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RBI’s move to limit FII investment rejected
biz
talk
Cairn to pump in Rs 5,000 cr on Rajasthan block
RBI may cut lending rate by 0.25% in May
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Boeing, Pfizer, Dow among US entities lobbying on India issues
Gold likely to remain stable; move in Rs 25,500-26,500 range: Experts
Tax Advice
personal finance
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RBI’s move to limit FII investment rejected
New Delhi, April 21 "The suggestion made by the RBI of limiting FII investments to secondary market was discussed. It was felt that considering the stage of capital market, it would not be prudent to place any restriction of this kind as of now," sources said. The issue was recently discussed at a high-level meeting presided over by Department of Economic Affairs secretary Arvind Mayaram. The meeting was also attended by DIPP secretary Saurabh Chandra, chief economic adviser Rahguram Rajan and RBI officials. The RBI had proposed that any investment by a foreign institutional investor (FII) in an Indian investee company over and above 24 per cent should comply with all the extant foreign direct investment (FDI) guidelines as regards pricing and entry point conditions. The government is keen to promote foreign investments to bridge the widening current account deficit which soared to the historic level of 6.7 per cent of the GDP during the quarter ended December 2012. The CAD is the difference between inflow and outflow of foreign currency. Finance Minister P Chidamabaram has been travelling to key global financial centres, including Canada, the US, Singapore and Hong Kong to promote India as an investment destination. Chidambaram, in his Budget speech, had proposed to follow the international practice with regard to defining FDI and FII. According to the proposed definition, if an investor has a stake of 10 per cent or less in a company, the investment would be treated as FII. And if an investor has a stake of more than 10 per cent, it would be treated as FDI. Since the beginning of 2013, FIIs have invested Rs 55,580 crore ($10.3 billion) into Indian equities. They invested $24.4 billion in 2012, about $5 billion below record purchases two years ago. As on April 12, the number of registered FIIs in the country stood at 1,762 and total number of sub-accounts was 6,358. During the April-January period of the current fiscal, FDI into India declined by 39 per cent to $19.10 billion due to global economic uncertainties. — PTI FIIs’ Investment
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Constantly improving technology has impacted printing greatly. Dr Alok Bharadwaj, executive vice-president, Canon India Pvt. Ltd, is upbeat about the company’s various innovations which make the printing more pleasurable. Talking to Girja Shankar Kaura, he talks about Canon’s strategy about the same. Q. What are the latest trends you are witnessing in the printing industry?
A. When we think of printing, there are 2-3 things which are impacting it. Firstly, in the business world of printing a lot of electronic transactions have started getting covered. The bills, account statements and even cutting out a cheque are being printed. So I can say a lot of these electronic transactions are creating an impact on electronic printing. We can see the impact in a way that transactional printing is becoming lesser globally. However, in India, we are noticing that transactional printing is increasing. Second trend is in the area of book printing. Book publishing or book printing used to be a work of bulk printing. Whenever you have to print a book you have to print it in runs. This trend is changing and is becoming more of “real time” book printing. Real time book printing means you don’t really print a book. It’s all electronic, as it is lying in your system. Whenever a retailer needs a book, then these orders are printed straight away from the machine, printed, packed and sent to any part of the country. So, the second trend will be book printing getting digital. This is positive for the business. As more and more books get into digital printing, printing changes from an offset printing to our kind of printing which we call digital printing. Third is the area of marketing customised collaterals. Fourth area will be corporate printing or office printing. In office printing, the new trend which is coming up is consolidated printing. Earlier, the trend was that companies had multiple printers but now this is shifting and its becoming consolidated which means the whole floor will have one printer. So, office printing is getting consolidated where individuals go and pick up their prints. The fifth trend is home printing or inkjet printing. Along with homework application, there is also photo printing application where one creates their own photo album, photo collage. People now are even interested in making interesting 3D figures. The new technology, which is called ink-efficient PIXMA printers, makes Canon the cheapest in terms of running cost. These printers are giving mono prints as cheap as Re 1. Q. How buying habits of consumers have changed over the years specially with regard to buying a printer? A. There was a time when people used to consider printer as a tyre to the car. But now there is a higher level of awareness and knowledge on printers. There are people who are more tech savvy and they understand the needs. The requirement of these young Indian consumers is WiFi, speed, photo quality and ability to connect with all devices. People are now buying printers from retail. Retail selling has increased phenomenally. Q. Colour printing is always considered expensive. How has this changed over the years? A. Colour will always grow. The shift is quite rapid in the past few years. Home printing is entirely coloured. Office printing has begun to shift but only 15% of the print is colour and 85% is still black. Industrial printings are all mono. It will take a while to convince them to use colour. But this is a future trend. Home printing and photo printing is all coloured. Q. How does a printer play an important role in today’s fast changing technology period? A. The importance is how we can get instant print. Technology is changing. People these days like to store everything in soft copy. The important thing is when you need a hard copy how instant can we get it. In times to come there will be printers in malls, airports and different public places where you can go and print straight. In future there might be printers with credit cards in cafés where you just pay for your coffee and work on your quotations through your smartphone and laptops but you need to take a print from there. Q. What are the innovations from Canon and how has Canon printers evolved over the years? A. One is ink-efficient where the cost of running is very important. Second is speed which is also very important. Quality of print should be more photo-like and that is also catching up. There is a need for customers to take prints which are high-quality and in colour resolution. The Canon printers can print even the smallest form expression with very good quality. This is the technology in print that is becoming important.
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Cairn to pump in Rs 5,000 cr on Rajasthan block
New Delhi, April 21 The company also wants back all of the area it had contractually relinquished. Cairn CEO P Elango on April 12 wrote to the Oil Ministry seeking approval for an "over-arching integrated block development plan" instead of the current practice of government approving capital spending only for discoveries that are proved to be commercially viable for production. The company "proposes to make risk investment of Rs 5,000 crore during 2013-16 under integrated block development plan in the interest of optimising the potential of the block at the earliest," he wrote. At present, the government reaps profit from an oil and gas field only after the operator has recovered all of its investment. Because of this, the government does not give blanket investment approvals and only gives nod for spending upon establishment of a discovery as commercially viable. Elango also suggested several amendments in the current practice of annual approvals for investments to be made and allowing of cost recovery, saying the "changes will help fast-tracking the exploration and development works in the block and bring us closer to the dream target of 300,000 barrels per day at the earliest".— PTI |
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RBI may cut lending rate by 0.25% in May
New Delhi, April 21 "Right now conditions should enable the RBI to cut repo rate. We expect a cut of 25 basis points (or 0.25 per cent) in its policy in May and may be by another 25 bps in the next review," HDFC Bank chief economist Abheek Barua said. RBI Governor D Subbarao will announce the Monetary Policy Statement 2013-14 on May 3. YES Bank chief economist Shubhada Rao said RBI may cut the repo rate or the short-term lending rate by about 0.25 per cent in May as inflation has come down and there is a need to fuel economic growth. "Taking cue from inflation, we believe that RBI could take this time...to cut rate, particularly, the way we have seen inflation in the past coming down. Given the strong deceleration in growth, we think RBI may cut repo rate by 0.25 per cent in May as well as may provide some liquidity easing," Rao said. Wholesale prices (WPI), a measure of inflation, softened to 5.96 per cent in March after an annual rise of 6.84 per cent in February, the lowest rate since November 2011. "If you look at the incremental data WPI, IIP in the last two months, that data is in favour of the 25 basis points rate cut. We are expecting a cut in repo rate in May," Anubhuti Sahay, economist, Standard Chartered Bank, said. Industry has been batting for a rate cut to tide over the problems concerning poor demand, low industrial output and subdued economic growth. The Index of Industrial Production (IIP), the key gauge to measure industrial activity, slumped to 0.6 per cent in February from 4.3 per cent a year ago because of poor performance in manufacturing coupled with contraction in power generation and mining output. — PTI
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Boeing, Pfizer, Dow among US entities lobbying on India issues
Washington, April 21 The companies having lobbied with the US lawmakers on trade and other issues related to India during the first quarter of 2013 also include Corning Inc, Duke Energy and Applied Materials Inc, shows the latest Congressional records of lobbying disclosure filings here. Besides, industry bodies like Telecommunications Industry Association, Aerospace Industries Association of India, PhRMA (which represents leading research-based pharmaceutical and biotechnology companies in the US), National Association of Manufacturers and National Electrical Manufacturers Association also lobbied on India-related issues. These lobbying activities of the companies and industry bodies have been disclosed by their registered lobby firms in their mandatory quarterly filings with the US Senate for the quarter ended March 31, 2013. Together, these companies and industry bodies have so far disclosed having spent more than $13 million on their lobbying activities during the first quarter of 2013, but they did not disclose the break-up of the expenses on lobbying on matters related to India and other issues. Most of these entities have disclosed lobbying on a wide range of issues, with India-related matters being one of them. Last year, disclosures about Walmart's lobbying with the US lawmakers for its India entry had generated a political storm. — PTI
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Gold likely to remain stable; move in Rs 25,500-26,500 range: Experts
Mumbai, April 21 "In the current scenario, gold is bearish. The prices of the yellow metal has already taken a beating last week and is likely to remain range bound in the near term. "The precious metal is waiting for some trigger to take either upward or downward direction," Angel Broking Associate Director, ommodities and Currencies, Naveen Mathur said At present, the market is bearish for the entire commodities segment as there is not any news that will trigger prices to catch up on the higher level, he said. The precious metal is likely to rule in the range of Rs 25,500- 26,500 per 10 gram in the domestic market and $1,340-1,410 an ounce (31.1 gram) internationally till the market gets some direction, he said. Gold closed on Saturday at Rs 25,800 in the domestic market, while globally it rules at $1,380. Echoing a similar view, Commtrendz Research Director Gnanasekar Thiagarajan said gold is likely to remain in this zone for some time unless the US dollar gains strength and there are some geopolitical news to boost the yellow metal. "Gold has reached closer to the bottom as the market overreacted to fear over Cyprus and other countries planning to sell the precious metal. Going ahead it may shed a little, but mostly it will firm up," he added. — PTI
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Senior citizen not liable to deposit advance tax
by SC Vasudeva Q. I am retired and senior citizen filing my income tax returns regularly. Please clarify the following points:
b) Rebate of Rs 10,000 has been allowed under Section 80 TTA. Kindly advise if this rebate allowed on the interest earned on one account only or the amount of interest on two savings accounts of different banks can be clubbed and rebate of Rs 10,000 could be availed from the total interest amount of both the accounts? c) Is the rebate on savings bank account(s) in addition to the savings account of post office. If yes, under which section? d) Is it correct that senior citizens need not deposit advance tax irrespective of the amount of their tax liability? If so, is this facility applicable for FY 2012-13 or now also? e) I want to gift some amount to my daughter who is now a Canadian citizen. Can I do so? If yes, then what is the procedure to be followed? Will the amount so gifted shall be taxable to anyone of us? Is there any limit for such gift? — Balbir Singh Batra A. (a) The amount of interest earned in PPF account is not to be included in the gross total income. The amount is exempted under Section 10 of the Act and should be shown in the column wherein income exempted under Section 10 of the Act is required to be specified. (b) The deduction allowable under Section 80TTA is in respect of interest earned in savings bank account. Deduction is permissible to the extent of Rs 10,000 only and can be in respect of more than one savings bank account. (c) Deduction allowable under Section 80TTA of the Act is in addition to the amount of income exempt under Section 10 in respect of interest earned in Post Office Savings account to the extent of Rs 3,500. (d) A senior citizen is not required to deposit advance tax in case he doesn’t have any income from business or profession. This facility is available for financial year 2012-13 and onwards. (e) You can gift a sum of $ 2,00,000 to your daughter in a financial year. You can approach an authorised dealer in this regard and the procedure to be followed for such remittance would be explained to you by such dealer. The amount so gifted is not taxable in either of the hands. Q. I want to gift Rs 1 lakh to my granddaughter from my pension income. Can I deduct that amount from my total income? — Jasbir Arora A. A gift made to a relative by an individual assessee is not deductible from the total income of such an assessee. There is no provision in the Act which allows such deduction. You are, therefore, not entitled to claim a deduction from your total income in respect of the gift made to your granddaughter.
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Transfer money the instant way
Before choosing a service provider, conduct a research on exchange rates and time your remittance accordingly Sudhesh Giriyan
Mr X's situation is just one example. A lot of Indians, traditionally, have migrated overseas in search of a better future and to earn more money; their families back home are solely dependent on funds remitted from abroad by the bread earner. With over 27 million Indians spread across the world, as a country we have the highest flow of inward remittances in the world. However, one of the challenges long faced by remitters is the prolonged time needed for the money to reach the beneficiary apart from what channel to use for remittance. India has a large unorganised remittance channel (hawala) which is rife with risks, but a lot of remitters use these channels for lack of better awareness. There have been several instances of these middlemen disappearing with people's hard earned money. An effective solution to Mr X's problem, and all of the families who are dependent on money sent by relatives working abroad, is instant money transfer through a money transfer company. Why opt for this channel? This facility enables instantaneous remittance of money from hundreds of countries across the world to India within a matter of minutes. In addition to facilitating rapid transfer, the process is hassle-free for both the remitter and the recipient. Moreover, this channel makes it possible to transfer money even to someone who does not have a bank account. This factor assumes great relevance in view of the fact that many such transfers are made to remote rural locations where there is limited access to banking facilities. You can also be rest assured of the safety of your money as the process is tightly regulated by the Reserve Bank of India. How does one remit money using this channel? The remitter simply needs to visit the nearest authorised agent of his chosen money transfer company, present the relevant identification documents and deposit cash. The beneficiary can collect the money from the receiving agent in his own location, minutes after the sender has effected the transfer. While we have already established that speed is one of the key factors, cost and reach are two other critical considerations while remitting money. Following are a few points one must be keep in mind while availing of a remittance facility. Agent network: Since you will be transferring/receiving money through an authorised agent it is important that you select a service provider with a widespread agent network, particularly in the country of residence of the sender and recipient for easy accessibility. Exchange rates
Before choosing a remittance service, you should conduct a thorough research on the rates offered by various service providers. It is also advisable to time your remittance appropriately in accordance with the exchange rates. Transfer fee
Another aspect of cost involved in remittances is the transfer fee. This is a processing fee charged by the service provider for aiding a transaction. This fee can be fixed or floating. It is advisable to select the fixed fee option for high value transactions. However, for small-value transactions, floating fee is more cost-effective since in this option the fee varies according to the value of the transaction. Documentation
For safe and effective transfer of money, the government has implemented stringent "Know Your Customer" (KYC) norms. These norms facilitate a smoother and quicker transaction process and nullify various risks associated with money transfers. It is therefore mandatory for both the remitter and the beneficiary to carry a government authorised identification document. Regulatory norms for
fund transfer
An individual can make a maximum of 30 remittances in a year through this route. Keeping in mind the above points, you can remit money effectively and be assured of the security of your loved ones. The author is vice president & business head of Xpress Money Services Ltd, an instant money transfer service. The views expressed in this article are his own |
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How safe are your liquid funds?
The fact is that there was no error detected here as we checked the respective NAVs on the asset management company's website. While assessing the real fact, we were surprised to know the answer as to why this had happened and the result was an eye opener for us. This happened only because our client had opted for the dividend reinvestment option. The result would have been the same in the dividend payout option also. The AMC recently declared a huge dividend in the plan, may be due to the year-end, which eroded our client's investment. Most lay investors do not know there is a dividend distribution tax of 27.0375 per cent in liquid funds, which is deducted from the dividend payout while giving the final effect. This dividend distribution tax resulted in a net loss to our client. Most of the lay investors opt for the dividend option, as the dividend in their hands is tax-free, but fail to understand the impact of other taxes like DDT. Normally dividend is expected from the growth amount but in our client's case dividend was paid from the principal amount invested, which did not appreciate much in last two months. Liquid funds are believed to be the safest investment, as your principal does not depreciate. Yes, there is no negative return and the loss only occurred because of DDT in his case. But a loss is a loss and the other facts cannot be ignored even if you are investing in safe instruments. If he had opted for the growth option, needless to say, there would have been a positive return. I believe this can happen in any fund if you choose your suboption without knowing its implications. Not only is selecting the right asset class important but it is also equally important to opt for the right suboption. If you make a mistake in selecting the suboption then it can result in a financial loss even if you have chosen the right asset class. There are four suboptions normally available in the mutual fund scheme — growth, dividend payout, dividend reinvestment and bonus. I believe dividend option in debt fund does not make any sense due to high dividend distribution tax. According to the current budget, DDT amounts to 28.325 per cent in all debt and liquid funds with effect from June 1, 2013, which fact one must know while opting for the suboption in mutual fund investments. So if you opt for dividend option in debt or liquid funds whether pay out or reinvestment option you already are taxed at higher rate whether you fall in that tax slab or not. The above real life example speaks for itself. Secondly, one has to be also careful while opting for systematic transfer plan by depositing lump sum in liquid plans. Most of the distributors give the similar advice for lump sum investment, park lump sum fund in liquid fund with sub option of daily dividend payout option and transfer investment periodically mostly monthly in equity scheme by systematic transfer plan. This can again give negative returns on a lump sum investment as in the above cited case of our client. It is advisable to invest through systematic investment plan by keeping money in a savings bank account. It is always advisable to take professional advice before making a large lump sum investment, specifically if you want regular income out of investment. It is also important to know and understand the tax implications and risks involved in the plan. If you have invested in the dividend option in any of the debt funds, I think you must review your investment at the earliest. The author is head of financial planning at Apnapaisa.com, an online marketplace for loans & investments. The views expressed in this article are his own |
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Life Insurance: Pure Term Insurance Premiums as on april 18, 2013 Premiums in Rs for the lowest term insurance covers for different sum assured. The term of the policy is 60 years minus the age
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what are Options & Futures*
An option gives you the right to buy or sell the underlying asset . A call option gives you right to buy the underlying asset while a put option gives you the right to sell. An option contract specifies the strike price, that is, the price at which you can buy or sell the underlying asset. In Futures, you buy a contract which will have a specific lot size of shares. When you buy a Futures contract, you don’t pay the entire value of the contract but just the margin. Open interest is the the total number of contracts not closed or delivered on a particular day. |
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a) Though the interest earned on deposits in PPF account is tax-free, is the amount of interest so earned yearly has to be included in the gross income and the rebate on such amount is to be sought under some specific section. If so, under which section? Or such amount is not needed to be included in the gross income.
I
was not only surprised but was shocked to know that one of our clients had suffered a loss of 4.4 per cent in just two and a half months in one of the liquid funds. He had invested Rs 3 lakh on January 10, 2013 in the Treasury Plan. He invested smartly in direct plans in which charges are lower than regular plans. He received his statement dated March 26, 2013 mentioning his current fund value at Rs 286,791. The net loss works out to approximately Rs 13,200, that is, around 4.4% absolute and an unbelievable 21% annualised.
