HENCY R SHAH AND ASSOCIATES

Consequences of an Inoperative PAN: Financial Transactions You Can't Do Without PAN-Aadhaar Linkage  The government introduced the Permanent Account Number (PAN) to make it easier to access taxpayer information and match it with their investments, loans, and business activities. This helps detect and prevent tax evasion and broaden the tax base. According to the Income Tax Act of 1961, it became mandatory to link Aadhaar number with PAN by June 30, 2023. Failing to do so would render PAN inactive from July 1, 2023. If PAN is not linked with Aadhaar, it can create difficulties in certain transactions. For example, routine banking transactions such as depositing more than Rs. 50,000 in a bank account, paying insurance premiums exceeding Rs. 50,000, or applying for credit/debit cards may be affected. Senior citizens (except those aged 80 years or more) who haven't linked PAN with Aadhaar may also face consequences. However, residents of Assam, Jammu and Kashmir, Meghalaya, non-res...

RBI puts on hold NUE licensing RBI is said to have put on hold licensing of the New Umbrella Entity (NUE) network, a fintech institution planned as a rival to the National Payments Corporation of India (NPCI). Six Groupings, which included Facebook, Google, Amazon, Flipkart, and others, had applied for NUE licenses. RBI will not grant permission to any of the six consortiums to commence business as all of them have fallen short of the RBI's expectations. It looks like none of the applicants have proposed anything novel or a great technology breakthrough that would have made RBI look over it, almost all of the plans were similar to that of the NPCI, which did not enthuse the RBI. NPCI, established by the RBI and banks, runs the Unified Payments Interface (UPI) and other payment systems. NUEs were supposed to set up and operate a new retail digital payment system and manage clearing and settlement systems that could be an alternative to the bank-promoted NPCI. The applica...

₹ to use as foreign trade currency   Use of rupee in foreign trade:  In order to facilitate international trade, Sri Lanka has agreed to utilize ₹. It occurs shortly after the Indian government announced it was looking into ways to include nations who are particularly short on dollars in the Indian rupee trade settlement process. Notably, the Indian government has been attempting to entice nations with dollar shortages to use its rupee settlement system since July of this year. The Indian rupee trade settlement system allows for the use of the Indian rupee in place of dollars and other major currencies in all international transactions. The RBI announced the creation of a system to conduct foreign trade in Indian rupees on July 11. While the market determines the exchange rate between the trading partners, the method will allow all exports and imports to be denominated and billed in Indian rupees. In order to educate stakeholders on the rupee trade, the Indian Fina...

Digital Rupee is the future of money Almost nine months after the Finance Minister, Nirmala Sitharaman first spoke about the digital currency in parliament, the digital rupee was launched in India. The pilot project launched by the RBI is for wholesale transactions in the bond market. The retail phase for the customers, however, will be launched sometime later. Digital Rupee or CBDC is a new digital form of money issued by central banks. The digital rupee rollout is a big step ahead in India’s digital transformation. It will be an excellent opportunity for India since it will potentially increase the ease of doing business, as well as improve resilience and security of the entire payments infrastructure. The Reserve Bank of India (RBI) has announced that the first pilot in Digital Rupee - Retail segment is planned for launch within a month in select locations. The central bank said that nine banks -- State Bank of India (SBI), Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank,...

  Tokenization of debit and credit cards The RBI has directed payment aggregators, wallets, and online merchants (other than card issuers/card networks) not to store any sensitive card-related customer information, including full card details. As a result, the card numbers can be replaced with a ‘token’. The RBI mandate would take effect on October 1, 2022. According to the RBI, this development will make card transactions more secure.     What is Tokenization? Tokenization is the process of replacing a card’s 16-digit number on the plastic card with a unique alternate card number, or ‘Token’ which shall be unique for a combination of card, token requestor, and device. Tokens can be used for online transactions, mobile point-of-sale transactions, or in-app transactions. This token contains no personal information that can be directly accessed and keeps changing making it the most secure method to complete payments. Here’s how to generate your token The...

 Festival Sale: Trend or Trap? The festive season is almost here, and with this, it brings festive sales. E-commerce giants have announced Festival sale, one of the biggest annual sales that the company hosts each year. They are offering discounts, exchange offers, no-cost EMI options and more across a wide range of products. Sale results in impulsive buying. In addition, GenZ consumers, young millennials, and first-time credit borrowers, who are typically overlooked or underserved by traditional banks, choose Buy Now Pay Later since it is so easy to acquire credit but BNPL service must be used with precautions otherwise it will lead to a debt trap when a person is unable to pay the amount. BNPL has become popular among millions of young consumers who are short on cash and don’t have a standard credit card. In India, several online retailers and financial institutions provide short-term financing options, making it a practical substitute for credit cards.   Di...