Press Release-Ten State Governments announce Auction of State Development Loans 2022 for 11,067 crore on March 6,2012

The following Ten State Governments have announced the sale of their 10-year State Development Loans (SDLs) for an aggregate amount of ` 11,067.000 crore (face value) through yield based auction using multiple price auction method.

Sr. No.	State	Notified Amount (` Crore)
1	Andhra Pradesh	1000.00
2	Bihar	500.00
3	Gujarat	1500.00
4	Jammu & Kashmir	200.00
5	Haryana	500.00
6	Karnataka	1500.00
7	Madhya Pradesh	1500.00
8	Maharashtra	2500.00
9	Punjab	567.00
10	Tamil Nadu	1300.00
	Total	11067.00

The auction will be conducted by the Reserve Bank of India (RBI) at Mumbai on March 6, 2012 (Tuesday). The Government Stock upto 10 per cent of the notified amount of the sale of each of the stock will be allotted to eligible individuals and institutions subject to a maximum limit of one per cent of its notified amount for a single bid per stock as per the Scheme for Non-competitive Bidding Facility (available in RBI website).

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Negotiated Dealing System (NDS) on March 6, 2012 (Tuesday). The non-competitive bids should be submitted between 10.30 A.M. and 11.30 A.M. and the competitive bids should be submitted between 10.30 A.M. and 12.30 P.M.

The yield percent per annum expected by the bidder should be expressed upto two decimal points. An investor can submit more than one competitive bid at different prices in electronic format on the NDS. However, the aggregate amount of bids submitted by a bidder should not exceed the notified amount for each State.

The Reserve Bank of India will determine the maximum yield at which bids will be accepted. Securities will be issued for a minimum nominal amount of ` 10,000.00 and multiples of ` 10,000.00 thereafter.

The results of the auction will be announced on March 6, 2012 (Tuesday) and payment by successful bidders will be made during banking hours on March 7, 2012 (Wednesday) at Mumbai and at respective Regional Offices of RBI.

The State Government Stocks will bear interest at the rates determined by RBI at the auctions. Interest will be paid half yearly on September 7 and March 7 of each year till maturity. The Stocks will be governed by the provisions of the Government Securities Act, 2006 and Government Securities Regulations, 2007.

The investment in State Government Stocks will be reckoned as an eligible investment in Government Securities by banks for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. The stocks will qualify for the ready forward facility.

Ajit PrasadAssistant General Manager

Press Release : 2011-2012/1409

Convention on Mutual Administrative Assistance in Tax Matters, Press Release

No.402/92/2006-MC (4 of 2012)

Government of India / Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

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New Delhi, 27^th January, 2012

PRESS RELEASE

Signing of Convention on Mutual Administrative Assistance in tax matters as amended by the 2010 Protocol by India.

On 26^th January, 2012, Indiahas signed a Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The Convention was signed by Shri Sanjay Kumar Mishra, Joint Secretary, Foreign Tax & Tax Research Division, Department of Revenue, Ministry of Finance, Government of India in the presence of Deputy Secretary-General of OECD Mr. RintaroTamaki. This instrument hitherto available for the members of OECD and council of Europewas amended in 2010 and open for all countries in June 2011. The Convention was amended to respond to the 2009G20 Summit call for developing a broader multilateral approach to improve the effectiveness of exchange of information, co-operation between the countries in the assessment and collection of taxes, with a view to combating tax avoidance and evasion.

Present signatories to the amended convention are: Argentina, Australia, Belgium, Brazil, Canada, Denmark, Finland, France, Georgia, Germany, Iceland, India, Indonesia, Ireland, Italy, Japan, Korea, Mexico, Moldova, Netherlands, Norway, Poland, Portugal, Russia, Slovenia, South Africa, Spain, Sweden, Turkey, Ukraine, the United Kingdom, and the United States.

By signing the Convention, India and the other 31 signatories encourage more countries to join, sending a strong signal that countries are acting together to ensure that individuals and multinational enterprises pay the right amount of tax, at the right time and in the right place.Manymore countries are expected to signing the Convention in future. This provides for a wider network of countries co-operating in Exchange of Information, Assistance in Tax Collection etc. Out of the 31 signatories, 12 of them have ratified the convention so far.

           

Salient features of this multilateral convention are

-         It is based on international standard of transparency and exchange of information.

-         This instrument is multilateral and a single legal basis for multi-country co-operation as against the DTAAs/TIEAs which are bilateral. It provides for an extensive network and there will be consistent application of provisions leaving limited scope for deviation.

-         It provides extensive forms of co-operation among the signatories on all taxes.

-         It not only facilitates the exchange of information, but also provides for assistance in the recovery of taxes. This will give a fillip to the efforts of the Government in bringing the Indian money illegally stashed abroad.

-         It provides for simultaneous tax examinations and participation in tax examinations in other countries.This provides for examination of tax affairs of the taxpayers simultaneously in their own territory and share the relevant information to each other. This allowstax officials to entering into the territory of the other country to interview individuals and examine records.

-         The convention explicitly provides for Automatic Exchange of information and Spontaneous Exchange of information.

-         It provides for service of documents in other country.

-         The Convention allows Exchange of past information in criminal tax matters.

-         The information received under the Convention can also be used for other purposes besides those related to tax co-operation, for example to counter money laundering with the approval of the supplying state.

AnujaSarangi

CIT (MC)

CBDT

Interest Rates increased on Small Savings Instruments

Under decision on the recommendations of the committee for comprehensive review of National Small Savings Fund (NSSF) dated 11th November, 2011, interest rates on small savings instruments have been changed.   This change has been done after a gap of long time.  Some highlights of the decision is given as under :-

1. Interest on Post Office Saving Account (POSA) will be increased from 3.50% to 4.00% p.a. 
2. Bonus @ 5% on Monthly Income Scheme (MIS) will be discontinued
3. Interest on savings schemes will be aligned with G-Sec rates of similar maturity with a spread of 25 basis points (BPS) with two exceptions.  The spread on 10 year NSC (new instrument) will be 50 bps and on senior citizens Saving Scheme 100 bps.   The interest rates for every financial year will be notified before 1st April of that year. 
4. Assuming the date of implementation of the recommendations of the committee as 1st December, 2011.

COMPARATIVE INTEREST RATES OF SMALL SAVING SCHEMES

Serial No.	Instruments	Current  Rate (%)	Proposed Rate (%)
1	Saving Deposit	3.50	4.00
2	1 Year Time Deposit	6.25	7.70
3	2 Year Time Deposit	6.50	7.80
4	3 Year Time Deposit	7.25	8.00
5	5 Year Time Deposit	7.50	8.30
6	5 Year Recurring Deposit	7.50	8.00
7	5 Year SCSS	9.00	9.00
8	5 Year MIS	8.00 (6 Year MIS)	8.20
9	5 Year NSC	8.00 (6 Year NSC)	8.40
10	10 Year NSC	New Instrument	8.70
11	PPF	8.00	8.60

Download the Detailed Press Release for More Clarity.  (Online View)

Streamlining of Scrutiny Selection Procedure

CBDT has reviewed scrutiny selection procedure for the Financial Year 2011-12 to scrutiny where the Income Tax Department is in possession of credible information.  Press release dated 14th March 2011 is given as under :- 

No.402/92/2006-MC (07 of 2011) 

Government of India / Ministry of Finance 

Department of Revenue 

Central Board of Direct Taxes 

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New Delhi dated the 14th March 2011 

PRESS RELEASE 

          Streamlining procedure for scrutiny of income-tax returns Scrutiny of income tax returns is an important mechanism for ensuring taxpayer compliance and to counter tax-evasion. However, it has evoked some concern from small taxpayers and senior citizens about prolonged enquiries. Concerns have also been raised about selection of the same cases in scrutiny year after year. 

        Appreciating the concern of these taxpayers and with a view to mitigate their hardships, Central Board of Direct Taxes has reviewed its scrutiny selection procedure. In order to redress the grievance, it has been decided that during the financial year 2011-12, cases of senior citizens and small taxpayers, filing income-tax returns in ITR-1 and ITR-2 will be subjected to scrutiny only where the Income Tax department is in possession of credible information. 

        Senior citizens for this purpose would be individual taxpayers who are 60 years of age or more. Small taxpayers would be individual and HUF taxpayers whose gross total income, before availing deductions under Chapter VIA, does not exceed Rupees ten lakh. 

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