FINANCEOUTLOOKINDIANOVEMBER, 20239to prevent tipping-off. A reporting entity is a bank, financial institution, middleman, or a person engaged in a specific business or profession."Every reporting entity shall...identify its clients, verify their identity using reliable and independent sources of identification, obtain information on the purpose and intended nature of the business relationship, where applicable and take reasonable steps to understand the nature of the customer's business, and its ownership and control," according to the notice.The reporting body is also required to "determine whether a client is acting on behalf of a beneficial owner, and identify the beneficial owner and take all steps to verify the identity of the beneficial owner, using reliable and independent sources of identification," according to the report."In the main rules, rule 3A shall be replaced with the following rule:- "3A. Policy implementation by groups.- (1) Every reporting entity that is part of a group must implement group-wide anti-money laundering and terror financing programmes, including group-wide policies for sharing information required for client due diligence and anti-money laundering and terror financing risk management, and such programmes must include adequate safeguards on the confidentiality and use of information exchanged, including safeguards to prevent tipping-off," the notification states.The Centre has already increased the rate of Tax Collection at Source (TCS) from 5% to 20% for remittances under the Liberalised Remittance Scheme (LRS) and purchases of abroad travel programme packages.TCS rates on LRS and overseas vacation packages were raised from 5% to 20% in the Budget 2023-24. It went into effect on July 1. Later, the government postponed implementation for three months, and the tax went into effect on October 1. The new rule in a nutshell: LRS for loan-financed education: nil up to Rs 7 lakh; 0.5% over Rs 7 lakh LRS for non-loan-financed medical treatment/education: nil up to Rs 7 lakh; 5% over Rs 7 lakh Other uses for LRS, such as overseas investments: Up to Rs 7 lakh, there is no tax; above Rs 7 lakh, there is a 20% tax. Purchase of an Overseas Tour Programme Package: 5% up to Rs 7 Lakh, then 20%.
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