Page 18 - Banking Finance April 2023

ROUNDUP

the rate as 575,000. As the rial was DBT was due to the free grains a similar issue and denied capital gains
600,000 to one dollar, meaning it had scheme. tax exemptions on sale of land. The
lost some 20 percent of its value in six reason: No agricultural activities had
Among other major DBT schemes, the
days - the fastest in the past two years. been carried out.
government's assistance for beneficia-
ries under Pradhan Mantri Gramin Exemption under section 54B of the
Direct benefit transfers at Awas Yojana-Rural (PMAY-R) beneficia- Income Tax (I-T) Act can be claimed in
Rs. 5.5 trillion so far; to ries in FY23 would likely exceed the respect of capital gains arising on trans-
FY22 achievement of about Rs 40,000 fer of agricultural land, provided it has
surpass FY22 level crore. So far in the current fiscal, DBT been used for agricultural purpose for
Transfer of assorted subsidies and sops in PMAY-R has reached Rs 38,638 at least two years prior to the sale. The
to the beneficiaries through the direct crore. capital gains is exempt to the extent
benefit transfer (DBT) has reached such gains is used to buy another agri-
about Rs 5.5 trillion so far in the cur- IBC recovery best in Q4 cultural land within three years.
rent financial year, nearly the same as
Banks could see one of the best quar- Tax officials point out that it is no
for the whole of FY21 and just 13%
terly recoveries after the Covid-19 cri- longer easy to pass off an income as
short of the achievement in the whole
sis in the fourth quarter of FY23 under tax-free agricultural income. Or for
of FY22.
the Insolvency and Bankruptcy Code that matter, even when a taxpayer
Given that a lot of dues are cleared in (IBC), 2016, following resolution of claims that a sale is of agricultural land,
the last month of the year, the DBT Sintex Industries and Reliance Home a range of records - be it land records
transfers are expected to surpass Rs Finance. or, in case of high-value matters, even
6.3 trillion achieved in FY22. satellite images - prove handy.
Monies aggregating about Rs. 6,600
Fertiliser subsidies worth Rs 1.9 trillion crore, are expected to be received In the case heard by the Chennai ITAT,
have been provided to farmers so far from the resolution of Sintex Industries the taxpayer Keshav Sunderam Rajam
in the current financial year, which was and Reliance Home Finance via the was a nonresident. He had invested
53% higher than Rs 1.24 trillion in the corporate insolvency resolution pro- the capital gains arising from sale of
whole of FY22 as input costs and glo- cess (CIRP) under IBC from successful 'agricultural land' by parking Rs 2.4
bal prices of fertiliser doubled in a year resolution applicants Reliance Indus- crore in a capital gains account scheme
or so. tries Ltd (RIL) - Assets Care & Recon- (the sum so deposited needs to be used
struction Enterprise (ACRE) combine for purchase of agricultural land within
Given that over two months are still to
and Authum Investments and Infra- the specified period) and had paid Rs
go before closure of FY23, the
structure, respectively. 1.2 crore to his father to acquire agri-
subsidised fertiliser to farmers for the
cultural land in Coonoor. He produced
whole of the year would be substan- This could result in reversal of provi-
'adangal' (local land records) to sub-
tially higher than reported so far. The sions, thereby boosting banks'
stantiate the land sold was agricul-
Centre's total fertiliser subsidy bill is bottomline, ad improve the asset qual-
tural. The I-T officer denied the capi-
estimated to be Rs 2.25 trillion for ity parameters further.
tal gains exemption benefit of Rs 3-odd
FY23 as against the budget estimate of
Banks will be recovering about 48 per crore on the grounds that the land sold
Rs 1.05 trillion and the actual Rs 1.54
cent of the claimed amount of about had not been used for agricultural pur-
trillion (including dealer and manufac-
Rs. 7,800 crore from the resolution of poses.
turer) in FY22.
Sintex industries.
Subsidies worth Rs 1.5 trillion were
Apparel biz thrives in in-
transferred to beneficiaries via
Cultivate agri land for
foodgrains under the public distribu- surgency zone
tion system (PDS) so far in FY23. The capital gains sop: ITAT Women from the interior areas of
food DBT through PDS will likely end Two different benches of the Income Dantewada district, which was once
the year around Rs 2.2 trillion in FY23, Tax Appellate Tribunal (ITAT) - in infamous for deadly Maoist violence,
the same as in FY22. The elevated food Chennai and Pune - recently dealt with have created a niche for themselves
16 | 2023 | APRIL | BANKING FINANCE