title insurance

IRDAI has vide its circular dated 8th September, 2021 recommended to general insurance companies to consider providing title insurance policies to real estate developers and promoters and also home buyers to mitigate the loss, if any due to bad or defective title to the property.

https://irdai.gov.in/ADMINCMS/cms/Circulars_Layout.aspx?page=PageNo4558

Title insurance is a form of indemnity insurance that protects a potential owner of a property against financial loss from defects in title to real property. The policy is a retrospective one where the insured is protected against losses arising from the events that occurred prior to the date of issuing the policy.

2.    There are a few Title Insurance products in the Indian marketcurrently. However, considering the requirements of legal protection for promotors in the early stages of development of the project during financial appraisal, registration and approval with RERA authorities and safeguarding the interests of individual buyers after taking over the physical possession of property, there is aneed to expand the current title insurance products suitable to promotors/ developers and retail property buyers.

3.    In order to ensure that the general insurers offer basic Title Insurance covers for legal liabilities of promotors/developers in case of any loss caused to allottees duetodefective title of the property, protection for individual buyers for the purchased units in projects and to facilitate easy marketability of these products, the Authority had constituted a Working Group to suggest, inter alia, product construct and policy wording for two new products in addition to the existing products.

4.    Accordingly, the Working Group hassuggested product structure, coverage and policy wordings for the following products.

(a)  Promoter Legal Expenses (Defence Cost) Policy: This cover will indemnify the insured against legal defence costs only against suits challenging the Title of the project.

(b)  Allottee/Individual Buyer Retail Policy: This cover is designed to indemnify the insured against loss from a defect on title of property. The policy may be opted by the individual buyer and financiers of the property at the time of the possession.

The policy wordings developed by the Working Group for the above products are given in the Annexure.

5.    The main objectives of new Title Insurance products are to provide cover to;

(a)  promoters/developers, preferring to optfor a minimum legal defence cost;

(b)  end usersi.e., allottees/individual buyers/financiersat the time of possession/handing over of the property unit for protection against any legal suits in future.

6.    All general insurers are, therefore,encouraged to file these products as per the procedure required under the extant product filling guidelines. The insurers may also design and filesimilar products, keeping in view the minimum coverage as specified in the given policy wording. The filing of the said product/s may be carried out at the earliest to respond to the requirements ofpromoters/developers and retail property buyers.

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carry forward loss – PSU disinvestment

CBDT clarification on the issue of carry forward loss in case of strategic disinvestment of a public sector undertaking. Read

https://pib.gov.in/PressReleasePage.aspx?PRID=1753960

Finance Act, 2021 has amended section 72A of the Income-tax Act, 1961 (the Act) to inter alia provide that in case of an amalgamation of a public sector company (PSU) which ceases to be a PSU (erstwhile public sector company), as part of strategic disinvestment, with one or more company or companies, then, subject to the conditions laid therein, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss, or as the case may be, allowance for unabsorbed depreciation of the amalgamated company for the previous year in which the amalgamation was effected.

In order to facilitate the strategic disinvestment, it has been decided that Section 79 of the Income-tax Act, 1961, shall not apply to an erstwhile public sector company which has become so as a result of strategic disinvestment. Accordingly, loss incurred in any previous year prior to, and including, the previous year of strategic disinvestment shall be carried forward and set off by the erstwhile public sector company. The above relaxation shall cease to apply from the previous year in which the company, that was the ultimate holding company of such erstwhile public sector company immediately after completion of the strategic disinvestment, ceases to hold, directly or through its subsidiary or subsidiaries, fifty-one per cent of the voting power of the erstwhile public sector company.

The term “erstwhile public sector company” and “strategic disinvestment” shall have the meaning in Explanation to clause (d) of sub-section (1) of Section 72A of the Income-tax Act, 1961.

Necessary legislative amendments for the above decision shall be proposed in due course of time.

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4.50 kms

4.50 kms in dry, airless, humid weather in Bombay. Running is a form meditation. It works.

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The Vulture is a Patient Bird

Another one of those fast moving thrillers from James Hadley Chase, my favorite author of all time and my go to author when i am bored of other books.

He writes of a fixer/ arranger Shalik’s quest for recovering a 400 year old Cesar Borgia diamond encrusted ring which has poison embedded into it, for a client. He arranges four people to do the job to recover the same from the estate of Kahlenburg, an invalid South African magnate owning a vast house and an underground museum somewhere off Johannesburg. He is surrounded by Zulu warriors who move silently and stealthily at night and are accurate with their weapons.

Garry is recruited along with Ken and Fennel, the last one for his expertise in picking any lock in the world. He brings in a beautiful, sensational model Gaye who is the poison pill to take apart Kahlenburg.

How they reach his estate and how they escape forms the rest of the book, which in typical Chase fashion is fast paced and thrilling, to say the least. James Hadley Chase does’nt disappoint with this one. Goodreads 5/5

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income tax filing dates extension

https://pib.gov.in/PressReleasePage.aspx?PRID=1753603

On consideration of difficulties reported by the taxpayers and other stakeholders in filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22 under the Income-tax Act, 1961(the “Act”), Central Board of Direct Taxes (CBDT) has decided to further extend the due dates for filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22. The details are as under:

  1. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which was 31st July, 2021 under sub-section (1) of section 139 of the Act, as extended to 30th September, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 31st December, 2021;
  2. The due date of furnishing of Report of Audit under any provision of the Act for the Previous Year 2020-21, which is 30th September, 2021, as extended to 31st October, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 15th January, 2022;
  3. The due date of furnishing Report from an Accountant by persons entering into international transaction or specified domestic transaction under section 92E of the Act for the Previous Year 2020-21, which is 31st October, 2021, as extended to 30th November, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 31st January, 2022;
  4. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 31st October, 2021 under sub-section (1) of section 139 of the Act, as extended to 30th November, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 15th February, 2022;
  5. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 30th November, 2021 under sub-section (1) of section 139 of the Act, as extended to 31st December, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 28th February, 2022;
  6. The due date of furnishing of belated/revised Return of Income for the Assessment Year 2021-22, which is 31st December, 2021 under sub-section (4)/sub-section (5) of section 139 of the Act, as extended to 31st January, 2022, vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 31st March, 2022;

It is also clarified that the extension of the dates as referred to in clauses (9), (12) and (13) of Circular No.9/2021 dated 20.05.2021 and in clauses (1), (4) and (5) above shall not apply to Explanation 1 to section 234A of the Act, in cases where the amount of tax on the total income as reduced by the amount as specified in clauses (i) to (vi) of sub-section (1) of that section exceeds rupees one lakh. Further, in case of an individual resident in India referred to in sub-section (2) of section 207 of the Act, the tax paid by him under section 140A of the Act within the due date (without extension under Circular No.9/2021 dated 20.05.2021 and as above) provided in that Act, shall be deemed to be the advance tax.

CBDT Circular No.17/2021 in F.No.225/49/2021/ITA-II dated 09.09.2021 issued. The said Circular is available on http://www.incometaxindia.gov.in.

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participation in financial products linked to rupee

IFSCA has vide its circular dated 25th August, 2021 clarified that branches of Indian banks and branches of other financial institutions that are set up in IFSC Gift City are allowed to offer financial products linked to the Indian rupee. As per the RBI definition, these units are classified as “overseas entity”.

https://ifsca.gov.in/Viewer/Index/223

Copy of circular can be accessed here.

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revocation of cancellation of regn – GST

update from GST portal

In view of the notification 34/2021 -Central dated 29th Aug 2021, where the due date of filing of application for revocation of cancellation of registration falls between 1st March, 2020 to 31st August, 2021, the time limit for filing of application for revocation of cancellation of registration is extended to 30th September, 2021.

The benefit of said notification is extended to all the cases where cancellation of registration has been done under clause (b) or clause (c) of sub-section (2) of section 29 of the CGST Act, 2017 and where the due date of filing of application for revocation of cancellation of registration falls between 1st March, 2020 to 31st August, 2021.

It is further clarified that the benefit of notification would be applicable in those cases also where the application for revocation of cancellation of registration is either pending with the proper officer or has already been rejected by the proper officer.

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production linked incentive – for textiles

https://pib.gov.in/PressReleasePage.aspx?PRID=1753118

Taking steps forward towards the vision of an ‘Aatmanirbhar Bharat’, Government led by Hon’ble Prime Minister, Shri Narendra Modi, has approved the PLI Scheme for Textiles for MMF Apparel, MMF Fabrics and 10 segments/ products of Technical Textiles with a budgetary outlay of Rs. 10,683 crore. PLI for Textiles along with RoSCTL, RoDTEP and other measures of Government in sector e.g. providing raw material at competitive prices, skill development etc will herald a new age in textiles manufacturing.

PLI scheme for Textiles is part of the overall announcement of PLI Schemes for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of Rs. 1.97 lakh crore. With the announcement of PLI Schemes for 13 sectors, minimum production in India is expected to be around Rs. 37.5 lakh crore over 5 years and minimum expected employment over 5 years is nearly 1 crore.

PLI scheme for Textiles will promote production of high value MMF Fabric, Garments and Technical Textiles in country. The incentive structure has been so formulated that industry will be encouraged to invest in fresh capacities in these segments. This will give a major push to growing high value MMF segment which will complement the efforts of cotton and other natural fibre-based textiles industry in generating new opportunities for employment and trade, resultantly helping India regain its historical dominant status in global textiles trade.

The Technical Textiles segment is a new age textile, whose application in several sectors of economy, including infrastructure, water, health and hygiene, defense, security, automobiles, aviation, etc. will improve the efficiencies in those sectors of economy. Government has also launched a National Technical Textiles Mission in the past for promoting R&D efforts in that sector. PLI will help further, in attracting investment in this segment.

There are two types of investment possible with different set of incentive structure. Any person, (which includes firm / company) willing to invest minimum ₹300 Crore in Plant, Machinery, Equipment and Civil Works (excluding land and administrative building cost) to produce products of Notified lines (MMF Fabrics, Garment) and products of Technical Textiles, shall be eligible to apply for participation in first part of the scheme. In the second part any person, (which includes firm / company) willing to invest minimum ₹100 Crore shall be eligible to apply for participation in this part of the scheme. In addition, priority will be given for investment in Aspirational Districts, Tier 3, Tier 4 towns, and rural areas and due to this priority Industry will be incentivized to move to backward area. This scheme will positively impact especially States like Gujarat, UP, Maharashtra, Tamilnadu, Punjab, AP, Telangana, Odisha etc.

It is estimated that over the period of five years, the PLI Scheme for Textiles will lead to fresh investment of more than Rs.19,000 crore, cumulative turnover of over Rs.3 lakh crore will be achieved under this scheme and, will create additional employment opportunities of more than 7.5 lakh jobs in this sector and several lakhs more for supporting activities. The textiles industry predominantly employs women, therefore, the scheme will empower women and increase their participation in formal economy.

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8.53 kms

8.53 kms in humid weather in Bombay. Have a great day folks.

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The Oldest Son

Beautiful Korean movie “The Oldest Son” (1984) starring Shin Sheong-Il, Tae-Hyun-Sil, Kim Il-hae and directed by Lee Doo-young.

Its a moving family movie around the love between parents and their children, and the responsibilities of the oldest son towards his parents and his family members.

The eldest son is the ideal one, studied well, and working in a top position in a company, with a family to boot including a perennially nagging wife who is always complaining about this and that. There is another son who is a do nothing sort of person and a third son who is quite young and dating a waitress.

The parents are forced to live in Seoul because their ancestral home has been washed away in the floods, so they are like forced to stay in one of the children houses. There is always the family tension, expenses, wife beating, children crying etc. to deal with.

The story is somewhat similar to the Tokyo Story made in 1954, which was an iconic film. The ending is quite beautiful and poignant. Makes one feel for the love between parents and children, its quite beautifully shown.

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penalty on Axis Bank

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=52161

The Reserve Bank of India (RBI) has imposed, by an order dated September 01, 2021, a monetary penalty of ₹25 lakh (Rupees Twenty five lakh only) on Axis Bank Limited (the bank) for contravention of/non-compliance with certain provisions of directions issued by RBI contained in the Reserve Bank of India – (Know Your Customer (KYC)) Direction, 2016. The penalty has been imposed in exercise of powers vested in RBI under provisions of section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949 (the Act).

This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Background

A scrutiny was carried out by RBI during February 2020 and March 2020 in a customer account maintained with the bank and it was observed that the bank had failed to comply with the aforesaid directions issued by RBI, ie., the bank failed to monitor/carry out on-going due diligence in the said account to ensure that the transactions were consistent with its knowledge about the customer, customer’s business and risk profile. In furtherance to the same, a notice was issued to the bank advising it to show cause why penalty should not be imposed on it for contravention of the said directions, as stated therein.

After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of contravention of/non-compliance with the aforesaid RBI directions were substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with the aforesaid direction.

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penalty on Bombay Mercantile

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=52170

The Reserve Bank of India (RBI) has, by an order dated September 02, 2021, imposed a monetary penalty of ₹50 lakh (Rupees fifty lakh only) on Bombay Mercantile Co-operative Bank Ltd., Mumbai (the bank) for non-compliance with directions issued by RBI contained in in the Reserve Bank of India (Co-operative Banks – Interest Rate on Deposits) Directions, 2016 and specific directions dated March 05, 2018 and April 11, 2018 issued by RBI under the Supervisory Action Framework (SAF). This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions issued by RBI.

This action is based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Background

The statutory inspection of the bank conducted by the RBI with reference to the bank’s financial position as on March 31, 2019, the Inspection Report pertaining thereto, and examination of all related correspondence revealed, inter alia, that the bank had offered Interest rates on NRE deposits higher than those offered by it on comparable domestic rupee term deposits and had sanctioned unsecured advances, resulting in non-compliance with aforesaid directions issued by RBI. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of the directions issued by RBI.

After considering the bank’s reply to the notice and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.

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incentives to enhance distribution of coins

Review of incentive and other measures to enhance distribution of coins

Please refer to our Master Direction DCM (CC) No.G-2/03.41.01/2021-22 dated April 01, 2021 on “Currency Distribution & Exchange Scheme (CDES)” for bank branches including currency chests which inter alia, provides for financial incentives of ₹25 per bag to banks for distribution of coins over the counter.

2. Keeping in view the overall objectives of Clean Note policy and to ensure that all bank branches provide better customer service to members of public with regard to exchange of notes and distribution of coins, the afore-said Scheme has since been reviewed and it has now been decided to revise the incentive being paid to the banks for distribution of coins with a major thrust on alternate avenues so as to extend the outreach. Accordingly, paragraph 2 (Incentives) Sl.No. (iii) stands revised as follows:

a) Revised scheme of incentive for distribution of coins

(i) With effect from September 01, 2021, an incentive of ₹65/- per bag for distribution of coins (instead of ₹25/- as earlier) will be paid on the basis of net withdrawal from currency chest (CCs), without waiting for claims from banks. Currency chest branch will have to pass on the incentive to the linked bank/branches for coins distributed by them on a pro-rata basis within one week from the receipt of incentives from RBI.

(ii) An additional incentive of ₹10/- per bag would be paid for coin distribution in rural and semi-urban areas on the submission of a CA / Auditor certificate to this effect.

(iii) The distribution of coins shall also be verified by RBI Regional Offices during inspection of currency chest/incognito visit to branches etc.

b) Banks to provide coins to bulk customers

Further, in terms of Paragraph 2, Sl. No. (iii) (iii) of circular ibid, banks were instructed to put in place a system of checks and balances so as to ensure that coins are distributed to retail customers in small lots and not to bulk customers.

On a review, with a view to meet the coin requirements of bulk customers (requirement of more than 1 bag in a single transaction) banks are advised to provide coins to such customers purely for business transactions. The banks may also endeavour to provide such services as part of their Board approved policy on ‘Door Step Banking’ services. Such customers should be KYC compliant constituents of the bank and the record of coins supplied should be maintained. Banks are advised to exercise due diligence to ensure that such facility is not misused.

Disbursement of coins to retail customers through counters of bank branches shall continue as hitherto.

c) Engaging Business Correspondents (BCs) for distribution of coins

Attention is invited to circulars DBOD.No.BAPD.BC.46/22.01.009/2013-14 dated September 2, 2013 and DCM (Plg) No. G 12 /10.65.03/2013-14 dated September 10, 2013, permitting banks to include distribution of coins and banknotes in the scope of activities undertaken by BCs and explore the possibility of enlisting their service for carrying out various currency management functions while addressing the last mile connectivity issues.

In this context, it is reiterated that banks should enhance the engagement of their BCs for distribution of coins to public and may also incentivise such activities as per their Board approved policy.

To ensure steady supply of coins to bulk customers and BCs for onward distribution, all banks may ensure that each of their branches maintains a minimum stock of one bag of coins in each denomination.

d) Engaging Cash in Transit (CIT) entities for distribution of coins

Attention is also invited to circular DCM (Plg) No. G – 14/10.65.03/2013-14 dated October 10, 2013 on Monetary Policy Statement for 2013-14 – Distribution of Banknotes and Coins – Alternative Avenues wherein banks were advised to explore the possibility of engaging the services of CIT entities for the purpose of distribution of banknotes and coins. It is reiterated that banks may engage CIT entities to further enhance distribution of coins to public.

3. Implementation of coin distribution measures may be commented upon by officers deputed to undertake bi-monthly and half-yearly verification as a part of internal control and supervision by the currency chest maintaining bank.

4. Senior Officers of banks on visits to currency chests and branches may be advised to specifically comment on the implementation of the above measures in their visit reports.

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tokenisation – enhancements

We invite reference to our circular DPSS.CO.PD No.1463/02.14.003/2018-19 dated January 8, 2019 on “Tokenisation – Card transactions”, permitting authorised card networks to offer card tokenisation services subject to the conditions listed therein. Initially limited to mobile phones and tablets, this facility was subsequently extended to laptops, desktops, wearables (wrist watches, bands, etc.), Internet of Things (IoT) devices, etc., vide our circular CO.DPSS.POLC.No.S-469/02-14-003/2021-22 dated August 25, 2021 on “Tokenisation – Card Transactions : Extending the Scope of Permitted Devices”.

2. Reference is also invited to our circulars DPSS.CO.PD.No.1810/02.14.008/2019-20 dated March 17, 2020 (as updated from time to time) and CO.DPSS.POLC.No.S33/02-14-008/2020-2021 dated March 31, 2021 on “Guidelines on Regulation of Payment Aggregators and Payment Gateways”, advising that neither the authorised Payment Aggregators (PAs) nor the merchants on-boarded by them shall store customer card credentials [also known as Card-on-File (CoF)].

3. On a review of the tokenisation framework and to enable cardholders to benefit from the security of tokenised card transactions as also the convenience of CoF, it has been decided to effect the following enhancements –

  1. Extend the device-based tokenisation1 framework referred to at paragraph 1 above to CoF Tokenisation (CoFT) as well.
  2. Permit card issuers to offer card tokenisation services as Token Service Providers2 (TSPs).
  3. The facility of tokenisation shall be offered by the TSPs only for the cards issued by / affiliated to them.
  4. The ability to tokenise3 and de-tokenise card data shall be with the same TSP.
  5. Tokenisation of card data shall be done with explicit customer consent requiring Additional Factor of Authentication (AFA) validation by card issuer.
  6. Additional requirements relating to CoFT are listed in the Annex.

4. Further, in the interest of cIarity, the following points may be noted –

  1. With effect from January 1, 2022, no entity in the card transaction / payment chain, other than the card issuers and / or card networks, shall store the actual card data. Any such data stored previously shall be purged.
  2. For transaction tracking and / or reconciliation purposes, entities can store limited data – last four digits of actual card number and card issuer’s name – in compliance with the applicable standards.
  3. Complete and ongoing compliance with the above by all entities involved, shall be the responsibility of the card networks.

5. This directive is issued under Section 10 (2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007).

Annex

(CO.DPSS.POLC.No.S-516/02-14-003/2021-22 dated September 07, 2021)

Conditions to be fulfilled for offering CoFT services

1. For the purpose of CoFT, the token shall be unique for a combination of card, token requestor and merchant4.

2. If card payment for a purchase transaction at a merchant is being performed along with the registration for CoFT, then AFA validation may be combined.

3. The merchant shall give an option to the cardholder to de-register the token. Further, a token requestor having direct relationship with the cardholder shall list the merchants in respect of whom the CoFT has been opted through it by the cardholder; and provide an option to de-register any such token.

4. A facility shall also be given by the card issuer to the cardholder to view the list of merchants in respect of whom the CoFT has been opted by her / him, and to de-register any such token. This facility shall be provided through one or more of the following channels – mobile application, internet banking, Interactive Voice Response (IVR) or at branches / offices.

5. Whenever a card is renewed or replaced, the card issuer shall seek explicit consent of the cardholder for linking it with the merchants with whom (s)he had earlier registered the card.

6. The TSP shall put in place a mechanism to ensure that the transaction request has originated from the merchant and the token requestor with whom the token is associated.

7. All other provisions of the RBI circulars dated January 8, 2019 and August 25, 2021 shall be applicable.

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