PCA Rules

RBI may Relax PCA Rules for State Banks

The Reserve Bank of India may consider relaxing its prompt corrective action (PCA) framework for loss-making banks, marking a significant shift in its stance. Banks under PCA face several limitations, including on lending, until they are nursed back to health.
Credit disbursement has suffered as a number of banks are under PCA. However, the government expects some lenders to come out of the PCA framework on their own.
RBI may Relax PCA Rules for State Banks
At present, 15+ banks are under the PCA framework. The lowest common equity Tier I ratio as prescribed by RBI stands at 5.5% against 4.5% under Basel III norms. Bank credit was up 12.5% on September 28 from a year ago. The RBI stoutly defended the PCA framework in the past.
Any relaxation in the PCA imposed on weak banks should be avoided.
Imposition of PCA can thus be seen as first, stabilising the banks at risk, and then, undertaking the deeper bank reforms needed for the long-term viability of the business model of these banks. The government is also hopeful that the recoveries made by banks under the bankruptcy process will help them bring down their losses and provide more capital for lending.
Since banks have written off most of their bad loans, any recovery would add to their bottom line and boost capital. Lenders expect to recover almost 86% of the  49,000 crore loan in the case of Essar Steel. ArcelorMittal has agreed to pay 50,000 crores, including an 8,000-crore the capital infusion, to acquire the firm.
Bankers also had certain expectations, which the government would consider. – Arun Jaitley
Banks had sought relaxation because they would find it difficult to come out of the PCA unless their income increased. . They have requested for the provisioning norms, and they have also requested for the way lending starts and risk-weighted assets also assigned, so as to allow them a little headroom for growing.

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Filing Income Tax Returns In India- for Residents and NRIs

The Indian government needs money for spending and its development activities collected in the form of taxes and income tax returns are the biggest source of income for the Indian government.

NRI Income tax returns

As per the latest data released by the Indian Income Tax Department, of 8.6 lakh Doctors in the country, only 4.2 lakh of Doctors pay income tax. 2.6 lakh Lawyers are taxpayers from 13 lakh Lawyers in the country and only 1 lakh Chartered Accountants are taxpayers from 2.8 lakh Chartered Accountants. So, there seems to be a huge gap that the Government might try to increase the number of taxpayers and income, in the coming years. This requires a brief review of laws and provisions relating to the submission of income tax returns in our country.

Taxable Income

In India, the entire financial year income is beaten together under the following five heads, namely

1. Income from Salaries,

2. Income from Home Property,

3. Income from Business / Profession,

4. Income from Capital Gains and

5. Income from Other Sources (For those income not covered above 4 heads).

Income Tax Return Requirements

Under the provisions of the Indian Income Tax Act, if a person’s income exceeds the basic exemption limit, the submission of Income Tax Returns (ITR) is required. However, in cases where a person has assets or financial interests in an entity located outside India or he signs authority in a foreign bank account, filing Income Tax Returns (ITRs) is mandatory even if income is under limiting exceptions.

List Of Income Tax Returns Applicable

S. NO. ITR Form Applicable For The Category
1. ITR 1 For Individuals having Income from Salaries, one house property, other sources (Interest etc.) and having total income upto Rs.50 lakh.
2. ITR 2 For Individuals and HUFs not carrying out business or profession under any proprietorship.
3. ITR 3 For individuals and HUFs having income from a proprietary business or profession.
4. ITR 4 For presumptive income from Business & Profession.
5. ITR 5 For persons other than:-
(i) Individual,
(ii) HUF,
(iii) Company and
(iv) Person filing Form ITR-7.
6. ITR 6 For Companies other than companies claiming exemption under section 11.
7. ITR 7 For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F).

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What is meant by tax elasticity?

What is meant by tax elasticity in the financial sector?

Tax revenue is the proportion of the tax revenue that has been revised to the GDP per capita.

This means the above statement means how much tax revenue will increase without any change in the tax rate (increase or decrease) with the GDP ratio.

Consequently, the tax exemption shows the financial performance of the government and the ‘joy’ of the government (tax revenue). This indicates a higher dependency on tax revenue for GDP growth.

Tax elasticity price will increase the price before the concept of elasticity or the purchase of an item incremental price (ie: buyers before buying an item or before finding an alternate source). Except, in this case, the question can increase tax increase before it changes behaviour.

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