News Flash Archives - CA

RBI’s Handbook – Regulations at Glance

Mohit Solanki — Thu, 27 Feb 2025 13:36:07 +0000

The Reserve Bank of India (RBI) has taken a significant step towards streamlining regulatory compliance by introducing the Regulations at a Glance handbook. This initiative is aimed at enhancing accessibility and understanding of key regulatory provisions governing banks, Non-Banking Financial Companies (NBFCs), and other regulated entities.

Objective of the Handbook

Over the years, the Indian financial system has witnessed continuous regulatory evolution, resulting in numerous circulars, master directions, and policy updates. To facilitate ease of compliance and provide stakeholders with a structured reference point, RBI has consolidated major regulations into a single, accessible document. This handbook serves as a high-level guide for industry professionals while emphasizing that specific compliance requirements must be met through detailed regulatory texts issued by RBI from time to time.

Regulatory Framework and Structure

The handbook is systematically categorized into six key sections:

Introduction – Provides an overview of the regulatory framework and the rationale for compiling the handbook.
Licensing of New Institutions – Covers the regulatory requirements for setting up new financial institutions.
Governance and Ownership Framework – Details governance norms and ownership restrictions applicable to regulated entities.
Prudential Norms and Capital Regulations – Summarizes capital adequacy norms, risk management policies, and prudential guidelines.
Conduct-Related Regulations – Includes key provisions related to fair practices, consumer protection, and ethical banking conduct.
Resolution of Regulated Entities – Outlines mechanisms for financial distress resolution and risk mitigation.

Key Features and Benefits

Comprehensive yet Concise: The handbook presents a structured summary of RBI’s key regulatory instructions in a tabular format for easy reference.
Enhanced Accessibility: Designed to provide quick access to essential regulatory guidelines, reducing the time required for compliance-related research.
Periodic Updates: The document will be regularly reviewed and updated to reflect the latest regulatory changes, ensuring its relevance in an evolving financial landscape.
Simplification of Compliance: While serving as a broad reference, the handbook directs regulated entities to Master Circulars, Master Directions, and relevant regulatory texts for precise compliance requirements.

Regulatory Review and the Role of RRA 2.0

The development of this handbook aligns with recommendations from the Regulations Review Authority 2.0 (RRA 2.0), which was constituted by RBI in 2021. The RRA 2.0 was tasked with reviewing and simplifying regulatory instructions to promote ease of compliance. One of its key suggestions was to compile a structured, accessible guide—leading to the creation of Regulations at a Glance.

Conclusion

The Regulations at a Glance handbook is a welcome step towards improving regulatory clarity and accessibility for financial institutions and professionals. While it serves as a valuable reference, stakeholders must continue to adhere to the latest RBI notifications and regulatory directives to ensure compliance. As financial regulations evolve, this handbook will play a crucial role in fostering a well-regulated and transparent banking ecosystem.

Handbook can be accessed from below mentioned link;

https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/HANDBOOKG27022025D0F3F53F5D3C4310A6BB2F8AC2175D3A.PDF

The post RBI’s Handbook – Regulations at Glance appeared first on CA.

change in Valuation Requirements

Mohit Solanki — Wed, 24 Jul 2024 05:01:37 +0000

The Finance Act, 2024 has introduced notable changes to the valuation requirements for private limited companies, by proposing removal of Section 56(2)(viib) of the Income Tax Act with effect from 1^st April, 2025. This section imposes tax on shares issued by private limited companies at a price exceeding the Fair Market Value (FMV). This taxation is commonly referred to as Angel Taxation.

Current Requirements

FMV of shares is determined according to Rule 11UA(2) of the Income Tax Rules. This rule prescribes the use of the net asset method based on a specific formula or use of other International valuation methods supported by a Merchant Banker’s report.

To comply, private companies issuing shares have been required to obtain:

A valuation report from a Registered Valuer as per the Companies Act.
A valuation report from a Merchant Banker as per Income Tax Regulations.

Amendment made in Finance Act, 2024

Finance Act, 2024 proposes to eliminate the requirement under Section 56(2)(viib) with effect from 1^st April, 2025. Moving forward, the issuance of shares will no longer require a Merchant Banker’s valuation report. Instead, shares can be issued at any price based on the valuation report from a Registered Valuer alone.

Impact and Benefits

This amendment is set to streamline the share issuance process for Start ups by:

Removing the dual valuation report requirement.
Reducing compliance costs and administrative burden.
Providing greater flexibility in pricing shares based on professional valuations.

Disclaimer

The information provided in this blog is for general informational purposes only and is not intended to be legal, tax, or professional advice. Readers should consult their own advisors for specific guidance on how these changes may impact their individual circumstances.

The post change in Valuation Requirements appeared first on CA.

Budget 2023

Mohit Solanki — Wed, 01 Feb 2023 08:15:44 +0000

Honorable Finance Minister Ms. Nirmala Sitharaman has presented union budget on 2^nd Feb, 2023. Brief highlights proposal made in union budget 2023 is as under;

TAX PROPOSALS

TAX PROPOSALS – PERSONAL TAXES

Rebate limit is increased from 5 Lakh to 7 Lakh under new tax regime
Tax limit increased to 3 Lakh in New tax regime and slab is is revised as under;
- Income from 3 Lakh to 6 Lakh – 5%From 6 Lakh to 9 Lakh – 10%From 9 Lakh to 12 Lakh – 15%From 12 Lakh to 15 Lakh – 20%
- Above 15 Lakh – 30%

Salaries person, pensioner including family pension will get benefit of 50000 standard deduction in new tax regime
Rate of highest surcharge is reduced from 37% to 25% in new tax regime.
New tax regime will be considered as default
Most of personal income tax benefit given for new tax regime. Individuals having large investment or deductible expenditure (Like Insurance premiums, Home loan, electric vehicle loan, provident funds, etc) generally opts for old regime only – So they will not have much benefit from this. To understand more on existing income tax slab under both regime, go to https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable-1#taxslabs

TAX PROPOSALS – CORPORATE DIRECT TAXS

Common IT return form will be introduced
Limit for Presumptive income declaration for MSME is increased from 2 crore to 3 crore and from 50 Lakh to 75 Lakh in case of professional if cash receipts is less than 5%.
Deduction of expense on supply received from MSME will be on payment basis.
Cash deposit limit of 2 Lakh per member for loan to and loans by rural or agri co-operative rural society.
Start up can claim carry forward of losses evenif there is change in shareholding – Time limit increased from 7 years to 10 years
100 joint commissioners will be placed for early disposal of small appeals
Limit of 10 Crore kept for getting benefit in sec 54 and 54F

TAX PROPOSALS – INDIRECT TAXS

Reduction of basic custom duties on certain some parts of EV battery, parts of mobiles, parts of TV, chemical payments, compounded rubber
Increased in basic custom duties in on electric kitechn chimney, article of gold and silver bars, cigarette.
Reduced basic custom duty to continue on some part of steel.

FISCAL TARGETS

Revised estimate of F.Y. 22-23
- Receipt of 23.40 Lakh Crore (20.90 lakh crore from taxex)
- Expense of 41.90 Lakh Crore
- Fiscal deficit – 6.4% of GDP

Estimated figure of F.Y. 23-24
- Receipt of 27.20 Lakh Crore
- Expense of 45 Lakh Crore
- Fiscal deficit – 5.90% of GDP

NON-TAX PROPOSALS

INCLUSIVE DEVELOPMENT

Agricultural credit target is increased to 20 Lakh Crore

REACHING LAST MILE

Establishment of Preventive Vulnerable Tribal Group (PVTG) with allocation of 15000 Crore for development of tribal people
PM Awas Yoyjna allocation is increased by 66% to 79000 crore
Support to pay penalty or bail money to poor people

INFRASTRUCTURE

Capital Investment increased by 33% to 10 Lakh Crore (3.3% of GDP)
Effective capital investment will be 13.70 Lakh Crore (4.5% of GDP)
15-year interest free loan to State amounting to 1.30 Lakh Crore
Allocation of 2.40 Lakh Crore for Railway
50 additional airport will be renewed
Investment of 10000 Crore per year in urban infra development fund

UNLEASHING POTENTIAL

Under Mission Karmyogi and ease of doing business, 39000 compliances and 3400 provisions are reduced.
Jan Vishwas Bill will be introduced to amend 42 central act
3 new Centre for excellence for artificial intelligence will be set up in top institute
PAN will be common business identifier for all digital system of government agency
Unified filing process for return in simplified form in for filing of same kind of information to different government agency.
Vivad Se Vishwas Scheme 1: Return of 95% money to MSME for failure to execute contract
Vivad Se Vishwas Scheme 2: For settling contractual dispute involving government and government undertaking.
E-courts Phase III with 7000 crore outlay.
100 labs in engineering institute for 5G.

GREEN GROWTH

35000 Crore outlay for priority capital investment energy and net zero objective.
19000 Crore for National green hydrazone mission.
Launch of PM PRANAM and GO BARTAN

YOUTH POWER

Pradhan Mantri Kausal Yojna 4.0 for 3 Lakh youth.
30 Skill India International Centre will be set up.
National apprentice promotion scheme for stipend payment to 47 Lakh
For Tourism, 50 destinations will be selected through challenge mode.

FINANCIAL SECTOR

9000 Crore for Credit guarantee scheme for MSME which will result in additional loan of 2 Lakh crore and will reduce cost by 1%.
GIFT IFSC – Delegation of power to IFSCA and set up of single window clearance system for registration with IRDA, SEBI, RBI, GSTN
Introduction of new small saving scheme named Mahila Sanman Saving Certificate for two years up to March, 2025. Maximum investment of 2 Lakh for two year with interest rate of 7.50%.
Limit in Senior citizen saving scheme increased from 15 Lakh to 30 Lakh
Limit for Monthly saving income increased from 4.50 Lakh to 9 lakh (increased from 9 to 15 for joint)

The post Budget 2023 appeared first on CA.

Launch of portal for IT/ITeS Policy Incentive application

Mohit Solanki — Wed, 06 Jul 2022 10:47:51 +0000

Gujarat government had launch IT/ITeS policy (2022-27) before few months giving series of incentives to companies in IT and technology sector. Portal to apply for the incentive scheme is launched today at Digital India Week summit held at Gandhinagar. URL for the new portal is https://dstpolicy.gujarat.gov.in/.

Major Incentive includes;

(i) Incentive at the rate of 25% on capex expenditure which includes office building, computers, softwares and network related capex;

(ii) Incentive at the rate of 15% on operational expenditure like lease rent, bandwidth, cloud rental, Electricity and patent expenditure for five years times;

(iii) One time incentive for additional employment generation at the rate of 50,000 per male employee or 60,000 per female employee;

(iv) Interest assistance up to 7% per annum;

(v) Assistance by way of PF payment which will be 100% in case of male employees and 75% in case of female employees.

The post Launch of portal for IT/ITeS Policy Incentive application appeared first on CA.

RBI Monetary Policy _ June, 2022

Mohit Solanki — Wed, 08 Jun 2022 05:47:11 +0000

Reserve Bank of India’s Monetary Policy Committee (MPC) in their meeting on Wednesday, 08th June, 2022 decided to hike key rate in order to curb ongoing high inflation situation. Repo rate is raised by 50 basis points (bps) from 4.40% to 4.90%. Consequently, the standing deposit facility (SDF) rate stands adjusted to 4.65 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 5.15 per cent.

These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. It is to be noted that last month also, MPC raised repo rate by 40 bps and cash reserve ration by 50 bps.

Effective key rates as on 8th June, 2022 is as under;
Repo Rate : 4.90%
Standing Deposit Facility : 4.65%
Marginal Standing Facility : 5.15%
Bank Rate : 5.15%
Reverse repo rate : 3.35%
Cash Reserve Ratio (CRR) : 4.50%
Statutory Liquidity Ratio (SLR) : 18.00%

The post RBI Monetary Policy _ June, 2022 appeared first on CA.