PNB Gold Monetization Scheme: All You Need To Know About

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Eligibility Criteria

To make gold deposits, resident Indians of the following categories are eligible according to the bank.

  • Individuals
  • HUFs
  • Proprietorship & Partnership firms
  • Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations
  • Companies or charitable institutions
  • Central Government
  • State Government or any other entity owned by Central Government or State Government.
  • Joint accounts of two or more eligible depositors are also permitted under the scheme, and such deposits will be credited to a joint bank account maintained in their names.

Type of deposit

Type of deposit

A deposit of at least 10 grams of gold with no maximum limit can be made, and the following are the types of deposits that can be made under the scheme. Note that on behalf of the Central Government, the bank will consider Medium Term and Long Term deposits. The scheme accepts gold in its purest form, such as gold bars, coins, and jewellery. Customers must submit an application form, proof of identity, proof of address, and an inventory form while making their deposits.

Type of Scheme Tenor (in Year)
Short Term Bank Deposit (STBD) 1-3
Medium Term Government Deposit (MTGD) 5-7
Long Term Government Deposit (LTGD) 12-15

Rate of interest and payment

Rate of interest and payment

The deposit on a Short Term Bank Deposit (STBD) is represented in gold, and the interest is computed using the current value of gold at the time of deposit. On maturity, the interest rate for the withdrawal period will be 2.25 percent per annum for Medium Term Government Deposits and 2.50 percent per annum for Long Term Government Deposits. The deposit underlying Medium Term and Long Term deposits will be represented in gold. The interest, on the other hand, will be paid in Rupees on the 31st of March each year or at maturity, whichever comes first. The depositor will have the choice of receiving simple interest payments yearly or cumulative interest payments at maturity.

(i) Short Term Bank Deposit(STBD):
Period Rate of Interest PA
1 year 0.50%
Above 1 year up to 2 years 0.60%
Above 2 years up to 3 years 0.75%

Premature withdrawal

Premature withdrawal

Premature withdrawal from a Short Term Bank Deposit (STBD) may be authorised. However, no interest will be paid if the deposit is withdrawn before one year has elapsed from the commencement of the deposit. In all other circumstances, a 0.15 percent penalty will be applied. Premature withdrawals are also permitted on medium-term deposits at any time after three years with a penalty on interest, and on long-term deposits at any time after five years with a penalty on interest. Furthermore, any early redemption will be in INR equivalent or gold at the bank’s sole discretion.



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Visa complains to US govt about India backing for local rival RuPay, BFSI News, ET BFSI

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Visa Inc has complained to the U.S. government that India’s “informal and formal” promotion of domestic payments rival RuPay hurts the U.S. giant in a key market, memos seen by Reuters show.

In public Visa has downplayed concerns about the rise of RuPay, which has been supported by public lobbying from Prime Minister Narendra Modi that has included likening the use of local cards to national service.

But U.S. government memos show Visa raised concerns about a “level playing field” in India during an Aug. 9 meeting between U.S. Trade Representative (USTR) Katherine Tai and company executives, including CEO Alfred Kelly.

Mastercard Inc has raised similar concerns privately with the USTR. Reuters reported in 2018 that the company had lodged a protest with the USTR that Modi was using nationalism to promote the local network.

“Visa remains concerned about India’s informal and formal policies that appear to favour the business of National Payments Corporation of India” (NPCI), the non-profit that runs RuPay, “over other domestic and foreign electronic payments companies,” said a USTR memo prepared for Tai ahead of the meeting.

Visa, USTR, Modi’s office and the NPCI did not respond to requests for comment.

Modi has promoted homegrown RuPay for years, posing a challenge to Visa and Mastercard in the fast-growing payments market. RuPay accounted for 63% of India’s 952 million debit and credit cards as of November 2020, according to the most recent regulatory data on the company, up from just 15% in 2017.

Publicly, Kelly said in May that for years there was “a lot of concern” that the likes of RuPay could be “potentially problematic” for Visa, but he stressed that his company remained India’s market leader.

“That’s going to be something we’re going to continually deal with and have dealt with for years. So there’s nothing new there,” he told an industry event.

‘NOT SO SUBTLE PRESSURE’Modi, in a 2018 speech, portrayed the use of RuPay as patriotic, saying that since “everyone cannot go to the border to protect the country, we can use RuPay card to serve the nation.”

When Visa raised its concerns during the USTR gathering on Aug. 9, it cited the Indian leader’s “speech where he basically called on India to use RuPay as a show of service to the country,” according to an email U.S. officials exchanged on the meeting’s readout.

Finance Minister Nirmala Sitharaman said last year that “RuPay is the only card” banks should promote. The government has also promoted a RuPay-based card for public transportation payments.

While RuPay dominates the number of cards in India, most transactions still go through Visa and Mastercard as most RuPay cards were simply issued by banks under Modi’s financial inclusion programme, industry sources say.

Visa told the U.S. government it was concerned India’s “push to use transit cards linked to RuPay” and “the not so subtle pressure on banks to issue” RuPay cards, the USTR email showed.

Mastercard and Visa count India as a key growth market, but have been jolted by a 2018 central bank directive for them to store payments data “only in India” for “unfettered supervisory access”.

Mastercard faces an indefinite ban on issuing new cards in India after the central bank said it was not complying with the 2018 rules. A USTR official privately called the Mastercard ban “draconian”, Reuters reported in September.



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Analysts, BFSI News, ET BFSI

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Stock markets this week will be driven mostly by updates related to the new coronavirus variant that sent equities tumbling globally on Friday, macroeconomic data announcements and auto sales numbers, analysts said. A World Health Organisation panel has named the new COVID strain ‘Omicron‘ and classified it as a highly transmissible variant of concern, the same category that includes the Delta variant.

The potentially more contagious Omicron was first reported to the WHO from South Africa on November 24, and has also been identified in Botswana, Belgium, Hong Kong and Israel. Many countries have introduced travel bans and restrictions on southern African countries in an effort to contain Omicron’s spread.

“New COVID variant, FIIs’ behaviour along with macro numbers will be key factors to drive the market this week. COVID related developments will remain key triggers for the market where the market will remain keenly interested to know the efficacy ratios of various vaccines against a new variant of COVID whereas restrictions-related news across the globe will also cause volatility,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

The Sensex nosedived 1,688 points on Friday amid concerns over the new coronavirus variant that also led to rout in global markets.

Yesha Shah, Head of Equity Research, Samco Securities, said, “Post Q2 result season, Dalal Street will look towards macros for hints to move the needle in broader markets. Inflation being a key factor will be at the centre of all news in the next two weeks since the RBI MPC meet is scheduled in December. November monthly auto sales number can be a trigger to drive some movement this week.”

Among macroeconomic data, PMI numbers for manufacturing and services sectors would also be tracked.

“Equity markets in the near term will closely follow the impact of new COVID variant, inflation data, and Central Bank policies,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.

During the last week, the BSE benchmark plunged 2,528.86 points or 4.24 per cent. PTI SUM MR



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Covid resurgence will force RBI to keep the monetary tap open, bond market shows, BFSI News, ET BFSI

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NEW DELHI: Central banks around the world sure have their work cut out. Just when monetary authorities were preparing the ground for a reversal of ultra-loose policies adopted in response to the coronavirus crisis, the virus, it seems, has taken new and potentially more dangerous avatars.

From bracing for interest rates in major economies to head northward sooner than later, global bond markets on Thursday took a 360-degree turn.

With a new and possibly even more deadly variant of the coronavirus being detected in South Africa, Botswana and Hong Kong, a fresh outbreak of the disease may well be on the cards. When this is coupled with a recent resurgence of Covid-19 in Europe — which has been accompanied by attendant restrictions on activity — the risk to global growth has intensified significantly.

The price action in global bond markets on Thursday showed this. Instead of getting ready for imminent policy normalisation, the bond markets seemed to be expressing the view that monetary accommodation would stay for a while longer. Yields on 10-year US Treasury papers nosedived a whopping 12 basis points on Thursday and were last at 1.51 per cent.

Clearly, investors are betting on the helping hand of central bank interventions to return.

THE INDIAN STORY
Indian sovereign bonds on Thursday enjoyed their best day in three-and-a-half weeks, with yield on the 10-year benchmark 6.10 per cent 2031 paper dropping four basis points.

Prior to the detection of the fresh variant in South Africa, a strong view in the market was that the Reserve Bank of India would start the process of raising interest rates at its next policy statement, on December 8, by raising the reverse repo rate and, therefore, narrowing the width of the liquidity adjustment facility corridor.

The central bank has already paved the way for the step as the quantum of funds withdrawn and the cutoff rates set at variable rate reverse repo operations has pushed rates on money market instruments closer to the repo rate of 4 per cent rather than the reverse repo rate of 3.35 per cent.

However, even as money markets may have aligned to the new expectation of the reverse repo rate, the act of raising it would itself have significant implications – namely that the ultra-loose accommodation is now well and truly going to be reversed. Because one would hardly expect the central bank to reverse its stance once it has officially started the process of lifting interest rates.

Now, however, market players are betting that there is a strong possibility that Governor Shaktikanta Das will keep all rates on hold and say that the central bank wishes to obtain more clarity on the global situation (and the spillovers for India) before raising any benchmark rates.

For India, another salutary impact of the new risk to global growth is a decline in international crude oil prices. Even as the government has reduced excise duty on petroleum products, the extent of the rise in oil prices over the last couple of months had emerged as a significant risk to domestic inflation, while worsening the outlook on the trade deficit.

Crude oil futures on the New York Mercantile Exchange slumped 3 per cent on Thursday, while Brent crude, the global benchmark, shed 2.2 per cent.

“The market’s view is changing; that is clearly perceptible from today’s move,” ICICI Securities Primary Dealership’s head of trading and executive vice-president Naveen Singh said. “There was almost a consensus that the reverse repo will be hiked, especially as market rates have aligned to a higher rate. But now there is a view that the RBI will maintain the status quo and wait for more details about whatever is happening in Africa and Europe. Because they cannot hike and then cut again if Covid were to worsen.”

While the yield on the 10-year benchmark bond may face hurdles when it comes to falling below the psychologically significant 6.30 per cent mark, for now, traders do not see it revisiting the 6.40 per cent mark, where it was hovering around a couple of weeks ago.

Hardening inflation can take a backseat for now, bond traders seem to be saying. The spotlight has once again squarely turned on protecting economic growth from what seems to be a hydra-like disease – two new heads sprout whenever one is severed.



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Upcoming Bonus Share Issues In December 2021

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1. NCL Research & Financial Services :

In its October 11, 2021 board meet, the members approved issuance of Bonus Equity Shares of Rs. 1/- each in the ratio of 1:1 (i.e. bonus issue of 1 share for every 1 share held by members as on record date. The ex-bonus date for the announced bonus is December 2, 2021, while the record date is December 3, 2021.

Earlier the company in the year 2014 announced bonus share issuance in the ratio of 4:1.

For the September ended quarter, the company’s revenue from operations declined q-o-q to Rs. 32.27 lakhs, while other income was at Rs. 8.5 lakh. Total expenses at the firm declined to Rs. 24.92 lakh. Consequently profit for the period surged to Rs. 11.72 lakhs.

Incorporated in the year 1985, the company is engaged in the trading of textile products in addition to investing in shares and securities.

The scrip last traded at a price of Rs. 6.57 per share on the BSE. NCL Research is not traded over the NSE.

2.Apollo Pipes:

2.Apollo Pipes:

The plastics sector company on October 22 announced bonus share issuance in the ratio of 2:1. The stock will turn ex-bonus on December 2, 2021 and its record date is December 4, 2021

For the just concluded September quarter of Fy 22, the company’s total income increased to Rs. 208.28 crore as against Rs. 125.23 crore reported in the same quarter a year ago. Also, the company’s net profit recorded an YoY surge and came in at Rs. 14.05 crore.

This is a small cap leading PVC pipe manufacturer in the country. The company’s offerings range across bath fitting, agriculture system, borewell system, plumbing, water storage etc.

The stock in the last 1-year has provided returns of 168%, while its YTD return have also been at a decent 146 percent. Mutual funds have increased their holding in the scrip in the September 2021 quarter to 9.06 percent. Likewise, DIIs have also been continuously raising their stake in the firm.

3. Indian Energy Exchange:

3. Indian Energy Exchange:

On October 21, the company’s board announced a bonus issue in the proportion of 2:1, which was subject to shareholders’ approval. Likewise, the company has obtained shareholders’ consent for the issuance of bonus shares and fixed December as the record date for determining the eligibility of shareholders who will be eiligible to receive the said bonus shares. The stock’s ex-bonus date is December 3, 2021.

In the September ended qtr., the company logged a 69% YoY increase in standalone net profit to Rs. 78 crore as against Rs. 46 crore in the same quarter during a year ago period. Last on the equities meltdown seen on Novermber 26, the scrip of IEX settled at Rs. 752.9, down over 3 percent. Nevertheless, on a year to date basis and 1-year basis it gave return of 230% and 254%, respectively.

Both the number and % holding in the scrip by mutual funds as well as FII/FPIs has been increased in the September quarter.

INDIAN ENERGY EXCHANGE (IEX) is the country’s first and top electricity exchange. It is a transparent, neutral, demutualised, nationwide, automated, online electricity trading platform.The company facilitates efficient price discovery and price risk management for participants of the energy market.

4. Panchsheel Organics:

4. Panchsheel Organics:

The pharma sector company on October 16 announced bonus share issuance in the ratio of 1:1. The ex-bonus date for the same is December 6, 2021. Via an exchange filing, the company informed about the revised record date to be as December 7 from the earlier December 3. The filing said ” the Company has revised the Record Date from December 3, 2021 to December 7, 2021 for the purpose of ascertaining the eligibility of the shareholders entitled for issuance of Bonus Equity Shares of the Company in the proportion of 1:1 i.e. 1 (One) Equity Share of Rs. 10/- each for every 1 (One) Equity Share of Rs. 10/- each, subject to approval of the Members on the issuance of Bonus Shares which will be sought at the ensuing Extra-ordinary General Meeting of the Members of the Company to be held on November 29, 2021″.

Panchsheel Organics an ISO 9001 : 2008 CERTIFIED, GMP approved public listed company (with listing on BSE) are manufacturers and exporters of Active Pharma Ingredients(APIs), Intermediates & Finished Formulations (both Human & Veterinary) having a wide experience of more than three decades in the healthcare field.

Disclaimer:

Disclaimer:

Disclaimer: Notably, the stocks listed are just to given an idea on the likely companies’ that will be issuing bonus shares in the near future and is not a recommendation to buy in these shares listed.

GoodReturns.in



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Tax Query: How to get TDS certificate from mutual funds?

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I have a few doubts with respect to my ITR for FY 2020-21 i.e. current AY 2021-22. I have invested ₹20,000 in Templeton India Equity Income Fund in 2006 under NFO. Since then periodical dividends declared under the scheme are getting credited to my savings a/c through ECS regularly and are accounted for in my ITR returns of the respective financial years. Since the Finance Act 2020 is modified and the dividends are now taxable in the hands of investors, the mutual fund has deducted TDS and paid the balance of the dividend to my savings account. Since I have not received Form 16 A for the TDS made by the mutual fund, I have sent a mail to the RTA of the MF. Initially, they have asked for a self-attested copy of my PAN card which I have provided to them. Now the RTA has replied that my PAN was not registered in FY2020-21 with them and was registered subsequently and hence, they are unable to fetch the TDS certificate for the FY2020-21. Since, the TDS was deducted on the dividend amount paid to me, kindly inform me how I can obtain TDS certificate and show them in my returns.

I also request you to kindly inform me how to show them in the current ITR in the absence of Form 16A.

Further, I am a retired pensioner and an amount of ₹15 lakh is invested in PMVVY Scheme and am receiving quarterly amount. Please clarify under what head should the amount be shown. Apart from my pension, during the year I have incomes including interest on bank deposits, dividend income from shares and MFs, interest income from NCDs, sovereign gold bonds, savings bank A/c, infra bonds, interest on NHAI tax-free bonds and short term & long-term capital gains. I have one self-occupied house property. My total income during the year is less than ₹50 lakh and I do not have any agriculture income. In the light of the above, I request you to kindly inform me which ITR return I have to file?

Rama Krishna

Dividend shall be taxable under the head ‘Income From Other Sources’ (IFOS) as per the Act. If your PAN is available with brokerage company/fund manager, the taxes deducted would be reported in your Form 26AS based on which the TDS credit can be claimed in the tax return. Where the company has not deposited the TDS/filed the TDS return, due to absence of your PAN details, you are required to complete the KYC formalities and provide the scanned copy of PAN to enable them to do the needful.

Pension income earned from Prime Minister Vaya Vandana Yojana Scheme (PMVVY) of LIC of India is fully taxable and shall be reported under the head IFOS. Please be informed that bank interest, dividend income from shares/mutual funds, interest income from infrastructure bonds, NCDs and sovereign gold bonds shall be taxable under the head IFOS. Short term capital gain/long term capital gain on sale of shares needs to be reported under the head capital gains.

Considering your income pattern, you are required to file ITR 2 for the FY 2020-21.

In the issue dated September 5, 2021, you have mentioned that if money is gifted to relatives, any interest earned out of that will be taxed in the hands of the recipient only. In a similar manner If shares allotted in an IPO are gifted to spouse, and if they are sold within a period of one year, will the short term capital gain be taxed in the hands of the recipient of the gift? If yes, what sort of record should be kept?

Niranjan

Your spouse is not required to pay any tax on receiving shares from you as a gift. However, Section 64(1)(iv) of the Act provides for clubbing of income in the hands of the transferor when assets are transferred for inadequate consideration. Providing gifts to your spouse would amount to transfer for inadequate consideration. Accordingly, any gains arising from sale of such shares is taxable in your hands. Besides documentation evidencing cost of acquisition of shares, sale consideration, selling expenses, etc., and documentation related to gift (like gift deed) needs to be kept on record.

The writer is Partner, Deloitte India

Send your queries to taxtalk@thehindu.co.in

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5 ways digital lending apps can become safer for you

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Lately, the digital lending platforms have gained traction as they provide easy access to the credit online and have come handy in hard times, especially after the outbreak of Covid, for those looking for instant loans. But there also have been increasing number of complaints by consumers against these platforms over mis-selling, breach of data privacy, and illegal conduct.

To protect the customers from widespread unethical practices, the Reserve Bank of India (RBI) has come out with the ‘Report of the Working Group on Digital Lending including Lending through Online Platforms and Mobile Apps’. The report contains recommendations and suggestions from both RBI and the government such as setting up of Self-Regulatory Organisation to oversee the functions of the players in the industry and to standardise certain operations. It is open for comments from public until December 31, 2021 through email.

We look at the five key areas which makes customers of digital lending apps vulnerable and how the report seek to ensure more protection for borrowers on these fronts.

Unauthorised lending apps

If you happen to opt for unauthorised digital lending apps, you may have to deal with unreasonable terms and conditions of the loan.

To have some accountability, currently, to be a digital lender, one has to be associated with a bank or a non-banking financial company or abide by the money-lending laws in the respective State in which the services are provided. But the report goes a few steps further.

Proposal: One, it suggests that digital lending should be limited to only those entities that are either regulated by the RBI or those registered under any other regulatory authority. Currently, there are some digital lending apps which are carrying out the business as intermediaries between the customer and the financial institution. Gaurav Jalan, Founder & CEO of mPokket and member at Fintech Association for Consumer Empowerment says there still exists an ambiguity on what kind of regulations that intermediaries will be subject to.

Bringing the whole digital lending space under regulatory framework is one of the significant changes that would take place if the report becomes actionable. Direct regulation will serve as an additional layer of monitoring that prevents apps from any unauthorised activities.

The working paper also suggests establishing an independent body – Digital India Trust Agency (DIGITA), which will verify the digital lending apps before they are made public. Not just that, the report also recommends setting up of a Self-Regulatory Organisation (SRO), an industry association which will lay down a code of conduct and provide a mechanism for grievance redressal of customers.

High and hidden costs

Digital lending apps generally charge higher interest rates than conventional banks and NBFCs. This is partly due to the additional risk these players take by serving users who may not have a proper credit history.

In addition to interest rate, there could be processing fee and other costs. Credible money-lending apps disclose most of these details transparently in the ‘About the app’ space in the app store and also mention them in the loan agreement. But many others don’t.

Proposal: To hold the reins of those apps that don’t disclose transparently and mispresent the rates of interest, the paper recommends that each lender provide a key fact statement (KFS) in standardised format for all digital lending products.

Especially in case of short term consumer credits (STCC), the Central bank may establish standard definitions for the cost of digital STCC/ micro credit as Annual Percent Rate (APR). This would enable disclosure of all costs in a clear and understandable way.

Another important recommendation has been that a cooling off/ look-up period of certain days should be given to customers for exiting digitally obtained loans by paying proportionate interest cost without any penalty.

Breach of data privacy

Most of the digital apps seek access to your contacts, gallery and details of other apps in your mobile phone, on installation, to create a credit profile of the borrower. There have been cases that these players breached data privacy.

Proposal: The report recommends that the app collect only minimum required personal data from the borrower after indicating usage of each data/ access permission obtained. The borrower should be provided with an option to revoke consent granted to collect their personal data and if required, make the app delete/ forget the data.

The key point here is that the lenders should capture the economic profile of borrower and assess the consumer’s creditworthiness in an auditable way.

Further, it also talks about mandatory submission of information of loan transactions by digital lenders to Credit Information Companies (CICs) at a shorter interval compared to conventional reporting. This will ensure less dependence on alternate data for financial consumers as more of them would develop formal credit history for themselves.

Unacceptable recovery methods

There have been cases in the past of unacceptable and high-handed recovery methods by lenders.

According to the current RBI’s ‘Guidelines on Fair Practices Code for Lender’, in the matter of recovery of loans, the lenders should not resort to undue harassment such as persistently bothering the borrowers at odd hours and use of muscle power for recovery of loans.

Proposal: Despite this, on the back of rise in concerns over unethical recovery practices, the working paper suggests standardising the code of conduct for recovery, which has to be framed by the proposed SRO.

The SRO is expected to maintain ‘negative’ list of agencies that involved in unreasonable means of recovery and the lender has to make sure periodically that the collecting agency is not mentioned in the list.

Poor grievance redressal

As per the current guidelines, the loan agreement must clearly disclose the options available for the borrower to redress any grievance — be it customer care support, bank/NBFC’s support or the regulator’s redressal mechanism.

A lot of users complain about the poor customer care support in the user reviews for most of these money-lending apps. Once the RBI announced the RBI’s Sachet portal (https://tinyurl.com/rbiportal) for filing complaints, there has been tremendous increase in the number of complaints filed, says the report.

Proposal: The key recommendation in this aspect is that the digital lending apps should name a suitably competent nodal officer to deal with FinTech related issues with customers as well as regulators, SRO, law enforcement agencies, etc. The contact details of the nodal officer would be displayed on the website of the digital lending app.

Also, similar to Banking and NBFC ecosystem, it suggested defined timelines, escalation mechanism for any grievances.

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Key lessons for homebuyers from RERA judgments

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It has been over four years since the Real Estate (Regulation and Development) Act or RERA has been active. There continues to be new questions raised on the different aspects of the Act. For instance, recently the Supreme Court confirmed the retroactive applicability of the Act to projects that were underway when the Act was passed in 2016.

As of November 2021, 70,848 projects have been registered and 78,793 complaints have been disposed, based on data from the Ministry of Housing and Urban Affairs. These cases have helped to shed light on the nuances of the Act.

Affirmed rights

There are a few judgments that have strengthened the rights of homebuyers. One example is the one involving Emaar MGF on the channels available to a buyer for remedy. The verdict clarified that consumers have the option to approach RERA as well as Consumer Protection forum and not limit to just one.

Another case, involving Arkanade Realty, relates to buyers’ rights on parking. The developer had delivered the house but the parking space was being sold to others. The ruling confirmed the requirement under RERA that the developer is obligated to provide parking space to all buyers in a project and that the land cannot be sold to outsiders.

Buyers can also take comfort to note that they can get compensation not just for delays in hand-over but also for shortages in carpet area. In a case handled by the Maharahstra RERA authority, a buyer filed that there was a shortfall of 69 sq. ft. in the 806 sq. ft. carpet area promised. The builder was directed to reduce the cost of the flat for the shortfall in area.

The Maharashtra RERA has also made it mandatory that a society or similar legal entity should be formed by the developer after 51 percent of the flats have been booked. This is a shift from the earlier practice of forming one after the project receives completion certificate. The benefit of this decision is that home buyers can oversee the work and seek regular updates from the developer.

Besides private builders, RERA also applies to construction projects undertaken by the Government. So homebuyers in these projects can also take advantage of the redressal available for delays or other issues. Also, landowners will be liable as a builder if they take a share of revenue from the sale of the project and would be answerable to buyers.

Another important issue that was lingering related to precedence of RERA in situations when there are different Central and State government laws. In a case regarding the state of West Bengal, the Supreme Court noted that the State can legislate in spaces which are left out by RERA but in areas where there are overlaps, RERA has an over-riding effect over any conflicting State laws.

Also read: ‘Real Estate Regulatory Authority can delegate its powers to hear complaints from homebuyers’

Few restrictions

There were also instances where the result was not favorable to buyers. One such is the judgment by National Company Law Appellate Tribunal (NCLAT) on the question of whether home buyers can be included under the ambit of financial creditor when the builder files for insolvency. While the buyers had already received an order for payment through RERA, the forum ruled that relief cannot be provided under the Insolvency and Bankruptcy Code to receive the amount awarded. On the question of whether redevelopment is covered, the Maharashtra RERA ruled in the negative. For these, the housing society members must approach a civil court.

Also, while a buyer can approach civil court and RERA, they cannot get double compensation. In a ruling, a plea for compensation and possession was dismissed because relief had already been granted by a civil court. The complainant was also charged INR 10,000, to cover the developer’s legal costs.

Lease transactions are also not in the purview of RERA as only allottees are covered and not lessees. In the case involving Lavasa’s project – which had been halted due to an order from the Ministry of Environment and Forests – the agreements were a 999-year lease and not of sale. The buyers were not deemed as allottees, but as lessees and hence cannot get relief for delays through RERA.

Some gaps

The question on whether a buyer can receive refund of their advance is still unclear. The Tamil Nadu RERA ruled that a buyer needs to approach the consumer forum for refund of the advance amount paid to book an apartment. However, the Maharashtra RERA ordered a refund when a buyer noted that there were discrepancies in the booking offer – such are regarding EMI payment terms. Given that the purview depends on the specific situation, buyers may keep their options open and approach both RERA and consumer forum for relief.

Also, data on follow-up to the verdict is a cause for concern – Karnataka RERA data from August 2021 showed that while 595 verdicts were delivered, only 14 cases had penalty amount paid. This is a mere ₹6.87 lakh paid out of ₹245.72 crore.

The author is an independent financial consultant

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How much life insurance cover does one need?

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Morgan Housel’s book ‘Psychology of Money’ does a great job of explaining the power of money – it can give you control over your own time. That in a nutshell is the function of life insurance. It enables financial continuity for your dependents and avoids a drain of your existing resources. So, it is quite irrefutable that adequate life cover is critical. Here, we revisit the factors that can help people determine how much life cover they need.

Most Indians continue to perceive life insurance as a savings vehicle and believe that the insurance benefit attached to such products is adequate. So, let’s clarify one thing – every earning individual with financial dependents must buy term insurance.

Take for example Arun, a 35-year-old married person with one kid and a second one on the way. He is looking to buy a term insurance and decides to rely on the general thumb rule – a life cover must be 10 times your annual income. Considering Arun earns ₹10 lakh per annum, the thumb rule would suggest his ideal life cover is ₹1 crore.

While this is a good thumb rule to determine the minimum cover required, an individual often needs more than 10 times his / her income. In other words, it is highly likely that Arun is inadequately covered. So, how can he determine his multiplier?

The DIME method is a holistic tool for assessing one’s current state of finances and future needs. So, here’s what Arun needs to know:

Debt: Your liabilities survive you and therefore provisioning for recurring debt is very important. Let’s assume Arun has an outstanding student debt of ₹2 lakh.

Income: Consider the number of years you want to provide an income replacement for your family and multiply your current income by that number. Assuming Arun wants to create income replacement for 5 years, he will need a corpus of at least ₹50 lakh.

Mortgage: The next step is accounting for a home loan, which can derail your family’s monetary stability in your absence. Let’s assume, Arun has an outstanding home loan of ₹50 lakh.

Education Expense: Considering Arun is a father, he will need to create a financial corpus to support his daughter until she turns 25 years of age (typically when kids start earning). With education cost constantly on the rise, Arun will need an estimated ₹35 lakh until graduation of his child. With another baby on the way, he wants to make an additional provision of ₹50 lakh for the upbringing and education of his second child.

All these factors summed up show Arun’s future requirement, which is ₹1.87 crore. But there is one missing ingredient – it doesn’t account for his existing assets. Assuming he has assets worth ₹20 lakh in the form of fixed deposits and mutual funds, Arun’s final financial requirement is ₹1.67 crore. Assuming Arun passes away after 10 years, then at a 4 per cent inflation rate per annum, he will need a life cover of ₹2.47 crore (nearly 25 times his current annual income).

Personal finance advisors can support you in this process. One key factor to always remember is that life insurance is not a one-time purchase. You must review your protection requirements at regular intervals, especially as you progress through various life stages.

The writer is Chief Distribution Officer, Edelweiss Tokio Life Insurance

(This is a free article from the BusinessLine premium Portfolio segment. For more such content, please subscribe to The Hindu BusinessLine online.)

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