Notification Regarding Printing of MICR Code and IFSC Code on Passbook/Statement of Account

RBI/2011-12/516
DPSS (CO) RTGS No. 1934/04.04.002/2011-12

April 20, 2012

The Chairman and Managing Director /
Chief Executive Officer of all banks participating in RTGS, NEFT and NECS

Dear Sir/Madam,

Printing of MICR Code and IFSC Code on Passbook/Statement of Account

As you are aware, the MICR code is necessary for all Electronic Clearing Service (ECS – Credit and Debit) transactions. Similarly, the IFSC code is a pre-requisite for NEFT and RTGS transactions.

2. Currently, the MICR code is available on the cheque leaf along with the IFSC code of the branch. On a review it has been decided that this information should also be made available in the passbook / statement of account of the account holders.

3. Banks are accordingly advised to take necessary steps to provide this information as indicated above in all passbook / statement of account to their account holders.

4. Please acknowledge receipt and furnish an action taken report within 15 days of receipt of the circular.

Yours faithfully,

Chief General Manager
(Vijay Chugh)

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Do you know, Why Income Tax Department isse Default Notice regarding TDS?

Now a days, Income Tax Department has been issued Default notices regarding TDS return.  Everyone are disturbe with them.  Therefore, we clarify such major fact to safe with them. Mostly out of which, lot of defaults have been generated either non-entry of Flag and  Codes or wrong entry of Flag and Codes.  Present RPU 2.7 do not check following control, which is required.

26Q- Transport Detail - 94C - Rate 0 % -
"T" Reason Code for Transporter not selected in Lower or No deduction/collection.

Some important flag and codes are given as under for knowledge of Deductor :-
Short deduction details            

Category of deductee:
'G' - General
'S' - Senior citizen
'W' - Woman
'C' - Company &
'N' - Non-Company.

Tax rate flag:
'L' : Indicates tax deducted at Lower rate as specified in the return.
'P' : Indicates tax deducted at prescribed rates as per the Income Tax Act.
'H' : TDS calculated on higher rate by ITD due to invalid PAN (For sections having multiple sub sections " Tax Rate Basis " is assumed to be 'L')

Reason code:
'A' - Lower or No deduction/collection under section 197/ 206C (9)
'B' - No deduction under section 197 or 197A
'Y' - Threshold transaction
'T' - Transporter transaction
'H' - TDS deducted at higher rate (as per the TDS return)

Amount rounded off
# Applicable only if Tax rate flag is 'L'

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What are the Common mistakes while filling of Income Tax Return (ITR) form and effected on reduction of refund ?

The accurate and complete filling up of the relevant column or detail in the Income Tax Return (ITR) form is most crucial for correct calculation of income by the Income Tax Department. As a general principle during processing, in case of any inconsistency between the values as entered in the Schedules and the cross-referenced values in other Schedules or Totals / Summary in PART B-TI,

• for Incomes, the higher value may be taken and
• for Expenses, Losses or Deductions, the lower value may be taken
  

for final computation of Income. In case of e-returns using Department software these inconsistencies will not arise. However, if you are using other commercially available software for return preparation, please contact the software provider in case of such inconsistencies.

In case the computation of Income or refund is different than what had been entered or what is expected, please verify the accuracy of the data entered by you in the ITR. Except for limited number of complicated tax returns, for most taxpayers, the simple check points are the following:

Salary from all employers, irrespective of whether Form 16 has been issued or not, should be entered in Item 1 of ITR 1 or details in Schedule Salary in ITR 2.

Interest income from fixed deposits, savings bank account etc should be entered in Item 2b of ITR 1 or Item 1b of Schedule OS-Income from Other Sources in ITR 2. The total in Item 2c of ITR 1 and intermediate totals in Items 1e, 1g, and 3 of Schedule OS-Income from Other Sources in ITR 2 should be correctly entered.

House Property Income should be entered in Item 1a, Municipal taxes paid should be entered in Item 1c and the intermediate total should be entered in Item 1e of Schedule HP-Income from House Property in ITR 2.

Income from Short Term Capital Gains should be entered in Item A of Schedule CG-Capital Gains in ITR 2.

Income from Long Term Capital Gains should be entered in Item B of Schedule CG-Capital Gains in ITR 2.

Adjustment of current year and brought forward losses- Schedules CYLA, BFLA and CFL-
Most taxpayers have left these Schedules completely blank. These schedules are used for permissible adjustment of current year loss of one type of income against another type of income and is available only in ITR 2.

Income chargeable to Income tax at special rates- Schedule SI
Most mistakes have occurred in this Schedule since taxpayers have not correctly filled the codes, rates or values. The following points may be considered:

Deductions from Income under Chapter VIA
Most mistakes have occurred due to incomplete details or leaving blank of value of deduction claim in ITR 1 or in the Schedule VIA in ITR 2. In most cases only the total deduction value is mentioned.

Reasons for difference in calculation of Tax or Interest under 234A, B or C and Interest on Refund.

Reasons for mistakes in Credit for tax payments or TDS
A major reason for difference in refund amount during processing is that the details of tax payment or TDS do not match the data available with the Department.

Miscellaneous mistakes
Mistakes in address etc do not affect processing but cause mis-delivery or non-delivery of communication or in case of Bank Account error cause rejection of refund credit to taxpayer account.

How to rectify the mistake and to get the correct refund
Mistakes in the ITR due to any of the reasons may be corrected by submitting a rectification form.

For faster credit of Income Tax refunds, correct bank account number and MICR code in the return should be mentioned. In case of any mistake in MICR or Bank Account number, the refund will not be credited. and a cancelled cheque showing correct particulars would be required to be submitted to CPC for correction in bank account number or MICR code.

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Importance of MICR Code for Refund of Income Tax Return

Friends, you know very well about due date to file income tax return for financial year 2010-11(assessment year 2011-12) i.e. 31st July, 2011. In refund case Taxpayee are more careful in more particular to file return in time to get early refund. But in refund cases besides other thing person must stress correctness of PAN,BANK a/c Number and MICR code. The MICR code is mandatory to be filed in refund cases ,if option of direct credit in bank account has been selected. So double sure your self while filing MICR code in Income tax return .Few main things about MICR code is given hereunder for your ready reference.

WHAT IS MICR CODE ?
The MICR code means MAGNETIC INK CHARACTER RECOGNITION code. In MICR technology the information is printed on the instrument with a special type of ink which is made up of magnetic material. On insertion of the instrument in the machine, the printed information is read by the machine. MICR system is beneficial as it minimizes chances of error, clearing of cheques becomes easy and transfer of funds becomes faster in order to facilitate operations.

MICR code consist of 9 digit :
First three digit (1-3) denotes city and are same/identical first three digit of your pin code e.g. first three digit of Pin code of New Delhi = 110 so first three digit of MICR code of all the bank branches located in New Delhi must be 110.

Digit (4-6) denotes for Bank:
each bank has given a three digit code,4-6 digit is= bank code eg. SBI code is "002"so 4-6 digit of MICR code all the the branches of SBI is "002" irrespective of location in the india.

Last three digit (7-9) denotes branch code,it is in serial wise ,means if delhi has only one branch of SBI and its MICR code will be
110 (FOR CITY)
002(FOR BANK)
001(FOR BRANCH)

"110002001"

So, if you are located in delhi & your client has given you a Micr code of the bank located in New Delhi , doesn't begin with "110",you can easily tell him your Micr code is wrong.

HOW CAN I KNOW MY BANK BRANCH MICR CODE ?

1. From your bank branch
2. From your cheque book ??
3. excel work book link is given below for Micr code for all most all the branches located in India.
   

Is there any benefit for MICR code OTHER than ITR.
Yes, now a days it is used by many organizations to send directly funds in customer account.

1. By mutual fund for sending sale receipt of the units to customer account
2. Refund of application money in shares .
3. Refund of taxes by other department also.
4. Refund of application money for real state/plot by govt/private organization.
   

Download MICR Codes of Bank, Branches in India

Read More

What is MICR Code & Why MICR code is mendatory for Refund Status Income Tax Return ?

Friends, you know very well about due date to file income tax return for financial year 2010-11(assessment year 2011-12) i.e. 31st July, 2011. In refund case Taxpayee are more careful in more particular to file return in time to get early refund. But in refund cases besides other thing person must stress correctness of PAN,BANK a/c Number and MICR code. The MICR code is mandatory to be filed in refund cases ,if option of direct credit in bank account has been selected. So double sure your self while filing MICR code in Income tax return .Few main things about MICR code is given hereunder for your ready reference.

WHAT IS MICR CODE ?
The MICR code means MAGNETIC INK CHARACTER RECOGNITION code. In MICR technology the information is printed on the instrument with a special type of ink which is made up of magnetic material. On insertion of the instrument in the machine, the printed information is read by the machine. MICR system is beneficial as it minimizes chances of error, clearing of cheques becomes easy and transfer of funds becomes faster in order to facilitate operations.

MICR code consist of 9 digit :
First three digit (1-3) denotes city and are same/identical first three digit of your pin code e.g. first three digit of Pin code of New Delhi = 110 so first three digit of MICR code of all the bank branches located in New Delhi must be 110.

Digit (4-6) denotes for Bank:
each bank has given a three digit code,4-6 digit is= bank code eg. SBI code is "002"so 4-6 digit of MICR code all the the branches of SBI is "002" irrespective of location in the india.

Last three digit (7-9) denotes branch code,it is in serial wise ,means if delhi has only one branch of SBI and its MICR code will be
110 (FOR CITY)
002(FOR BANK)
001(FOR BRANCH)

"110002001"

So, if you are located in delhi & your client has given you a Micr code of the bank located in New Delhi , doesn't begin with "110",you can easily tell him your Micr code is wrong.

HOW CAN I KNOW MY BANK BRANCH MICR CODE ?

1. From your bank branch
2. From your cheque book ??
3. excel work book link is given below for Micr code for all most all the branches located in India.
   

Is there any benefit for MICR code OTHER than ITR.
Yes, now a days it is used by many organizations to send directly funds in customer account.

1. By mutual fund for sending sale receipt of the units to customer account
2. Refund of application money in shares .
3. Refund of taxes by other department also.
4. Refund of application money for real state/plot by govt/private organization.
   

Download MICR Codes of Bank, Branches in India

Read More

What is MICR Code ? Why it is most important to get early Income Tax Refund ?

Friends, you know very well about due date to file income tax return for financial year 2010-11(assessment year 2011-12) i.e. 31st July, 2011. In refund case Taxpayee are more careful in more particular to file return in time to get early refund. But in refund cases besides other thing person must stress correctness of PAN,BANK a/c Number and MICR code. The MICR code is mandatory to be filed in refund cases ,if option of direct credit in bank account has been selected. So double sure your self while filing MICR code in Income tax return .Few main things about MICR code is given hereunder for your ready reference.

WHAT IS MICR CODE ?
The MICR code means MAGNETIC INK CHARACTER RECOGNITION code. In MICR technology the information is printed on the instrument with a special type of ink which is made up of magnetic material. On insertion of the instrument in the machine, the printed information is read by the machine. MICR system is beneficial as it minimizes chances of error, clearing of cheques becomes easy and transfer of funds becomes faster in order to facilitate operations.

MICR code consist of 9 digit :
First three digit (1-3) denotes city and are same/identical first three digit of your pin code e.g. first three digit of Pin code of New Delhi = 110 so first three digit of MICR code of all the bank branches located in New Delhi must be 110.

Digit (4-6) denotes for Bank:
each bank has given a three digit code,4-6 digit is= bank code eg. SBI code is "002"so 4-6 digit of MICR code all the the branches of SBI is "002" irrespective of location in the india.

Last three digit (7-9) denotes branch code,it is in serial wise ,means if delhi has only one branch of SBI and its MICR code will be
110 (FOR CITY)
002(FOR BANK)
001(FOR BRANCH)

"110002001"

So, if you are located in delhi & your client has given you a Micr code of the bank located in New Delhi , doesn't begin with "110",you can easily tell him your Micr code is wrong.

HOW CAN I KNOW MY BANK BRANCH MICR CODE ?

1. From your bank branch
2. From your cheque book ??
3. excel work book link is given below for Micr code for all most all the branches located in India.
   

Is there any benefit for MICR code OTHER than ITR.
Yes, now a days it is used by many organizations to send directly funds in customer account.

1. By mutual fund for sending sale receipt of the units to customer account
2. Refund of application money in shares .
3. Refund of taxes by other department also.
4. Refund of application money for real state/plot by govt/private organization.
   

Download MICR Codes of Bank, Branches in India

Read More