Tuesday, November 1, 2011

Damaged currency note from Bank ATM?

The Reserve Bank of India says that you can walk into any bank irrespective of your having an account in it and demand that the damaged or torn or mutilated currency note you have unfortunately come to possess during one of the several monetary transactions in daily life be exchanged for a good one. But that does not seem to be applicable to damaged notes spit out by the ATM machine. At least, that is what the bank in which I have a Savings Bank account has told me.

Recently, I withdrew some cash from the ATM machine nearest to my residence. For the first time in over three years, there was a torn note among the several notes. Had the torn note been of a lower denomination, I would have pasted a cello- tape on it to cover the torn portion and given it in some shop while buying some goods. Even the shop keeper would have ignored the cut and paste job. But this note happened to be a thousand rupee note. No shop keeper accepts a thousand rupee note without examining it thoroughly. Since there have been news reports of counterfeit currency in circulation, particularly in 500 and 1000 denominations, every one is very careful. Naturally so. I had no option other than to take it to my bank and ask for an exchange. The official at the cash counter asked me for the ATM slip which one gets from the machine while withdrawing money. Luckily, I had it with me and handed it to him. To my surprise, the official said that the particular ATM from which I withdrew money is maintained by a distant branch and not the one I have account in and to which I have come. So, he said, the solution is to travel 6 km to that branch and get the note exchanged. I could not agree to the impractical suggestion and I insisted that the note be exchanged at this very branch. The poor official had to go the branch manager, however reluctantly so and get his consent before issuing me a new thousand rupee note, as a one time exception. But he made it clear that in future, I should approach that branch whichever is responsible for maintaining the particular ATM , if I had a similar problem. Alternatively, I should choose that ATM which is just outside any bank branch so that one just walks into the branch and gets the job done if the note needs to be replaced. This, in effect, would mean that I should give up the luxury of using the ATM which is less than 100 metres from my residence and instead have to walk nearly a km to withdraw money from an ATM which is directly outside the bank. Sounds illogical, right? Though torn notes from ATM are not a regular occurrence, possibility does exist ; the fact that if you need to withdraw Rs.10000.-, the ATM coughs out 9 thousand rupee notes, 1 five hundred rupee note and 5 hundred rupee notes makes the probability, however small, of a thousand rupee note being torn rather than one of smaller dimension being so does make one a bit nervous.

Thursday, September 1, 2011

Form16A.....find the devil in the fine print !

When every year you calculate the income tax to be paid, you do take into consideration the interest income you have earned on your bank fixed deposits. Form 16A which is also called the TDS certificate is issued by the bank after the end of a financial year. The form mentions the interest paid/credited for the four quarters, and the TDS ( tax deducted at source) amounts for the four quarters. This information is an important input for your arriving at the total tax to be paid and balance tax to be paid after considering the TDS amounts.

Very few people pay attention to the other details mentioned ( or to be mentioned but not actually mentioned) in the form 16A. How would you know that the bank has deposited the TDS cut from your interest in the Govt. account? For this, you must check whether transfer challan/voucher number is given for every TDS amount mentioned in form 16A. The bank is supposed to file a quarterly TDS return to the Income Tax department for all the TDS amounts cut from each of its customers . These returns are now filed electronically. The returns are uploaded to NSDL/TIN . When the uploading is successful, TIN issues a receipt . So, form 16A which your bank has given you must contain the receipt number. This receipt number is an 8-digit alphabetical combination. If this number is not given in your form 16A, you must demand from the bank that they mention the receipt number. Receipt number is the only proof that the bank has filed the TDS returns. If they have not filed the returns, then you do not get tax credit in form 26AS. The income tax department goes by whatever is mentioned in form 26AS.

Another important thing to be checked is whether the bank has mentioned your PAN number in the form 16A. If they have mentioned it in ink while the rest of the details are printed, chances are that the bank did not mention your PAN number in their TDS returns. Without PAN number being there in the bank's TDS returns, the income tax department can not link the TDS amounts to your PAN number; so you do not get the tax credit for the TDS cut and deposited. Such TDS amounts will not appear in your form 26AS. You will soon get a letter from the income tax department raising questions on the TDS amounts you have mentioned in your IT returns.

Do not have blind faith in your bank. While their intentions may not necessarily be suspect, the bank employees' well-known negligence might land you in problems. So, go through your form 16A before you file your IT returns and ensure that mistakes in the form are corrected well in time.

Saturday, March 19, 2011

Play of Money in Tamilnadu Elections

In the Indian Elections, money has always played a role. Obviously, I am not referring to the genuine expenditure incurred by the candidates. Cost of posters and hoardings, expenses for organising public meetings and rallies, money spent for scores of vehicles hired and food for the volunteers and political workers. These are definitely expenses which are justifiable. But the unjustifiable and illegal expenditure namely money paid to the poorer sections of the electorate for voting in favour of a particular candidate has assumed alarming proportions.

Tamilnadu has been a pioneer even in this evil practice. Every election has seen more money flowing by way of bribe. The recently innovated 'Tirumangalam Formula' is an euphemism for buying votes by giving exhorbitant and unprecedented amounts to a large section of people irrespective of their financial status. The 'Scientist' (!) who invented this formula is none other than Alagiri, one of the sons of Karunanidhi, the Chief Minister of Tamilnadu. It is an innovation in the sense that money was delivered to the voters of Tirumangalam where a by-election was held, in the early hours of the day and hidden between the pages of morning newspapers. Estimates of cash paid for a vote vary between Rs.500.- and Rs.5000.- There are reliable reports that if a family has 4 votes, it was paid Rs.20000.- That would mean that if there is a deficit of 10000 votes (assuming that money need not be paid for all the votes obtained by a candidate) , an expenditure of Rs.5 crores would be able deliver this number of votes. For a party which has earned thousands of crores through corruption while being in power, spending a total of Rs.500 crores in about 100 assembly constituencies is no big deal.

One genuine question needs to be asked in this context. Is it not imaginable that people accept money but do not necessarily vote for the candidate who bribed them? Observers of the political scene say that a promise is extracted from people who are being paid substantial bribe; the promise is that they will vote for the candidate who bribed them. This promise is demanded in the name of God. Tamilnadu rural folks being very religious and God-fearing, this method works perfectly; not many betray or go back on their promise. While people getting money along with their newspapers in the early mornings have no promises to keep, those voters who are personally handed over bulk amounts ( say Rs.5000.- per vote) for their entire family are asked to promise and they keep their word irrespective of their liking or otherwise for the candidate.

Tamilnadu has been leading the country in many fields and the people of the state are rightly proud of such feats. But it is a pity that the state has started pioneering novel methods of bribing voters. This is one innovation that the state will have to feel ashamed of.