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Cheque & Types

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Cheque:  Section 6 of the Negotiable Instruments Acts, 1881, states "A cheque is a bill of exchange drawn on a specified banker, and not expressed to be payable otherwise than on demand." So, a cheque is a written instruction to a bank (also called the drawee bank) asking it to pay a specific sum of money to the person/company whose name is written on it. The person issuing the cheque is called the drawer and the one to whom it is issued is called the payee. Types of cheques  cheques are of basically four types Open cheque: A person holding an open cheque can  i. Receive payment over the counter at the bank ii. Deposit the cheque into his account iii. Pass it to another person by endorsing the cheque on the reverse side Crossed Cheque: Payment of a crossed cheque cannot be made over the counter at a bank; it can only be credited into the payee's account. Cheques can be crossed by drawing two parallel lines across the top left corner. Bearer Cheque: A be
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Non Performing Assets

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Non-Performing Asset   Loans and advances given by the banks to its customers are an Asset to the bank. Just for the sake of simplicity, we can understand that a loan (an asset for the bank) turns as NPA when the EMI, principal or interest component for the loan is not paid within 90 days from the due date. Thus a Bad Loan is a n asset that ceases to generate any income for the bank . As per RBI guidelines, NPA is defined as under: Non performing asset (NPA) is a loan or an advance where; i.     interest and/ or installment of principal remain overdue for a period of more than 90 days in  respect of a term loan, ii.    the account remains‘out of order’ in respect of an Overdraft/Cash Credit (OD/CC), iii.   the bill remains overdue for a period of more than 90 days in the case of bills purchased and  discounted, iv.   the instalment of principal or interest there on remains overdue for two crop seasons for short  duration crops, v .   the instalment of principal or interest
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Government introduces “Place of effective management” (POEM) in IT Act

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Shell companies are the companies located abroad but controlled from India, to evade taxes. Government aims to curb them by introducing “Place of effective management” (POEM) in IT Act. Thereby, such offshore companies will be taxable in India, if key Management decisions are taken from India. Shell companies based abroad would have to pay taxes on their global income for a year if their  place of effective management (POEM)  is India. According to the Union Budget 2015-16, shell companies would be considered tax resident of India if their POEM is India, even for one day in a financial year. The key companies likely to be impacted are the Indian groups that have overseas subsidiaries that lack substance. Many Indian companies have subsidiaries in tax havens abroad which, in turn, do businesses in other countries. With this amendment — proposed to be made effective from the next financial year — all these companies will be bought under the Local tax jurisdiction. The requir
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