Direct Tax Code (DTC) Progress

Monday, January 10, 2011

Allaying apprehensions about the proposed Direct Tax Code (DTC), Union finance minister Pranab Mukherjee on Saturday assured an audience of nearly 1,300 overseas Indians that the regulations were still being formulated and there was no firm decision yet. Clarifying that no decision has been taken in terms of DTC as the bill is currently being scrutinized by a parliamentary standing committee, Mukherjee said it is a wrong perception that an NRI becomes an Indian resident for the purpose of taxation if he stays in India for 60 days in a financial year.

Read more...

NRIs to Get 10 percent of industrial plots Reserved in Haryana, Great Investment option

There's good news for NRIs wanting to invest in Haryana. The state has decided to reserve up to 10 percent of industrial plots or sheds for NRIs and persons of Indian origin (PIO).

Industrial units with 33 percent or more foreign direct investment (FDI) can also avail the benefit of reservation of industrial plots, a spokesperson of the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) said here Monday.

"In case of NRI plots, the entire amount towards the price of the plot would have to be remitted through the Non-resident External Rupee (NRE) Account of the applicant or in remittances from abroad or foreign exchange," he said.

Haryana has crafted success in industrial investment in the last three to four decades. The state's industrial base in Gurgaon, Manesar, Faridabad, Panipat, Kundli and other places is well-known. Some big names like Maruti-Suzuki, Hero Honda and several others have invested in the state.

In case of FDI projects, at least 33 percent of the project cost should come from the FDI route.

However, the 10 percent limit would not preclude allotment of plots in the FDI category as part of the general scheme of allotment, he added.

The spokesperson said preferential allotment of up to two percent of industrial plots or sheds in each industrial estate had been prescribed by the government people with disabilities.

He stated that while allotting plots, preference would be accorded to prestigious projects involving capital investment of Rs.10 crore, Rs.20 crore and Rs.30 crore and above.

Ex-servicemen, women entrepreneurs, unemployed engineering graduates, polytechnic, ITI trained candidates and new entrepreneurs who display exceptional entrepreneurial skills would also be given preference in allotment, he added.

NRIs and applicants of other categories will apply to the HSIIDC for allotment of industrial plots.

Haryana has planned industrial model townships (IMT) and industrial estates in several places across the state, especially in the national capital region (NCR) of New Delhi.

The new industrial estates are located in Panchkula, Bawal, Bahadurgarh, Rai and Kundli while IMTs are coming up at Manesar and Rohtak.

Read more...

1 Tonne of Gold Sold last Week Gold traders stock-up after Gold prices Fall

India's gold buying continued on Monday afternoon after prices fell 1.8 percent in the previous week, as traders sought to stock in anticipation of the upcoming harvest festival and on wedding demand, dealers said.

"The good response has been continuing from last week. I sold about 1 tonne of gold last week," said a dealer with a state-run bullion importing bank in Mumbai.

The most-active gold for February delivery was trading 0.38 percent higher at 20,450 rupees per 10 grams at 12:59 p.m., still down 2.3 percent from the record high of 20,924 rupees struck last month.

International spot gold edged higher, after losing 3.5 percent in the first week of 2011, as fears over the euro zone debt crisis buoyed appetite for bullion, and bargain hunting in the physical market provided support.

"I am expecting good sales to continue today as well at $1,370-1,375 (an ounce)," said the dealer with the state-run bank. Weddings in India, the world's largest consumer of yellow metal, will re-start next month.

Gold traders also awaited direction from the rupee, which plays an important role in determining the landed cost of the dollar-denominated yellow metal.

The Indian rupee held its ground, supported by firm Asian peers and a sharp drop in the country's trade deficit in December.

Read more...

Only 5 % Investment is of NRI's - At Least 95 Percent of Investments in the country is Domestic Investment

Planning Commission Deputy Chairman Montek Singh Ahluwalia today dispelled the impression that India was after NRI funds saying that more than 95 per cent of investment comes from domestic sources.

"I think we can get rid of the notion that we are connecting with the NRIs (Non-Resident Indians) because we want investment...we are not reaching out to NRIs because we need money," Ahluwalia said at the Pravasi Bhartiya Divas organised by the government in collaboration with industry chamber CII .

"At least 95 per cent of investments in the country is domestic investment," Ahluwalia said adding, "if you feel your money is well spent here, you are welcome... If you think in another country you can do better... as an economist I will tell you that is exactly what you should do."

Sharing the dais with Ahluwalia, Minister for Overseas Indian Affairs Valyar Ravi said, "The NRIs share in the foreign direct investment (FDI) in the country is just 1.3 per cent."

According to the latest government data, the cumulative FDI in the country since 1991 stands at USD 179.45 billion.

Although, the NRI investment in the country is not huge, but the remittances from workers are significant. India received USD 46.9 billion as remittances during 2008-09.

Ahluwalia pointed out, "We are reaching out (to NRIs) because we value the long, socio-cultural footprint that we all share.

"So, honestly I would tell you, if you don't feel ready to invest in India, don't be apologetic. It's our job to get investors...Indian or foreigner doesn't matter," he added.

India is planning to double the investment in infrastructure to USD one trillion in the 12th Five Year Plan (2012-17) compared to USD 500 billion in the current Plan.

Read more...

Fixed Deposit (FD) Some Basics

Banks have been raising interest rates on fixed deposits of various tenures by 0.5-0.75% in the past two weeks. A three-year FD in the second week of December 2010 was earning as much as 8.30-8.50%. The interest rate has since swelled to 9%. A senior citizen might even earn 10% by picking the right bank FD.

In this backdrop, it is tempting to withdraw an FD and deposit the money with a bank offering a higher interest rate. Here is why you should not rush.

Banks usually levy a penalty in the form of a 0.5-1% lower interest on customers looking to ditch their account for a rival’s.

"When the interest rate goes up in quick succession, people will start breaking existing deposits. Bank will feel the pressure," says S Govindan, general manager of personal banking and operations department at Union Bank of India. Banks are okay with customers reinvesting money with them, though there are exceptions.

HDFC Bank is one. The bank has said it will charge a 1% penalty on premature withdrawals for all fixed deposits, including sweep-in FDs (accounts that combine savings-current and fixed deposit features) and partial closures, from 24 January 2011.

Penal interest
ICICI Bank already charges a 0.5-1% lower interest rate to end an FD. The penal interest is 0.5% for a one-year deposit and 1% for deposits below `5 crore but with a higher tenure. A spokesperson of ICICI Bank said the penalty applies even if the money is re-invested.

Not every bank imposes a sweeping fine on withdrawals. IDBI Bank said last week it will not fine new or renewed FDs opened from January 1, 2011.

The penalty of 1% lower interest when people renew existing FDs or open a new deposit will now be waived off, says RK Bansal, executive director and chief financial officer of IDBI Bank.

If you break the FD now

It is a customer-friendly measure, says Bansal. People want to re-invest when rates rise, he says, though FD termination creates an asset-liability mismatch for the bank.

Like IDBI, public sector counterparts such as State Bank of India , Bank of Baroda , Punjab National Bank and Union Bank of India also impose a charge on premature withdrawal, even if it is partial. There is no fine on a deposit renewed for higher interest rate, said officials of these banks.

UBI’s Govindan says there was always a penalty on breaking an FD. UBI charges a lower interest rate of 1% on an FD removal. "But if you re-invest the same amount for a period higher than the remaining period of the original FD, the penalty is waived off," he says.

The waiver is paying off. "We are seeing people who were in for the shorter term are breaking existing FDs and going for the longer-tenure FDs because of the attractive interest rate," says Govindan.

The Reserve Bank of India had asked banks to allow conversion of fixed, recurring or daily deposits for reinvesting without reducing the interest as a penalty. In April 2010, RBI reversed its stance, saying banks can decide their own charges if people convert deposits to earn higher interest.

The leeway to banks means a rethink on pulling out money is in order. For a customer, it pays to calculate the penalty as some banks do not tell upfront about the charges while ending an FD prematurely. The accompanying tables will help you decide.

"Breaking an FD is helpful to a customer only if there is a rapid increase in interest for two weeks or one month as we have seen now," says Govindan. "If the rate moves up in the range of 300 bps (3%) in quick succession, you benefit."

Read more...

About This Blog

Search Market - Cheap Electronics Online - UK shopping centers

Lorem Ipsum

  © Free Blogger Templates Columnus by Ourblogtemplates.com 2008

Back to TOP