Business Affairs: November 2016

Wednesday 30 November 2016

RBI caps withdrawals from Jan Dhan accounts at Rs 10,000 a month

In a move aimed at protecting “the innocent farmers and rural account holders of PMJDY (the Pradhan Mantri Jan Dhan Yojana) from activities of money launderers and legal consequences under the Benami Property Transaction & Money Laundering laws”, the Reserve Bank of India (RBI) has placed a limit of Rs 10,000 on monthly withdrawals from Jan Dhan bank accounts.

According to the new notification, the KYC (Know Your Customer)-complaint account holders might be allowed to withdraw Rs 10,000 a month from their account, while branch managers could allow further withdrawals beyond Rs 10,000 within the current applicable limits only after ascertaining the genuineness of such withdrawals and duly documenting them on bank record.

Monday 28 November 2016

New income declaration scheme explained

Evasion of taxes deprives the nation of critical resources which could enable the Government to undertake anti-poverty and development programmes. It also puts a disproportionate burden on the honest taxpayers who have to bear the brunt of higher taxes to make up for the revenue leakage. As a step forward to curb black money, bank notes of existing series of denomination of the value of Rs.500 and Rs.1000 [Specified Bank Notes(SBN)] have been recently withdrawn the Reserve Bank of India.

Concerns have been raised that some of the existing provisions of the Income-tax Act, 1961 (the Act) can possibly be used for concealing black money. The Taxation Laws (Second Amendment) Bill, 2016 (‘the Bill’) has been introduced in the Parliament to amend the provisions of the Act to ensure that defaulting assessees are subjected to tax at a higher rate and stringent penalty provision.

Yet another disclosure scheme with 50% tax rate

The government on Monday unveiled yet another disclosure scheme for deposits made till December 30 and proposed amendments in the Income-Tax Act, proposing harsher penalty for evaders.

Finance Minister Arun Jaitley introduced a Bill to this effect in Parliament on Monday. This is the third income disclosure scheme introduced by the Bharatiya Janata Party (BJP) government in the past two years.

The latest disclosure scheme - Pradhan Mantri Garib Kalyan Yojana - will allow those depositing money in banned Rs 500 and Rs 1,000 notes to enjoy immunity from certain taxation laws by paying a 50% Tax on the undisclosed income. However, the declarants will have to deposit a fourth of the undisclosed income with a four-year lock-in.

Sahara proposes to pay over Rs 11,000 crore to ensure 'absolute' release of Subrata Roy

The Sahara Group on Monday presented in the Supreme Court a roadmap for repayment of an outstanding amount of over Rs 11,136 crore to SEBI and proposed to clear its liability in 21 instalments in two-and-a-half years to ensure "absolute" release of its chief Subrata Roy.

The group submitted the application, along with a payment plan, seeking approval of the apex court and for "absolute" release of Roy and two directors Ashok Roy Chaudhary and Ravi Shankar Dubey once the amount is paid.

The proposed plan was placed before a bench comprising Chief Justice T S Thakur and Justices Ranjan Gogoi and A K Sikri, which asked SEBI and senior advocate Shekhar Naphade, who is assisting as amicus curiae in the matter, to respond to it.

After RBI's CRR spanner, banks can't cut lending rates as much as expected

An image of RBI headquarters in Mumbai (Photo: Kamlesh Pednekar)

Upset by the Reserve Bank of India’s (RBI) decision to charge the entire deposits that banks collected between September 16 and November 11 as a reserve requirement, bankers have said they would not be able to cut lending rates as much as was expected of them.

Banks would now be scrambling to manage enough liquidity for their healthy functioning even as the general public continues to pour in deposits of old high-value notes and the restriction of cash withdrawal prevents adequate outflow of the money deposited.

In a surprise announcement on Friday, RBI had said an incremental cash reserve ratio (CRR) of 100% would need to be maintained on deposits collected during the period mentioned above. Under normal circumstances, CRR is only four% of deposits. Banks don’t earn any interest on CRR.

Full text of govt's I-T Amendment Bill

Evasion of taxes deprives the nation of critical resources which could enable the Government to undertake anti-poverty and development programmes. It also puts a disproportionate burden on the honest taxpayers who have to bear the brunt of higher taxes to make up for the revenue leakage. As a step forward to curb black money, bank notes of existing series of denomination of the value of Rs.500 and Rs.1000 [Specified Bank Notes(SBN)] have been recently withdrawn the Reserve Bank of India.

Concerns have been raised that some of the existing provisions of the Income-tax Act, 1961 (the Act) can possibly be used for concealing black money. The Taxation Laws (Second Amendment) Bill, 2016 (‘the Bill’) has been introduced in the Parliament to amend the provisions of the Act to ensure that defaulting assessees are subjected to tax at a higher rate and stringent penalty provision.

Thursday 24 November 2016

Pakistan knocks UN doors over LoC tension with India

Alarmed by the escalation of tension with India along the LoC, Pakistan today asked the UN to act before the situation snowballs into a "full-fledged crisis".

Pakistan's Ambassador to the UN Maleeha Lodhi met the Deputy UN Secretary General Jan Eliasson and the Chef de Cabinet of the Secretary General Edmond Mulet during which she alleged that the situation along the Line of Control (LoC) posed a "grave threat to international peace and security".

Where is the rupee headed?

Rupee hit a record low of 68.86 against the US dollar (USD) in intra-day deals on Thursday, surpassing its earlier all-time intra-day low of 68.85 hit on August 28, 2013. The rupees’ near 3% decline in November compares with a 5.6% loss for Malaysia’s ringgit, the worst in Asia, and a 3.2% drop in Indonesia’s rupiah, data show.

Government’s efforts to cleanse the economy of black money via the demonetisation route, surprise outcome of the US Presidential elections and the possibility of a hike in key rates by the US Federal Reserve (US Fed) in its December meeting that triggered has led to outflows from emerging markets, including India, are the key reasons for rupee’s weakness against the US dollar.

Tuesday 22 November 2016

Demonetisation: Modi wants your opinion on the currency ban

Amid opposition attack, Prime Minister Narendra Modi today asked the people to directly convey their views to him on demonetisation via his App.

He asked the public to participate in a survey where a number of questions have been posed with regard to scrapping of old Rs 500 and Rs 1000 currency notes.

"I want your first-hand view on the decision taken regarding currency notes. Take part in the survey on the NM App," he said in a tweet.

The Prime Minister posed questions like, Do you have any suggestions/ideas or insights you would like to share with PM Narendra Modi.

Demonetisation: Don't deposit Maoists' money in banks, police tell Jharkhand villagers

The Jharkhand Police have started a poster campaign in Maoist-hit areas of the state asking people not to deposit or exchange the demonetised currency notes belonging to Maoist guerrillas or their organisations.

"The villagers should not deposit the illegal money (of Maoists) in Jan Dhan accounts, otherwise they will be held responsible for such transactions," Inspector General of Police (operation) M.S. Bhatia, who is also the Jharkhand police spokesperson, told IANS.

"We are putting up pamphlets in remote rural areas where hardcore Maoists have dumped their cash. We (police) want to inform the villagers in advance that they should not be duped," he said.

Demonetisation: Don't deposit Maoists' money in banks, police tell Jharkhand villagers

"We are putting up pamphlets in remote rural areas where hardcore Maoists have dumped their cash. We (police) want to inform the villagers in advance that they should not be duped," he said.

Friday 18 November 2016

Don't allow misuse of bank account or face action: Government

The government on Friday cautioned Jan Dhan account holders, housewives and artisans that they will be prosecuted under the I-T Act for allowing misuse of their bank accounts through the deposit of black money in Rs 500/1,000 notes during the 50-day window till December 30.

Demonetisation The directive comes against the backdrop of reports that some are using other persons' bank accounts to convert their black money into new denomination notes. In some cases, even rewards are being given to account holders for allowing such misuse.

The government had earlier said deposits up to Rs 2.50 lakh in bank accounts would not come under tax scrutiny as it is within the tax exemption limit. In the case of Jan Dhan account, the holder can deposit up to Rs 50,000

Don't allow misuse of bank account or face action: Government

Thursday 17 November 2016

Flaunting your Rolex on FB? Taxmen to track social media to nab high spenders

If you flaunt your expensive Rolex watch on Facebook from 2017-18 onwards, chances are that the income tax department is watching you.

The department is planning to include information given on social media under its Project Insight, a project to do data mining to nab high spenders who may not be reporting their true income.

"If you flaunt that you have gone on an expensive trip to a foreign location on Facebook and other social media, we will gather that information to match it with your income declared," a finance ministry official said.

Another official also said Project Insight will include information from social media in its data mining.

Wednesday 16 November 2016

How an American launched Zoomcar in India, and now plans to go international

In 2011, Greg Moran spent three months traveling across India, talking to thousands of people for what he says was primary research for his fledgling startup idea: to launch a car rental service in Asia’s fastest growing economy.

The New York resident decided to marry his passion for environment and numbers, and launched Zoomcar in India – where less than 10% of city residents own cars, and public transport can often be a nightmare.

“For the first 15 months we were just in Bangalore and then we launched in Pune, and then we went to Delhi,” said Greg.

“Going global is the next big thing. Not this year, but I think 18 months out that makes sense,” he said.
Nothing’s locked in, but countries under consideration are Indonesia, the Philippines, or Nigeria and other African markets.

Risk averse gold traders on edge as Modi fights 'black money'

Some Indian gold traders are placing bulk, short-term import orders on fears that Prime Minister Narendra Modi might soon add curbs on overseas purchases of the metal to his withdrawal of high-denomination banknotes in his fight against 'black money', traders and jewellers said.

India is the world's second biggest gold buyer, and it is estimated that one-third of its annual demand of up to 1,000 tonnes is paid for in black money - untaxed funds held in secret by citizens in cash that don't appear in any official accounts.

Modi has said he may not stop at the shock currency move that has led to a massive cash shortage, but has not made clear what his next step would be in his drive to uncover the wealth. That uncertainty is likely to create sharp swings in purchases, affecting world prices.

One week on: 25 deaths, chaos, never-ending bank queues and frustrated customers

Chaotic scenes and seemingly never-ending queues could still be seen outside banks and ATMs as people hustled to get valid currency notes for meeting their daily expenses after the Centre last week demonetised the old higher value bills.

Demonetisation Cash strapped people continue to wait in lines

Cash-strapped people were seen waiting in frustration as most of the cash dispensing machines ran out of cash within hours after being stocked.

In Delhi, people in large numbers started queueing up outside ATMs and banks from early morning but with limited success as many cash vending machines were running dry. Police also had to threaten an unruly crowd outside RBI with lathis.

One week on: 25 deaths, chaos, never-ending bank queues and frustrated customers

Demonetisation Cash strapped people continue to wait in lines

Cash-strapped people were seen waiting in frustration as most of the cash dispensing machines ran out of cash within hours after being stocked.

Monday 14 November 2016

Modi's mother queues up at a bank to exchange cash

As thousands continue to struggle daily in the wake of the central government’s surprise move of demonetising of Rs 500 and Rs 1000 notes since November 8, Prime Minister Narendra Modi mother, Heeraben on Tuesday was seen joining the serpentine queues of a bank in Gandhinagar, Gujarat.

Heeraben, who is aged above 90 years, went to the bank to exchange currency worth Rs 4,500.

Ever since its announcement, the move has been facing several road blocks in terms of implementation with public anger simmering in the wake of dysfunctional ATMs, and long queues and limited cash at banks.

Gas migration case: RIL initiates arbitration against govt

Mukesh Ambani-led Reliance Industries Ltd (RIL) and its partners, BP and Niko Resources, have initiated an arbitration process against the Centre's notice imposing a penalty of $1.55 billion on these companies for allegedly using migrated gas from state-run Oil and Natural Gas Corporation's (ONGC's) asset in KG-D6.

It was on November 3 that the government had slapped the penalty. Following this, RIL had come out with a statement that the contractor's liability has not been established by any process known to law and the quantification of the purported claim is without any basis and arbitrary. "RIL remains convinced of being able to fully justify and vindicate its position that the government’s claim is not sustainable," it said. The company is already locked in arbitration with the government on various other issues related to KG-D6.

The demonetisation of Rs 500 and Rs 1,000 notes will hurt agriculture, informal sector workers—about 482 million people who earn cash incomes—and disrupt India’s consumption patterns for at least the next quarter, according to an assessment released last week by Deloitte, an international consulting firm.

In contrast, sectors like e-commerce and payment banks, payment gateways are set to gain as transactions using cashless methods will increase over the coming months, the Deloitte report said, emphasising that “the long-term outlook remains positive”.

The lines to exchange defunct Rs 500 and Rs 1,000 notes grew across India, as fraying tempers and scuffles were reported.

The Prime Minister–who had promised working ATMs by day three–pleaded for 50 days to set the chaos right, and his government extended the validity of the old notes in select transactions for another 10 days.

Banks shut today, ATMs open, withdraw Rs 2500 a day: Top developments

Amid unending queues of cash-starved citizens at banks and relentless attacks by the opposition, the government on Sunday announced an increase in withdrawal limits at banks and ATMs. The Centre also urged the states to "facilitate the opening of new bank accounts" and last-mile distribution of small denomination notes as it announced that the new Rs 500 note had been issued.

Here is everything you might have missed over the weekend:

Daily withdrawal amount raised: The daily withdrawal from ATMs has now been hiked to Rs 2,500 from Rs 2,000 and from bank counters to Rs 4,500 from Rs 4,000. The limit of Rs 10,000 per day withdrawal has been removed.

The upper limit for weekly withdrawals from bank accounts has been raised to Rs 24,000 from Rs 20,000.

Money rush: ATMs will start dispersing Rs 2000 notes from today

With banks struggling to cope with rush to get alternative currency, the government has extended use of old defunct Rs 500 and Rs 1,000 notes for paying household utility bills, fuel, taxes and fees and purchases from co-operative stores till November 24.

It has also advised banks to waive charges imposed on various kind of e-transactions till December 31. Besides, the RBI has advised national payment corporation of India to waive its transaction charges on old transactions which are settled through financial switch.

Here are the key highlights of what Shaktikanta Das, DEA said today

1. The focus of the government is to activate all channels whereby cash is dispensed to the public.

Sunday 13 November 2016

Donald Trump vows to immediately deport up to 3 million undocumented immigrants

In line with his hardline immigration stance, President-elect Donald Trump has vowed to immediately deport up to three million undocumented immigrants, saying "we are getting them out of our country or we are going to incarcerate".

"What we are going to do is get the people that are criminal and have criminal records, gang members, drug dealers, where a lot of these people, probably two million, it could be even three million, we are getting them out of our country or we are going to incarcerate," Trump told CBS News.

"But we're getting them out of our country, they're here illegally," the 70-year-old business tycoon-turned politician said in an excerpt released ahead of broadcast of the interview.

Donald Trump vows to immediately deport up to 3 million undocumented immigrants

"But we're getting them out of our country, they're here illegally," the 70-year-old business tycoon-turned politician said in an excerpt released ahead of broadcast of the interview.

New series of Rs 500 notes issued

After Rs 2,000 currency notes, the government has launched a new series of Rs 500 notes, even as people are stand in long serpentine queues awaiting their turn at bank branches across the country.

After demonetising old Rs 500 and RS 1,000 currency notes, the government had first introduced only Rs 2,000 notes. However, ATMs are not able to dispense it, since they will have to be re-calibrated to do so. This might take up to three weeks.

Similarly, ATMs will have to be re-calibrated for a new series of Rs 500 notes as well.

The government also plans to soon reintroduce the Rs 1,000 note back in the market, but with far more evolved security features.

CLOSE India to be part of core World Bank team

For decades a borrower, India will soon sit in the core management team of the International Development Association (IDA) of the World Bank.

Axel Van Trotsenburg, vice-president, development finance at the Bank, told Business Standard: “India will be one of the IDA deputies, the 14-member group of donor nations which run the key negotiations with member countries.” Van also said the institution would weigh costs to consider Indian markets for raising bonds — as the institution will for the first time tap international markets to raise money — to finance low-cost aid programmes.

Set up in September 1960, IDA was at one time the biggest source of aid for India. For IDA, too, India happened to be the largest aid recipient among its 173 member-countries.

Banks shut today, ATMs open, withdraw Rs 2500 a day: Top developments

Amid unending queues of cash-starved citizens at banks and relentless attacks by the opposition, the government on Sunday announced an increase in withdrawal limits at banks and ATMs. The Centre also urged the states to "facilitate the opening of new bank accounts" and last-mile distribution of small denomination notes as it announced that the new Rs 500 note had been issued.

Here is everything you might have missed over the weekend:

Daily withdrawal amount raised: The daily withdrawal from ATMs has now been hiked to Rs 2,500 from Rs 2,000 and from bank counters to Rs 4,500 from Rs 4,000. The limit of Rs 10,000 per day withdrawal has been removed.

The upper limit for weekly withdrawals from bank accounts has been raised to Rs 24,000 from Rs 20,000.

Friday 11 November 2016

It was a great honour, says Donald Trump on meeting Barack Obama

US President designate Donald Trump said it was a "great honour" to meet President Barack Obama, as the two met for transition talks at the White House, media reports said.

"So Mr. President, it was a great honour being with you, and I look forward to being with you many, many more times in the future," Washington Post quoted Trump as saying on Thursday.

"We discussed a lot of different situations, some wonderful and some difficulties. I very much look forward to dealing with the president in the future, including counsel," he added.

Thursday 10 November 2016

Amid an unfolding boardroom drama that has seen Tata Sons split wide open, with most board members and senior executives sing with Interim Chairman Ratan Tata or ousted group chief Cyrus Mistry, Bhaskar Bhat is learnt to have resigned from the board of Tata Chemicals.

"Bhaskar Bhat, non-executive, non-independent director, has resigned from the Board of the company w.e.f. November 10, 2016," Tata Chemicals said in a BSE filing.

In his resignation letter, Bhat said, "I have just read the statement put out by the independent directors on the BSE website. The contents as well as the spirit of the statement completely dilutes the views I expressed at the Board meeting today especially regarding the threat the company faces on account of loss of confidence of the promoter Tata Sons in the Chairman of Tata Chemicals."

Taxmen clamp down on jewellers, traders stop accepting old notes amid raid fears

A day after demonetisation of Rs 500 and Rs 1,000 notes, the Income Tax (I-T) department on Thursday conducted surveys on jewellers and suspected hawala operators across Mumbai, Delhi and parts of Punjab.

There have been reports of illegal profiteering by discounting of money, sale of gold at an up to 60 per cent premium, and sale of jewellery for over Rs 2 lakh without PAN details.

“We are keeping a watch on illegal transactions. I can only say that legal and honest taxpayers have nothing to worry about,” Sushil Chandra, chairperson, Central Board of Direct Taxes (CBDT) told Business Standard, but did not specify details of survey operations.

DND flyway toll free, SC refuses to stay Allahabad HC order

The Supreme Court on Friday refused to stay Allahabad High Court's order making 9.2-km, eight-lane Delhi-Noida Direct (DND) flyway toll free.

The apex court has asked the Comptroller Auditor General to verify the cost of DND flyway project and submit a report before it within four weeks.

The court had on October 28 declined to stay the Allahabad High Court's order making the Delhi-Noida flyway toll-free.

The great Indian jugaad: How some are beating the Rs 1000 note ban

Even as the Modi government on Tuesday declared that Rs 500 and Rs 1,000 would no longer be legal tender, the average Indian, with his prowess in the art of jugaad, found ways to beat the system, thanks to a 50-day window given for exchange of these banknotes.

Despite the panic visible across all cities, there always are some opportunists ready to take advantage of someone’s desperation. They always find ways to play the system. And, in this case, they have turned religious places, non-government organisations (NGOs) and gold jewellers into laundering centres. At many places, even the retail shops have become money-exchange centres, they are giving Rs 400 in exchange for Rs 500 notes. Even some bank managers are getting offers for a 20 per cent cut in lieu of exchange of Rs 500 and Rs 1,000 notes.

Read More...

EU invites Trump to discuss trade deals at summit, warns against 'isolation'

The EU's top leaders today invited US President-elect Donald Trump to a summit as soon as possible as they warned of uncertainty in relations and a need to respect democratic values.

"I do not believe that any country today can be great in isolation," European Council chief Donald Tusk told reporters in Brussels, referring to Trump's campaign slogan of "Make America Great Again".

"Europe and the United States simply have no option but to cooperate as closely as possible."

Tusk and European Commission boss Jean-Claude Juncker said in a letter that they wanted to discuss "unprecedented challenges" including the Islamic State jihadist group, the conflict in Ukraine, and a troubled EU-US trade deal under negotiation.

Trade troubles ahead: What Trump's victory means for Asia

Donald Trump, points toward Republican Vice presidential candidate Gov. Mike Pence

No mainstream observer expected this. Donald Trump was not supposed to win the GOP primary, let alone the White House. Yet, here we are.

This was always an election that would favour a change candidate, but conventional wisdom said that the reality TV star was not plausible in a general election. But he turned his complete lack of political experience into a huge advantage.

The fact that Trump was light on policy detail while on the stump, and that he contradicted himself on an almost daily basis, means that we have very little to go on when trying to ascertain what a Trump presidency will mean for Asia.

Donald Trump's victory: American Muslims express shock, fear

Fear and shock were expressed by American Muslims after Republican Donald Trump was confirmed as President of the US after months of taking anti-Islamic stands.

The Republican made his most controversial remarks about Islam in December last year, sparking anger among the world's 1.5 billion followers of the religion, when he called for a ban on Muslims entering the US after a mass shooting in California, the Daily Mail reported.

For the editor of the Muslim section of Patheos, a website specialising in spirituality, Dilshad Ali had never felt the fear of Trump until now.

"I woke up today and I finally felt it. It felt personal, like the election was a vote against me," the 40-year-old mother of three told CNN on Wednesday.