Page 5 - Banking Finance August 2019

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Tax dept can share info on assets of loan defaulters:
Fin Min proposes to
make PAN and Aadhaar CBDT
The Central Board of Direct Taxes (CBDT) has recently given permission to tax
interchangeable officials in order to share information on immov-
Finance Minister Nirmala able properties of such defaulters following many
Sitharaman requests from banks. “The Board is of the view
has pro- that sharing of information with PSBs in respect
posed to of assets held by defaulters of loans, so as to en-
make PAN able recovery of loans from such defaulters, is in
card and public interest, and hence, can be furnished,” said the CBDT.
Aadhaar interchangeable, allowing It also added that apart from the Statement of Assets, if requested, other infor-
those who do not have a PAN to file mation like bank accounts details and sundry debtors of the defaulter can also
income tax returns. She also said be provided. The CBDT, meanwhile, also stated that the information may be
that the proposal will come into ef- provided only of the borrower, mortgager and guarantor of the loan. A confi-
fect from September 1.
dentiality clause must also be included during information delivery and an un-
While presenting the first budget of dertaking signed by the bank that the data will be used only for loan recovery
the Modi government in its second and not for any third party use.
term, Finance Minister stated that The tax officials have also been directed by the CBDT in order to ensure that
Aadhaar crad will be issued to NRIs any tax due against the defaulter is safeguarded in case of recovery based on
after their arrival in India, without the information shared. “An undertaking may be obtained from the PSB to ob-
the mandatory wait for180 days. tain a No Objection Certificate from the jurisdictional Principal Commissioner of
"More than 120 crore Indian now Income Tax of the loan defaulter before appropriation of the surplus amount
have Aadhaar. Therefore, for ease recovered from sale of immovable and movable asset of the defaulter, informa-
and convenience of taxpayers, I tion in respect of which is shared,” it said.
propose to make PAN and Aadhaar The CBDT directive is the latest in a series of measures intended at helping banks
interchangeable and allow those recover dues from defaulters, many of whom have willfully defaulted on loans.
who do not have PAN to file Income With a multi-pronged effort in place for recovery of bad loans, gross non-per-
Tax returns by simply quoting their forming loans of PSBs fell by Rs 89,189 crore to Rs 8.06 lakh crore as on March
Aadhaar number and also use it 31, 2019. Amit Maheshwari, Partner, Ashok Maheshwary & Associates, said,
wherever they are required to “This directive will only aid the public sector banks in their recovery efforts and
quote PAN," said Sitharaman, while not the private sector lenders. Also, several defaulters may have already shifted
delivering her maiden budget.
their assets and may not hold significant assets in their name.”

BANKING FINANCE | AUGUST | 2019 | 5