In the directive, the department has also asked that if any member of the cooperative is found to have deposited the amount received for commercial transactions into a personal account, such transactions should be sent to the Financial Information Unit.
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The Department of Cooperatives has issued a directive to cooperative organizations not to conduct commercial transactions from personal accounts. The department issued the directive based on the increasing trend of depositing the amount for the organization's transactions into personal accounts.
However, the department has stated that the directive has been issued based on the Income Tax Act 2058 and previous directives on money laundering.
In the directive, if any member of the cooperative is found to have deposited the amount received for commercial transactions in a personal account, the department has also asked to send such transactions to the Financial Information Unit.
The directive was issued mainly to implement the provisions of the Money Laundering Prevention Regulations and the Income Tax Act, said Umesh Dhungana, Registrar of the Cooperatives Department. “Rather than based on complaints and grievances, the directive has been issued mainly to implement the provisions of the Act and Regulations,” he said.
Section 81A of the Income Tax Act, 2058, provides that no amount received for commercial transactions can be deposited in a personal account. The act provides that no person can deposit any amount received for commercial transactions through cash, checks, QR codes, or any other electronic means into a personal bank account. However, the department has issued a new directive after it was found that the cooperative organization was not following the provisions of the Act.
Similarly, Rule 10 of the Money Laundering Prevention Regulations, 2081, contains provisions related to commercial transactions and accounts. There is a provision that a legal person or legal arrangement cannot pay or receive money related to commercial transactions to anyone's personal account except the account of such legal person or legal arrangement. The directive stipulates that if a personal savings account is found to be used as a means of commercial transactions, other than in accordance with the prevailing law, the concerned financial institution must provide information about it to the Financial Intelligence Unit and the Inland Revenue Department. The department has issued the directive based on the same directive.
'Section 81A of the Income Tax Act, 2058 BS, provides that no person can deposit any amount received for commercial transactions in cash, checks, QR codes and any other electronic means in a personal bank account,' the directive states.
Similarly, the Prevention of Money Laundering Act, 2064 defines cooperatives as financial institutions, and as per Rule 10 of the Prevention of Money Laundering Regulations, 2081 and Section 81 A of the Income Tax Act, 2058, commercial transactions should not be carried out from personal accounts. If a member is found to have carried out such transactions, the department has directed that a report should be made to the Financial Intelligence Unit.
