look news india
A shocking revelation has come to light in the proceedings of the Income Tax Department. Banks and NBFCs indulge in large scale corruption to increase loan business with the help of agents.
This corruption is based on bribes and commissions. Agents earn huge amounts of money as commission for providing customers to banks and NBFCs. Such agents also pay huge bribes to officials of banks and NBFCs for loans. On which tax is being evaded indiscriminately. The Income Tax Department now suspects that such payments are being made in the case of credit card issuing and insurance companies also. A loan agent who earns an annual income of one thousand rupees mainly through commission. Abnormally high expenditure is shown to avoid paying tax on this amount. This amount is shown as non-wage expenditure. So that the amount payable under tax does not increase. Salaries and allowances to employees typically constitute a large portion of a loan agent's expenses. In some cases, commission income is 2.5 percent of the loan value.
Income Tax raids on non-bank finance companies (NBFCs) and direct selling agents (DSAs) for loans from private banks in Hyderabad have revealed suspected bribery to bank and company officials. As a result, there is a demand for a nationwide investigation into the functioning of this industry. This raid has created a red alert situation. When the business of NBFCs and private banks is booming, the loan discount rate is very low and when the business is slow, the discount rate is high. At such times the margin of agents increases. A part of which is given to banks or NBFC officials. Some bribes are given in cash. Therefore regulatory inconvenience has increased. In short, only the customers' interest is at stake. Which is worrying. A report said that a detailed investigation has been conducted to uncover further irregularities in the case. Banks and NBFCs depend on DSA's network to grow their business. Who is given commission? Lenders are lending a good amount of money. Be it auto, home or any other type of loan. In such a situation, the Reserve Bank of India (RBI) is also worried. Its pace has slowed down due to recent regulatory measures taken by the RBI. But some retail loans are disbursed without the required collateral.
Action against malpractices by IT department
The malpractice resulted in the loan agent receiving an annual income of Rs 1 thousand crore, mainly through commission, on which the income was allegedly inflated to avoid paying taxes. To ensure that this amount was shown as non-salary expenditure.
As a result, the attention of the Income Tax Department was drawn towards this malpractice. Banks and NBFCs depend on direct selling agents, who are paid commission, to grow their loan business.