Social Networking is becoming a platform for Stock Hoaxes

Under a report published in Business Line - it says that the social networking sites are becoming fertile grounds for preposterous stock market tips and advices.

In such hoaxes, anonymous users set up their accounts with names that may sound similar to prominent stock market players, issue negative commentary that creates confusion and panic amongst investors and results in massive decline of shares in the market.

One should always follow the reliable and trusted source of advice received in the matters of stock market tips. One should investigate the rumor with the stock market professionals and then react accordingly. Instead of getting bamboozled, one must always rely to the trusted source of information such as broker, research analyst or any stock market expert.

SEBI (Amendment) Bill 2013 widens the criteria of SAT Chief

Rajya Sabha Passes SEBI (Amendment) Bill 2013 that widens the criteria for selection of Securities Appellate Tribunal (SAT) chief.Finance Minister P.Chidambaram stresses a lot on the actions to be taken against the people involved in Insider Trading. It is a serious offence and SEBI should improve the surveillance.

The SEBI (Amendment) Bill 2013 proposes to appoint a Retired High Court Judge (having held the position for 7 years) to the head of SAT.

The existing provision prescribe only a serving or retired Supreme Court Judge or Chief Justice of a High Court as a head of Tribunal.

Bonus Shares: A New Perspective

In the case of listed companies, the Securities and Exchange Board of India's DIP (disclosure and investor protection) and ICDR(Issue of Capital and Disclosure Requirements) regulations currently, the said company cannot issue bonus shares by capitalizing its revaluation reserves.

The Question arises whether an unlisted company can do so.....Well, the guidance note issued by ICAI clearly states that the company cannot issue bonus shares out of reserve created by the revaluation of its assets.

However, in case of Bhagvati Developers Vs. Peerless General Finance & Investment Co, the SC held that a non listed company can do so....The enactment of companies bill addressed the issue and stated a company including non listed, cannot issue bonus shares by capitalizing its revaluation reserves.

This clarifies the situation of the Bonus Issue under IPO and Public Issue of Securities.

What is Trade to Trade Settlement System?

A Trade to Trade settlement system is such that delivery is absolutely mandatory. 

Day-trading (intra-day buying and selling) is not encouraged in stocks that are in trade-to-trade segment.

If you sell shares (from your demat account) that are under trade-to-trade transaction & buy them back later on the same day, then the investor in such a case has to give delivery for the shares sold. 

However, a day later, the investor shall get delivery of the shares bought which clearly signifies that each trade is separate.

If you do not have shares in your demat account, you cannot sell them. This is because you have to give delivery. The shares that you buy, come into your demat account after a couple of days; thus you cannot sell them on the same day.

Budget 2013 -14: SEBI & Others

1. In order to curb the Insider Trading and malpractices, budget has proposed to amend SEBI Act as to provide sufficient protection to the investors.

2. SEBI to simplify the procedures and prescribe uniform Registration & additional norms for entry for foreign portfolio investors. (FPI is foreign direct investment in capital market).

3. Rule that, where an investor has a stake of 10 per cent or less in a company,it will be treated as FII and, where an investor has a stake of more than 10 per cent, it will be treated as FDI will be laid.

4. FIIs will be permitted to participate in the exchange traded currency derivative segment to the extent of their Indian rupee exposure in India.

5. SEBI to prescribed requirement for angel investor pools by which they can be recognised as Category I AIF venture capital funds.

6. Small and medium enterprises, to be permitted to list on the SME exchange without being required to make an initial public offer (IPO).
Here SME Exchange means a platform of the Exchange is intended for small and medium sized companies with high growth potential. The SME platform of the Exchange shall be open for SMEs whose post issue paid up capital shall be less than or equal to Rs.25 crores. The platform shall allow new, early stage ventures and small quality companies to raise much needed growth capital as they grow, mature and transit to the Exchanges’ main board.

7. Stock exchanges to be allowed to introduce a dedicated debt segment on the exchange.
                                                                    Others

1. Surcharge of 10 percent on persons (other than companies) whose taxable income exceeds 1 crore.

2. Increase surcharge from 5 to 10 percent on domestic companies whose taxable income exceed 10 crore.

3. Tobacco products, SUVs and Mobile Phones to cost more.

4. In case of foreign companies who pay a higher rate of corporate tax, surcharge to increase from 2 to 5 percent, if the taxabale income exceeds 10 crore.

5. In all other cases such as dividend distribution tax or tax on distributed income, current surcharge increased from 5 to 10 percent.

6. Education cess to continue at 3 percent.

7. Contributions made to schemes of Central and State Governments similar to Central Government Health Scheme, eligible for section 80D of the Income tax Act.

8. Donations made to National Children Fund eligible for 100 percent deduction.

9. Proposal to introduce Commodity Transaction Tax (CTT) in a limited way. CTT applicable on the sale of commodities. Agricultural commodities will be exempted. CTT shall be at the rate of 0.01% on the value of transaction and the tax shall be payable by the seller.

10. Modified provisions of GAAR will come into effect from 1.4.2016.

11. No change in the normal rates of 12 percent for excise duty and service tax.

12. No change in the peak rate of basic customs duty of 10 perent for non-agricultural products.

13. Duty on specified machinery for manufacture of leather and leather goods including footwear reduced from 7.5 to 5 percent.

14. Duty on pre-forms precious and semi-precious stones reduced from 10 to 2 percent.

15.Duty on Set Top Boxes increased from 5 to10 percent.

16. Duty on raw silk increased from 5 to 15 percent.

17. Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and similar vessels increased.

18. Duty free gold limit increased to 50,000 in case of male passenger and 1,00,000 in case of a female passenger subject to conditions.

19. Excise duty on SUVs increased from 27 to 30 percent. Not applicable for SUVs registered as taxis.

20. Duty on mobile phones priced at more than 2000 raised to 6 percent.

21. Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema halls.

22. Proposals to levy Service Tax on all air conditioned restaurant.

23. Additional deduction of interest upto 1 lakh for a person taking first home loan upto 25 lakh during period 1.4.2013 to 31.3.2014 (Total 2.5 lacs)

24. Income limit under Rajiv Gandhi Equity Savings Scheme (RGESS) will be raised from Rs. 10 lakh to Rs. 12 lakh.

ON Rajiv gandhi Equity Scheme (http://rgess.com/)

Who can invest in RGESS?

New retail investors with an annual income of less than 10 lakhs.

How much can I invest?

The maximum amount eligible for claiming benefit under RGESS is Rs. 50,000.

Tax Benefit - Deduction u/s 80 CCG, is available on 50% of the amount invested. The benefit is in addition to deduction available u/s Sec 80C.

Lock-in Period - 3 years. Fixed lock-in during first year followed by a flexible lock-in for subsequent two years.

CS Executive Guidelines Answers

CS Executive Guidelines answers have been put together to facilitate the learning.

Please note that the guidelines answers are the most recommended thing that one can take into account while studying CS. You must go through all the guidelines answers which can add some value in learning and clearing exams.

In case you need any clarifications, please feel free to get in touch with me at mukul.singh@csfuturz.com

Happy Learning!!!!

Public Provident Fund Scheme, 1968 (PPF, 1968) and Senior Citizens Savings Scheme, 2004 (SCSS, 2004) – Revision of interest rates

Referring to the circular RBI/2011-12/359 dated January 20, 2012 regarding interest rates on small savings schemes, the Government of India have vide their Office Memorandum (OM) No. 6-1/2011-NS.II (Pt.) dated March 26, 2012, advised the rate of interest on various small savings schemes for the financial year 2012-13. 

Accordingly, the rates of interest on PPF, 1968 and SCSS, 2004 for the financial year 2012-13 effective from April 01, 2012, on the basis of the interest compounding/payment built-in in the schemes, will be as under:

Scheme	Rate of interest w.e.f. 01.12.2011	Rate of interest w.e.f. 01.04.2012
5 year SCSS, 2004	9.0% p.a	9.3% p.a
PPF, 1968	8.6% p.a	8.8% p.a

This will result in good amount of saving in PPFs and SCSS.

SEBI (Debenture Trustee) IInd Amendment Regulation 2011

The SEBI (Debenture Trustee) IInd Amendment Regulation 2011 states that the net-worth of Debenture Trustee shall now be Rs. 2 Crore. Go to the Official Copy of Order.

Basic Concepts of Income tax

The Income Tax Act - Basic Concepts have been explained lucidly and can be read under Google Docs.

In the case of Vodafone

The Supreme Court on Friday, gave a remarkable decision, by directing  the government to return Rs 2500 crore to Vodafone International  Holding with interest over a $ 2.2 billion tax bill for its purchase of Hutchison Whampoa’s Indian mobile business  in 2007.

 This decision is indeed a welcoming note for all the Foreign Investors to make more and more investments in our country together with an increase confidence on the Indian judiciary.

 Vodafone had started off its operation in year 2007 by acquiring 67% stake in the Hutchison- Essar Ltd from Hong Kong based Hutchison Group through companies based in Netherlands and Cayman Island.

 The case took off with, The Income Tax Department raising query that since the capital gains were made in India through the deal, the company was liable to pay the tax and issued a show cause notice to it asking as to why it should not be treated as representative assessee of the Vodafone International Holding.

Vodafone, challenged the show cause notice before the Bombay High Court saying it was share transfer carried outside India. The appeal was rejected by the high court in December 2008 which was again challenged by Vodafone before the Supreme court.

The Supreme Court also dismissed the appeal in January 2009 and directed Income Tax Department to decide whether it had jurisdiction to tax the transaction. The Supreme Court, still, observed Vodafone would be at liberty to challenge the Income Tax department’s decision if it went against Vodafone and the question of law would also be open.

The Income Tax Department replied to this order in May 2010 saying, that the department has competent jurisdiction over the Vodafone, to be treated as an ‘assessee in default’ for failure to deduct tax at source. This decision of IT department was challenged by Vodafone before the Bombay High Court.

The High court passed its judgment on September 8, 2010, dismissing Vodafone’s petition and held that “the essence of the transaction was a change in the controlling interest in HEL which constituted a source of income in India”. It said the “the proceedings which have been initiated by the Income Tax Authorities cannot be held to lack jurisdiction”.

 Vodafone again moved to the Supreme Court challenging the High Court decision which had held ‘that the Indian Income Tax department had jurisdiction over the deal.’ On January 20, 2012, Supreme Court  dismissed the judgment of Bombay High Court asking Vodafone International Holding to pay income tax of Rs 11000 crore on a deal abroad and directed the Income Tax department to return Rs 2500 crore to the company which was deposited by the company earlier within 2 months along with 4% interest.

Source: corporatelawreporter