Latest news with #Vaswani
Mint
04-05-2025
- Business
- Mint
Microfinance stress, RBI embargo weighed on Kotak Bank's Q4 profitability
Mumbai: Kotak Mahindra Bank's profitability in the fourth quarter was dragged by stress in its microfinance portfolio and consequently slower growth in its agriculture and rural portfolio, even as the lender's operational metrics remained largely stable. The private sector lender's net profit in the December quarter fell 14% on-year to ₹ 3,552 crore. Sequentially, though, profit after tax was 7.5% higher. 'The microfinance business has gone through a very tough time, and that is what has contributed to the higher losses,' Kotak Mahindra Bank's managing director and chief executive officer Ashok Vaswani said in the post-earnings conference. Growth in the retail portfolio was also slow as the lender was unable to expand its high-yielding credit card book because of the Reserve Bank of India's embargo on the bank onboarding new customers. The embargo was lifted after 10 months in February. Vaswani said the bank's personal loan book saw good growth led by its acquisition of Standard Chartered India's personal loan portfolio in January. The corporate loan book also grew 'really well', he said. Customer assets, including advances and credit substitutes, rose 13% on-year to ₹ 4.8 trillion at the end of March. Loans, including inter-bank participation certificates (IBPC) and Bill Rediscounting Scheme (BRDS), were at ₹ 4.4 trillion, also up 13% on-year. Consumer loans were up 17% largely led by strong growth in mortgage, business banking and personal loans, whereas growth in the credit card business was 7% lower on-year. Commercial loans were up 6% on-year, with commercial vehicle, commercial equipment, and tractor finance seeing good growth. However, Kotak Mahindra Bank's agriculture portfolio grew a muted 1% on-year and its retail microcredit loan portfolio fell 33%. Corporate loans grew 6% and SME loans by 31%. 'Advances sort of reduced, but what we did was, we turned to build the credit substitutes such as commercial papers (CPs) and bonds etcetera,' deputy MD Shanti Ekambaram said, adding that the bank let go of some wholesale segments given the high pricing competitiveness in the segment. Vaswani said Kotak Mahindra Bank aims to grow its share of unsecured and personal loans to around 15% of its advances, compared with 10.5% now and around 12.7% before the credit card embargo and hit on microfinance. Unsecured retail advances, including retail microcredit, comprised 10.5% of net advances in the fourth quarter, mostly unchanged from a quarter ago and lower than 11.8% in the corresponding quarter of the previous year. Overall loan growth in 2025-26 is expected to be 1-1.5 times of GDP growth, Vaswani said, adding that Kotak Mahindra Bank aimed to maintain its credit-deposit (CD) ratio at 85-87%. The CD ratio was 85.5% on 31 March. Net interest income (NII) was up a muted 5% on-year at ₹ 7,284 crore. Net interest margin for the quarter was 4.97%. Chief financial officer Devang Gheewalla said NIM in the fourth quarter was supported by cuts on saving account rates and a financial year-end rise in average current account balances. Going forward, while higher lending in the unsecured credit card space would aid margins, overall, the margins would remain under pressure as the repricing on the liability side plays out, he said. The bank's gross non-performing assets ratio was 1.42% as of 31 March, worse than 1.39% a year ago but better than 1.50% in the previous quarter. Net NPA ratio at 0.31% had improved from 0.41% a quarter ago and 0.34% a year ago. Slippages during the fourth quarter were elevated at ₹ 1,488 crore, of which ₹ 135 crore were upgraded during the quarter itself. The bank wrote-off loans worth ₹ 873 crore during the quarter and saw recoveries and upgrades of ₹ 747 crore. Provisions were also high at ₹ 909 crore, significantly up from ₹ 794 crore a quarter ago and ₹ 264 crore a year ago. First Published: 4 May 2025, 11:12 AM IST
Mint
21-04-2025
- Business
- Mint
TDS on rent and contract work: How small taxpayers can avoid penalties
When a young Mumbai-based couple bought an apartment from a seller who resides outside India, they ensured that they fully complied with the rules on tax deducted at source (TDS). They deducted the tax at source at the higher 31.2% rate (includes cess) applicable to non-resident Indian (NRI) sellers and submitted it to the tax authorities on time. However, they missed one additional step: filing an e-TDS return. Consequently, the couple, who did not wish to be named, was slapped with a penalty of ₹ 80,000. Many individuals like this couple face penalties and interest charges each year due to missed steps in TDS compliance, often stemming from limited awareness. After the TDS amount is submitted, the deductor has to file the return within the last date of the quarter in which TDS is deducted (the 31st of July, October, January and March). The penalty for this default is a severe ₹ 200 per day, capped at the TDS amount. The TDS rate in the case of NRI property sellers is quite high at 31.2%, which means the cap equivalent to the TDS amount for the ₹ 200 daily penalty doesn't really help the tenant when the landlord is an NRI. The couple was late in filing e-TDS by seven months, which added up to about ₹ 40,000 for both individuals. Since they bought the property jointly, both were required to deduct TDS and file the return separately. Hence, they both paid a combined penalty of ₹ 80,000 for this slip-up. Individuals and HUFs that are not liable for tax audits were first brought under the purview of TDS in 2013 with the introduction of Section 194-IA that deals with tax deducted at source on the purchase of immovable property . Gradually, more sections on other types of payments were added to broaden the tax base. Mint lists out some key TDS provisions that small taxpayers should be aware of to avoid paying penalties through their nose. Being a tenant to an NRI landlord is a full-time job with multiple compliances. The tenant has to get TAN (tax deduction and collection account number) and mandatorily deduct 31.2% TDS (includes cess; applicable surcharge also to be added) on the rent every month, regardless of the rent amount. It must be deposited to the Income Tax (IT) department by 7th of the following month using Form 27Q. Next, the tenant must file a quarterly e-TDS return. 'Once the return is filed, the tenant must generate and issue a Form 16A to the NRI landlord — this is the TDS certificate showing tax deducted and deposited," said Ajay R. Vaswani, founder, ARAS and Company, Chartered Accountants. 'In contrast, when rent is paid to a resident landlord above ₹ 50,000 per month, the tenant can simply fill Form 26QC online, pay 5% TDS once in a year and be done — no TAN, no quarterly returns, no Form 16A. But for NRI landlords, even a simple rental agreement becomes a full-blown TDS compliance project for the tenant," said Vaswani. The tricky part is that the onus of verifying whether the landlord is a resident or non-resident is on the tenant. 'The tenant should ask for a self-declaration copy. If it turns out later that the landlord was an NRI and tax wasn't deducted properly, the tenant bears the brunt," Vaswani said. Also Read: New TDS rules for partnership firms: What you need to know When a person or entity engages a contractor for any type of work, TDS will be deducted under Section 194C and 194M. 194C is applicable to anyone engaging a contractor for construction, repair work or any other contractual services where the total payment is over ₹ 1 lakh in a year or a single payment is over ₹ 30,000. Chirag Wadhwa, proprietor at Wadhwa Chirag & Associates, Chartered Accountants said for individuals and Hindu Undivided Family (HUF) engaged into business or profession, it is only when their previous year's annual turnover exceeds ₹ 1 crore (in the case of business) or ₹ 50 lakh (for professionals) that they have to deduct TDS under 194C. 'In the case of any other entity, even if there is no audit requirement, TDS under 194C applies," he said. It should be noted that TDS is to be deducted on oral contracts also, even when there is no formal written agreement. '194C gets attracted to even mundane payments like advertisement, courier, house-keeping services, pest control and catering, among others," Wadhwa added. TDS rate is 2% when the recipient is an entity and 1% if it's an individual. 194C compliance mainly affects small entities like housing co-operations, charitable institutions and small proprietor firms. For instance, a small housing committee with less than 20 apartments may not have a full-time CA. So the committee head will have to volunteer to get TAN, which is mandatory for 194C TDS, and deposit the TDS each time a payment is made to the several contractors they may hire, like security, horticulturist, for maintenance work etc. What if a businessman is hiring a contractor to construct his personal house? In this case, section 194M comes in. TDS under 194M is for individuals and HUF who don't fall under 194C. '194M is applicable under two conditions – individual or HUF turnover is below the ₹ 1 crore/ ₹ 50 lakh threshold or even if they are liable for audit but are engaging a contractor for a personal purpose," said Wadhwa. So, a businessman building his own house comes under 194M as he/she fulfils the second condition. Bhawna Kakkar, CA and founder, Kakkar & Company, Chartered Accountants says section 194C is well-known among businesses as CAs typically ensure TDS compliance during audits. However, Section 194M is less commonly followed. 'It applies even to salaried persons if they make high-value payments for professional or contractual services. Since it doesn't require a TAN and often arises in personal transactions, awareness and compliance remain quite low." TDS under 194M is deducted at 5% rate if the aggregate amount of payments exceeds ₹ 50 lakh in a year. Some common contractual services that concern most individuals are constructing a house, hiring an interior decorator, paying a wedding planner or event manager, hiring a lawyer or any other professional, etc. 'The ₹ 50 lakh limit is per year and when it is breached, the payer has to deduct TDS even for the earlier payments (out of the subsequent payments to be released). He cannot deduct TDS from the first payment itself," said Prakash Hegde, Bangalore-based chartered accountant. Kakkar said for both 194C and 194M, each deduction requires a corresponding TDS return filing. 'For 194C, each time TDS is deducted, you'll need to file Form 26Q quarterly, reflecting all payments and TDS deducted. 194M is a challan cum statement deduction that is submitted along with TDS deposit. For this only PAN is sufficient for deductor as well as deductee." Also Read: Relying on rental income in retirement? Take these steps to protect yourself. Failure to deduct TDS carries severe penalties. A 1% monthly interest applies for non-deduction, 1.5% interest when TDS is deducted but not deposited and for delays in filing e-TDS return or challan cum statement, ₹ 200 per day, capped at TDS amount, until the return is filed. These penalties apply to all TDS provisions. TDS non-compliance is a running risk as the interest and penalties are slapped only when the income tax (IT) department flags a default. 'With the income tax department increasingly relying on data from various sources, including the Statement of Financial Transactions (SFT) that captures cash receipts above ₹ 2 lakh, such payments can easily be flagged, potentially leading to demand for tax along with interest and penalty," said Kakkar. However, in the case of NRIs, the consequences of non-compliance are more severe. 'In case of non-compliance, the tenant could become 'assessee-in-default". This means the tenant could be forced to pay the entire TDS amount out of their own pocket, even if the rent was already paid out," Vaswani explained. Over and above the penal interest and ₹ 200 daily fee for non-filing of return, tenants to NRI landlords can also be face additional penalty up to the full amount of TDS under Section 271C and even prosecution under Section 276B for willful default when the TDS is deducted but not deposited with the government, as per Vaswani. 'Unless the landlord later pays full tax and files a return, the burden stays on the tenant." Hegde said the ₹ 200 per day fee for non-filing default, especially, is quite an expensive one. He said property buyers quite often cough up this fee for many of the previous instalments in cases where they pay several installments when buying from a builder. 'When buying a house, under Section 194IA, the buyer has to deduct 1% TDS on the total amount if it exceeds ₹ 50 lakh or more. Now, in case of several instalments, the buyer has to deduct and deposit the same using a challan-cum-statement of TDS in Form 26QB for each installment, which the builders may not inform buyers. Say, if there are eight instalments over three years and the buyer doesn't realise until the final instalment, the ₹ 200 daily fee on the first instalment will add up over three years, capped at the TDS amount. The same will apply to all seven instalments missed." In the first such instance, the tax department recently sent notices to many tenants claiming HRA for not deducting TDS. It is expected that the IT department could impose large-scale enforcement for other TDS provisions too in the coming years. Also Read: Claimed HRA but skipped TDS on rent? The taxman wants answers
Tahawul Tech
14-03-2025
- Business
- Tahawul Tech
Extreme Networks announces Appointment of Anisha Vaswani as CICO
Extreme Networks, Inc., a leader in AI-powered automation for networking, recently announced it has appointed Anisha Vaswani as Chief Information and Customer Officer (CICO). Vaswani will report directly to Extreme President and CEO Ed Meyercord. As CICO, Vaswani will develop and implement the company's overall IT strategy, ensuring that technology investments support the company's business objectives and growth. Additionally, she'll focus on driving internal innovation and customer success for the company by acting as 'Extreme's Customer ONE,' testing and validating Extreme's products and solutions before rolling them out to customers to ensure they create a new industry standard for excellence. Vaswani will also oversee the company's customer success initiatives, proactively engaging with customers to complete successful technology migrations and deliver significant value add – prioritising long-term customer relationships, loyalty and retention. 'At Extreme, we believe technology and customer experience must be seamlessly integrated, which is why we created the CICO role. Anisha is the perfect candidate to ensure that every innovation enhances the customer journey. Her expertise in cloud adoption, cybersecurity and AI, combined with her track record of driving product adoption, maximising value and increasing customer lifetime value, will help Extreme continue its journey to becoming a leading SaaS company in our space', said Ed Meyercord, President and CEO of Extreme. Prior to Extreme, Vaswani served in several CIO roles at prominent companies such as IDG, Box, Toast, Inc., and Shockwave Medical. As Shockwave Medical, she helped the company scale operations and grow annual revenue to $1B. As CIO of Toast, she helped guide the company through the IPO process and played a role in growing the company from $1B in revenue to over $3B in annual revenue. She holds a B.S. in Management Information Systems from San Jose State University. Anisha Vaswani, CICO at Extreme, said, 'Extreme is at a pivotal moment, with innovations like Extreme Platform ONE set to redefine the future of networking. I'm excited to join a team of visionary thinkers and believe that through relentless innovation and an unwavering focus on our customers, we'll turn bold ideas into transformative success. Creating customer value is at the heart of everything we do'. Image Credit: Extreme Networks.
