Ukraine crisis: Exodus of firms from Russia reversing 30 years' investment

 Foreign energy majors have been pouring in money since the 1990s

Russia Ukraine Conflict: The invasion of Ukraine is causing a mass exodus of companies from Russia, reversing three decades of investment by Western and other foreign businesses there following the collapse of the Soviet Union.

The list of those cutting ties or reviewing their operations is growing by the hour as foreign governments ratchet up sanctions against Russia, close airspace to its aircraft and lock some banks out of the SWIFT money messaging system. With the ruble plunging and the U.S. banning transactions with the Russian central bank, operating in Russia has become deeply problematic. Some companies have concluded that the risks, both reputational and financial, are too great to continue.

For some companies, the decision to exit Russia is the conclusion of decades of lucrative, if sometimes fraught, investments. Foreign energy majors have been pouring money in since the 1990s. Russia’s largest foreign investor, BP Plc, led the way with its surprising announcement on Sunday that it would exit its 20 per cent stake in state-controlled Rosneft, a move that could result in a $25 billion write-off and cut its global oil and gas production by a third…Read More

Silver Lake in talks to take $1 billion stake in Reliance Retail: Report

Reliance, an oil-to-telecoms conglomerate controlled by India’s richest man, Mukesh Ambani, is pitching its retail business as a formidable force

Private equity firm Silver Lake Partners is in talks to invest $1 billion in the retail arm of India’s Reliance Industries Ltd (RELI.NS), the Financial Times reported on Thursday, citing people with direct knowledge of the matter. The investment, which would value Reliance Retail at about $57 billion, comes as the company is aiming to sell about 10% in new shares, the report added. Silver Lake declined to comment on the report, while Reliance could not immediately be reached outside of normal business hours.

Reliance, an oil-to-telecoms conglomerate controlled by India’s richest man, Mukesh Ambani, is pitching its retail business as a formidable force in the world’s second most populous country, expanding rapidly to woo potential investors. The company has raised more than $20 billion from global investors including Facebook Inc (FB.O) by selling stakes in its Jio Platforms digital business and has said it aims to attract investors to Reliance Retail over the next few quarters.

How to claim income tax deduction for investments made in April – July 2020

One of the key points to note while accounting for these investments made from April to July is that a deduction once claimed in FY20 on an investment made, cannot be claimed again for FY21

The government had imposed a nationwide lockdown in March due to the coronavirus pandemic outbreak across India. As a result of this lockdown that began in March, days before the close of the financial year, several taxpayers had been denied the opportunity to make tax saving investment for financial year 2019-20 (FY20). The government had hence extended the due date up to June 30, 2020, and has recently given a further extension until July 31, 2020 for making tax saving investments pertaining to FY20. This move has given taxpayers more time to invest and save tax.

Taking the above example into consideration, it is entirely up to the taxpayer to decide which financial year he wants to claim the deduction for investments made in the months of April to July 2020. However, another point to consider is that the government has introduced a new tax regime in Budget 2020, where taxpayers can pay taxes at reduced tax rates, if they opt to not claim any deductions from their income.

If a tax filer decides to pay tax under this new regime for FY21, then it would be prudent to plan ahead and claim whatever investments are possible for FY20 only. The remaining unclaimed investments will not be able to be carried forward in such cases.

How to claim?

Those who want to claim deductions for investments made in April, May, June and July 2020 in FY20, are required to file schedule DI, or Details of Investments, in their ITR forms for FY20, which are due on November 30, 2020. Schedule DI will contain details relating to investments, deposits and payments made under section 80C to section 80GGC of the Income Tax Act, where the eligible amount of deduction for FY20 is to be disclosed. Further, deductions attributable to any investment or expenditure made during April 1, 2020 and July 31, 2020 need to be separately specified. Any amount utilised out of the capital gains account for FY20 for investments in schedule 54 to 54GB will also need to be specified in this schedule…Read More

PPF, EPF, Sukanya Samriddhi: All you need to know about tax savings schemes

Individuals and HUFs can opt for a new tax regime from FY 2020-21 by giving up about 70 deductions/exemptions

The new tax regime comes with just a couple of deductions. Most significantly, a deduction for investments and expenses eligible under section 80C of up to Rs 1.5L is not available in the new regime. This has left steady investors of PPF, EPF, and other savings instruments in doubt about whether they should continue with these investments or not.

Individuals and HUFs can opt for a new tax regime from FY 2020-21 by giving up about 70 deductions/exemptions. The old regime allows for a deduction at the stage of investment which is unavailable in the new regime. While exemption for interest income and exemption on the maturity proceeds continues to be available in the new regime. So should one continue with these EEE investments? Let’s understand more.

In the table below, an individual having total income in the bracket Rs 5 to 15 lakh is tax neutral between the existing regime and new tax regime at the value of ‘Deductions’ indicated therein. Simply speaking, if one were to claim deductions as per column 2, tax outgo between the two regimes shall be the same. In a case the total deductions claimed exceed the value as per the ‘Deductions’ limit mentioned below, the old tax regime will be more beneficial, i.e. tax outgo will be lower in the old regime.

Sound economics, good investment: Should you opt for Bharat 22 ETF?

ETFs have become a preferred vehicle for parking the long-term money

Mayuresh Joshi is Fund Manager at Angel Broking

Last week, the government announced Bharat 22 ETFs, an exchange traded fd of 22 large cap shares. While the composition includes mostly profit-making, dividend paying public sector companies, the government is also including some shares of blue chip companies like ITC, Larsen & Toubro and Axis Bank held under the Special Undertaking of Unit Trust of India or SUUTI.

Economic news

The government observed in the release that over the past 3 years to June 2017, assets under management of exchange traded funds in India surged five times to just under Rs 54,000 crore. The release also emphasized that exchange traded funds or ETFs are a popular class of funds globally. Assets under management are expected to grow to $7 trillion by 2021 from $4 trillion today. There is merit in the argument the government has made in the press release.

ETFs have become a preferred vehicle for parking the long-term money. Sovereign Wealth Funds and Pension Funds worldwide love them. While the average cost of fund management is high in active funds, it is much lower in exchange-traded funds. At the same time, they are relatively less risky with well-defined assets under management. The liquidity of these funds is also high since they are listed on stock exchanges.

So if you make a checklist of investments, ETFs  tick most of the boxes.

Why good economics?

The government's move to create Bharat 22 will allow it to raise money for meeting the disinvestment target. The budget estimate puts it at over Rs 72,000 crore. So far, in 2017-18, it has only managed to raise Rs 9,300 crore. The timing is just about right if they launch it now. This is because stock markets are at a record high and new investors attracted to India are looking for assets like blue chip company shares. The government could raise a significant amount of money by transferring some of the direct holding to the ETF. The release issued last week does not comment on the timing and the amount the government proposes to receive through this....

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