Home > Business > Business Headline > Report
Bankers miffed by I-T disclosure diktat
BS Banking Bureau in Mumbai |
August 12, 2003 08:41 IST
The demand of the Income-Tax Department seeking blanket information, under the garb of 'fishing and roving' enquiry, from banks on transactions above Rs 50,000 for the financial year 2002-2003 has been dubbed as 'totally unjustified' by bankers.
They averred that information in this regard is being submitted at half-yearly intervals - October and April.
| Also Read | | |
|
While computerised branches will be in a position to comply with the demand, when it comes to non-computerised branches, more so in the case of public sector banks, it will be an impossible task."This is just harassment. It only makes one wonder as to what the department does with all the reports that banks submit (in compliance with Section 139A of the Income-Tax Act, 1961) on transactions at half-yearly intervals - in October and April," said a senior banker.
"As it is, banks are having operational difficulties in complying with the task of submitting information regarding cash transactions of Rs 100,000 and above.
"This exerts tremendous pressure on bank branches as such transactions are large in numbers. With the lowering of the bar on reporting transactions, the banks woes will simply multiply manifold," he averred.
Banks feel that enquiries under Section 133 (6) should be restricted to large value cash transactions (Rs 10 lakh and above) and data on assets offered against loans/ overdrafts of Rs 50 lakh (Rs 5 million) and above.
As such submission of details on cash transactions of Rs 10 lakh (Rs 1 million) and above can be made by banks without additional workload at the branches as a reporting system is already in existence for such transactions.
Moreover, under Section 139A, every person is required to mandatorily quote Permanent Account Number, or General Index Number, or make a declaration in Form 60 for specified transactions such as opening bank accounts, for purchase of bank draft of more than Rs 50,000 in cash, deposit of more than Rs 50,000 in cash in any one day, etc.
These details are sought in all transactions to ensure that nobody escapes the tax dragnet. In view of this, banks want the I-T enquiry to be only 'case specific' and 'area specific' and not blanket.
Bankers pointed out that Section 13 of the Banking Companies (Acquisition) Act, 1970 requires confidentiality to be maintained in relation to the affairs of banks' customers except where it is otherwise required by law.
Though submission of such information in pursuance of statutory obligation may not be a breach of banker-customer relationship, but it does impinge upon the secrecy ethos of banks, which have been traditionally honoured and observed all over the world.
Customer transactions that are under the revenue department's scanner are:
- Time deposits exceeding Rs 50,000;
- Purchase of bank draft of more than Rs 50,000 in cash;
- Deposit of more than Rs 50,000 in cash in any one day;
- Foreign exchange exceeding Rs 25,000 purchased by anyone;
- Finance advanced to purchase motor vehicles (other than two-wheelers).