More options for your NRI relatives to send money home

Shyamal Banerjee/Mint

Live Mint : Vivina vishwanathan :Jul 11 2013. 05 21 PM IST

Apart from the traditional way remittance , a few innovative ways have been introduced recently.

On 27 June, the rupee plummeted to 60.73 per dollar and that was good news for non-resident Indians (NRIs) who send money to their families in India. According to the World Bank, India is the largest recipient country in the world; it received almost $70 billion in remittances in 2012. Like the numerous NRIs from the Gulf Co-operation Council, Rengish Antony, project development engineer, Johnson Controls Inc., too, sends money to his homeland. Says Antony, “I send money every month to India either through UAE Exchange or Western Union. It takes almost two-three working days for the money to reach my parents.”

Though Antony still follows the traditional way of remitting money, a few innovative ways have been introduced recently. Says Kiran Shetty, managing director, Western Union India, “People look for options to send money through Internet or mobile. This transformation will happen slowly.” Here are some of the innovative ways of remitting money to India.

Remittance card

It is a rupee-denominated prepaid card. Your relative in the US, the UK, Canada, the UAE or any other country can load cash in the prepaid card at any UAE exchange centre. The card is not issued to the remitter; it is only for the beneficiary or receiver in India. All you have to do is apply for it online on the bank website. After ensuring compliance with know-your-client norms, the bank would activate the card. You will also get a personal identification number. Once the sender remits the money from the overseas UAE Exchange branch, the funds will be automatically loaded into the prepaid card, which can be used at any automated-teller machine (ATM) or point of sale (PoS) terminal like a debit card.

The cash withdrawal limit is Rs.50,000 per day and PoS transaction limit Rs.15,000 per day varying from bank to bank. Currently, ICICI Bank Money Transfer Money2India and PNB Xpress Money Remit card—launched by Xpress Money and Punjab National Bank—are available.

Charges: There is no issuance fee for the ICICI Bank card. But there is a one-time processing fee ofRs.300. The charges vary from card to card.

Mobile-based remittance

Banks and money transfer operators have started providing mobile-based remittance via instant money transfer. For instance, Xpress Money and Axis Bank Ltd together have launched a platform where you can receive money using a code sent to the phone. For this the sender has to visit an Xpress Money outlet. While sending the money, she has to mention the beneficiary’s mobile number. The receiver will then get a code on her mobile. She can walk into any Axis Bank ATM and key in the code to withdraw the money. For this, the sender and the receiver need not be an Axis Bank account holder.

Charges: Only the transaction fee is applicable here and it varies from country to country. For instance, if you send money from the US, the transactional cost will be $28 and if it is from UAE, it will be 15 United Arab Emirates dirham.

Apps

If you are a smartphone user, you are likely to see more action in the remittance space soon. Xoom Corp., a digital money transfer provider and Vesta Corp. have introduced an app for money transfer. You can download the app only on an android or iPhone. Once you download the app, you will have to create a login ID. Through this you can remit money after which the receiver will get a transaction number. The receiver has to quote the transaction number to withdraw the money. Some banks offer apps to track the money transfer process.

Charges: The app is free. However, transaction fee is applicable and it varies from country to country.

Quick remit

If you are one of those who is sceptical of using new ways of remitting money to India, you can continue using traditional platforms to remit money. However, the current environment has pushed traditional remittance service providers to upgrade their existing platforms. Money transfer companies are seen focusing on instant cash, too. Says Promoth Manghat, vice-president (global operations), UAE Exchange, “Now everything needs to happen instantly. Flashremit, a real-time account credit solution, is an offering to address that need. Here transactions are done instantly on a one-on-one basis. Even before you leave the counter, the sender and the receiver will get an SMS on their mobile phones confirming the credit of the remittance.”

Charges: Only transaction fee is applicable, which varies from country to country. If you plan to send money through any of these modes, remember to check transfer charges, exchange rates, service charges and the number of days required to send the amount. Also, ensure to initiate transaction with an authorized remittance provider.

Books of account pre-requisites to tax unexplained cash credit; no additions for deposit in bank account in absence of books

Taxmann :Wednesday, July 10, 2013

Where assessee has not maintained any books of account, AO can’t invoke provisions of section 68 on the basis of deposits made in bank account of assessee

In the instant case, the assessee had not maintained any books of account. During assessment, the AO invoked the provisions of section 68 and made additions of all the deposits made by assessee in his bank account. The assessee, however, contended that the provisions of section 68 could only be invoked where any sum was found credited in his books of account. On appeal, the CIT (A) deleted the additions. Aggrieved-revenue filed the instant appeal.

The Tribunal held in favour of assessee as under:

1) The provisions of section 68 can only be invoked if any sum is found credited in the books of account maintained by assessee and the assessee offers no explanation about the nature and source thereof or the explanation offered by him isn’t, in the opinion of the Income-tax Officer, satisfactory. In this eventuality, the said sum so credited may be charged to income-tax as the income of the assessee of that previous year;

2) The passbook issued by the bank can’t be termed to be the books of account  of the assessee as per the judgment of the Bombay High Court in CIT v. Bhaichand N. Gandhi [1982] 11 Taxman 59. Therefore, the provisions of section 68 can’t be invoked on various deposits or credits found in the bank account of the assessee in the absence of any books of accounts maintained by assessee for the previous year;

3) Though provisions of section 68 couldn’t be invoked on the deposits made in the bank account of the assessee, yet the veracity of the additions made by the AO on certain deposits by invoking the provisions of section 68 examined and the assessee had furnished reasonable and plausible explanations along with confirmation with regard to different deposits. 

Thus, there was no infirmity in the order of CIT(A) – ITO v. Kamal Kumar Mishra [2013] 33 taxmann.com 610 (Lucknow - Trib.)