Changes In Minimum Balance And Tax Benefits

MINIMUM BALANCE IN BANK ACCOUNTS
 
918 . Karunakaran Shri P.
 
Will the Minister of FINANCE be pleased to state:-

(a) whether the Reserve Bank of India (RBI) has issued guidelines to Bank to inform their customers about fall in minimum balance in their accounts in advance;

(b) if so, the details thereof; and

(c) the status of implementation of said guidelines by banks?

ANSWER

The Minister of State in the Ministry of Finance (SHRI JAYANT SINHA)

(a) to (c) Reserve Bank of India (RBI) has issued guidelines dated 20.11.2014 specifying that while levying charges for non-maintenance of minimum balance in their savings bank accounts, banks shall adhere to the additional guidelines given in the Annexure. The guidelines come into effect from April 1, 2015.
All banks have been advised to take immediate steps to update customer information so as to facilitate sending alerts through electronic modes (SMSs / e.mails etc.) for effective implementation of the guidelines.

ANNEXURE
LOK SABHA ANNEXURED UNSTARRED QUESTION 918 DATED 27.02.2015

Levy of charges for non-maintenance of minimum balance in savings bank account shall be subject to the following additional guidelines:
I. In the event of a default in maintenance of minimum balance / average minimum balance as agreed to between the bank and customer, the bank should notify the customer clearly by SMS / email /letter etc. that in the event of the minimum balance not being restored in the account within a month from the date of notice , penal charges will be applicable.

II. In case the minimum balance is not restored within a reasonable period, which shall not be less than one month from the date of notice of shortfall, penal charges may be recovered under intimation to the account holder.

III. The policy on penal charges to be so levied may be decided with the approval of Board of the Bank.

IV. The penal charges should be directly proportionate to the extent of shortfall observed. In other words, the charges should be a fixed percentage levied on the amount of difference between the actual balance maintained and the minimum balance as agreed upon at the time of opening of account. A suitable slab structure for recovery of charges may be finalized.

V. It should be ensured that such charges are reasonable and not out of line with the average cost of providing the services.

VI. It should be ensured that the balance in the savings account does not turn into negative balance solely on account of levy of charges for non-maintenance of minimum balance.

Benefits to Middle Class Tax Payers in the Budget 2015-16

No Change In Rate Of Personal Income Tax

Rationalization And Removal Of Various Tax Exemption

Exemption To Individual Tax Payers To Continue To Facilitate Savings

Atal Pension Yojana For Defined Pension, Government To Contribute 50% Of The Premium

 

Payments to the Beneficiaries Including Interest Payment on Deposit in Sukanya Samriddhi Scheme to be Fully Exempt

The Union Minister of Finance Shri Arun Jaitley in his Budget Speech in Lok Sabha today proposed rationalization of various tax exemptions and incentives to reduce tax disputes and improve tax administration. He said, with a view to encourage savings and to promote health care among individual tax payers, it is proposed to increase the limit of reduction of health insurance premium from Rs 15,000 to Rs 25,000 and for senior citizen this limit is increase from Rs 20,000 to Rs 30,000.

For senior citizen above the age of 80 years, not eligible to take health insurance, deduction is allowed for Rs 30,000 toward medical expenditure. Deduction limit of Rs 60,000 on expenditure on account of specified diseases is enhanced to Rs 80,000 in the case of senior citizens.

Additional deduction of Rs 25,000 is allowed for differently-abled persons, increasing the limit from Rs 50,000 to Rs 75,000. It is also proposed to increase the limit of deduction from Rs 1 lakh to Rs 1.25 lakh in case of severe disability.

The Finance Minister Shri Jaitley also proposed to provide that investment in Sukanya Samriddhi Scheme will be eligible for deduction under section 80C of the income-tax and any payment from the scheme shall not be liable to tax.

Limit on deduction on account of contribution to a pension fund and the new pension scheme is proposed to be increased from Rs 1 lakh to Rs 1.5 lakh.
Additional deduction of Rs 50,000 will be allowed for contribution to the new pension scheme u/s 80 CCD increasing from Rs 1 lakh to Rs 1.5 lakh.