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.

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.

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

Sebi to reform IPO norms

Capital markets regulator Sebi on Thursday said it is in the process of reforming the initial public offer (IPO) norms to ensure minimum price volatility on the day of listing. "We are in the process of reforming IPO process which will ensure that much safer process and volatility in the initial days of listing is much less ... We are looking into every aspect," Securities and Exchange Board of India (Sebi) whole-time member Rajeev Agarwal said. - www.business-standard.com

Lack of funds no excuse for dishonouring bonds: Delhi High court

NEW DELHI: A government cannot be allowed to dishonour its sovereign guarantee on grounds of lack of funds, the Delhi High Court has said, while ordering the Jammu-and-Kashmir-government to redeem its bonds bought from its financial institution by Airport Authority of India (AAI).

"The state cannot say that it does not have the fund to honour its sovereign guarantee. The court would enforce the sovereign guarantee, because a sovereign guarantee cannot be allowed to fail, if rule of law is to be upheld," Justice Vipin Sanghi said.

The court's direction came on the plea of AAI against default in payment of redemption of bonds as well as the half yearly interest payable by Jammu and Kashmir State Financial Corporation.

The AAI had bought the JKSFC bonds to finance its own employee's provident fund.

The court also directed the state government to pay Rs 10.4 crore to the AAI for redemption of the bonds bought by it from JKSFC.

The court also disallowed the plea that the matter did not fall under its territorial jurisdiction saying that the financial transactions between the parties took place here.

The bench directed the Jammu and Kashmir government to "honour its sovereign guarantee" and "to make payments of the amount due comprising of the face value of the bonds which is Rs 10.4 crore along with interest up to the date of redemption at the rates prescribed in the said bonds".

It further asked the state to pay overdue interest to AAI on the amount due and payable on the date of redemption at the rate of 8 per cent.

The AAI had subscribed to the bonds to "prudently manage and invest the Contributory Provident Fund (CPF) of its employees." 
Source: economictimes

Union Budget 2011-12 Highlights

Union Budget 2011-12

• AC restaurants serving liquor & AC hospitals with beds more than 25 in the ambit of Service Tax.
• Service tax on air travel up to Rs 50 for domestic travel and Rs 250 for international travel in economy class; on higher classes, it will be 10 per cent flat.
• Customs duty on raw silk reduced from 30 to 5 per cent.
• Some legal services to be brought under service tax net; service by individual to another individual exempted.
• 20% export duty for iron ore.
• Custom duty on Pet Coke and Gypsum to minimized to 2.5%.
• No new tax exemption limit for women.
• Mandatory levy of 10 pct on branded garments.
• Budget estimates for 2011-12 projects- Rs 9,32,440 crore.
• No change in Central excise duty rate. Base rate on excise duty raised from 4% to 5%.
• Surcharge rate reduced from 7.5 percent to 5 percent for domestic companies.
• Hike in exemption IT limit from Rs 1.6 lakh to Rs 1.8 lakh.
• New series of coins with new rupee symbol expected.
• Simplify tax collection procedure.
• 1 million UID cards to be distributed per day shortly.
• Targeting to reduce deficit to 4.6% for the upcoming fiscal year.
• Plan and Non-Plan expenditure to be increased by 23%.
• BPL pension eligibility age limit reduced.
• Group formed to monitor corruption;will start implementing from 62 dept. in first phase.
• Amendment of Indian Stamp Act shortly.
• Simplified form 'Sugam' for small tax payers.
• Rs 1.64 lakh crore for Defence.
• Rs 1000 crore to build judicial infrastructure.
• Group of ministers to sort out Environmental concerns.
• 1000 crore for improvising judiciary system.
• Rs 8,000 cr to Northeast.
• 60 schemes for SC/ST to be implemented.
• Rs 100 crore for Ladakh.
• Rs 150 crore for Jammu.
• Pension amount increased for 80 years and above.
• Indira Gandhi National Old Age Pension Scheme eligibility revised from 65 to 60 years.
• Rs 200 cr grant to IIT Kharagpur.
• Rs 20 crore to IIM Calcutta.
• 50 Crore to muslim universities in different states.
• 58,000 crore for Bharat Nirman Schemes: FM
• State Innovation Council in each state to be set up.
• Remuneration of anganwadi workers raised from Rs 1,500 to Rs 3,000 a month. Helpers to get Rs 1,500 from Rs 750.
• Independent debt management office to be established.
• Rs 1.6 lakh crore to be spent on social projects.
• Current a/c gap a concern due to composition of FX flows: FM
• Establishment of national policy on psychotic drugs, narcotics.
• Tax free infra bonds worth Rs 30000 cr for PSBs proposed.
• 15 mega food parks to be set up.
• Infrastructure spending increased by 23%.
• Rs 30K crore tax free bonds to be provided for railways.
• Financial assistance to be provide to Bengaluru, Chennai, Kolkata metro projects.
• Allocation under Rashtriya Krishi Vikas Yojana to be increased to Rs 7860 crore.
• Promote organic farming.
• GDP manufacturing, targeting 16-25 % increase in next 10 years.
• Rs 300 cr to cultivate pulses in rain-fed areas;Rs 300 cr for the promotion of farm product cultivation.
• Provide Rs 6000cr for PSU bank recapitalization.
• FM: Micro finance companies to be provided with Rs 100 crore equity funds.
• Extension of NBS for urea to be analyzed.
• Home loan limit increased.
• Rs 300 cr for improving pulses production.
• Rural infrastructure development fund to be raised to 180 billion Rupees for the coming fiscal year.
• Grant 1% interest on home loans upto 50 lakhs.
• Mortage Risk Guarantee fund for rural housing to be set up.
• Rs 5,000 cr to be provided to SIDBI to meet priority lending targets.
• Rs 2000 crore for warehousing facilities.
• Rs 2,000 cr for manufacturing facilities.
• Allocation of Rs 6000 cr for some PSU banks.
• Only registered FII's to be associated with Indian MF industry.
• Rs 40,000cr to be raised via disinvestment.
• GST bill to be introduced in current session.
• Extension of NBS to cover urea under review: FM
• 500 crore proposed for empowering women.
• Micro finance institutes proposed for 100 crore.
• 300 crore to be provided to NABARD.
• FBI to regularize banking amendments.
• Ensures better delivery of urea, kerosene.
• FII allow to trade amongst themselves.
• FBI policy to be regularized.
• Public Debt Management Bill to be introduced in 2012.
• Pranab sees Budget 2011-12 as transition towards a transparent and result-oriented economic management.
• Public sector undertaking to be increased.
• Direct transfer of cash subsidy to downtrodden.
• Average inflation and current account deficit to be minimized by next year: FM
• Compensation of Rs 9 lakh to be given to defence and Central paramilitary forces for permanent disability and discharge from service.
• Govt. to reconsider ecological concerns.
• Tremendous growth in exports-29.4%.
• Food inflation down from 22.2% to 9.3 %. But still is a major concern, says FM.
• Budget to ensure more transparent economy.
• Focus on supply side issues in agriculture.
• Pranab: Work on food inflation.
• Stabilize the macro economic situation.
• Budget 2011 approved by Cabinet.
• Pranab: Impressive fiscal consolidation
• Pranab Mukherjee begins the speech.