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Date: 05/05/2014
Interest Tax Act 1974 – Collection from borrowers

RBI/2013-14/579
UBD.BPD (PCB) Cir No.56/13.04.00/2013-14

May 5, 2014

The Chief Executive Officers of
All Primary (Urban) Co-operative Banks

Dear Sir,

Interest Tax Act 1974 – Collection from borrowers

Please refer to our circular UBD.BPD (PCB) Cir No.18/13.04.00/2008-09 dated September 22, 2008 on the captioned subject.

2. It is observed from the Supreme Court Order dated February 21, 2014 in Writ Petition (Civil) No.301 of 2005 that credit institutions which were in existence between October 1991 and March 1997 but were merged with another bank /financial institution prior to the date of the Supreme Court Order in April 2004 or merged subsequently, the transferee banks are liable to contribute to the extent of ` 50 lakh each as also deposit the excess amount collected by way of rounding off the interest tax on the interest income on loans and advances by the transferor banks, to the Trust Fund.

3. In view of the Supreme Court Order dated February 21, 2014, all UCBs are advised to take suitable action in accordance with the Order of the Supreme Court and report status to the concerned Regional Office of RBI.

Yours faithfully,

(P.K. Arora)
General Manager

 
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