Unity Small Finance Bank has Taken Over PMC Bank Impacts

Hello Friends,

This is Good news for PMC account holder where there is a good hope for getting their back their hard earned money from the withheld PMC accounts.

There has been a recent news that the Unity Small Finance Bank has taken over the PMC Bank. This would result in your PMC bank account been migrated to Unity SFB. As part of the amalgamation scheme approved by RBI and the Government of India, along with the support of DICGC, as detailed in the open letter from Unity bank to PMC account holders, The PMC account holders will soon have the access to their funds.

The settlement process is as per the Government of India  -Sanctioned Punjab and Maharashtra Co-operative Bank Ltd (Amalgamation with Unity Small Finance Bank Lts) Scheme 2022. Based on the aggregate  eligible balance across PMC accounts in the "Same Capacity and Same Right" (As per the DICGC settlement procedure), the PMC account holder will be assigned to one the following groups to decide the eligibility.

Group C - Customers having less then Rs. 5 Lakhs Balance (Including interest accrued till 31st March 2021; Subject to claim approval & receipt of funds from DICGC)

Group B - Customers having Rs. 5 Lakhs to 15 Lakhs Balance (Including interest accrued till 31st March 2021; Subject to claim approval & receipt of funds from DICGC)

Group A - Customers having above Rs. 15 Lakhs Balance (Including interest accrued till 31st March 2021; Subject to claim approval & receipt of funds from DICGC)

For being eligible for the above the accounts would be transferred from PMC would transferred to Unity SFB. The PMC customers need to do the undergo the KYC procedure as per the bank norms.

The KYC can be done by visiting the existing PMC bank branch or by using the Unity Bank KYC app.

Source : https://theunitybank.com/docs/Retail_Depositor_Letter.pdf

I would keep this information updated as soon as more details are available on the same. Thanks for taking time to read this, hope this is helpful. 

Update 28/3/2022:

The account balances are now visible for the linked and verified PMC accounts on the Unity KYC application. The funds will soon be available for transfer and withdrawals based on the limits as detailed for Group A , Group B and Group C on approval from DICGC.

Update 19/4/2022:

The update as on today DICGC approval has been received for most of the customers. Also Unity Bank has started sharing new cheque books to the existing PMC Customers since last few days. The PMC account holder can withdraw amounts using cheques upto the limit of 5 lakhs. If Customer holds Fixed Deposit (FD) with bank, they have to surrender the FD slips to the bank and get the closure amount transferred to their saving account which can be used for withdrawal. By any case if customer has not received the  new cheque book. They can contact branch and get the amount transferred through NEFT/RTGS. At last some good work shown by the bank and relief to its customers. Still Funds above 5 lakhs will be kept locked by the bank and would be released within next 5 years as per the government plan. The Unity KYC app does not allow withdrawals yet, Customer has to visit branch for the same.

Regards,

Author

Tax Ready Reckoner for Investments for FY 2015-2016

Tax Ready Reckoner for Investments - FY:  2015-16:

EQUITY:

Stocks:

1. If you hold on to them for a year, the long-term capital gain is tax free
2. Short-term capital gain is taxed at 15%
3. Dividends are tax free

DEBT FIXED INCOME INSTRUMENTS:

Savings a/c:

1. Interest up to Rs 10,000 is tax free, taxed at slab rate after that
2. TDS not deducted on savings interest.

Fixed deposits:

1. Full interest taxed at slab rate
2. TDS of 10% if interest in any financial year crosses Rs 10,000

Recurring deposits:

1. Full interest taxed at slab rate
2. TDS wef. this FY, the interest on RD is also subject to TDS like F.D.

Tax-free bonds:

1. Full interest is tax free
2. The long-term capital gain (after holding for 1 year) taxed at 10%
3. Being interest bearing instruments, no indexation benefit allowed
4. Short-term capital gain taxed at marginal rates.

Normal bonds and debentures:

1. Full interest taxed at slab rate TDS of 10% if interest in any financial year crosses the Rs 5,000 mark
2. The long-term capital gain (after holding for 1 year) taxed at 10%
3. Being interest bearing instruments, no indexation benefit allowed
4. Short-term capital gain taxed at marginal rates.

MUTUAL FUNDS:

Equity funds:

1. Long-term capital gain (after holding for 1 year) is tax free
2. Short-term capital gain is taxed at 15%
3. Dividends are tax free

Arbitrage funds:
(Provided they maintain equity fund status)

1. Long-term capital gain (after holding for 1 year) is tax free
2. Short-term capital gain is taxed at 15%
3. Dividends are tax free

Equity oriented balanced funds:

1. Long-term capital gain will be tax free
2. Short-term capital gain taxed at 15%.
3. Dividends are tax free

Debt funds:

1. Long-term capital gain (after holding for 3 years) is taxed at 20% after indexation
2. Short-term capital gain taxed at marginal rates
3. Dividends are tax-free in the hands of the investor, but scheme pays a very high dividend distribution tax of 28.32%

Debt-oriented balanced funds:

1. Long-term capital gains (after holding for 3 years) taxed at 20% after indexation
2. Short-term capital gain taxed at marginal rates
3. Dividends are tax-free in the hands of investors, but scheme pays a very high dividend distribution tax of 28.32%

Gold funds:

1. Long-term capital gain (after holding for 3 years) taxed at 20% after indexation
2. Short-term capital gain taxed at marginal rates.

GOLD:

Gold bullion and ornaments:

1. Long-term capital gain (after holding for 3 years) taxed at 20% after indexation
2. Short-term capital gain taxed at marginal rates.

Gold bonds:

1. Small interest received in the middle will be taxed at slab rates
2. Long-term capital gains (after holding for 1 year) taxed at 10%
3. Being interest bearing instruments, no indexation benefit allowed
4. Short-term capital gains taxed at marginal rates.

INSURANCE:

Endowment policies
1. Final proceeds tax free if premium in any year did not exceed 10% of the sum assured
2. TDS of 2% if the total receipt crosses Rs 1 lakh in financial year
3. Investors should consider service tax paid on premiums also while calculating returns
4. For endowment plans, it is 3.5% for first year's premium and 1.75% for the renewal premium.

ULIPS:

For ULIPs, service tax is 14% on all charges (like mortality charges, AMC fees, switch fees, etc)

REAL ESTATE:

1. Rent received (or notional rent for the locked up second home) are taxed at slab rate
2. Deductions available for rent includes property tax, repair costs, home insurance, etc
3. The long-term capital gain (after holdiing for 3 years) is taxed at 20% after indexation
4. Short-term capital gain is taxed at the marginal rates.

REAL ESTATE INVESTMENT TRUST (REIT):

1. Long-term capital gain (after holding for 1 year) from REIT units listed and traded in stock exchanges will be tax free 2. Short-term capital gain from REIT units listed and traded in stock exchanges will be taxed at a lower rate of 15%
3. REIT will be pass- through vehicle and is not liable for any income received by it
4. Rents received by REIT and distributed will be taxed at the hands of investors as rental income
5. Interest received by REIT and distributed will be taxed at the hands of investors as interest income
6. Dividends received by REIT and distributed will be tax free in the hands of investors.

Securities Transaction Tax (STT): STT is levied on stocks and equity mutual funds in lieu of tax-free dividends and also lower capital gain taxes. Equity mutual funds are defined as schemes that maintain more than 65% equity exposure and because of that, equity oriented balance funds and arbitrage funds also comes under this category.

Dividend distribution tax (DDT): The mutual fund dividends are tax-free, but there is a dividend distribution tax (DDT) applicable for debt mutual funds. The high DDT (works out to be 28.32% now) has taken the sheen out of the dividend options in debt mutual funds.

Indexation benefit: While computing long-term capital gain (LTCG), indexation benefit is provided as compensation against inflation. For example, if the LTCG is 10% p.a. and the inflation is 7% p.a., you need to pay tax only on 3% additional gains. Indexation benefit is not available for instruments that have interest components.