Mumbai, May 12
India's foreign exchange reserves declined by US $2.187 billion to $293.17 billion for the week ending May 4, according to data released by the Reserve Bank of India on Saturday.

The central bank said foreign exchange reserves had risen slightly by $758.3 million to $295.36 billion in the previous week.

Foreign currency assets, which account for most of India's reserves, fell by $1.76 billion to $259.18 billion, according to the RBI’s weekly statistical supplement.

The bank did not provide any reasons for the fall, but heavy selling in the rupee has had an effect on the decline.

The value of special drawing rights (SDRs) was down by $10 million to $4.46 billion and reserves with the International Monetary Fund fell by $6.6 million to $2.90 billion. However, gold reserves too slid by $405.2 million at $26.61 billion.

Mumbai, May 12
At the opening ceremony for Daimler AG's $850 million India factory, chairman Dieter Zetsche stepped down from the cab of a gleaming yellow 25-tonne truck with scaled-down horsepower, a stripped-back gearbox and no sign of the iconic Mercedes-Benz three-pointed star on its grille.

Daimler has been assembling high-end trucks in India for years, but its recently launched cut-price BharatBenz line has joined a trend by global heavy equipment manufacturers to compete in India's high-volume, high-growth — but cost-conscious — mass market.

The potential is huge. Truck sales alone grew 18% in the year to March 2012 to over 800,000 vehicles, and are expected to double to 1.6 million by 2017. This eclipses the United States, where just over 300,000 commercial trucks were sold in 2011.

But it's a market where being best isn't good enough. To target the low end of India's engineering markets, which accounts for over 70% of sales, manufacturers need to offer the best value, and to do that they need to go local.

Carmakers have been localizing their products for years, sourcing materials and making cheap, India-tailored vehicles. India-made cars from companies such as Ford or South Korea's Hyundai which poured billions of dollars into India in the 1990s now command 75% of the market.

By comparison, foreign truckmakers have less than 10% of India's domestic market, while overseas manufacturers of substations — a market targeted by local units of Germany's Siemens AG and Swedish-Swiss rival ABB Ltd — have just over 20% of the local market. — Reuters

New York City, May 12
One of the pillars of Wall Street — JPMorgan Chase, the largest US bank by assets — faced new scrutiny Saturday after it reported a shocking $2 billion derivatives loss that even its pugnacious chief executive called "egregious."

"It ought to be a concern to the SEC. They are the ones who ought to have a concern about that," said Senator Carl Levin, referring to the Securities and Exchange Commission, the government's top financial regulator.

"The SEC should surely take a look at it." added the Democratic lawmaker, who heads the Senate's Permanent Subcommittee on Investigations.

According to The New York Times, the SEC was already on the case.

The inquiry, which is being run out of New York, will probably examine the bank's past regulatory filings about the internal unit that placed the trades, as well as recent statements from the firm's top executives, the paper said, citing unnamed people "briefed on the matter."

The huge New York-based bank sent shivers through the markets with the loss, after having convinced many that a well-managed bank could manage the risks of complex derivatives that lay behind the 2008 financial crisis.

Politicians called for tightening bank regulation and tough controls on hedging activities, and a Republican senator requested a hearing into the case.

JPMorgan CEO Jamie Dimon revealed the losses late Thursday in an unscheduled call to analysts, saying they were incurred in the last six weeks by the New York bank's risk management unit, the Chief Investment Office.

They involved trading in credit default swaps usually meant to offset other risks in the bank's investments, but Dimon said the strategy "morphed" into trading that was overly complex, poorly executed and badly overseen. — AFP

Q: I own two residential properties that I had purchased by taking out housing loans. I understand if the first house is declared as "self occupied" then, even if it is rented out, the rental does not fall under the category “income from house” and hence need not be included/added to one’s total income while calculating losses incurred on house property for income tax purposes. Is this correct?
— M.R. Pradhan

A: Only one self-occupied residential property is tax free, with the emphasis being on "self-occupied". In other words, if a property is rented out, it doesn't qualify to be termed self-occupied. Whether a property is self-occupied or not is a matter of fact — it doesn't depend upon the taxpayer's declaration.

Therefore, the answer to your question is the rent will be taxable. It's only when the taxpayer has two houses and none of them rented out, then any one of the two may be taken as self-occupied and tax exempt, with the other one deemed to be let out.

However, if a residential property is let out per se, then tax exemption for one self-occupied property doe not come into the picture.

Q: I have to calculate the indexed cost of my apartment that was allotted to me by my housing society in 1992. The flat was semifinished and I had to get additional construction done in it. I sold this flat in 2011 but didn't keep the receipts for the additional work. Can I get an official valuator to evaluate the house's basic price in 1992, calculate the indexed cost and use it for capital gains tax purposes?
— Gautam Bhattacharya

A: In your case this isn't permitted as per the law - valuation through an official chartered valuer can only be done to arrive at the value as on April 1, 1981. In any case, even the valuer (had the valuation been allowed at a later date) would have valued the property with respect to the market value of similar properties in the area — the additional mosaic, tiling and woodwork would not have been considered.

However, keep in mind that when the law mentions that the cost of improvement might be considered, it means more in the nature of structural improvement rather than additional construction work like tiling, woodwork, etc.