Bank Account Archives

Woman’s Bank Account Linked to ₹2 Cr Money Laundering: Income Tax Department Action

Income Tax dept likely to probe ₹2 cr money laundering case via woman’s account

The Income Tax Department is likely to intervene in the case of a man – allegedly associated with a Swaminarayan trust – who was accused of money laundering in a Delhi woman’s account with whom he was in a relationship.

It was revealed that the victim, after filing a case with the police, has now also informed the Income Tax Department in writing for an investigation into the financial transactions.

One Praveen Patel claimed to be associated with a Swaminarayan trust in Ahmedabad, was accused of using a woman’s bank account for money laundering.

The woman, with whom Patel was in a relationship, filed a complaint at the Ahmedabad West police station, accusing him of transferring a total of ₹2 crore in a span of 2.5 years.

According to the complaint, Patel claimed to work as an accountant for a Swaminarayan Trust in Ahmedabad and had met the woman, originally from Delhi but in Gujarat in search of a job. Both later had a relationship, and the man also arranged for a rented house for her in the Gota area.

After gaining her trust, Patel allegedly informed her about the ‘black money’ the trust received and convinced her to use her bank account. He would then withdraw the money from her account via cheques, making it legitimate.

According to the complaint, when the woman discovered that Patel was married, she wanted to end the relationship but refrained from it fearing legal action against the illegal transactions made from her bank account.

A month ago, overwhelmed by the stress caused by these transactions, the woman once again tried to end the relationship but was threatened by the accused.

The woman approached police, who initiated an investigation into the matter.

RBI’s New Guidelines: Alert Bank Account Closures Begin January 1, 2025

Reserve Bank of India (RBI) has announced new regulations that will lead to the closure of certain types of bank accounts starting January 1, 2025. This initiative aims to improve banking security, reduce fraud, and enhance operational efficiency. The accounts affected by these guidelines include dormant accounts, inactive accounts, and zero balance accounts. Here’s what you need to know:

Types of Accounts Facing Closure

1. Dormant Accounts:
Accounts that have not shown any transaction for two or more years will be classified as dormant. These accounts are more susceptible to misuse and fraud, making their closure essential for maintaining banking security.

2. Inactive Accounts:
If an account has had no transactions for over 12 months, it will be considered inactive. To prevent closure, account holders must reactivate the account by making at least one transaction.

3. Zero Balance Accounts:
Accounts that have been maintaining a zero balance for an extended period may also be closed. This step is intended to eliminate the misuse of such accounts and ensure compliance with Know Your Customer (KYC) norms.

Steps to Avoid Account Closure

To ensure your account remains active and open, customers are advised to take the following actions:

Reactivate Inactive Accounts: If your account has been inactive for over 12 months, make a transaction to reactivate it.
Engage with Dormant Accounts: Accounts that have been dormant for two years should be reactivated by visiting the bank branch.
Maintain a Positive Balance: Avoid leaving your account with a zero balance for long periods to keep it active.

Along with the account closures, RBI has introduced new rules for fixed deposits (FDs) with Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs). The new regulations simplify terms for premature withdrawal and aim to improve communication between financial institutions and depositors.

FCRA Bank Account Rules Compliance: Why Your NGO Needs SBI Account

Under the Foreign Contribution (Regulation) Amendment Act of 2020, organizations registered under the FCRA are required to maintain a dedicated FCRA account at the State Bank of India’s Main Branch located in New Delhi for the purpose of receiving foreign contributions.

This designated account is solely for receiving online foreign funds. Additionally, organizations may open a second account with any scheduled bank for utilizing these foreign contributions, which acts as the functional designated account for fund usage.

Details of the designated account must be provided in the FCRA registration application or in any application for prior permission. The account number will be included in the approval letter received by the organization.

Process of Opening an FCRA Account

Step 1: The applicant must obtain the Account Opening Form (AOF) either in person at the nearest SBI branch, a branch of their choice, or by downloading it from the SBI website.
Step 2: The completed form must be submitted for review and verification, along with the necessary KYC documentation, which should include the KYCs of the signatories and the controlling person/beneficial owner.
Step 3: The applicant must send the completed form via mail and also provide a hard copy of the AOF to open the ‘FCRA Account’ at NDMB.
Step 4: The branch that accepted the AOF will send an acknowledgment to the applicant.
Step 5: After reviewing the AOF and KYC documents, the SBI branch accepting the AOF will email the verified documents to SBI, NDMB. This process may take up to three working days.
Step 6: SBI, NDMB will confirm receipt of the AOF and other documents to the applicant via email within one working day of receiving them.
Step 7: Within three working days of receiving the duly verified scanned copies of the complete AOF and KYC documents from the receiving branch, NDMB will notify the applicant entity of the details of the newly opened ‘FCRA Account’.
Step 8: Notifications will be dispatched via SMS and to the registered email address.
Step 9: The applicant can continue to maintain their existing FCRA Accounts for keeping or utilizing funds.

Designated Banks for FCRA Accounts

According to Section 17 of the Foreign Contribution Regulation Act, 2010, foreign contributions must be received solely in a designated, exclusive FC account at a specified bank, as outlined in the FCRA registration or FCRA prior permission order. This account should be maintained separately by the association. It is illegal to accept donations in any account other than the designated FCRA Bank account. Funds in this account can be used directly without limitations.

The State Bank of India, New Delhi Main Branch, Sansad Marg, Delhi-110001, was designated as the branch for opening FCRA-designated bank accounts by the Ministry of Home Affairs on 7 October 2020.

Advantages of Opening an FCRA Account in SBI

Transparency

FCRA bank accounts ensure that foreign contributions received by NGOs and other organizations are handled transparently and in compliance with legal regulations.

Compliance with FCRA Amendment Act, 2020

The FCRA Amendment Act, 2020 implemented stricter regulations on the management of foreign contributions. A notable change is that FCRA bank accounts can only be established at the State Bank of India’s main office in New Delhi.

Competitive Interest Rates

The State Bank of India (SBI) is a preferred bank for non-resident Indians (NRIs) looking to invest their earnings in India, as it offers competitive interest rates on NRI deposits. These favorable rates provide a safe and reliable banking option while helping NRIs maximize their savings returns.

Income Tax Refund: Validate or Re-validate Bank Account for ITR 2024

The Income Tax Department has issued a crucial update, emphasizing the necessity for taxpayers to validate or re-validate their bank accounts on the e-filing portal in order to facilitate smooth processing of income tax refunds (ITR).

A validated bank account is indispensable for receiving an ITR. Even previously validated bank accounts will require re-validation in the event of changes such as branch or IFSC modifications, bank mergers, and similar scenarios.

In an announcement on Tuesday, June 18, the Income Tax Department emphasized, “Attention Taxpayers! A validated bank account is essential for receiving refunds. Please ensure the validation status of your bank account on the e-filing portal for seamless processing of refunds!”

Adding a New Bank Account for ITR 2024

To add a new bank account, follow these steps:

Visit Income Tax e-Filing Portal
After logging in, navigate to the ‘Profile’ section located at the top right corner
Access ‘My Bank Account’
Add the new bank account details
Click on validate

Re-validating Existing Bank Account for IT Refund

To re-validate an existing bank account, follow these steps:

Visit the e-filing portal at Income Tax e-Filing Portal
After logging in, click on Profile
Proceed to ‘My Bank Account’ and select Re-validate
Update details such as IFSC, account type, etc.
Click on validate

Following validation, the bank account details in the database will be categorized as: Failure, success, success with a remark, or pending for validation.

Potential Reasons for Bank Account Validation Failure

Bank account validation can fail due to the following reasons:

Non-linkage of PAN with the bank account: It is essential to link the permanent account number (PAN) with the bank account. After linking PAN with the bank account, click on re-validate to submit the request. Taxpayers can reach out to their branch for further assistance.
PAN mismatch: Ensuring the correct linkage of PAN with the bank account is crucial.
Invalid account type: If this message appears, one can click on re-validate and select the correct bank account type, followed by submission of the validation request.
Invalid IFSC code: Users must input the correct Indian Financial System Code (IFSC) and then submit the validation request.

Tag: Bank Account