Finance Ministry urges banks, DRTs to speed up debt recovery
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The finance ministry has called on banks, debt recovery tribunals and other stakeholders to work together to reduce the backlog of pending cases and create a more effective recovery ecosystem, to help free up capital stuck in litigation.This capital could be redeployed "for productive use in the economy," the ministry said in a statement on Saturday.The appeal was made during a colloquium held earlier in the day with chairpersons of Debt Recovery Appellate Tribunals (DRATs), presiding officers of debt recovery tribunals (DRTs), and representatives of various public and private sector banks as well as the Indian Banks' Association.Among the key issues deliberated were prioritisation of high-value cases, use of alternate dispute resolution mechanisms such as Lok Adalats, and further reforms to reduce turnaround time for various processes in DRT proceedings, the statement said.It was also pointed out that robust monitoring and oversight mechanisms by banks are key for increasing recovery through DRTs.The ministry also highlighted key initiatives taken by the Department of Financial Services such as the adoption of revised DRT regulations, mandatory e-filing, hearing through video conferencing, and hybrid hearings for reducing turnaround time of the matters adjudicated by the tribunals.
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Time of India
a day ago
- Time of India
Changes in tax on lumpsum and premature withdrawals under UPS and NPS in the latest version of Income Tax Act, 1961
Income tax exemptions for UPS Academy Empower your mind, elevate your skills Finance minister Nirmala Sitharaman introduced the Taxation Law (Amendment) Bill, 2025, in today's Lok Sabha session. This Bill aims to amend the Finance Act, 2025 and the Income Tax Act, 1961. The main focus of these changes is to align the tax treatment of UPS ( Unified Pension Scheme ) with that of NPS ( National Pension System ). Here are some key updates included in the Taxation Law (Amendment) per the bill, any payment made from the NPS Trust to a UPS subscriber, which does not exceed 60% of the individual's corpus at the time of superannuation, voluntary retirement or retirement, shall be exempt from income to the bill, 'any payment from the National Pension System Trust to an assessee, who is a subscriber to the Unified Pension Scheme, to the extent that it does not exceed sixty per cent of the individual corpus, as specified in notification number FX-1/3/2024-PR, dated the 24th January, 2025 of the Department of Financial Services, made at the time of his superannuation or voluntary retirement or retirement under clause (j) of rule 56 of the Fundamental Rules [which is not treated as penalty under the Central Civil Services (Classification, Control and Appeal) Rule.'According to the bill, 'any sum received as a lump sum amount as per clause (vi) of paragraph 2 of the notification number FX-1/3/2024-PR, dated the 24th January, 2025, of the Department of Financial Services, by an assessee being a subscriber to the Unified Pension Scheme will also be tax exempt.'As per law, a lump sum payment will be allowed on superannuation at the rate of 10% of monthly emoluments (basic pay + Dearness Allowance) for every six months of qualifying service you complete. Moreover, this lump sum payment will not affect the amount of assured bill further adds that, 'where any amount standing to the credit of the assessee, being a subscriber to the Unified Pension Scheme, in his account referred to in sub-section (1) or sub-section (1B), in respect of which a deduction has been allowed under those sub-sections or sub-section (2), together with the amount accrued thereon, if any, is received by the assessee or his nominee, in whole or in part, in any previous year on account of his superannuation or voluntary retirement or retirement under clause (j) of rule 56 of the Fundamental Rules [which is not treated as penalty under the Central Civil Services (Classification, Control and Appeal) Rules, 1965], as may be applicable, the whole of the amount shall be deemed to be the income of the assessee or his nominee, as the case may be, in the previous year in which such amount is received, and shall accordingly be charged to tax as income of that previous year.'Simply put, if the UPS subscriber or their nominee receives any amount from the scheme before their superannuation, retirement or voluntary retirement, it will be treated as income in the hands of the individual and taxed CA Ashish Niraj, Partner, A S N & Company Chartered Accountants explains, this sub-section has been inserted to clarify that in case the assesee closes the account or opts out of the pension scheme referred to in sub-section (1) or sub-section (1B), then such amount will be deemed to be his income in that previous year and will be CA Mohit Gupta, 'if an assessee (subscriber to the Unified Pension Scheme) receives any amount (including accrued income) from their pension account—where deductions were claimed earlier under Section 80CCD(1), (1B), or (2)—on superannuation, voluntary retirement, or retirement under Rule 56(j) of the Fundamental Rules (not treated as penalty), the entire amount will be treated as taxable income in the year of receipt'.Additionally, if the remaining balance in the individual corpus is transferred to the pool corpus on his superannuation, voluntary retirement or retirement, it won't be treated as income for the taxpayer in that year. According to CA Ashish Niraj, Partner, A S N & Company Chartered Accountants, this is merely shifting funds from individual corpus to pool corpus for annuity purposes, and hence, does not invite Prabhakar K S, Founder & CEO, Shree Tax Chambers, "with effect from April 1, 2025, any amount received by an assessee or their nominee on superannuation or retirement will be considered income in the year it's received and will be charged to tax accordingly. A subscriber, upon attaining 60 years, can withdraw 60% of the total corpus as a lump sum, which is tax-free. The remaining 40% should be utilised to buy annuities. The annuity income is taxable as per the applicable income tax slab rates".
Time of India
4 days ago
- Time of India
Changes in tax on lumpsum and premature withdrawals under UPS and NPS in the latest version of Income Tax Bill
Income tax exemptions for UPS FM Nirmala Sitharaman, in today's Lok Sabha session, introduced the Taxation Law (Amendment) Bill, 2025, which is further set to amend the Finance Act, 2025 and the Income Tax Act, 1961. Most of the changes herein focus on bringing UPS on par with NPS in terms of tax treatment . Here are some major changes that have been presented in the Taxation Law (Amendment) per the bill, any payments from the NPS Trust to a UPS (United Pension Scheme) subscriber, which do not exceed 60% of the individual's corpus at the time of superannuation, voluntary retirement or retirement, shall be exempt from income to the bill, 'any payment from the National Pension System Trust to an assessee, who is a subscriber to the Unified Pension Scheme , to the extent that it does not exceed sixty per cent of the individual corpus, as specified in notification number FX-1/3/2024-PR, dated the 24th January, 2025 of the Department of Financial Services, made at the time of his superannuation or voluntary retirement or retirement under clause (j) of rule 56 of the Fundamental Rules [which is not treated as penalty under the Central Civil Services (Classification, Control and Appeal) Rule.'Furthermore, the bill states that, 'any sum received as a lump sum amount as per clause (vi) of paragraph 2 of the notification number FX-1/3/2024-PR, dated the 24th January, 2025, of the Department of Financial Services, by an assessee being a subscriber to the Unified Pension Scheme will also be tax per law, a lump sum payment will be allowed on superannuation at the rate of 10% of monthly emoluments (basic pay + Dearness Allowance) for every completed six months of qualifying service. Moreover, this lump sum payment will not affect the quantum of assured bill further adds that, 'where any amount standing to the credit of the assessee, being a subscriber to the Unified Pension Scheme, in his account referred to in sub-section (1) or sub-section (1B), in respect of which a deduction has been allowed under those sub-sections or sub-section (2), together with the amount accrued thereon, if any, is received by the assessee or his nominee, in whole or in part, in any previous year on account of his superannuation or voluntary retirement or retirement under clause (j) of rule 56 of the Fundamental Rules [which is not treated as penalty under the Central Civil Services (Classification, Control and Appeal) Rules, 1965], as may be applicable, the whole of the amount shall be deemed to be the income of the assessee or his nominee, as the case may be, in the previous year in which such amount is received, and shall accordingly be charged to tax as income of that previous year.'Simply put, if the UPS subscriber or their nominee receives any amount from the scheme before their superannuation, retirement or voluntary retirement, the same will be treated as income in the hands of the individual and taxed CA Ashish Niraj, Partner, A S N & Company Chartered Accountants explains, this subsection has been inserted to clarify that in case the assesee closes the account or opt out of pension scheme referred to in sub-section (1) or sub-section (1B) then such amount will be deemed to be his income in that previous year and will be CA Mohit Gupta, 'if an assessee (subscriber to the Unified Pension Scheme) receives any amount (including accrued income) from their pension account—where deductions were claimed earlier under Section 80CCD(1), (1B), or (2)—on superannuation, voluntary retirement, or retirement under Rule 56(j) of the Fundamental Rules (not treated as penalty), the entire amount will be treated as taxable income in the year of receipt'.According to CA Gaurav Makjhiani, tax lead at Roedl & Partner, this clarification is introduced to ensure complete parity in tax treatment between the two schemes. For relevant employees, this removes a major barrier to adopting UPS, as the same deductions for contributions and exemptions on withdrawals are now according to the bill, if the balance outstanding in the individual corpus is transferred to the pool corpus on his superannuation, voluntary retirement or retirement, the same will not be treated as income of the assessee in that year. As per CA Ashish Niraj, Partner, A S N & Company Chartered Accountants, this is merely shifting funds from individual corpus to pool corpus for annuity purposes, and hence, does not invite taxes.
United News of India
04-08-2025
- United News of India
Bank branches to remain closed on Sunday
Chennai, August 3 (UNI) Contrary to their earlier decision, several public sector banks have decided to keep their branches closed today, said a top official of All India Bank Employees' Association (AIBEA). However some banks have instructed their Business Correspondents office to be open and the automatic teller machines (ATM) to be loaded with sufficient cash so that farmers can withdraw cash today under the Pradan Mantri Kisan Samman Nidhi (PM-Kisan) scheme. 'It seems the banks have realised the legal infirmities raised by the bank unions in opening the branches on Sunday and decided to reverse their earlier decision,' General Secretary, AIBEA, told UNI. Indian Bank, Union Bank of India, Bank of Baroda while announcing its decision to keep the branches open today has asked is Zonal/Regional/Branch offices to ensure the functioning of the Business Correspondents office and ATMs are loaded with cash. Business Correspondents are authorised intermediaries of banks to offer banking services in unbanked and remote areas. The Bengaluru headquartered Canara Bank have instructed its Circle Offices that it has withdrawn the circular to keep the branches open today. On Saturday the United Forum of Bank Unions (UFBU)-an umbrella body of bank unions said public sector banks are not legally authorised to open their core banking solution (CBS) on Sunday as directed by the Department of Financial Services. The Department of Financial Services has directed the public sector banks to keep branches open on August 3, 2025, specifically for the disbursement under the PM-KISAN scheme. The Ministry of Agriculture, Department of Agriculture & Farmers Welfare has also written a letter in this regard, the UFBU said. In a letter to the Secretary, Department of Financial Services, the UFBU has said: 'No notification has been issued by the Reserve Bank of India (RBI) declaring 3rd August, 2025 (Sunday) as a working day under the Negotiable Instruments Act. There has also been no Gazette notification to the effect that 3rd August, 2025 Sunday will be a working day for the Banks.' 'In the absence of such a notification, banks are not legally authorized to open the CBS system and transact business on this day,' the letter adds. According to UFBU, this omission implies that the business conducted will not be legally recognized for cheque clearing, interbank transactions, or other legally compliant operations. The UFBU said adhering to the directive of working on August 3, 2025 would make the bankers work 12 consecutive days, that is, from July 28, 2025 to 8th August, 2025. 'This is beyond the purview of any provisions of labour laws that entire staff have to work for such continuous periods without any break and one can imagine the fatigue and exhaustion that the staff would be subjected to by the same,' UFBU said. Pointing out that the government must have been aware that the 20th instalment under the Scheme was due on these dates and could have asked the Banks to work out a method to handle this work through discussion with the Unions so that the process becomes smooth and less-cumbersome. The UFBU has demanded the immediate withdrawal of directions to keep branches open on Sundays or holidays unless legally mandated under the Negotiable Instruments Act and through Gazette notification. UNI VJ RKM
