The ex gratia relief will be credited to the account of all eligible borrowers without any requirement to apply, it said. The ex gratia relief will be credited to the account of all eligible borrowers without any requirement to apply, it said. Under the ex-gratia scheme of government, any loan of up to Rs 2 crore taken before February 29, 2020 will not be charged with compound interest from March 1 to August 31, 2020. Agriculture and allied activity loans are not eligible for the interest on interest waiver announced by the government last week, the finance ministry has clarified. The Government of India has announced the Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts (1.3.2020 to 31.8.2020) (the ‘Scheme’) on October 23, 2020. The period reckoned for refund shall be from 1st March 2020 to 31st August 2020. FREQUENTLY ASKED QUESTIONS (FAQs) COVID 19 Ex Gratia to borrowers for difference in interest Date 26th October 2020 1. Yes, you would be eligible for the scheme. No. Click here to register your E-mandate and update alternate bank account details. Ex gratia payments in settlement agreements are great things if you can get them, because they offer a unique tax break only really available to employees who are leaving work after a dispute or redundancy situation. Ex-gratia payment made voluntarily by an employer is not taxable as ‘profits in lieu of salary _____ 24 December 2015 Background Section 17(3) of the Income-tax Act, 1961 (the Act) brings certain payments such as profits in lieu of salary within the ambit of ‘income from salaries’. Reach us via call, SMS, e-mail, or visit one of our branch offices. The outstanding as on 29.02.2020 will be the reference amount for calculating the differential. • In the ‘Raise a Request’ page, select your loan / loan type and product description The Department of Financial Services has issued a set of Frequently Asked Questions (FAQs) on the interest waiver scheme, or the scheme of ex-gratia payment of difference between simple and compound interest to eligible borrowers for a six month period between March 1 and August 31, 2020.Get latest Economy online at cnbctv18.com The government’s scheme applies to housing loans, education loans, credit card dues, auto loans, MSME loans, consumer durable loans and consumption loans. Neither, Bajaj Finance Limited will process and credit your loan account on or before 5.11.2020. Will I also be eligible for Ex-Gratia interest refund? Individual lending institutions will finalize the list of eligible borrowers for the relief based on the guidelines from Govt of India. • Submit the request and our service team will respond to you soon, Connect with us on social media and stay updated for our latest news and offers, 6th Floor,Bajaj Finserv Corporate Office, No, Bajaj Finance Limited will process and credit your loan account on or before 5.11.2020. What will be the treatment of penal interest/ penalties while arriving at the rate of interest? The Finance Ministry has approved guidelines for a scheme to grant ex-gratia payment of the difference between compound interest and simple interest for … For reprint rights: Syndications Today, Some banks have already started refunding eligible borrowers under the scheme from November 3. The government had earlier asked the banks to refund the difference between simple and compound interest to eligible borrowers on or before November 5. The ex gratia relief will be credited to the account of all eligible borrowers without any requirement to apply. New Delhi: The Reserve Bank of India (RBI) issued direction on Tuesday to all lending institutions to implement provisions of Scheme for grant of ex-gratia payment of difference between compound and simple interest for six months to borrowers in specified loan accounts (1 March to 31 Aug) and take necessary action within the stipulated time. Below is a sample calculation of Ex-Gratia amount for different rate of interest -. Bajaj Finance Limited will provide Ex-Gratia payment to customer’s account of the difference between compound interest and simple interest on loan accounts with sanctioned limits and outstanding up to Rs.2 crores (aggregate of all the borrowings/ facilities from all the banks and financial Institutions) for the period from 1st March 2020 to 31st August 2020 (6 months / 184 days). ◦ ‘Loan against Security’ Home Whatsnewstatic FAQs for scheme of Ex gratia payment to borrowers for difference in interest. Will I get the Ex-Gratia interest refund if my loan account is NPA? In case where no interest is being charged on equated monthly instalments for a specified period, for the purpose of relief, interest may be applied at MCLR/ Base rate. The period reckoned for refund shall be from March 1 to August 21, 2020, that is six months period or 184 days, it said. Workshop on Scheme for grant of ex-gratia payment of the differential interest October 27, 2020 / 1 Comment / in Uncategorized / by Vinod Kothari Consultants While compound interest is the unquestionable reality of the world of banking and finance, somehow, courts have always been disapproving of the idea of “interest on interest”. 2 crores (aggregate of all the borrowings / facilities from all the banks and financial Institutions) for the period from 1st March 2020 to 31st August 2020 (6 months / 184 days). So how will customers know if they have been refunded or have received a cashback? The period reckoned for refund shall be from March 1 to August 21, 2020 that is six months period or 184 days, it said. What is the ex gratia Interest Relief scheme announced by Government of India? Do I apply for the relief/Ex-Gratia Scheme? When something has been done ex gratia, it has been done voluntarily, out of kind or grace.In law, an ex gratia payment is a payment made without the giver recognising any liability or legal obligation.. If you do not pay this tax liability, you may be penalised—this can include penalty tax, interest and, in some cases, prosecution. Will my Non-Fund based limits as on 29-02-2020 be included for arriving at the eligibility amount of up to INR 2 crore? No. My EMIs were bounced during the Moratorium period, will I be eligible for interest Ex-Gratia refund? Under the ex-gratia scheme of government, any loan of up to Rs 2 crore taken before February 29, 2020 will not be charged with compound interest from March 1 to August 31, 2020. • Click here and and login to Customer Portal Experia Everything About the Ex-gratia Relief Provided by the Government of India. Ex Gratia Payment Ex Gratia Payment. Loan accounts with sanctioned limits and outstanding not exceeding Rs.2 crores (aggregate of all facilities with all the lending institutions) as on 29.02.2020. Those who had not availed the moratorium will also get the benefit of the scheme. The ex-gratia payment credited to the customer account will be the relief on compound interest promised by the Centre to the Supreme Court. Also, for the employees who come under the Bonus Act and wishes to pay ex-gratia beyond 20% of wages, it is given in the name of Ex-gratia. In which of my accounts will the differential amount be credited? How will Bajaj Finance Ltd assess whether a customer has aggregate loan facilities up to INR 2.00 CR from the banking system? On an outstanding loan of Rs 1 lakh and at an interest rate of 8%, the borrower will get an ex-gratia of about Rs 68. posted on. • MSME: In respect of term loans / Demand Loan, the rate of interest for the purpose of calculating the differential will be the contracted rate as specified in the loan agreements/ documentation applicable as on 29th February 2020. 2 crores (aggregate of all the borrowings / facilities from all the banks and financial Institutions) for the period from 1st March 2020 to 31st August 2020 (6 … However, will be subject to the finalization & processing of Refund by the SBI/Government of India/Regulators. The compound interest works out to a very small amount. So, all the banks and financial institutions are expected to credit the refund or cashback to eligible borrowers by the end of the day. The Ex-Gratia Payment Scheme is the payment of the difference between the Compound Interest and the Simple Interest for six months ending 31 August 2021 to borrowers in specified loan accounts. In respect of Cash Credit/ Overdraft, the rate of interest for the purpose of calculating the differential shall be the rate of interest prevailing as on 29.02.2020. What will be the treatment of penal interest/ penalties while arriving at the rate of interest? In a case where no interest is being charged on EMIs (no cost EMIs), the ex-gratia payment can be computed using the lender’s base rate or MCLR, whichever is applicable. ... the government had recently passed a scheme to “grant ex-gratia payment of the difference between compound and simple interest to borrowers of specified loan … The period reckoned for refund shall be from March 1 to August 21, 2020 that is six months period or 184 days, it said. 2 crores (aggregate of all the borrowings/facilities from all the banks and financial Institutions) for the period from 1st March 2020 to 31st August 2020 (6 months / 184 days). Loan moratorium: Do you have to apply for govt’s interest waiver scheme? The contracted rate / interest rate prevailing as on 29.02.2020 which is considered for calculating the interest differential will exclude any penalties or any penal rate of interest applied in the account. Where can I reach out for support. Non-fund-based limits will not be included for arriving at the eligibility. For example on an outstanding loan of Rs 1 lakh( with an interest rate of 8%), the borrower will get an ex-gratia of about Rs 68. The ex-gratia relief will be credited to the account of all eligible borrowers without any requirement to apply. Loan accounts should be standard in the books of the lending institutions as on 29.02.2020. c. The relief shall cover the following segments – MSME Loans, Education loans, Housing Loans, Consumer Durable Loans, Credit Card Dues, automobile loans, personal loans to professional loans. (Photo: Reuters/Representational image), Loan moratorium: How to know if bank has credited ‘interest on interest’ refund, expected to credit the refund or cashback to eligible borrowers by the end of the day. The period reckoned for refund shall be from March 1 to August 21, 2020, that is six months period or 184 days, it said. Umesh Singh. Note: refunds of contributions only apply where the individual has less than 2 years The government’s ex-gratia payment of interest on interest concession to customers with outstanding loans upto Rs 2 crore will cover 75 per cent of borrowers in the system, according to rating agency CRISIL. The loan will entail only simple interest. ◦ ‘Loan against Fixed Deposits’. November 9, 2020. • The Period to be considered for crediting of difference between compound and simple interest by lending institutions would be from 01st March 2020 to 31st August 2020 (six months/ 184 days). Do I need to place a request to get the Ex-Gratia Interest refund? Q4. With the festival season, there is one more reason for the loan borrowers to be jubilant as they will get a refund of their interest amount as per the Scheme for Grant of Ex- Gratia payment introduced by the Government of India. 2 Cr. In case the loan is closed and there is no overdue in any other loan, the amount will be refunded in your registered bank account. The period reckoned for refund shall be from March 1 to August 21, 2020 that is six months period or 184 days, it said. • Select your query under the tab: Add New Query I have a query related to COVID-19, Ex-Gratia Interest relief. Any repayment / credits subsequent from 01.03.2020 – 31.08.2020 shall be ignored for the purpose of calculation.   • Query Type: Interest Refund Eligibility and Dates of Reserve Bank of India Ex Gratia Scheme The ex-gratia relief will be credited to the account of all eligible borrowers without any requirement to apply. b. In case you do not maintain any such account with the lending institution, you can advise Bajaj Finance Limited the details of the account in other banks where the amount can be credited /remitted to. No. Yes. Follow Our Latest Article : Income Tax Refund Status 2021. If the Government’s intention is to mitigate the sufferings of the borrowers, this Penal Interest should also be refunded to the borrowers and to be claimed from the Government as ex-gratia. The relief will be available to you irrespective whether you have availed or partially availed or not availed the moratorium on repayment as announced by RBI vide DOR. d. The period reckoned for refund shall be from 1st March 2020 to 31st August 2020, i.e. Upon credit of the differential amount to the respective loan account(s), BFL will notify the same to you vide an SMS to your registered mobile number. Yes, you will be eligible for the scheme. Viman Nagar, Pune – 411014, IRDAI Corporate Agency Registration Number, Loan Against Property For Chartered Accountants, Hybrid Flexi Personal Loan EMI Calculator, Platinum Choice First-Year-Free SuperCard, Pre-approved category on Smartphones and Laptops, PRE-APPROVED OFFERS ON KITCHEN APPLIANCES, Home, Kitchen appliances & Furniture on EMI, PRE-APPROVED OFFERS ON FITNESS, TRAVEL, FASHION. How will the list get finalized for the ex gratia to borrowers scheme? All banks and financial institutions in the country have started refunding eligible borrowers for the ‘interest on interest’ or compound interest charged during the loan moratorium period, as directed by the government. The ex-gratia payment under the government’s interest waiver scheme will be admissible irrespective of whether the borrower has fully or partially availed the moratorium. Off Pune-Ahmednagar Road, The bank/ lending institution will provide ex gratia payment to the borrower account of the difference between compound interest and simple interest on loan accounts with sanctioned limits and outstanding upto Rs. Ex gratia payments are also known as ‘golden handshakes’ or ‘golden boots’. Interest-on-interest waiver: Crop, tractor loans not part of ex-gratia relief scheme. If you applied for ex gratia relief and are denied before payment, you must still pay your tax liability. From a borrower’s perspective, the benefit would be relatively higher for those who had availed of higher-yielding loans. I have taken partial Moratorium; will I be eligible for this relief package? This penal interest would have been charged for the installments which were not paid during the moratorium period in the case of Term Loans. Do I have to apply for the relief? If the interest rate is 14%, Rs 210 will be credited. Even if you paid your EMI on time. Applicability of the scheme loan moratorium Centre issues guidelines for loan interest waiver, check how much money may be returned. The Reserve Bank of India then asked all banks in the country to refund the difference between simple and compound interest to all eligible borrowers under the scheme. 32 views Calculation of ex-gratia. The period reckoned for refund shall be from March 1 to August 21, 2020, that is six months period or 184 days, it said. Borrowers who had not opted for the moratorium are also eligible for a refund if they meet the eligibility criteria. How will I get to know the benefit amount and if I have got the benefit under the scheme or not? In the text message, banks are expected to share the exact amount of refund or cashback given to the eligible borrowers. Gratia to borrowers scheme any result, what 's next on 29-02-2020 be included arriving... Ltd assess whether a customer has aggregate loan facilities up to INR 2 crore subject to the of! 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