Pre 2005 currency notes can be exchanged for 6 more months

The Reserve Bank of India has extended the deadline for turning in pre-2005 currency notes to June 30, 2015. Earlier, all citizens had to turn them in by this month-end. The most visible difference between the old and new notes is that the latter carry the year of printing. 

As part of its drive to withdraw currency notes with basic security features, RBI had said that all notes issued prior to 2005 would be withdrawn from circulation. They would continue to be legal tender, but RBI would destroy them as and when they come into bank branches. 

In a statement released here on Tuesday, RBI said that it is soliciting cooperation from the public in withdrawing these notes from circulation and has urged them to deposit the old design notes in their bank accounts or exchange them at a bank branch convenient to them. The RBI has stated that the notes can be exchanged for their full value. It has also clarified that all such notes continue to remain legal tender. 
Click here for RBI Press Release

Struggling to pay high interest on home loan ? SBI has a solution

This article is exclusively for existing home loan borrowers of SBI !
Existing home loan borrowers of SBI with floating rate of interest is struggling to pay the enhanced interest on their outstanding amount. While the bank is offering loan to new customers @ 10.15%, old customers with floating rates are paying nearly 13% interest now. 
There is some good news for them ! SBI offers a switch over facility for old customers. They can switch over to the new attractive rate of interest by paying a nominal one time fee of 0.56% of the outstanding loan amount. Then they will be charged @10.10% for women and 10.10% for others.
So let's act fast before the offer expires ! Contact your servicing branch or SBI RACPC, fill up a simple switch over form, pay the fee (0.56%) and enjoy the benefit.

FM to Relaunch Kisan Vikas Patra (KVP)

FM to Relaunch Kisan Vikas Patra (KVP); Available to the Investors in the Denomination of Rs. 1000, 5000, 10,000 and 50,000, with no Upper Ceiling on Investment; Investment made in the KVP will Double in 100 Months

The Union Finance Minister Shri Arun Jaitley will re-launch the Kisan Vikas Patra (KVP) here tomorrow in the presence of Shri Ravi Shankar Prasad, Union Minister of Communication and IT and Shri Jayant Sinha, Minister of State for Finance among others. Increasing savings rate in the economy was one of the priorities of the new Government on assuming charge. In view of the popular demand and to revitalize Small Savings, the Finance Minister in para 27 of his Budget Speech announced that “Kisan Vikas Patra (KVP) a very popular instrument among small savers will be reintroduced The instrument will encourage people, who may have banked and unbanked savings to invest”. Accordingly, it is decided to reintroduce Kisan Vikas Patras (KVPs). KYC norms regarding all National Savings Schemes (NSS) are now applicable in post offices and banks w.e.f. January, 2012. The re-launched Kisan Vikas Patra (KVP) will be available to the investors in the denomination of Rs. 1000, 5000, 10,000 and 50,000, with no upper ceiling on investment. The certificates can be issued in single or joint names and can be transferred from one person to any other person / persons, multiple times. The facility of transfer from one post office to another anywhere in India and of nomination will be available. The certificate can also be pledged as security to avail loans from the banks and in other case where security is required to be deposited. Initially the certificates will be sold through post offices, but the same will soon be made available to the investing public through designated branches of nationalised banks. Kisan Vikas Patras have unique liquidity feature, where an investor can, if he so desires, encash his certificates after the lock-in period of 2 years and 6 months and thereafter in any block of six months on pre-determined maturity value. The investment made in the certificate will double in 100 months. Reintroduction of Kisan Vikas Patra (KVP) is a welcome step not only in the direction of providing safe and secure investment avenues to the small investors but will also help in augmenting the savings rate in the country. The scheme will also safeguard small investors from fraudulent schemes. With a maturity period of 8 years 4 months, the collections under the scheme will be available with the Govt. for a fairly long period to be utilized in financing developmental plans of the Centre and State Governments and will also help in enhancing domestic household financial savings in the country. Kisan Vikas Patra (KVP) – a certificate savings scheme was launched by the Government on 1st April, 1988. The scheme provided facility of unlimited investment by way of purchase of certificates from post offices in various denominations. The maturity period of the scheme when launched was 5 ½ years and the money invested doubled on maturity. The scheme was very popular among the investors and the percentage share of gross collections secured in KVP was in the range of 9 % to 29 % against the total collections received under all National Savings Schemes in the country. Gross collections under the scheme in the year 2010-11 were Rs. 21631.16 crores which was 9 % of the total gross collections during the year. In the year of its closure, the scheme secured gross collections of Rs. 7575.95 crores (April 2011 to November 2011).

Starting today, ATM use over 5 times per month will attract fee of Rs 20

Using ATMs to withdraw money or for other purposes like balance enquiry beyond five times in a month will attract a levy of Rs 20 per transaction from November 1.

As per the Reserve Bank's new guidelines that comes into force from tomorrow, bank customers in six metros-- Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bangalore - are allowed to withdraw money and/or carry out non-financial transactions like mini-statements at ATMs of banks, where they hold saving/current accounts, free of charge only five times a month.
Click here for RBI Circular

Every transaction beyond this threshold will be charged Rs 20 per use.

Besides, the number of free transactions at ATMs (Automated Teller Machines) of non-home banks has been cut to three times a month from five times.

"Taking into account the high density of ATMs, bank branches and alternate modes of payment available to customers, the number of mandatory free ATM transactions for savings bank account customers at other banks’ ATMs is reduced from the present 5 to 3 transactions per month (inclusive of both financial and non-financial transactions)," RBI had said in a notification issued in August this year.

The RBI, however, clarified that nothing precludes a bank from offering more than three free transactions at other bank ATMs to its account holders if it so desires.

The cap in the number of free ATM transactions will not apply on small/no-frills or basic savings bank deposit account holders who will continue to enjoy five free transactions.

At places other than the six metro centres, the facility of five free transactions for savings bank account customers will remain unchanged upon using other bank ATMs.

India has a total of 1.6 lakh bank ATMs across the country as of March 2014.

The new guidelines were issued in pursuance of a representation made to the RBI by Indian Banks' Association on the back of growing cost of ATM deployment and maintenance incurred by banks as well as rising interchange outgo due to free transactions. 

SBI links free ATM usage to account balance

 The country's largest lender State Bank of India (SBI) has reviewed its ATM usage charges, allowing more free transactions to those who avoid visiting its branches, and unlimited transactions for those with large balances. 

In its latest directive on ATM charges applicable from November 1, SBI said that it will limit the number of branch withdrawals to four a month for those maintaining balances of up to Rs 25,000. 

For customers maintaining an average monthly balance of Rs 25,000 and above, the bank will provide unlimited usage of its own ATM network, but will limit access to third-party ATMs to three transactions a month. The bank will also increase the number of free transactions on its home network from five to nine if the customer does not visit a branch during the month. 
For those who maintain average balances of over Rs 1 lakh, the bank will provide unlimited access to all ATMs across the country. However, those customers whose balances are less than Rs 25,000 will face the limit of five transactions on their home bank ATMs and three transactions on other banks' machines. Those who exceed the limit will pay Rs 5 per transaction at SBI's ATMs and Rs 20 at machines belonging to other banks. 

The new charge structure follows an RBI directive that allowed banks to reduce the number of free ATM transactions on their own networks and other bank's networks to five and three respectively. The limits are applicable only in six major cities — Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad. Elsewhere, the earlier limit of five free transactions will continue. 
Source : Times of India

Budget 2014: Finance Ministry may double tax exemption limit under 80C to Rs 2 lakh

Seeking to boost household savings, the Finance Ministry is considering doubling the exemption limit for investments by individuals in financial instruments to Rs 2 lakh.

Presently the investments and expenditures up to a combined limit of Rs 1 lakh get exemptions under Sections 80C, 80CC and 80 CCC of the Income Tax Act.

Sources said the revenue department is assessing the burden on the exchequer in case of increase in the benefit limit. The announcement is expected in the Budget.

The Budget for 2014-15 will be presented by Finance Minister Arun Jaitley in the Lok Sabha on July 10.

There have been demands from bankers and insurers to hike the tax exemption limit from Rs 1 lakh per annum to encourage household savings.

The savings rate has come down from over 38 per cent of GDP in 2008 to 30 per cent in 2012-13.

The hike in the exemption limit, sources said, would provide much needed relief to the salary earners who are reelining under the impact of high inflation.

The Direct Taxes Code (DTC) too has recommended that the combined ceiling for investments and expenditures be raised to Rs 1.5 lakh per annum.

The financial instruments which enjoy exemption include life insurance premium, public provident fund, employees provident fund, National Savings Certificates, repayment of capital on home loan, equity linked saving schemes sold by mutual funds and bank FDs of five year maturity. 
Source : Economic Times

Advance Tax Payment extended from 15th March to 18th March 2014

Date of Payment of Final Installment of Advance Tax Extended from 15th March to 18th March 2014

The Final Installment of Advance tax for Financial Year 2013-14 is required to be paid on or before 15th March, 2014 by the tax payers who are liable to pay advance tax. These taxpayers can make payments in the designated branches of the authorized banks, electronically or physically, as per law. The banks are open for half day on 15th March, 2014, being a Saturday. Accordingly, to facilitate payment of this installment of Advance tax for the Financial Year 2013-14, the Central Board of Direct taxes (CBDT) has issued an order to extend the time limit to make such payments of Advance Tax, from 15th March, 2014 to 18th March, 2014. Taxpayers, therefore, can now pay their advance tax installment by Tuesday, 18th March, 2014 without entailing any consequential interest for deferment. View the PIB Release

Revision of Interest Rates for Small Savings Schemes for the Financial Year 2014-15 Announced

Various decisions taken by the Government of India on the recommendations of the Shyamala Gopinath Committee for Comprehensive Review of National Small Savings Fund (NSSF), were communicated to all concerned by the Government through its Office Memorandum dated 11^th November, 2011.

            One of the decisions of the Government based on the recommendations of the Committee relates to revision of interest rates every financial year, to be notified before 1^st April of that year.  Accordingly with the approval of the Finance Minister, the rates of interest on various small savings schemes for the Financial Year 2014-15 effective from 01.04.2014, on the basis of the interest compounding/payment built-in in the schemes, shall be as under :

Scheme	Rate of interest w.e.f.01.04.2013	Rate of Interest w.e.f. 01.04.2014
1.	2.	3.
Savings Deposit	4.0	4.0
1 Year Time Deposit	8.2	8.4
2 Year Time Deposit	8.2	8.4
3 Year Time Deposit	8.3	8.4
5 Year Time Deposit	8.4	8.5
5 Year Recurring Deposit	8.3	8.4
5 Year SCSS	9.2	9.2
5 Year MIS	8.4	8.4
5 Year NSC	8.5	8.5
10 Year NSC	8.8	8.8
PPF	8.7	8.7

       The necessary notifications will be notified separately in this regard in due course. 

PAN application : New procedure kept in abeyance

Government Decides to Keep in Abeyance the Decision to Change the Procedure for Pan Allotment Till Further Orders

The Central Board of Direct Taxes (CBDT) has decided to keep in abeyance the decision to change the procedure for PAN allotment till further orders. Accordingly, the operation of Circular No. 11 dated 16.01.2014 issued to PAN service providers has been directed to be put on hold till further orders. In the meantime, the old procedure of PAN application and allotment shall continue.

Application for PAN : Change in procedure

Original documents to be shown
With effect from 03.02.2014 original Documents regarding proof of address and proof of residence to be shown in the PAN Facilitation Centre. Theses documents to be verified with the copies submitted alongwith PAN application Forms and be returned over the counter.
View the notification dated 24.01.2014

RBI to withdraw all pre 2005 currency note

The Reserve Bank has appealed to the public not to panic. They are requested to actively co-operate in the withdrawal process.

The Reserve Bank of India (RBI) on Wednesday decided to withdraw all currency notes issued prior to 2005, including Rs. 500 and Rs. 1,000 denominations, starting March 31. The step was aimed at curbing black money and fake currencies in the country.

“From April 1, 2014, the public will be required to approach banks for exchanging these notes. Banks will provide exchange facility for these notes until further communication,” an advisory issued by the central bank on Wednesday said.

The size of India’s black economy is estimated to be about a third of its GDP. If hidden income of $500 billion (about 30 lakh crore) were to be disclosed and taxed at 33%, it would generate Rs. 10 lakh crore, enough to fund the food programme in the country for a few years. 

Identify the notes to be withdrawn

The RBI asked the public to exchange currency notes that do not display year of printing on the reverse side. “…public can easily identify the notes to be withdrawn as the notes issued before 2005 do not have on them the year of printing on the reverse side.” The year of printing in a small font is visible at the middle of the bottom row in notes issued after 2005. 

View the RBI Press Release

Banks to charge fee for own ATM transaction ?

The Indian Banks' Association has suggested to the Reserve Bank of India that free use of automated teller machines (ATM) should be capped at just five transactions a month, including that of the bank in which the account is active. 

The recommendation follows overzealous state governments' order to banks to install security guards at all ATM booths after a woman banker was assaulted by a burglar in Bengaluru. 

"Even now, five free transactions are enough to meet the withdrawal requirements of most of the account holders. For balance enquiries, sms is a more convenient option," said M Tanksale, CEO of IBA, the lobby group. 

Now, there is no limit on the number of free transactions an account holder can do at the ATMs operated by the bank in which he has an account. 

Free transactions at ATMs operated by other banks are capped at five a month. The decision not to levy any charges on customers for doing transaction at their own bank ATMs has not been imposed by RBI on banks, but was an initiative taken by banks in a bid to reduce workload at branch and improve customer service. 

Source:-The Economic Times

Currency notes with anything written on them will be accepted as usual

In the wake of rumours circulating in the market that from January 1, 2014, banks will not accept banknotes with anything written on them, the Reserve Bank has urged members of public not to fall prey to such rumours and to use their banknotes without any fear. The Reserve Bank of India has clarified it has NOT issued any such instructions.
View RBI's clarification on Scribbling on Banknotes