B U S I N E S S

No proposal to convert idle gold into bullion, says RBI
Mumbai, August 31
The Reserve Bank of India (RBI) today said it is not contemplating any proposal to buy idle gold and convert it into bullion. “The RBI clarifies that no such proposal is under its consideration at this juncture,” the apex bank said in a statement.

Bullion usually stands for gold in the form of bars before coining. A Reuters file photo

With the rupee downslide, currency trading on the rise
Chandigarh, August 31
Real estate, gold and equity markets are passé for the new age smart investors. The sharp volatility in the currency has been attracting investors of the region, with anybody having spare cash now going in for future trading of dollars.

Companies Bill gets President’s assent
New Delhi, August 31
The new Companies Bill has received President's assent that will make it into a law replacing the nearly six-decade old regulations that govern corporates in the country. The Companies Bill, 2013 received assent from the President Pranab Mukherjee on August 29, a government official said.

investor guidance
PPF account can be extended for five years
Q: I have a PPF a/c with the State Bank of India (SBI) which matured on March 31, 2013 after a period of 25 years (extended by 10 years). In case, I withdraw my entire accumulated amount in December 22, 2013, up to what period is the interest calculated?

No proposal to convert idle gold into bullion, says RBI

Mumbai, August 31
The Reserve Bank of India (RBI) today said it is not contemplating any proposal to buy idle gold and convert it into bullion. “The RBI clarifies that no such proposal is under its consideration at this juncture,” the apex bank said in a statement.

There have been some news stories in the media in the last couple of days about the RBI discussing or considering various options of converting idle gold, including that available with temple trusts, into bullion.

Bullion usually stands for gold in the form of bars before coining.

Demand for gold is the reason for rise in import of the precious metal. The rising gold import is one of the reasons for the current account deficit (CAD), which widened to a record 4.8 per cent of GDP in 2012-13 fiscal.

The RBI and the government have already taken various steps to control the import of gold with a view to check CAD.

The government recently raised customs duty on gold to 10 per cent.

The import of gold went up by a huge 87 per cent from 205 tonnes in April-July 2012 to 383 tonnes during the corresponding period this year. In value terms, the increase was 68 per cent from Rs 56,488 crore to Rs 95,092 crore.

The government has targeted a CAD at 3.7 per cent of GDP, or $70 billion, in the current financial year. India’s CAD, which indicates the excess of imports of goods, services and transfers over exports, touched a record 4.8 per cent of GDP, or $88.2 billion, in 2012-13.

Earlier, a news agency had reported that the central bank was planning to ask banks to buy household gold and divert it to precious metal refiners in an effort to reduce the contry’s current account deficit and improve the domestic supply of gold.

Yesterday, the governemnt raised the import tariff value of gold to $461 per 10 gram and of silver to $803 per kg as the prices of the precious metals touched all-time high last week. — PTI

Gold, silver fall further on weak demand

NEW DELHI: Gold prices declined further by Rs 275 to Rs 31,425 per 10 gram, extending losses for the third straight day in the national capital on Saturday on fall in demand at higher levels amid weak global trend. Silver shed another Rs 70 at Rs 53,930 per kg after losing ~4,500 in the last two days. — PTI

With the rupee downslide, currency trading on the rise
Ruchika M. Khanna
Tribune News Service

Chandigarh, August 31
Real estate, gold and equity markets are passé for the new age smart investors. The sharp volatility in the currency has been attracting investors of the region, with anybody having spare cash now going in for future trading of dollars.

Investment firms in the region say that the volume of trading in currencies, especially in the dollars, has gone up in the past one month. With the continued appreciation of the dollar against the rupee, more and more investors are now buying one to three-month contracts of dollars on the two exchanges — MCX and NCDEX.

Officials of these investment firms say trading in dollars saw a massive jump in the last week.

Since trading in currency on the exchange does not require physical trading, and a person need not pay upfront the entire amount for which he buys the dollars (or any other currency), it has been gaining popularity. As against the exchange rate of Rs 65.70 (to a dollar), the forward contract of dollars ending on September 26 is at Rs 66.87 and the next contract ending on October 29 is being traded at Rs 67.22 for a dollar.

Amitabh Nijhawan, north zone head for Fortune Financials India Ltd., said the currency trading had never been as active as now. “It’s not just the exporters who are buying dollars as a hedge against further appreciation of the dollar. Normal investors are seeing a huge potential to make a quick buck and are thus trading in dollars on the exchanges. Since you have to pay just 10% of the amount for which you are buying dollars (and pay the differential only in case the dollar depreciates from the value at which you bought), many equity investors have shifted to currency trading," he said.

Market analysts say the volume of trade in currency has gone up by almost 100 %.

Naveen Mathur, associate director- commodities and currencies, Angel Broking Ltd., said the daily volume of trade in currencies had almost doubled in the past one month.

"The daily trading in currency on the exchanges had come down to Rs 25,000 crore a day in July. But with the dollar rising substantially, daily volume of trade is now up to an average of Rs 55,000 crore - Rs 60,000 crore. Even trading on the spot exchanges has gone up. With the GDP growth slowing down and sentiment again expected to turn negative, the dollar is expected to appreciate, thus fuelling increase in trading of currency," he said.

Companies Bill gets President’s assent

New Delhi, August 31
The new Companies Bill has received President's assent that will make it into a law replacing the nearly six-decade old regulations that govern corporates in the country. The Companies Bill, 2013 received assent from the President Pranab Mukherjee on August 29, a government official said.

The new Bill, providing for sweeping changes in the way companies operate and are regulated in the country, received Parliamentary approval earlier this month. It would replace the Companies Act, 1956. The Corporate Affairs Ministry is in the process of making the rules for the new legislation.

The draft rules, expected to be ready in two weeks, would be put out on the Ministry's website. After this, stakeholders and general public, among others, would have up to 60 days to provide their comments. — PTI

investor guidance
PPF account can be extended for five years
A.N. Shanbhag

Q: I have a PPF a/c with the State Bank of India (SBI) which matured on March 31, 2013 after a period of 25 years (extended by 10 years). In case, I withdraw my entire accumulated amount in December 22, 2013, up to what period is the interest calculated?

— Darshan

The interest will be paid up to November 30, 2013. If you desire, you can extend the PPF account for an additional block of five years.

Q: I understand that a tax return needs to be filed if income earned exceeds basic exemption limit. Clarify if dividend, short-term and long-term capital gains are to be included in the calculation of income.

— Swamy R G

To arrive at the basic exemption limit only taxable incomes need to be considered. Hence, dividends or long-term capital gains from equity or equity mutual funds will not be considered. However, short-term capital gains and taxable long-term capital gains (from say property or debt mutual funds) will have to be considered.

Q: I owned three pieces of land. Subsequently, I sold two of them to my brothers and purchased a new piece. Can I avail of the benefit of set off to claim capital gains tax exemption since the land sold is being replaced by the land purchased. The whole transaction is among four brothers.

— Jaiswal

Capital gains tax exemption on sale of land is only available if the net sale proceeds are reinvested in another residential property and not land. This is as per the Section 54F of the Act.

Q: For a retired person, is it necessary to pay quarterly advance tax on the earnings out of investments in the FDs, securities, postal schemes, etc. or can he pay yearly tax once only in March of every year?

— Adarkar

All taxpayers are required to pay advance tax in spite of the fact that most of their income is subject to TDS.

If the tax payable for the year is Rs 10,000 or more, advance tax is payable without having to submit any estimate or statement of income to the ITO in three instalments during each FY as follows: On or before September 15: 30% of estimated tax, December 15: 60% less tax already paid, March 15: 100% less tax already paid.

TDS is treated as advance tax paid.