country to receive such funding.
A dedicated fund for carrying out Fund of Funds operations would address these issues and
enable flow of assistance to innovative Start ups through their journey to becoming full fledged
business entities. This would encompass support at seed stage, early stage and growth stage.
Government contribution to the target corpus of the individual Fund as an investor would
encourage greater participation of private capital and thus help leverage mobilization of larger
resources.
Speech of the Secretary, Economic Affairs at the South Asia Subregional Economic
Cooperation (SASEC) 2025 Second Regional Consultation Workshop
Following is the text of the Inaugural Address made by Shri Shaktikanta Das, Secretary,
Department of Economic Affairs (DEA), Ministry of Finance at the South Asia Sub-regional
Economic Cooperation (SASEC) 2025 Second Regional Consultation Workshop here today.
Distinguished Heads and members of delegations from the SASEC countries; Mr. Hun Kim,
Director General, South Asia Department; my colleagues from different Ministries of the
Government
of
India,
ladies
and
gentlemen.

It gives me pleasure to be with you in this Second Regional Consultation Workshop on SASEC
2025. Todays Workshop will discuss a long-term vision and a ten-year roadmap that will help
our sub-region attain new heights of growth, development and prosperity. Let me compliment
ADB for facilitating this event and preparing inputs to guide in our deliberations.
In the last week, we met in Frankfurt for the annual meeting of the ADB where all of us
acknowledged that Asia will be the biggest driver of growth in coming years. It will definitely
attract
bigger
investment.
SASECs success as a regional cooperation program can be attributed in large part to its strategy
of pursuing hardware and software initiatives in tandem. Cross border infrastructure projects are
complemented with the necessary simplification and harmonization of procedures at the borders
and improvements in testing and measurement facilities. To support trade facilitation, we build
capacity to apply the latest technological interventions, and comply with international standards
and best practices. We do this through periodic training of our human resources.
India has always engaged with its neighbours in addressing common challenges --- economic
vulnerability, social deprivation, environmental degradation. We have also engaged with them in
the pursuit of common goals --- sustainable growth, inclusiveness, prosperity. We have always
believed that mutual support of each others endeavours can add impetus to individual country
initiatives. In SASEC, we have long held the principle that regional cooperation complements
domestic undertakings. National and regional initiatives are very much interrelated. Over the past
15 years, through ADB, we have seen the interrelatedness by uncovering the regional spillovers
of national initiatives, and realizing the benefits of positive externalities by financing crossborder
projects
and
national
projects
with
regional
dimensions.
The SASEC initiative supported by ADB assists the six participating countries in the sub-region
to address many issues that impede growth and development. By providing a platform for
dialogue and cooperation, SASEC helps participating countries to develop a better understanding
of each others strengths and weaknesses. Over the last two decades, SASEC has helped craft
solutions to cross-border issues. I thank ADB for making SASEC a project- driven initiative that
looks
beyond
the
bilateral
bottlenecks.
Recently, SASEC has also established specialised forums on customs and electricity transmission
to provide more focused technical support to national and bilateral efforts in these areas. The
Bangladesh Bhutan India Nepal (BBIN) Motor Vehicles Agreement (MVA) is a shining example
of cross-border cooperation among four countries to ease movement of vehicles and goods
transiting through third countries. India is also involved in the negotiation of the India-MyanmarThailand (IMT) MVA which will boost South Asia's connectivity eastward. .
With ADB support, India is presently developing two priority road corridors. The first road
corridor will connect India with Bangladesh, Nepal and Bhutan through the chicken neck area
of North Bengal. The second road corridor will establish India-Myanmar connectivity in the state
of Manipur. Other projects are being simultaneously pursued to complement these two road
corridors. Integrated Check Posts (ICPs) at Agartala and Petrapole on the India-Bangladesh

border will be operationalized. Another ICP at Moreh on the India-Myanmar border will be
developed. We are also planning to establish ICPs and improved Land Customs Stations (LCS) at
key border points with Bangladesh, Nepal and Bhutan to ease the movement of goods and people
within the subregion. India is planning to develop regional connectivity projects worth almost $5
billion
in
SASEC.
India is also developing the East Coast Economic Corridor (ECEC), with ADB as our lead
partner. Phase1 of the ECEC will be implemented as the Vizag Chennai Industrial Corridor
(VCIC) project. The ECEC covers some of the existing growth centres, but it also has the
potential to develop other centres that can be linked through efficient multi-modal transport
systems and infrastructure services. Growth in the corridor would be distributed spatially within
the region and have significant implications in connecting to global production networks and
value chains in ASEAN, in line with our Governments 'Act East' policy. The goal of the ECEC
is not only to generate domestic output and employment, but more importantly, to create a more
competitive environment for the development of trade and industry in the region.
The ECEC will facilitate the movement of the bulk of Indias major natural resources like coal
and iron ore and can serve as a node for extractive and downstream value-added industries.
Creation of world-class infrastructure supported by transport corridors, logistics services,
development of human capital and skills, communications, energy grids and institutional policies
that support trade both within the region and outside will be a significant addition to the stock of
public capital and lift major constraints to growth nationally and regionally.
I am happy to note that SASEC programme has accorded priority to trade facilitation. It is
imperative to recognize the challenges and opportunities of this region and to realise its potential.
It is a fact that South Asia is among the least integrated region in the world. Problems in trade
facilitation, non-tariff barriers (NTBs) and infrastructure deficit hindered intra-regional trade in
South Asia. In the World Banks ease of doing business ranking SASEC countries generally
occupies lower positions in trade facilitation. Four SASEC countries have long coastline that
could be developed to its full potential to integrate this sub-region with global production
centres.
Recently, India launched a major port-led development initiative called Sagarmala, which will
help modernize India's Ports and coastlines to contribute more in India's growth. About 90% of
Indias trade by volume and 70% by value are moved through ports. The major ports thus play a
key role in facilitating external trade. The focus has been on improving the port infrastructure,
modernization of existing facilities and increasing the capacity and draught at ports. The
Government of India has been promoting capacity enhancement of major ports through PPP
projects for the construction of berths/terminals/jetties and mechanization of berths for cargo
handling. Apart from the modernization of the existing ports in the east coast, India is developing
two new ports on the same coast line at Dugarajapatnam in Andhra Pradesh and at Sagar Island
in West Bengal. These ports will further enhance our trade with our neighbours and ASEAN
countries.
India has also been assisting its neighbours in the sub-continent to improve their power situation.
The India-Bangladesh transmission line is providing safe and reliable interconnection of the

power grids to supply of 500 MW of power from India to Bangladesh. A 1320 MW Maitri
Thermal Power Project, a joint venture of Indias NTPC Ltd and the Bangladesh Power
Development Board, will be developed. The Power Grid Corporation of India is also engaged in
developing three 230 kv transmission lines in Myanmar with the support of a credit line of US $
64 million between the Exim Bank of India and the Myanmar Foreign Trade Bank. India is also
investing to develop hydroelectric projects in Nepal and Bhutan.India is currently engaged in
discussions for a mega gas pipeline project linking Turkmenistan, Afghanistan and Pakistan with
India. Under this project, a 1,680 km long pipeline would be constructed. At the request of the
four participating countries, ADB has agreed to house the secretariat of this project.
Ladies

and

gentlemen.

India is committed to continue its close relations with countries of South Asia and South East
Asia. We are presently engaged in a number of regional initiatives that includes SAARC,
BIMSTEC, the Mekong-Ganga initiative, India-ASEAN Partnership, and the East Asia Summit,
among others. These initiatives provide a much wider space to pursue the many possibilities that
an expansive and vibrant Asian landscape has to offer. Asias dynamism is an excellent
opportunity for all of us, to further intensify our drive towards the common goal of sustainable
and inclusive growth. It is in this context that we welcome ADBs proposal to develop a SASEC
Vision document and a comprehensive long-term operational plan to guide our efforts more
deliberately
and
resolutely
into
the
future.
In conclusion, let me once again compliment the ADB for organizing this workshop. I hope that
country delegations will contribute their ideas to help shape a well-rounded vision document and
operational plan. The need of the hour is to acknowledge our strengths and weaknesses and,
through cooperation, develop synergies through mutual support. The ADB is in a unique position
to take a neutral view and to play a very good role as facilitator, advisor and catalyst in the
SASEC
region.
I wish the workshop all success and look forward to fruitful deliberations on SASEC 2025.
Thank you.

India and Mauritius sign the Protocol for amendment of the Convention for the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect
to Taxes on Income and Capital Gains

The Protocol for amendment of the Convention for the avoidance of double taxation and
the prevention of fiscal evasion with respect to taxes on income and capital gains between
India and Mauritius was signed by both countries today at Port Louis, Mauritius. The key
features of the Protocol are as under:
i.

Source-based taxation of capital gains on shares: With this Protocol, India gets
taxation rights on capital gains arising from alienation of shares acquired on or
after 1st April, 2017 in a company resident in India with effect from financial year
2017-18, while simultaneously protection to investments in shares acquired before

1st April, 2017 has also been provided. Further, in respect of such capital gains
arising during the transition period from 1st April, 2017 to 31st March, 2019, the
tax rate will be limited to 50% of the domestic tax rate of India, subject to the
fulfillment of the conditions in the Limitation of Benefits Article. Taxation in India
at full domestic tax rate will take place from financial year 2019-20 onwards.
ii.

Limitation of Benefits (LOB): The benefit of 50% reduction in tax rate during
the transition period from 1st April, 2017 to 31st March, 2019 shall be subject to
LOB Article, whereby a resident of Mauritius (including a shell / conduit
company) will not be entitled to benefits of 50% reduction in tax rate, if it fails the
main purpose test and bonafide business test. A resident is deemed to be a shell/
conduit company, if its total expenditure on operations in Mauritius is less than Rs.
2,700,000 (Mauritian Rupees 1,500,000) in the immediately preceding 12 months.

Iii

Source-based taxation of interest income of banks: Interest arising in India to

Mauritian resident banks will be subject to withholding tax in India at the rate of
7.5% in respect of debt claims or loans made after 31st March, 2017. However,
interest income of Mauritian resident banks in respect of debt-claims existing on or
before 31st March, 2017 shall be exempt from tax in India.

iv

The Protocol also provides for updation of Exchange of Information Article as per
international standard, provision for assistance in collection of taxes, source-based
taxation of other income, amongst other changes.

Major impact: The Protocol will tackle the long pending issues of treaty abuse and
round tripping of funds attributed to the India-Mauritius treaty, curb revenue loss, prevent double
non-taxation, streamline the flow of investment and stimulate the flow of exchange of
information between India and Mauritius. It will improve transparency in tax matters and will
help curb tax evasion and tax avoidance. At the same time, existing investments, i.e. investments
made before 1.4.2017 have been grand-fathered and will not be subject to capital gains taxation
in India.
Unified Payments Interface: the product to enable money transfers both Push and Pull
through Smart Phones
Reserve Bank of India (RBI) has informed that it has given in-principle approval to National
Payments Corporation of India (NPCI) for implementing Unified Payments Interface (UPI). The
product will enable money transfers both Push and Pull through smart phones. The two
important features of UPI are, (i) it facilitates customer convenience by eliminating the need for
providing detailed account/beneficiary details, through the use of virtual address and (ii) it
facilitates interoperability of person-to-merchant payments (both push and pull).
As regards performance of ATMs, as per RBI data, the numbers of ATMs of Scheduled
Commercial Banks (SCBs) have increased from 141516 as on 31.12.2013 to 193622 as on
31.12.2015. Between 2012-13 to 2015-16 (April-February), the debit card transactions at ATMs
have increased from 5530.16 million (553.016 crore) to 7339.76 million (733.976 crore). The
value of transactions in this period has also increased from 16650.08 billion to 23114.58 billion.

RBI has also issued guidelines for licensing of payment banks in November 2014 and 11
applicants have been given in-principle approval to set up payments bank. The main objective
of setting up of payments banks is to further financial inclusion by providing (i) small savings
accounts and (ii) payments/remittance services to migrant labour workforce, low income
households, small business, other unorganized sector entities and other users in a secured
technology-driven
environment.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply
to a question in Lok Sabha today.
RBI Norms for Protecting Customers
Reserve Bank of India (RBI) has released a Charter of Customer Rights, which enshrines broad,
overarching principles for protection of bank customers and enunciates the five basic rights for
bank customers, that I s, (i) Right to Fair Treatment, (ii) Right to Transparency, Fair and Honest
Dealing, (iii) Right to Suitability, (iv) Right to Privacy, and (v) Right to Grievance Redress and
Compensation. RBI has advised banks to formulate either an exclusive Customer Rights Policy
keeping the spirit of the Charter intact or dovetail the existing Customer Service Policies suitably
to integrate the Charter and its tenets with the approval of the Board. The banks have since
framed Customer Rights Policy with the approval of the Board. Banks have also been advised to
review internally by the Board the progress made in implementation of the Charter.
RBI vide its circular dated September 28, 2006, issued guidelines on Fair Practices Code (FPC)
for all Non-Banking Financial Companies (NBFCs) to be adopted by them while doing lending
business. The guidelines inter-alia covered general principles on adequate disclosures on the
terms and conditions of a loan and also adopting a non-coercive recovery method. The same was
revised in view of the recent developments with sector including creation of New Category of
NBFCs viz., NBFC-MFII and also the rapid growth in NBFCs lending against gold jewellery.
Revised
circular
was
issued
on
March
26,
2012.
The Banking Ombudsman Scheme has specified 27 grounds of complaints under which
complaints can be lodged with the Banking Ombudsman on grievances related to deficiency in
banking services provided by commercial banks, Regional Rural Banks and scheduled primary
cooperative banks. In so far as NBFCs are concerned, no cases of depositor cheating by the
entities regulated by RBI have come to the notice of RBI during the last three years.
RBI has also set up the Banking Codes and Standards Board of India (BCSBI) as an autonomous
body, adopting the stance of a Self-Regulatory Organization in the larger interest of improving
the
quality
of
customer
service
by
the
Indian
Banking
System.
Further, RBI has issued guidelines on Fair Practices Code for Lenders. In terms of these
guidelines the banks have been advised to frame the Fair Practices Code duly approved by their
Board
of
Directors.
This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply
to a question in Lok Sabha today.
Account of Total Quantity of God with Government

Reserve Bank of India holds 557.75 metric tons of gold having value of Rs. 1334.3
billion as part of its foreign exchange reserves as on April 22, 2016. It is estimated that there are
stocks of over 20,000 tons of gold in India.
MPORT OF GOLD
EXPORT OF GOLD
YEAR
QTY (Tonnes)
VAL
(Million QTY (Tonnes)
VAL (Million
USD)
USD)
2013-14
661.71
28704.67
72.01
3086.46
2014-15
915.47
34407.18
70.82
2845.15
2015-16
956.62
31679.47
149.23
5512.52
Policy/Guidelines to Promote Cashless Transactions
Reserve Bank of India (RBI) has issued instructions on Credit/Debit card
transactions Security and Risk mitigation measures to enhance the security of
card transactions (including card based online transactions) and Security and Risk
Mitigation measures for electronic payment transaction (including e-banking
transactions). The details of the instructions issued are available on RBI
website www.rbi.org.in. Some of the important instructions are as under:

i)

Banks have been advised to provide online alerts for all card transactions.

ii)

Banks have been advised to put in place a system of providing additional

factor of authentication/validation (2FA) for all card not present transactions
using the information which is not available on the card.

iii)

All new debit and credit cards to be issued only for domestic usage unless
international use is specifically sought by the customers. Such card enabling
international usage will have to essentially EMV chip and PIN enabled.

iv)

Customer induced options may be provided for fixing a cap on the

value/mode of transactions/beneficiaries. In the event of customer wanting to
exceed the cap, an additional authorization may be insisted upon.

RBIs instructions on charges levied by banks on cards inter-alia mention that

the banks should not levy any charge that was not explicitly indicated to the credit
card holder at the time of the issue of the card without getting his/her consent. The
debit card issuing bank should also specify the basis of any charges levied.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of
Finance in written reply to a question in Lok Sabha today.

Internationalisation of Rupee
Internationalization of Rupee will facilitate greater degree of integration of Indian economy with
rest of the world in terms of foreign trade and international capital flows. Key benefits of
internationalization of Rupee include savings on foreign exchange transactions for Indian
residents, reduced foreign exchange exposure for Indian corporate, reduction in dependence on
foreign
exchange
reserves
for
balance
of
payment
stability
etc.
One of the important drivers for internationalization of a currency is the countrys share in global
merchandise and commercial services trade. Indias percentage share in the global trade is still
on the lower side and it limits the pricing ability of domestic businesses in Indian Rupee.
Moreover, the share of Indian Rupee in the Global foreign exchange market turnover at present
is also very low. Internationalization of Indian currency would also require full capital account
convertibility. As a policy, we have followed a gradual and cautious approach in opening up the
capital account. The capital account is being progressively liberalized in accordance with the
evolving macro-economic conditions and requirements of the Indian industries, individuals and
financial sectors. Government has been taking measures to promote the internationalization of
the Indian Rupee. Recently, a framework was put in place for issuance of Rupee denominated
bonds overseas by Indian corporate.

Rules under Income Declaration Scheme, 2016 providing an

option to the declarant the fair market value of immoveable
property acquired through Registered Deed amended; Fifth
set of Frequently Asked Questions (FAQs) providing
clarification on various issues under the Income Declaration
Scheme 2016 also issued
The Income Declaration Scheme, 2016 (the Scheme) provides an opportunity
to persons who have not paid full taxes in the past to come forward and declare
their undisclosed income and assets. Income Declaration Scheme Rules, 2016 (the
Rules) were notified on 19.5.2016. Representations have been received from various
stakeholders to provide an option to value the immoveable property on the basis of
the registered value. After due consideration of the representations, the Rules have
been amended to provide that where acquisition of an immovable property is
evidenced by a registered deed, an option shall be available with the declarant to
declare the fair market value of such property by applying the cost inflation index to
stamp duty value of the property.
Further, the fifth set of Frequently Asked Questions (FAQs) providing
clarification on various issues under the Scheme has been issued and is available on
the official website of the Income Tax Department i.e.,www.incometaxindia.gov.in.
Some of the important issues clarified therein are as under:

(i)

Where loans, creditors, advances received, share capital, payables etc. are disclosed
in the audited balance sheet but are fictitious in nature and cannot be directly linked

to acquisition of a particular asset, then such fictitious liabilities can be disclosed

under the Scheme as such without linking the same with the investment in any
specific asset.

(ii)

The income declared under the Scheme for an earlier assessment year can be taken
into account to explain the related transactions of the subsequent assessment years in
assessment proceedings pending before the Assessing Officer provided there is a
nexus between the two.

(iii)

No adverse action shall be taken against the declarant by FIU or the income-tax
department solely on the basis of cash deposits made in banks consequent to the
declaration made under the Scheme.

(iv)

The period of holding of assets declared under the Scheme shall be taken on the
basis of the actual date of acquisition of such asset and not from 1.6.2016 as clarified
earlier.