The Covid-19 had affected a lot of families in India and has also wiped out a lot of wealth of many individuals and left many others unemployed. In order to provide a relief to the tax payers, the Income Tax Department of the country has announced certain tax benefits and reliefs for the taxpayers. In this article let’s look at some of the important announcements.
Anurag Thakur who is the Minister of state in the finance ministry had confirmed about the tax exemptions and the development regarding it. He conveyed that the amount paid by an employer to an employee or any other person for the treatment of Covid-19 for the year 2019-20 and the subsequent years will not be taxed.
The Finance Ministry had released a report in detail about the information. As per the reports, any amount spent by anybody for the treatment of the employee or someone else would-be tax free. In simple terms, the person who has paid for the treatment and the beneficiary who has received the payment will be exempted from tax.
Tax Exemptions for Employees
The Government has announced exemptions on the tax that is received by employees from their employer or any other person for the treatment of Covid-19. The Government has stated that many employees and individuals have received help from their employers and other well-wishers to meet the expenses of their Covid treatment.
The Press release has conveyed that in order to make sure that an individual would not have any liability on the income tax payment that arises on this account, the Government has decided to provide exemptions for the employees or the individuals or the tax payer for the amount received by their employers or well wishers for the payment of the expenses caused for the medical treatment of Covid-19 in the FY 2019-20 and the subsequent years.
The Government has also conveyed that there won’t be any tax on the ex – gratia payment that is received by the family member of the deceased employee due to Covid-19. The Government has conveyed that there wouldn’t be any tax charged on the amount that an individual has received as a help from the family, friends or relatives due to Covid-19. The amount exempted from the tax would be up to INR 10 lakhs.
This is considered to be one of the most important relief and a much needed one that is bought in by the Income Tax Department. The taxpayers have faced a lot of difficulties whenever they were hospitalized or under the treatment and the medical expenses for the Covid-19 had turned to be costlier for a lot of people.
The exemption for the amount received for the medical treatment would provide some relief for the taxpayers and their families as well. It is considered that the families who have lost a member would get benefited by providing exemptions on the ex – gratia amount received by them.
Deadline extended by the Government
The Government has extended the deadline for linking PAN cards and Aadhar cards to 30 September 2021 from 30 June 2021 as many people were facing troubles in linking the PAN with Aadhar cards. The deadline for making payment under the Vivad Se Vishwas Scheme has also been extended till 31 August 2021.
The deadline for the Tax Compliance for the deadline for saving Capital Gains tax has also been extended to 30 September 2021.
The move from the Income Tax Department of the country would help a lot of families and taxpayers to come out of the financial crisis they are currently facing due to the pandemic and this would provide a relief for them.
FAQ
What is exemption in income tax?
Tax exemption is the monetary exclusion that reduces the taxable income which include exemption of charitable organizations from property taxes and income taxes, veterans.
Who are tax exempted for Covid-19 treatment?
The government stated that tax exemption will be presented to the amount received for medical treatment from the employer or the third party for treatment of Covid-19.
What is the limit to the tax exemption provided for Covid-19?
The exemption shall be limited to Rs 10 lakh in aggregate for the amount received from any other persons for Covid-19.
The Government of India had made a number of announcements and plans in the Union Budget of 2021-22 and one of the major plans was in regards to disinvestment of privatization. In this article let’s look at the plans of the Government in regards to privatizing the banks and whether the Central Bank of India would become a Private banking organization.
The Government of India had shortlisted 4 Public sector banks in order to privatize them in the fiscal year 2021-22. The four banks on the list are Bank of Maharashtra, Bank of India, Indian Overseas Bank and Central Bank of India.
The Government of India has decided to privatize just two of these banks for now and according to certain reports NITI Aayog has decided to privatize the Central Bank of India and Indian Overseas Bank and their names were shortlisted by the organization.
The report also added that the Bank of India will also be a candidate that is potential enough for privatization. In regards to disinvestment, NITI Aayog has submitted the names of two state-run banks and one general insurer to the secretaries of the committee.
Reason Why Government is Privatizing the Banks
The Modi Government has been pushing to sell all the assets that are owned by the Government in order to cover up the expenses for the Coronavirus Pandemic and to increase the revenue of the Government as it has spent a massive amount for the recovery from the pandemic.
The announcement regarding the privatization of the banks was made during the Union Budget announcement of 2021-22. The Central Government has a target to gain around INR 1.75 lakh crore from the sale of stakes in the current fiscal.
The Central bank of India and other public sector banks will probably become a private bank as the Government has already implemented it in many other sectors and to some banks as well. The country has only 12 public sector banks as compared to 27 in the year 2017.
GDP of India
Banks Officers’ Confederation on Privatization of the Banks
The Confederation of Bank officers does not seem to be much happy with the decision made by the Central Government. The officers had even called for protests and strikes regarding the case. The strike notice had conveyed the message that the decision of the Government in order to privatize the public sector bank is totally unwarranted and added that the requirement right now is to strengthen the public sector banks.
It is found that the State Bank of India will be the only bank that would remain a public sector bank and the Government had justified this statement by saying that the bank is a strategic bank and it is responsible for the implementation of the public sector initiatives like expanding the rural credit.
The Banking unions have conveyed that the same can be done to other public sector banks. They added that certain schemes such as MUDRA and Jan Dhan Yojana have been successful due to the vigorous implementation of the public sector banks.
The unions also believed that during the pandemic they were an important part in implementing the measure in order to support the plans of the Government to provide liquidity and fiscal stimulus. Privatizing the public sector banks is like providing the money of the people to private hands with a different interest towards them.
Conclusion
The Government is also privatizing Air India, BPCL, and shipping corporations, and the process for it has already been started in the current fiscal year. The proposal regarding privatization is handled by DIPAM and the Department of Financial Services.
FAQ
Why do Governments Privatize?
Privatization generally helps governments to save money and increase efficiency, where private companies can move goods quicker and more efficiently.
What are some examples of privatization?
Public sale of shares, Public auction, Public tender and Direct negotiations are some of the example of privatization.
Which are the 2 banks that are going to be Privatized?
The Government of India had shortlisted 4 Public sector banks in order to privatize them but has decided to privatize just two of these banks for now, which are the Central Bank of India and Indian Overseas Bank and their names were shortlisted by the organization.
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Small business owners and entrepreneurs in India’s underdeveloped areas can get loans, credit, insurance, access to savings accounts, and money transfers via microfinance. Many who do not have conventional financial capital profit from microfinance.
Small Industries Development Bank of India (SIDBI) is a non-profit financial institution dedicated to assisting India’s micro, small, and medium-sized businesses in their growth and development.
As of May 2021, SIDBI is hiring IT experts, including a Chief Technology Officer.
SIDBI, which panders to the funding needs of micro, small, and medium enterprises, stated that it aims to promote and improve the flow of credit to such businesses and resolve both economic and technological gaps in the MSME ecosystem. The Small Industries Development Bank of India (SIDBI) will employ information technology professionals on a contract basis, including a chief technology officer (CTO), to improve customer service in the face of technology’s growing importance.
About Sidbi and How it Works?
The Small Industries Development Bank of India (SIDBI) is India’s apex regulatory authority for microfinance institution regulation and certification. It is governed by the Ministry of Finance of the Government of India, which is based in Lucknow and has offices around the country. SIDBI is a commercial bank established in Lucknow, Uttar Pradesh, India.
Small Industries Development Bank of India is a wholly-owned subsidiary of the Industrial Development Bank of India, which was founded under a special Act of Parliament in 1988 and went into effect on April 2, 1990. The bank provides services such as promoting, financing, and developing the micro, small, and medium-sized firm sector, as well as coordinating the functions of institutions involved in similar activities.
Its objective is to provide refinancing and short-term lending to businesses, and it is the MSME sector’s primary financial institution. SIDBI also manages the functioning of organizations that do similar tasks. The bank provides debt funding to small and medium-sized businesses in the form of loans. Beverages, meals, banking institutions, financial institutions, industrial, mechanical, and electrical parts, database software, cloud computing, E-commerce, and many more industries are served by the bank.
Through the SIDBI Foundation for Micro Credit, SIDBI is actively involved in the creation of Micro Finance Institutions and assists in the extension of microfinance through the MFI method. Its promotion and development program focuses on the promotion of rural businesses and the development of entrepreneurship.
It runs a refinance program called Institutional Finance with the aim to expand and support money supply to the MSE sector. SIDBI assists Banks, Small Finance Banks, and Non-Banking Financial Companies with Term Loans through this program. SIDBI lends directly to MSMEs, in addition to refinancing operations.
Functions of SIDBI :
The SIDBI refinances loans made to small businesses by banking institutions.
Assists in the expansion of marketing channels for Small Scale Industries’ products.
It provides small-scale businesses with services like factoring and leasing.
In semi-urban areas, promotes employment prospects in small-scale industries.
Starts the process of upgrading technology.
Allows credit to flow to Small Scale Industries as working capital or term loans.
Sidbi – Mission and Vision
SIDBI’s mission statement says “To facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system”
SIDBI’s vision statement says, “To emerge as a single window for meeting the financial and developmental needs of the MSME sector to make it strong, vibrant and globally competitive, to position SIDBI Brand as the preferred and customer – friendly institution and for enhancement of share – holder wealth and highest corporate values through modern technology platform.”
Sidbi – Name, Logo and Tagline
SIDBI stands for Small Industries Development Bank of India.
Sidbi’ s Company Logo
Sidbi – Founder and History
The Small Industries Development Bank of India (SIDBI), established on April 2, 1990, by an Act of the Indian Parliament, serves as the primary financial institution for the promotion, financing, and development of the Micro, Small, and Medium Enterprise (MSME) sector, as well as for the coordination of functions of institutions engaged in similar activities.
SIDBI’s activities have stayed committed to the national goals of poverty reduction, job creation, and entrepreneurial development in the MSME sector. The following are significant landmarks in SIDBI’s history:
Founded in 1990;
Microfinance foundation built-in 1994;
Technology bureau for small enterprise (TBSE) established in 1995, which later became India SME technology services.
SIDBI venture capital limited;
Credit guarantee fund trust for micro and small enterprises;
SMERA rating ltd.
India SME Asset Reconstruction Company Ltd., founded in 2008. (ISARC)
Setup MUDRA in 2015
2016 – Trade receivables discounting system (TReDS)
In 2017, a certified credit counselor was established (CCC)
Launch of MSME pulse and CriSidEx in 2018
Sidbi – Products and Services
SIDBI is a non-profit organization that manages and finances the different organizations involved in the development of small businesses. SIDBI runs a refinance program in which it provides term loan assistance to banks, small finance banks, and non-banking financial firms in order to sustain the money supply.
SIDBI’s 16.73 percent holding, which is the largest individual holding, is held by the State Bank of India. The following are some of SIDBI’s additional services:
Small-scale industry refinancing (SSI)
It provides aid with SSI import and export.
It offers SSI with seed cash and low-interest loans.
SIDBI assists with factoring, leasing, and HP financing, among other things.
Sidbi – Revenue and Growth
Sidbi, increased its net profit by 9% to INR 630 crore in the quarter ended December 20 from INR 578 crore the year before.
SIDBI received a liquidity support of INR 15000 crore from the Reserve Bank of India in April as a special refinance facility at the repo rate in April 2021 to deal with MSME funding during the pandemic, in addition to the government’s drive for MSME financing. From INR 816 crore in Q3’FY’20 to INR 840 crore in Q3’FY’21, the company’s net interest income increased by 3% .
“The credit growth to the MSME sector has been strong despite the impact of the COVID-19 pandemic and this has helped us to achieve encouraging financial performance with a boost to our loan book” said, V Satya Venkata Rao, deputy managing director, Sidbi. “We have also managed to keep our asset quality under check by. Our focus will be on sustaining the growth and scalability with various measures targeted towards recovery and strengthening of the MSME ecosystem.”
The top 10 competitors in SIDBI’s competitive set are moolya, LetsVenture, ah! Ventures, Startups.co, GREX Alternative Investments Market Pvt. Ltd., BitGiving, Applyifi , Equity Crest, TermSheet, Smergers, Startify, Catapooolt and Gust.
Sidbi – Awards and Achievements
From time to time, SIDBI has received a number of international prizes and honors. Several of SIDBI’s models are being copied more and more these days (i.e. MFI led inclusive growth, community linked financing model, Industry Association-BMO- led financing model, participatory development approach, cluster development – both hard infrastructure development support as also Making Market Work For MSMEs through business development service).
SIDBI was named the winner of the SABERA – Social and Business Enterprise Responsible Award 2020 in two categories: “Most Innovative Development Sector Project” and “Responsible Business of the Year.”
SIDBI’s responsive, inclusive, and impact-oriented activities for instilling entrepreneurship culture under Mission Swavalamban were recognized with this award. It also looked at creative approaches/initiatives that enhance the enterprise ecosystem and ease access to financial and non-financial services for entrepreneurs in India via digital bouquet offers.
In light of the growing role of technology, the Small Industries Development Bank of India would engage information technology specialists on a contract basis, including a chief technology officer (CTO). SIDBI, which provides funding for micro, small, and medium-sized businesses (MSMEs), stated that its goal is to improve and enhance credit flow to MSMEs while also addressing financial and developmental gaps in the MSME ecosystem.
Sidbi – FAQs
What does SIDBI do?
The bank provides services such as promoting, financing, and developing the micro, small, and medium-sized firm sector, as well as coordinating the functions of institutions involved in similar activities.
When was SIDBI founded?
The Small Industries Development Bank of India (SIDBI) was established on April 2, 1990.
What are the objectives of SIDBI?
To boost the marketing of small-scale industry products. Upgrade technologies while also doing small-scale unit upgrading. To provide additional financial help to the ancillary and smaller industry on a small scale. To promote sectors that provide jobs.
What companies do SIDBI compete with?
The top 10 competitors in SIDBI’s competitive set are moolya, LetsVenture, ah! Ventures, Startups.co, GREX Alternative Investments Market Pvt. Ltd., BitGiving, Applyifi , Equity Crest, TermSheet, Smergers, Startify, Catapooolt and Gust.
Indian Government is planning to introduce a new bill that will ban all the private cryptocurrencies in the country. The government has plans to ban cryptocurrencies such as bitcoin and Ethereum and to introduce a national cryptocurrency. The new bill is planned to be introduced in the lower house of the parliament.
This bill is not considered to be the first time the Indian Government has been against the purchase of digital assets in the country. In the year 2018, the Indian government panel had proposed to ban all the cryptocurrencies in the country and had suggested that the offenders would be put in jail for a period of 10 years.
In the same year, the finance minister Arun Jaitley had said that The Government of India doesn’t consider the cryptocurrencies legal. He said that it is not considered as a digital asset or a payment method and that the Government would take all legal actions to stop the use of these digital coins for payment activities. The government had stated that it was not approved by them and it was illegal.
The monetary regulator of the country had later banned the use of cryptocurrencies in the year 2018. The ban was after the reporting of a number of fraudulent activities related to cryptocurrencies. However, the ban was later removed by the Supreme Court of India in March 2020.
There has been a lot of anxiety and fear across the country regarding the ban of cryptocurrencies. It is said that there are around 75 Lakh Cryptocurrency owners in the country. Their holdings have a worth of up to $1 billion.
One of the other major reasons for the ban of cryptocurrencies in the country is because of the Aadhar card. It is said that the ban of cryptocurrencies would have been already put in action several years ago by the Government without any intention.
The unintentional ban is supposed to be when the government introduced the Jan Dhan-Aadhar-Mobile trinity during the rule of the Modi Government in India. Aadhar was a huge project undertaken by the country which required the citizens of India to register into the financial system of the country by using a unique identification number. The Government wanted to use that network to directly send subsidies.
Brent Johnson who is the Chief executive of the San Francisco Santiago Capital which is U.S based company has said that Aadhar could be the reason for the Government to introduce the new bill in the country. Because the Aadhar card was a project to ensure that all the citizens had an account with the government, their ID’s and payments.
As of March 2020, the unique identification authority has issued over 122 crore Aadhar cards in the country which covers up to 90% of the Indian population. Out of 110 crore bank accounts in the country around 96 crore accounts have been linked to Aadhar cards according to UIDAI.
Brent Johnson also added that, if the mobile network connection is taken into consideration regarding the Aadhar card it would seem like it is safe for the Government of India to create a network to issue of its own cryptocurrency in the country which would be accessible to everyone.
Cryptocurrency and Regulation of Official Digital Currency Bill
The bill that will be introduced is called as “Cryptocurrency and Regulation of Official Digital Currency Bill”. The main intention of the bill would be to create an easy way to provide support to the new digital currency introduced by the Reserve Bank of India.
The bill also concentrates on banning all the private cryptocurrencies in India. The ban will also improve the chances to increase the demand of the National Currency issued by the Government of India.
It is considered that there will be certain exceptions because the Government of India would require the underlying technology of the bill which is the blockchain technology.
Brent Johnson said that the government would most probably want to use the advantage of Aadhar cards to issue its own cryptocurrency and would want to avoid competitions.
e-Kuber
The recent move of the Reserve bank of India which allowed the retail investors of the country to register with e-kuber. It helps the retail investors to open an account with the portal which helps in purchasing government bonds in primary and secondary markets.
This new portal has raised a curiosity amongst the people in the country. The market participants feel that this would be the portal for issuing the National Digital currency in the country.
FAQ
In Which countries Bitcoin is illegal?
Inspite of its rising popularity, cryptocurrencies are illegal in these countries. Saudi Arabia, Algeria, Bolivia Algeria, Ecuador, Bangladesh, Nepal, Macedonia.
Who is the richest Bitcoin owner?
Satoshi Nakamoto, the founder of Bitcoin, rumored to own around 1 million Bitcoins.
How safe is Cryptocurrency?
Cryptocurrency is considered as one of the riskiest digital currency.
Conclusion
The Deputy Governor of RBI, BP Kanungo has told that an internal part of the Reserve Bank of India is working on the model for the cryptocurrency and that RBI would soon give more information regarding it. If they don’t ban cryptocurrency, many investors might get a new revenue stream and most of the youth will invest in it. However, the government has experts who knows better than us. Hence, we must respect whatever decision they take.
Jeenal Jain
