What changed
RBI issued an updated master circular (RBI/2010-11/87) replacing the July 2009 version, incorporating all instructions issued till end-June 2010. The circular reiterates the existing framework for direct tax collection, including the major heads of account and the requirement for banks to issue paper tokens as acknowledgment of payments, and emphasizes the 4-5 day waiting period for receipted challans.
What it means for you
Banks must ensure strict compliance with the consolidated instructions, particularly the issuance of tokens, secure handling of receipted challans, and adherence to the 4-5 day waiting period. Non-compliance could lead to customer grievances and regulatory scrutiny. The circular also clarifies that Fringe Benefit Tax has been abolished from assessment year 2010-11 and Banking Cash Transaction Tax withdrawn from April 1, 2009.
What you must do
- Review and implement the updated master circular instructions across all authorized branches.
- Ensure every taxpayer receives a paper token as acknowledgment at the time of payment.
- Secure receipted challans properly—do not keep them in open boxes or allow customers to pick them freely.
- Make receipted challans available within 4-5 days based on local clearing arrangements.
- Update internal systems to stop accepting Fringe Benefit Tax (abolished from AY 2010-11) and Banking Cash Transaction Tax (withdrawn from April 1, 2009).
- Train branch staff on the revised procedures and the importance of timely remittance and document dispatch.
Who it affects
All agency banks handling direct tax collections, Branch managers and tellers at authorized branches, Taxpayers depositing direct taxes at bank branches
What is the key change in this master circular compared to the 2009 version?
The circular updates the master circular by incorporating all instructions issued by RBI up to end-June 2010. It consolidates existing instructions for easier reference, with emphasis on token issuance, secure handling of challans, and the 4-5 day waiting period for receipted challans.