Edition: 3rd May 2020 E-NEWS LETER Published by CICASA Jodhpur
Edition: 3rd May 2020
E-NEWS LETER
Published by CICASA Jodhpur
Edition: 3rd May 2020
Important Announcement
Youtube Channel “CICASA Jodhpur” for CA students.
We received good response, in the month of April-20, we received 5 videos from students on a
different - different topics.
1. Pushp Kumar Sahu (Equalisation levy)
2. Naresh Choudhary (Relief under GST Act and Other Indirect Tax Law Looking to Covid 19)
3. Antima Gaur(Accounting Standard - 2)
4. Antima Gaur (Profit Prior to Incoporation)
5. Pushp Kumar Sahu (Section 94B of Income Tax Act)
Invitation for Contribution of Article‟s/ quiz for Newsletter JODHPUR Branch of CICASA
appreciate all the Student authors who contributed their articles for the newsletter. We
request all the students to further contribute their articles for the newsletter and a quiz (10
questions), which are of Academic/Practical interest and will be useful for the students from
exam point of view as well. The article should not be copied from elsewhere and it should be
original work of the author.
Please send your Articles at:
If anyone interested in making videos with us for You Tube Channel please contact us on
[email protected] or call on 9828597133
YouTube Channel Link
Edition: 3rd May 2020
Message from Chairman (Jodhpur Branch of CIRC of ICAI)
Dear Students,
Warm Greetings!
At the outset I pray to almighty for the safety and health of yourself and family members in these unprecedented
times of COVID-19 outbreak. I feel privileged to interact with all of you through this news letter “SAMBHAV”.
As we all are aware the whole world has been adversely effected by pandemic COVID-19 and getting into serious
life threatening challenge. Indian Government under the guidance of our Honorable Prime Minister Mr. Narendra
Modi has imposed lockdown and further extended within interest of nation and our lives. I urge my students to
follow the instructions laid by government and soliciting all to download Aarogya Setu (Mobile App) to break the
spread of the disease. Therefore these challenges may confine our movement but cannot confine our zeal for
knowledge and endeavor to continue the spirit of learning.
Many new initiatives such as webinars, capsule courses, brainstorming competition and fun activities for
continuous growth and excellence in academic and social advancements are conducted. I appreciate the students
for their large participation and also congratulate to all the winners in such competitions. My special thanks to
those student for their generous contribution in ICAI COVID-19 Relief Fund under these special circumstances in
the interest of mankind.
Also want to highlight about extension of the examination May’20 from 19th
June to 29th
July’20 so I sincerely
request you all to utilize this extended period and prepare yourself for examination and my best wishes to all in
getting success.
If any student facing any hardship during this period I would like to extend my full support and will ensure our best
efforts for any possible need and assistance.
I would like to conclude by mentioning special thanks to CICASA Chairman, CA. Dhaval Kothari and also on behalf
of entire managing committee for his best efforts towards student activities and commencing successful
publication of “SAMBHAV” for first time in history of Jodhpur branch.
“STAY HOME STAY SAFE”
“Strength and growth come only through continuous effort and struggle.”
CA. Surendra Lunawat
Chairman – Jodhpur Branch (2020-21)
Edition: 3rd May 2020
My Dear Readers and Students,
Very Warm Wishes!
In the month of April we all were facing lockdown due to COVID-19 pandemic. I hope, you and
your family members are safe, enjoying the best heath.
Keeping in view the COVID-19 situation and lockdown, Jodhpur Branch of CICASA of ICAI came
in the month of April with Quarantine Talent Search program (Drawing, Essay writing, Selfie,
Slogan Writing and environmentalist). We received huge participation from students.
Jodhpur Branch of CICASA of ICAI became co-host with WICASA of ICAI for organizing of online
crash course for CA Final (old and new), CA Intermediate/IPCC, and CA Foundation. More than
500 students registered from Jodhpur Branch.
Last month, we organized First Webinar of Jodhpur Branch for students jointly with Lucknow
Branch. It was 2 day program on GST Annual Return and GST Audit. We received tremendous
response from students and more than 300 students registered from Jodhpur Branch.
I would like to take this opportunity to fully express of my heartfelt thanks to Judges of
Quarantine Talent Search Program CA. Amit Ji Jain, CA. Ritesh Ji Bhootra and CA. Pooja Ji Rathi
and speaker of Webinar CA. Arpit Ji Haldia and CA. Shashank Ji Mittal and special thanks to
Chairman Lucknow Branch CA. Rahul Ji Verma and Secretary CA. Raveesh Ji Choudhary.
The “Sambhav” is our little effort to share some knowledge content with you through articles
written by students on various topics; to inform you about the past events and upcoming
events. Also, it gives space to the budding writers, who wish to express themselves through
their write ups. !
"It’s Going To Be Hard, But Hard Does Not Mean Impossible.
Before I Conclude I would request all our students to participate actively in all the programs organized
by CICASA Jodhpur.
Hope you enjoying reading.
CA. Dhaval Kothari
Chairman- Jodhpur Branch of CICASA
Edition: 3rd May 2020
In – News
Edition: 3rd May 2020
Edition: 3rd May 2020
NPA: A HOLE IN THE HEART OF INDIAN ECONOMY
Banks are the engines of a country which keeps the wheels of the country moving. Banks fail
and economy of country collapse. The biggest ever challenge that Indian banking industry is
currently facing is the management of Non Performing Assets (NPA's) which is not only
affecting the banks but the whole economy. In fact level of NPA's in Indian banking sector is
nothing but a reflection of state of health of industry and trade.
Let’s go on main content now.
What are Non performing Assets (NPA's) ?
• An NPA is a loan or advance for which the principle or interest payment remained overdue for
a period of 90 days.
Edition: 3rd May 2020
Banks are further required to classify NPA into:
The current scenario:
• Indian banks' gross non-performing assets (NPAs) stood at Rs 9.4 lakh crore as on March
31,2019. This is a HUGE amount.
• The gross NPA ratio of banks stood at 9.3 percent in March 2019, this means that about 10%
of loans are never paid back, resulting in substantial loss of money to the banks.
• The gross percentage of non-performing assets in Indian public sector banks accounts for 80
to 85% of the total NPA, while private sector banks accounts for the remaining.
• Also, the NPA problem in India is worst when comparing with other emerging economies of
the world.
However a ray of hope came when Gross NPA ratio improved to 9.1% as of Sept 2019 end but
banking sector is by no means out of the woods.
“The failure of a loan usually represents miscalculations on both sides of the transaction or
distortions in the lending process itself.”
This quote captures one of the fundamental reasons for India’s non-performing assets (NPA)
problem as more debts provided by the banks, particularly by the state-owned public sector
banks (PSBs), turn into risky category credits. The accumulation of bad loans happened over an
extended period of time, and today it threatens to hamper the revival of economic growth by
choking the credit supply channel of the economy.
The origin of Crisis !
The answer lies partly in the credit boom of the years 2004-05 to 2008-09.
In that period, commercial credit (or what is called ‘non-food credit’) doubled. It was a period in
which the world economy as well as the Indian economy were booming. Indian firms borrowed
furiously in order to avail of the growth opportunities they saw coming.
Edition: 3rd May 2020
▪ Most of the investment went into infrastructure and related areas — telecom, power, roads,
aviation, steel.
▪ Businessmen were overcome with exuberance and they believed, as many others did, that
India had entered an era of 9% growth.
But soon after, as the Economic Survey of 2016-17 notes, many things began to go wrong.
▪ There were problems in acquiring land and getting environmental clearances and several
projects got stalled. Project costs soared.
▪ At the same time, with the onset of the global financial crisis in 2007-08 and the slowdown in
growth after 2011-12, revenues fell well short of forecasts.
▪ As a result, financing costs rose as policy rates were tightened in India in response to the
crisis.
▪ Further, the depreciation of the rupee meant higher outflows for companies that had
borrowed in foreign currency.
This combination of adverse factors made it difficult for companies to service (i.e maintain and
repay) their loans to Indian banks.(Reference taken from-The Hindu)
And thus, This has lead to Twin Balance sheet problem in India!
Twin Balance Sheet Problem- Twin Balance Sheet problem is the stress on Balance Sheets of
both; the Lenders (Banks) and the Borrowers (Corporates). Banks suffer the sting of stressed
assets which have very less probability of full revival and Corporates have loan and interest
obligations which are beyond their current financial standings.
Yes Bank and PNB Bank Crisis!
You all have heard of Yes bank and PNB bank crisis, right?
One problem was common in both the banks, not just the presence of HUGE amount of
Nonperforming assets but also under-reporting them.
Perpetrated by Nirav Modi, the PNB scam was one of the biggest banking fraud in India’s
history. Nirav Modi had allegedly acquired fraudulent Letters of Undertaking from one of PNB’s
Mumbai branches to secure overseas credit from other Indian lenders, which ultimately proved
to be A BIG NPA!
Also, Yes Bank’s financial crisis has largely been attributed to growing NPAs and poor
management. As per YES Bank’s financial results, YES Bank’s gross NPAs have pole-vaulted to
18.87 per cent – the highest in the private banking space. Further, A major crisis may be
brewing for Indian banks in near future!
Edition: 3rd May 2020
ALERT of a bad loan surge after lockdown is over!
Indian banks sitting on cluster of NPA cluster bombs:
• The lockdown has disrupted businesses and hit sales, incomes and revenues, increasing cash
flow pressure.
• To provide relief and stave off bankruptcies, RBI has announced measures for increased flow
of credit via banks to companies and allowed banks and non-bank financial institutions to grant
borrowers a three-month moratorium on loan repayments and reclassification of stressed loans
as NPAs.
• The relief given by RBI can offset liquidity constraints to an extent in the interim, but revenue-
related challenges will continue due to the massive unprecedented shock to the economy.
• The moratorium and forbearance in terms of classification of stressed loans will prevent a
spike in NPA levels at banks and non-banks for the next couple of months. But a few months
after the moratorium is over, bad loans may rise sharply.
• With the lockdown in place, growth forecasts have been revised downwards to 0% for FY20
by Moody’s. As a result the NPA ratio could go way over 12% by next March.
What should be the Way Ahead?
The need of the hour to tackle NPAs is some urgent remedial measures. This should include:
• Mechanism to identify the hidden NPAs.
• In case of willful defaulters, legal action should be taken without any delay.
• Improving credit risk management- This includes credit appraisal, credit monitoring.
Authored By:
Yash Nandwani
(WRO0635223)
Edition: 3rd May 2020
What is Indian Govt And RBI doing to fight with this Pandemic COVID19 ??
Let me first give You little bit of background . There is a good sequencing of attacking the
Corona virus Problem by the govt.First there is dress rehearsal of lock down in form of “Janta
Curfew” on Sunday then after that govt came with compulsory locked down for 21 days & then
on Wednesday a lot of Tax payments regulatory fillings were pushed back by three months and
then in Thursday the informal sector got hurt by the locked down given a life line .Some
humanitous measures were announced (500Rs for all woman Jandhan Holders, Three cylinders
free for next 3 months, the amount of grains to get in PDS are going to be doubled & many
more). Now comes the announcement for formal sector, this is the ones who borrows from
Banks so this is announced in such way in which one set of steps putting of lot of money in
hands of banks and in another sets of steps borrower have been given more time to repay loans
Broadly these two steps are announced.
Now Being more involved with formal, The following are the Announcements as per my
understanding :
1. RBI reduced repo rate by the 75 basis point to 4.4% (lowest in 11 years) to rescue slow
moving economy, with effect of this the EMIs for the month of March and onwards will
be reduced by significant amount. Industries like Hotel, Tourism , Real estates &
Individuals with homes loans will get major benefits of this. It will encourage banks to
infuse money into productive sectors. The reverse repo rate reduced by 90 basis points
to encourage refinancing.
2. The moratorium period of three months has allowed by RBI. This will directly affect the
liquidity of the banks. So as to face the liquidity issues RBI has reduced CRR
requirements significantly by 100 basis points. (First time in 7 years). Reduction in CRR
will help banks to reduce their lending rated and aid monetary transmission. MSF rate
also increased to 3% based on SLR. It will also infuse greater amount of liquidity in
economy.
3. The NPA classification would be major point with respect to RBI norms. The relaxation
or guidelines are expected from RBI to consider or ignore moratorium period of 3 month
while determining NPA classification.
Edition: 3rd May 2020
4. Effect to the ratios:
GNPA & NNPA - For banks it won't be major challenge for closing March 2020 books as
they are following 90 days approach as per RBI norms. Where as for NBFCs considering
application of IndAS, For ECL provision considering next 12 months approach, their
GNPA and NNPA would be affected.
NIM (Net interest Margin)- As the cost of funds would be continued on deposits and
other instruments, but their interest income would be significantly affected due to
pandemic. So NIM would be mismatched with their past trends.
Hope this pandemic won't lead to crisis like sub prime or big bang where the securities prices
kept on reducing and banks left with zero liquidity to repay deposits.The measures taken by RBI
and govt is appreciable,They are doing it differently, hope our Economy and life get back to
normal soon and, We all win against this Pandemic COVID19.
.
Authored By:
Mahim vyas
(CRO0611937)
Edition: 3rd May 2020
Notified Jurisdictional Area Section 94A
In this article, we will understand why section 94A was introduced and what was the need of
invoking such provisions under the Income Tax Act,1961.
Section 94A was introduced by Finance Act, 2011 by the Central Government in order to notify
certain jurisdictions from which India has no such agreements or arrangements of Sharing/
Exchanging Tax information of the assessee. Central Government has been trying since long to
bring back the Black money deposited by Indians in Foreign Bank Accounts. The main reason
behind introducing this section is to Curb the circulation of unaccounted money and various
international transactions which takes place between Tax Havens and other tax oriented
countries. And where Tax information exchange system does not exist.
This section Empowers the Central Government to Blacklist the countries where such effective
agreement of sharing tax information does not exist.
This provision acts as counter measure to discourage the transactions between India and
Notified Jurisdicted Areas. Till date only Cyprus has been notifed as NJA by Central
Government which was rescinded in the year 2016 Vide Notification No. 114 dated
14/12/2016 and Notification No. 119 dated 16/12/2016. Therefore in the current regime
there is no such NJA exists.
Let us better under this provision in the form of example
There were two brothers named Pushp Kumar Sahu resident of India and another one is Uday
Kumar Sahu who is a resident of Country X which is notified by Indian Government as Notified
Jurisdicted Area, Mr. Uday and Mr. Pushp has been entered into a transaction in the nature of
lending or borrowing of money , then after entering into such transaction both the parties will
be deemed to be an “Associated Enterprises”( within the meaning of section 92A) by virtue of
section 94A(2).
There would be a liability in the hands of Mr. Pushp kumar sahu in respect of any sum received
or credited from Mr. Uday in any previous year, then Mr. Pushp has to offer the explanation
about source of the said sum, if he fails to explain the same, then such sum credited in his
account would be deemed to be his income and accordingly tax will charged on such income.
Edition: 3rd May 2020
Under the same situation Mr. Pushp has also made payment to Mr. Uday ( Resident of NJA)
then there is a liability of Mr. Pushp to deduct tax on such sum credited to the account of Mr.
Uday at the highest of the following rates, namely;
1). At the rate or rates in force;
2). At the rate specified in the relevant provisions of this act;
3). At the rate of 30%.
Authored By:
Pushp Kumar Sahu
(CRO0553317)
Edition: 3rd May 2020
Interview of All India Rank (16th) CA. Ritika Mehta by Kratika Moondra
Exam preparation starts from planning the last six months of the
preparation time. That's the most crucial part. I ensured that all
my coaching classes are scheduled such that 6-4 months are
reserved for revision. Also, minimum 6 hours sleep is must. I
always sticked to the same study material which I used from
beginning and the institute's material. – CA. Ritika Mehta (AIR
16 – CA Final, May 19)
How did you prepare for your Exam? – Kratika
Moondra
Did you expect that you will be in
All India Rank? – Kratika Moondra
No, I had never thought about results but always focused on giving
my best. – CA. Ritika Mehta (AIR 16 – CA Final, May 19)
What was your first reaction after knowing that
you became CA with AIR? – Kratika Moondra
I came to know about AIR after 1 hour of result declaration and I was
speechless. – CA. Ritika Mehta (AIR 16 – CA Final, May 19)
How did you prepare for your Exam? – Kratika
Moondra
Exam preparation starts from planning the last six months of the
preparation time. That's the most crucial part. I ensured that all
my coaching classes are scheduled such that 6-4 months are
reserved for revision. Also, minimum 6 hours sleep is must. I
always sticked to the same study material which I used from
beginning and the institute's material. – CA. Ritika Mehta (AIR
16 – CA Final, May 19)
Edition: 3rd May 2020
What was the role of Mock Test organized by
ICAI in your success? – Kratika Moondra
Mock test is the best tool to assess your speed and confidence. I
took the mock test to know whether I can complete the paper with
appropriate presentation in the given time. Mock tests also boosts
your confidence as we get to know the points of improvement. –
CA. Ritika Mehta (AIR 16 – CA Final, May 19)
To whom you give credit for this achievement
of yours? – Kratika Moondra
To my grandparents, parents, friends and every person I met during
the entire journey of CA as I've learnt a lot over this journey. – CA.
Ritika Mehta (AIR 16 – CA Final, May 19)
At last what are your study mantras which you want
to share with other students ? – Kratika Moondra
Dedication and continuous written practice is must. There is no
alternative to hardwork. Hardwork with smart ways can help you
achieve the milestone.– CA. Ritika Mehta (AIR 16 – CA Final,
May 19)
How did you manage Study with articleship? –
Kratika Moondra
Time management is the most important to manage study along
with articleship. Even articleship experience helps you to
understand the concepts in an effective way. – CA. Ritika Mehta
(AIR 16 – CA Final, May 19)
Edition: 3rd May 2020
Hi Friends, I Kratika Moondra got chance to have few words with CA. Ritika Mehta (AIR 16
in CA Final, May 2019 Exam). I am thankful to her for sharing her success story and also
thankful to CA. Dhaval Kothari sir for giving me this opportunity to have a word with AIR16 it
will also inspire me and other students to work for AIR.
CA. Ritika Mehta
Kratika Moondra
CRO0574008
Edition: 3rd May 2020
WINNERS LIST OF QUARANTINE TALENT SEARCH WINNERS LIST OF QUARANTINE TALENT SEARCH WINNERS LIST OF QUARANTINE TALENT SEARCH WINNERS LIST OF QUARANTINE TALENT SEARCH
DRAWING / PAINTING:-
1. Nausheen Ali
2. Nishi Gupta
3. Anita Parakh
ESSAY WRITING
1. Mayank Kayal
2. Ajay Rawat
3. Sourav Jangid
SELFIE COMPETITION
1. Megha Parakh
2. Hardik Prajapat
3. Muskan Jain
SLOGAN WRITING
1. Nishi Gupta
2. Karina Jeswani
3. Payal Rathi
ENVIRONMENTALIST
1. Mahim Vyas
2. Naresh Choudhary
Jodhpur Branch of CICASA of CIRC of ICAI
congratulates to All Winners.
Edition: 3rd May 2020
SLOGAN
"Prevention & Sanitation is a way, to keep all viruses away,
Be with family and enjoy home stay, corona is atrocious, will soon fade away."
(Nishi Gupta)
“Against Corona, We have seen the Country strive,
So let’s help the nation revive.” Stay Home, Stay Lives (Karina Jeswani)
आशा क� एक लो लगाओ, हताशा को दरू भगाओ,
महामार� क� इस नकारा�मकता म�, सकारा�मकता क� �करण �दखाओ,
मन म� उपजे इस डर को, आज एक नई �ह#मत से $मलाओ,
आओ $मलकर द�प जलाओ। (Payal Rathi)
Edition: 3rd May 2020
FINITE DESPAIR INFINITE HOPE
Our little contribution will result country back in motion.
INDAI ….in the whole world,
Is what the heaven called.
The country which has given thousands a living,
Is now fighting for its own surviving.
Today busy roads went all empty,
Just because of COVID-19 ND order by Majesty.
Never thought in an imagination
India will be silent,
From Temples to Railway stations.
Yes, current view looks like a Paradise,
But…such silence brings tears in eyes.
Somewhere we all are enjoying this quarantine
But there is some starving and are not fine.
Thanks to those clad in green and white
Who are still in laboratory, Radhika Pungalia
To cure the injury to our country. (CRO0610299)
Great salute to doctors, Police and warriors in pain ,
For keeping the country priority without any complain.
There is something in its utter stillness
That makes country,
The artifice of its own happiness.
Hope the country will be busy soon
And everything will be normal too..!
Edition: 3rd May 2020
Drawing:
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Edition: 3rd May 2020
Disclaimer: - Readers attention is specifically invited to the fact that the views stated are
those of the respective author only and not of the Jodhpur Branch of CICASA of CIRC of ICAI.
Neither the author nor the Jodhpur Branch of CICASA of CIRC of ICAI bears any responsibility of
any sort of whatsoever in case of any action taken by the reader. The articles are prepared
from general information and compilation of the statues, circulars and Notification as
understood by the Authors and should not be constructed as legal advice on any particular
matter.
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Thank You