News & Updates

Indian Development Update Report - By World Bank

As per "Indian Development Update Report", World Bank has showed it's consern over low participation of Indian Women in the Labour Market which unable India to have double digit growth rate i.e. “Low female labor force participation, however, remains a serious concern. Higher level of women participation in the economy can help propel India closer to double digit growth. A special focus of this report has been on the low female labor force participation of women in India. India has one of the lowest female participation rates in the world, ranking 120th among the 131 countries for which data are available. Even among countries with similar income levels, India is at the bottom, together with Yemen, Pakistan and Egypt (figure 1). Worse still, the rate has been declining since 2005.  This is a matter of concern as women’s paid employment is known to increase their ability to influence decision-making within the household, and empower them more broadly in society as a whole, the Update says (Taken from World Bank Website).

However it appraise Indian economy by saying “India remains the fastest growing economy in the world and it will get a big boost from its approach to GST which will - reduce the cost of doing business for firms, reduce logistics costs of moving goods across states, while ensuring no loss in equity,” said Junaid Ahmad, World Bank Country Director in India.

Section 269ST of IT Act, 1961

New section inserted by finance act, 2017 which prohibits accepting cash of more than Rs 2 Lacs . The section introduced is as under:

"Section 269ST: Mode of undertaking transactions

No person shall receive an amount of two lakh rupees or more—

(a) in aggregate from a person in a day; or

 (b) in respect of a single transaction; or

 (c) in respect of transactions relating to one event or occasion from a person,

otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account:

Provided that the provisions of this section shall not apply to—

  (i) any receipt by—

  (a) Government;

  (b) any banking company, post office savings bank or co-operative bank;

  (ii) transactions of the nature referred to in section 269SS;

 (iii) such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.

Explanation.—For the purposes of this section,—

 (a) "banking company" shall have the same meaning as assigned to it in clause (i) of the Explanation to section 269SS;

 (b) "co-operative bank" shall have the same meaning as assigned to it in clause (ii) of the Explanation to section 269SS.]"

This section is introduced for demotivating cash transactions in the system and to curb black money. With the introducation of this section, worries arises among NBFCs & HFCs as to whether the provisions of section 269ST of the Act shall apply to one instalment of loan repayment or the whole amount of such repayment. This issue is considered by CBDT and wide circular no. 22/2017 dated 03/07/2017, this issue is addressed. The circular is as under:

"1. With a view to promote digital economy and create a disincentive against cash economy, a new section 269ST has been inserted in the Income-tax Act, 1961(the Act) vide Finance Act, 2017. The said section inter-alia prohibits receipt of an amount of two lakh rupees or more by a person, in the circumstances specified therein, through modes other than by way of an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account. Penal provisions have also been introduced by way of a new section 271DA, which provides that if a person receives any amount in contravention to the provisions of section 269ST, it shall be liable to pay penalty of a sum equal to the amount of such receipt.

2. Subsequently, representations have been received from non-banking financial companies (NBFCs) and housing finance companies (HFCs) as to whether the provisions of section 269ST of the Act shall apply to one instalment of loan repayment or the whole amount of such repayment.

3. In this context, it is clarified that in respect of receipt in the nature of repayment of loan by NBFCs or HFCs, the receipt of one instalment of loan repayment in respect of a loan shall constitute a ‘single transaction’ as specified in clause (b) of section 269ST of the Act and all the instalments paid for a loan shall not be aggregated for the purposes of determining applicability of the provisions section 269ST. "