Greenvissage explains, How is residential status under FEMA different from Income Tax?

The criteria to determine residential status in India is different under Income Tax from the same under the Foreign Exchange Management Act (FEMA), each law has its purposes. While the income tax law guides the taxation of global income based on residential status, the FEMA law guides cross-border payments and access to liberalised remittance schemes based on residential status. As per the income tax law, a person can be a resident, non-resident or resident but not ordinarily resident (RNOR) in India. Individuals are treated as residents if they were in India for 182 days or more during the relevant financial year. Further, if a person is in India for 60 days or more in the financial year and their cumulative stay in India is 365 days or more in the four immediately preceding financial years, the person would still be considered a resident in India. As per the latest amendment, from FY 2020-21 onwards, for individuals with annual income above INR 15 lakh, the period of staying in the country has been reduced to 120 days or more, instead of 182 days. Meanwhile, if a person is in India for at least 729 days, during the previous 7 financial years, or has been a non-resident for 9 out of 10 previous financial years, then such person is considered as RNOR. Under the FEMA laws, individuals are recognised as ‘Person Resident in India’ or ‘Person Resident Outside India’. If a person stays for more than 182 days in India during the previous financial year, then the person is treated as a Person Resident in India. However, if a person has stayed in India for more than 182 days during the previous year, and leaves India or stays outside India for employment, business or vacation or an uncertain period of stay, then such person is treated as a Person Resident Outside India, with immediate effect. Similarly, when an individual has not stayed in India for more than 182 days during the previous year, but during the current year comes to India or stays in India for any of the three purposes stated above, the person becomes a Person Resident in India, with immediate effect. Under FEMA laws, it may happen that a person was resident for part of the year and non-resident for the balance year, however, under income tax laws, the residential status remains the same throughout the financial year. Further, under the income tax act, the citizenship of the person is also important, for being exempt from paying taxes in India. However, under FEMA, citizenship is not relevant. It is important to note here that the nationality of a person is not relevant under both laws.

Greenvissage explains, What is Ayushman Bharat Health Account?

The Ayushman Bharat Health Account (ABHA), earlier known as Ayushman Bharat Health ID, is a programme launched by the Indian government to provide a Digital Health ID to the citizens. Under the programme, a 14-digit ABHA number will be assigned to all citizens to uniquely identify them in India’s digital healthcare ecosystem. The health card is aimed at establishing a strong and trustable health identity that can be accepted by all healthcare providers and payers across the country. Individuals can access their digitized health records at any time through the ABHA portal. Citizens can register on the ABHA portal and get an Ayushman Bharat Health Account (ABHA) with a unique 14-digit ABHA ID. Meanwhile, hospitals and doctors will also enrol on the Health Facility Registry (HFR) and the Health Professionals Registry (HPR) respectively. People can upload their health records digitally at the click of a button while doctors, pharmacists and diagnostic service providers can also access medical history with ease if a person shares their health ID number and explicit consent. Although it might look similar to how platforms like Apollo, 1mg, and NetMeds have digitized prescriptions, test results and other items, there’s one key difference. These platforms are not centralized systems as they have their own rules, systems, and standards. Meanwhile, ABHA is the government’s central health data repository and a person needs to sign up only once. More importantly, hospitals, clinics and insurers – both public and private will also be able to access the records. The key beneficiaries of this whole programme are expected to be health insurance companies which will get more data for analysis and a better understanding of the healthcare system – geographically and demographically. Researchers will also be able to use the data aggregated to study how health and diseases have evolved in the country. Although only a few people know about ABHA ID, 240 million health IDs have already been generated without even anyone noticing the same. This was possible firstly because of the Ayushman Bharat Pradhan Mantri-Jan Arogya Yojana (AB-PMJAY), free health insurance for the poor and the marginalized, and secondly because of the Cowin platform for COVID vaccinations where people have signed up using Aadhar. Under these two programmes, the government has automatically created a health ID for all the beneficiaries.

Greenvissage explains, What are belated returns, revised returns and updated returns?

The due date for filing the income tax return for the financial year 2021-22 has already passed. While most people make an honest effort towards filing returns, many others neglect the same, or file tax returns without exercising due caution. It worked well for them until the last decade, however, with the latest Memorandum of Understanding (MOUs) signed by the income tax department where dozens of other authorities share information and databases with the income tax department, the income tax officer already has a lot of information about your income, and also major expenses incurred during any particular year. With the help of data analytics, the income tax department is now sending automated tax notices where there is a difference in the income reported, or if an income has not been reported, as compared to the information already available to the income tax department. Recently, the income tax department announced that it is sending automated notices to people who have earned money through online gaming and not disclosed the same in their tax returns. So, you can imagine, if you fail to file a return or miss disclosing certain income, you are inviting deep trouble, in case the tax department picks your case for scrutiny, or the data analytics point out any anomaly in your return. Non-filing of returns or non-disclosure of income in the tax returns carries tax and penalties as steep as 85% of such income. However, there is still a way out to save yourself from paying extra taxes and penalties. Under income tax laws, apart from the income tax return that every person is expected to file (referred to as ‘Original return’), the tax department gives three more options to the taxpayers to avoid genuine hardships – Belated return, Revised return and Updated return. If you have filed your income tax return, however, missed reporting a portion of your income, you can file a ‘Revised return’ which is again the same as the original income tax return, except that this time you file the return with the correct information. You are allowed to revise the original return until March 31 of the next financial year. If you have failed to file your return before the due date, you can still file a ‘Belated return’ which is the same as the original income tax return with a few disadvantages such as late filing fees, no carry forward of losses, etc. Belated returns can be filed voluntarily up to December 31 of the next financial year. However, if you have to file even a belated return, by December 31, in such cases, you can file an ‘Updated return’. This is a new option provided by the income tax department in the latest budget. Updated returns can be filed within 24 months from the end of the financial year. However, it carries an additional 25% tax if the return is filed within the first 12 months, and an additional 50% tax, if the return is filed in the next 12 months. Updated returns carry two mandatory conditions –1) the return can be filed only if there is an increase in the income and the tax, it cannot be filed if you have wrongly disclosed higher income, 2) the return can be filed only after payment of additional taxes, the return cannot be filed unless the tax dues are cleared.

While banking transactions are being digitised, most of us still have to visit the nearest physical branch to get the full banking experience. There are forms to be filled and submitted at the right counters. The bank representatives would process the same. At times, there are even long queues for the same, especially for cash withdrawals. The whole process of physically visiting the bank is cumbersome and time-taking and it gets worse with public sector banks. According to data, State Bank of India has 19,000 customers per branch and only 1 employee to serve about 1,680 customers, as compared to HDFC Bank which has 10,000 customers per branch and 1 employee for every 467 customers. Thus, the quality of services differs vastly amongst the banks. And again, if you live in cities, you might consider yourself lucky, because there are several remote villages in India which do not have fully functional bank branches. So most of these people have to visit nearby cities to avail the full banking services. To overcome these problems, the Reserve Bank of India (RBI) has come up with an innovative solution – Digital Banking Units (DBUs). The digital banking units are much like an actual bank branch, except that they will be digital like ATMs and operate 24×7 just like them. The DBUs will provide the usual traditional banking services including cash withdrawals, deposits, passbook printing, statement generation and fixed or recurring deposits, as also loan applications and the ability to open accounts. The RBI has announced 75 such DBUs in the initial phase. The DBUs will have a Self-Service Zone and also a Digital Assistance Zone where at least 2 bank staff will man the booth to help people when needed. The DBUs can go a long way to improve financial inclusion in the country.