Government Small Savings Schemes – Salient features including Tax Rebate

PrintPDF

Central and State Governments take various measures from time to time to promote and popularize small savings scheme through print and electronic media as well as holding seminars, meetings and providing training to the various agencies involved in mobilizing deposits under these schemes. As part of this ongoing exercise, Government has recently taken initiatives to make the small savings schemes attractive and investor friendly. The initiatives are:-

The restriction on opening of more than one account during a calendar month under the Senior Citizens Savings Scheme has been removed with effect from 24^th May, 2007.

All categories of pensioners have been allowed to open and maintain ‘Pension Account’ under Post Office Savings Account Rules, with effect from 11^th July, 2007.

The penalty on pre-mature withdrawal of deposits under the Post Office Monthly Income Account (POMIA) scheme has been rationalized from 3.5% to 2% on withdrawal on or before expiry of three years and 1% on withdrawal after expiry of three years.

The maximum deposit ceilings of Rs.3.00 lakh and Rs.6.00 lakh under the Post Office Monthly Income Account (POMIA) Scheme has been raised to Rs. 4.50 lakh and Rs.9.00 lakh in respect of single and joint accounts respectively.

Bonus at the rate of 5% on the deposits made under Post Office Monthly Income Account (POMIA) Scheme on or after 8^th December 2007 upon the maturity of the deposit has been reintroduced.

The benefit of Section 8OC of the Income Tax Act, 1961 has been extended to the investments made under 5-year Post Office Time Deposits Account and Senior Citizens Savings Scheme, with effect from 01.04.2007.

Measures are also taken to promote and popularize these schemes through print and electronic media as well as holding seminars and meetings, providing training to the various agencies involved in mobilizing collection in Small Savings Schemes etc.

A website of the National Savings Institute under Government of India, Ministry of Finance has also been launched to facilitate interface with the public through wider dissemination of information on small savings and on-line registration and settlement of investors’ grievances. The website address is nsiindia.gov.in.

The details of various Small savings Schemes operated by DoP are :-

Government Small Savings Schemes at a Glance

SCHEME	Interest Payable, Rates, Periodicity etc.	Minimum Amount for opening of account and maximum balance that can be retained	Salient features including Tax Rebate
Post Office Savings Account	3.5% per annum on individual/ joint accounts.	Minimum INR 20/- for opening. Maximum balance of INR 1,00,000/- for an individual account. INR 2,00,000/- for joint account.	Account can be opened by cash only. Cheque facility available if an account is opened with Rs.500/- and for this minimum balance of Rs.500/-in an account is to be maintained. Cheque facility can be taken in an existing account also. Interest earned is Tax Free up to Rs.3500/- per year. Nomination facility is available at the time of opening and also after opening of account. Account can be transferred from one post office to another. One account can be opened in one post office subject to balance in all accounts should not exceed limit of Rs.1 Lakh and 2 Lakh in single/joint account. Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account. Joint account can be opened by two or three adults. At least one transaction of deposit or withdrawal in three financial years is necessary to keep the account active. Single account can be converted into Joint and Vice Versa. Minor after attaining majority has to apply for conversion of the account in his name.
5-Year Post Office Recurring Deposit Account	On maturity INR 10/- account fetches INR 728.90/-. Can be continued for another 5 years on year to year basis.	Minimum INR 10/- per month or any amount in multiples of INR 5/-. No maximum limit.	Account can be opened by cash/cheque and in case of cheque, the date of deposit shall be date of presentation of cheque. Nomination facility is available at the time of opening and also after opening of account. Account can be transferred from one post office to another. Any number of accounts can be opened in any post office. Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account. Joint account can be opened by two adults. If monthly deposit is not made up to the last working day, a default fee is charged. After 4 regular defaults, the account becomes discontinued and can be revived in two months but if the same is not revived within this period, no further deposit can be made. There is rebate on advance deposit of at least 6 installments. Single account can be converted into Joint and Vice Versa. Minor after attaining majority has to apply for conversion of the account in his name. One withdrawal upto 50% of the balance allowed after one year. Full maturity value allowed on R.D. Accounts restricted to that of INR. 50/- denomination in case of death of depositor subject to fulfillment of certain conditions.
Post Office Time Deposit Account	Interest payable annually but calculated quarterly. Period Rate 1yr.A/c 6.25% 2yr.A/c 6.50% 3yr.A/c 7.25% 5yr.A/c 7.50%	Minimum INR 200/- and in multiple thereof. No maximum limit.	Account may be opened by individual. Account can be opened by cash/cheque and in case of cheque the date of realization of cheque in Govt. account shall be date of opening of account. Nomination facility is available at the time of opening and also after opening of account. Account can be transferred from one post office to another. Any number of accounts can be opened in any post office. Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account. Joint account can be opened by two adults. Single account can be converted into Joint and Vice Versa. Minor after attaining majority has to apply for conversion of the account in his name. 2, 3 & 5 year account can be closed after 1 year at discount. Account can also be closed after six months but before one year without interest. The investment under 5 years TD qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.
Post Office Monthly Income Account	8% per annum payable i.e. INR 80/- will be paid every month on a deposit of INR 12000/-.	In multiples of INR 1500/- Maximum INR 4.5 lakhs in single account and INR 9 lakhs in joint account.	Account may be opened by individual. Account can be opened by cash/cheque and in case of cheque the date of realization of cheque in Govt. account shall be date of opening of account. Nomination facility is available at the time of opening and also after opening of account. Account can be transferred from one post office to another. Any number of accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts. Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account. Joint account can be opened by two or three adults. All joint account holders have equal share in each joint account. Single account can be converted into Joint and Vice Versa. Minor after attaining majority has to apply for conversion of the account in his name. Maturity period is 6 years. Interest can be drawn through auto credit into savings account standing at same post office, through PDCs or ECS. Can be prematurely encashed after one year but before 3 years at the discount of 2% of the deposit and after 3 years at the discount of 1% of the deposit. (Discount means deduction from the deposit.) A bonus of 5% on principal amount is admissible on maturity in respect of MIS accounts opened on or after 8.12.07.
Senior Citizens Savings Scheme Account	9% per annum, payable from the date of deposit to 31st March/30thJune/30th Sept & 31st December in the first instance & thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st December.	There shall be only one deposit in the account in multiple of INR.1000/- maximum not exceeding rupees fifteen lakh.	An individual of the Age of 60 years or more may open the account. An individual of the age of 55 years or more but less than 60 years who has retired on superannuation or under VRS can also open account subject to the condition that the account is opened within one month of receipt of retirement benefits and amount should not exceed the amount of retirement benefits. Maturity period is 5 years. A depositor may operate more than one account in individual capacity or jointly with spouse (husband/wife). Account can be opened by cash for the amount below Rs. 1 lakh and for Rs. 1 Lakh and above by cheque only. In case of cheque, the date of realization of cheque in Govt. account shall be date of opening of account. Nomination facility is available at the time of opening and also after opening of account. Account can be transferred from one post office to another Any number of accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts. Joint account can be opened with spouse only and first depositor in Joint account is the investor. Interest can be drawn through auto credit into savings account standing at same post office, through PDCs or Money Order. Premature closure is allowed after one year on deduction of 1.5% interest & after 2 years 1% interest (Discount means deduction from the deposit.). After maturity, the account can be extended for further three years within one year of the maturity by giving application in prescribed format. In such cases, account can be closed at any time after expiry of one year of extension without any deduction. TDS is deducted at source on interest if the interest amount is more than INR 10,000/- p.a. Investment under this scheme qualify for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.
15 year Public Provident Fund Account	8% per annum (compounded yearly).	Minimum INR. 500/- Maximum INR. 70,000/- in a financial year. Deposits can be made in lumpsum or in 12 installments.	An individual can open account with Rs.5/- but has to deposit minimum of Rs.500/- and maximum Rs.70,000/- in a financial year. Joint account cannot be opened. Account can be opened by cash/cheque and In case of cheque, the date of realization of cheque in Govt. account shall be date of opening of account. Nomination facility is available at the time of opening and also after opening of account. Account can be transferred from one post office to another. The subscriber can open another account in the name of minors but subject to maximum investment limit by adding balance in all accounts. Maturity period is 15 years but the same can be extended within one year of maturity for further 5 years and so on. Maturity value can be retained without extension and without further deposits also. Premature closure is not allowed before 15 years. Deposits qualify for deduction from income under Sec. 80C of IT Act. Interest is completely tax-free. Withdrawal is permissible every year from 7th financial year. Loan facility available from 3rd Financial year. No attachment under court decree order.
KisanVikas Patra	Money doubles in 8 years & 7 months. Facility for premature encashment. Rate of interest 8.4% (compounded yearly)	No limit on investment. Available in denominations of INR. 100/-, INR. 500/-, INR. 1000/-, INR. 5000/-, INR. 10,000/-, in all Post Offices and INR. 50,000/- in all Head Post Offices.	A single holder type certificate may be issued to an adult for himself or on behalf of a minor or to a minor. It can also be purchased jointly by two adults. There is no Tax rebate on investment in KVP.
National Savings Certificate (VIII issue)	8% Interest compounded six monthly but payable at maturity. INR. 100/- grows to INR 160.10 after 6 years.	Minimum INR. 100/- No maximum limit available in denominations of INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-.	A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor. Deposits quality for tax rebate under Sec. 80C of IT Act. The interest accruing annually but deemed to be reinvested will also qualify for deduction under Section 80C of IT Act.

Companies Name Availability Rules – Govt Amends the existing Rules

PrintPDF

Company Law : Companies (Name Availability) Rules, 2011
In exercise of the power conferred by clause (a) of sub-section (1) of section 642 read with sections 20 and 21 of the Companies Act, 1956 (1 of 1956), the Central Government hereby makes the following Rules:

1.(i) These Rules may be called “Companies (Name Availability) Rules, 2011”;
(ii) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

2. As per provisions contained in section 20 of the Companies Act, 1956, no company is to be registered with undesirable name. A proposed name is considered to be undesirable if it is identical with or too nearly resembling with:

(i) Name of a company in existence; or

(ii) A registered trade-mark or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999.

3. After notification of these Rules, while applying for a name in the prescribed e-form-1A, using Digital Signature Certificate (DSC), the applicant shall be required to furnish a declaration to the effect that:

(i) he has used the search facilities available on the portal of the Ministry of Corporate Affairs (MCA) i.e.,www.mca.gov.in/MCA21 for checking the resemblance of the proposed name(s) with the companies and Limited Liability Partnerships (LLPs) already registered or the names already approved.

(ii) the proposed name(s) is/are not infringing the registered trademarks or a trademark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999;

(iii) the proposed name(s) is/are not in violation of the provisions of Emblems and Names (Prevention of Improper Use) Act, 1950 as amended from time to time;

(iv) The proposed name is not offensive to any section of people, e.g., proposed name does not contain profanity or words or phrases that are generally considered a slur against an ethnic group, religion, gender or heredity;

(v) he has gone through all the prescribed guidelines, given in these Rules, understood the meaning thereof and the proposed name(s) is/are in conformity thereof;

(vi) he undertakes to be fully responsible for the consequences, in case the name is subsequently found to be in contravention of the prescribed guidelines.

4. Where, the proposed name is containing more than one word, there will be an option in the e-form 1A for certification by the practicing Chartered Accountants, Company Secretaries and Cost Accountants, who will certify that he has used the search facilities available on the portal of the Ministry of Corporate Affairs (MCA) i.e., www.mca.gov.in/MCA21 for checking the resemblance of the proposed name(s) with the companies and Limited Liability Partnerships (LLPs) already registered or the names already approved and the search report is attached with the application form. The professional will also certify that the proposed name is not an undesirable name under the provisions of section 20 of the Companies Act, 1956 and also is in conformity with Companies (Name Availability) Rules, 2011 and Guidelines made therein.

5(i). Where e-form 1A has been certified by the professional in the manner stated at ‘4’ above, the name will be made available by the system online to the applicant without backend processing by the Registrar of Companies (ROC). This facility is not available for applications for change of name of existing companies.

(ii) Where a name has been made available online on the basis of certification of practicing professional in the manner stated above, if it is found later on that the name ought not to have been allowed under provisions of section 20 of the Companies Act read with these Rules, the professional shall also be liable for penal action under provisions of the Companies Act, 1956 in addition to the penal action under Regulations of respective professional Institutes.

(iii) Where e-form 1A has not been certified by the professional, the proposed name will be processed at the back end office of ROC and availability or non-availability of name will be communicated to the applicant.

6. The name if made available, is liable to be withdrawn anytime before registration of the company, if it is found later on that the name ought not to have been allowed. However, ROC will pass an specific order giving reasons for withdrawal of name, with an opportunity to the applicant of being heard, before withdrawal of such name.

7. The name if made available to the applicant, shall be reserved for sixty days from the date of approval and further extension of thirty days with revalidation application and fees. If, the proposed company has not been incorporated within such period, the name shall be lapsed and will be available for other applicants.

8. Even after incorporation of the company, the Central Government has the power to direct the company to change the name under section 22 of the Companies Act, 1956, if it comes to his notice or is brought to his notice through an application that the name too nearly resembles that of another existing company or a registered trademark.

9. In determining whether a proposed name is identical with another, the following shall be disregarded:

(i) The words Private, Pvt, Pvt., (P), Limited, Ltd, Ltd., LLP, Limited Liability Partnership;

(ii) The words appearing at the end of the names – company, and company, co., co, corporation, corp, corpn, corp.;

(iii) The plural version of any of the words appearing in the name;

(iv) The type and case of letters, spacing between letters and punctuation marks;

(v) Joining words together or separating the words does not make a name distinguishable from a name that uses the similar, separated or joined words;

(vi) The use of a different tense or number of the same word does not distinguish one name from another;

(vii) Using different phonetic spellings or spelling variations does not distinguish one name from another. For example, J.K. Industries limited is existing then J and K Industries or Jay Kay Industries or J n K Industries or J & K Industries will not be allowed. Similarly if a name contains numeric character like 3, resemblance shall be checked with ‘Three’ also;

(viii) Misspelled words, whether intentionally misspelled or not, do not conflict with the similar, properly spelled words;

(ix) The addition of an internet related designation, such as .COM, .NET, .EDU, .GOV, .ORG, .IN does not make a name distinguishable from another, even where (.) is written as ‘dot’;

(x) The addition of words like New, Modern, Nav, Shri, Sri, Shree, Sree, Om, Jai, Sai, The, etc. does not make a name distinguishable from an existing name such as New Bata Shoe Company, Nav Bharat Electronic etc. Similarly, if it is different from the name of the existing company only to the extent of adding the name of the place, the same shall not be allowed. For example, ‘Unique Marbles Delhi Limited’ cannot be allowed if ‘Unique Marbles Limited’ is already existing;

Such names may be allowed only if no objection from the existing company by way of Board resolution is produced/ submitted;

(xi) Different combination of the same words does not make a name distinguishable from an existing name, e.g., if there is a company in existence by the name of “Builders and Contractors Limited”, the name “Contractors and Builders Limited” should not be allowed;

(xii) If the proposed name is an exact Hindi translation of the name of an existing company in English especially an existing company with a reputation, e.g., Hindustan Steel Industries Ltd. will not be allowed if there exists a company with name ‘Hindustan Ispat Udyog Limited’;

Guidelines for availability of name

10. In supersession of all the previous circulars and instructions regarding name availability, the applicants and Registrar of Companies are also advised to adhere following guidelines while applying or approving the proposed name:

(i) It is not necessary that the proposed name should be indicative of the main object. However, in case the proposed name is indicative of any activity, the same will be appropriately reflected in the main object clause of the Memorandum of Association;

(ii) If the Company’s main business is finance, housing finance, chit fund, leasing, investments, securities or combination thereof, such name shall not be allowed unless the name is indicative of such related financial activities, viz., Chit Fund/ Investment/ Loan, etc.;

(iii) If it includes the words indicative of a separate type of business constitution or legal person or any connotation thereof, the same shall not be allowed. For e.g. co-operative, sehkari, trust, LLP, partnership, society, proprietor, HUF, firm, Inc., PLC, GmbH, SA, PTE, Sdn, AG etc.;

(iv) Abbreviated name such as ‘ABC limited’ or ‘23K limited’ cannot be given to a new company. However the companies well known in their respective field by abbreviated names are allowed to change their names to abbreviation of their existing name (for Delhi Cloth Mills limited to DCM Limited, Hindustan Machine Tools limited to HMT limited) after following the requirement of section 21 of the Companies Act, 1956;

(v) If the proposed name is identical to the name of a company dissolved as a result of liquidation proceeding should not be allowed for a period of 2 years from the date of such dissolution since the dissolution of the company could be declared void within the period aforesaid by an order of the Court under section 559 of the Act. Moreover, if the proposed name is identical with the name of a company which is struck off in pursuance of action under section 560 of the Act, then the same shall not be allowed before the expiry of 20 years from the publication in the Official Gazette being so struck off since the company can be restored anytime within such period by the competent authority;

(vi) If the proposed names include words such as ‘Insurance’, ‘Bank’, ‘Stock Exchange’, ‘Venture Capital’, ‘Asset Management’, ‘Nidhi’, ‘Mutual fund’ etc., the name may be allowed with a declaration by the applicant that the requirements mandated by the respective regulator, such as IRDA, RBI, SEBI, MCA etc. have been complied with by the applicant;

(vii) If the proposed name includes the word “State”, the same shall be allowed only in case the company is a Government company. Also, if the proposed name is containing only the name of a continent, country, state, city such as Asia limited, Germany Limited, Haryana Limited, Mysore Limited, the same shall not be allowed;

(viii) If a foreign company is incorporating its subsidiary company, then the original name of the holding company as it is may be allowed with the addition of word India or name of any Indian state or city, if otherwise available;

(ix) Change of name shall not be allowed to a company which is defaulting in filing its due Annual Returns or Balance Sheets or which has defaulted in repayment of matured deposits and debentures and/or interest thereon;

(x) With a view to maintain uniformity, the following guidelines may be followed in the use of keywords, as part of name, while making available the proposed names under sections 20 and 21 of the Companies Act, 1956:

	S.No.	Key Words	Required authorized capital (in Rs.)
	1	Corporation, corp, corpn, corp.	25 crore
	2	international, Globe, Global, World, Overseas, Universe, Universal, Continent, Continental, Inter Continental, Asiatic, Asia, Asian being the first word of the name	5 crore
	3	If any of the words at (2) above is used within the name (with or without brackets)	2 crore
	4	Hindustan, India, Indo, Indian, Bharat, Bharatvarsh, Bhartiya or any other country’s name being first word of the name	2 crore
	5	If any of the words at (4) above is used within the name (with or without brackets)	25 lakh
	6	Industries/ Udyog	5 crore
	7	Enterprises, Products, Business, Manufacturing, Venture.	50 lakh

Cabinet clears GST Constitution Amendment Bill

PrintPDF

The Union Cabinet has approved Constitution Amendment Bill to pave the way for implementation of Goods and Services Tax, a new indirect tax regime that will subsume various levies such as excise and service tax.

According to sources, the Cabinet has cleared the Bill but there are certain changes which the Law Ministry has been asked to do. Now, the government would push to table it in Parliament.

“It has been approved. We will try to introduce it in Parliament,” a minister said.

The Finance Ministry has worked on the final draft Amendment Bill, the fourth since the discussions on the new tax regime started.

Earlier, the first three drafts prepared by the Centre were rejected by the states citing autonomy issues.

The fourth draft, a hybrid of the second and third draft, has proposed that the GST council for taking decisions on all important matters will be formed through a presidential order.

In addition, the composition of the GST Dispute Resolution Authority, proposed to be a part of the Constitution Amendment, will be decided by Parliament.
Furthermore, petroleum, natural gas, diesel and ATF have been kept out of the GST ambit in the final draft.

Last year, a draft Constitution Bill proposed by the Centre to the states had suggested a council chaired by the Union Finance Minister, with states as members, to make changes in GST.

The Centre subsequently provided another draft to states, suggesting that changes in GST could be made only if there was a consensus on those issues in the council. However, some state finance ministers did not agree to even this suggestion.

Taking into consideration the states’ concerns, the Finance Ministry had floated a third draft on the GST Constitution Amendment Bill.

The new draft proposed to create a GST Council through an Act of Parliament, instead of a presidential order, as proposed in the previous draft. The Centre had also dropped any reference to the Union Finance Minister heading the GST Council.

The GST will subsume indirect taxes such as excise duty and service tax at the central level and VAT on the states front, besides local levies.

Liability of interest where CENVAT credit was wrongly taken but reversed by assessee before utilization- Circular No. 942/03/2011-CX

PrintPDF

1. Attention is invited to the Board’s Circular No. 897/17/2009-CX dated 03.09.09, wherein it was clarified that in light of clear and unambiguous provisions of Rule 14 of the CENVAT Credit Rules, 2004, the interest shall be recoverable when credit has been wrongly “taken”, even if it has not been utilized.

2. References have been received to re-examine the issue in light of judgement of P&H High Court in the case of Ind-Swift Labs. V/s UOI [2009(240)ELT328(P&H)]. The said judgement of P&H High Court held that under provisions of Rule 14 of CENVAT Credit Rules, 2004, interest cannot be claimed from the date of wrong availment of credit. It is required to be paid from the date it is wrongly utlilized.

3. The matter has been examined. It is observed that the issue has now been conclusively settled by the Apex Court in the departmental appeal against the above mentioned judgement of P&H High Court. The Apex Court vide its judgement dated 21.02.11 in Civil Appeal No. 1976 of 2011 has set aside the aforesaid order of Hon’ble High Court. The Apex Court has ruled that “If the aforesaid provision is read as a whole we find no reason to read the word “OR” in between the expressions ‘taken or utilized wrongly or has been erroneously refunded’ as the word “AND”. On the happening of any of the three circumstances such credit becomes recoverable along with interest.” In effect, therefore, the view taken by the Board in circular dated 03.09.09 has now been endorsed by the Apex Court.

4. Immediate action may be taken to safeguard revenue in light of the judgement of Apex Court.

5. Trade & Industry as well as field formations may be suitably informed.

6. Receipt of this circular may kindly be acknowledged.

Companies may have to induct at least one female independent director

PrintPDF

Coinciding with International Women’s Day , the Corporate Affairs Ministry on Tuesday said it would make it mandatory for companies having five or more independent directors to have at least one female independent director.

Companies having five or more independent directors would have to necessarily have at least one female independent director, Corporate Affairs Minister Murli Deora said. The proposal would be part of Companies Bill 2009, which is expected to be tabled in the current session of Parliament.

Industry body Assocham in a study titled ‘Corporate Women: Close the Gender Gap and Dream Big’ on Monday said that women executives would play a fundamental role in shaping market-leading institutions. However, the study said, currently out of 1,112 directorships of 100 companies listed on the Bombay Stock Exchange, only 59 positions, or 5.3%, are held by women.

This figure compares with 15% in Canada, 14.5% in the US and 12.2% in Britain. Last month, finance minister Pranab Mukherjee said Companies Bill 2009, which seeks to replace a half-a-century-old Act, would be presented in Parliament in the ongoing session.

“The Companies Bill introduced in Parliament in 2009 has been received by the Parliamentary Standing Committee. The proposed Bill will be introduced in Lok Sabha in current session,” Mr Mukherjee had said.

Compulsorily Online Payment of MCA fees from 27th March 11 of Fees Less then Rs. 50000 and 1st October’2011 of Fess more then Rs. 50000

PrintPDF

The Ministry of Corporate Affairs has reviewed the processes involved in delivery of important services to stakeholders, with a view to identify and improve the components causing delay in disposal of applications. Payment confirmation is found to be a major bottleneck in delivery of services in respect of offline payment made by physical challans. It was found that often there was a delay in confirmation of payments by physical challans, as banks have been given a reporting time of ‘T’+3 days, as per payment procedure approved by C&AG,‘T’ being the transaction date. This leads to delay in creation of work item for disposal of an application/e-form, leading to inconvenience of stakeholders. On the other hand, it was found that wherever fees were paid online in the system, the work item was created faster and the approvals were speedier as banks are following’ T’+1 for reporting online payments.

In the interest of stakeholders, with a view to improving service delivery time, Ministry has decided to accept payments of value upto Rs.50,000, for MCA 21 services, only in electronic mode w.e.f 27th March, 2011.

For the payments of value above Rs. 50,000, stakeholders would have the option to either make the payment in electronic mode, or paper challan. However such payments would also be made in electronic mode w.e.f .1st October’2011.