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The Securities and Exchange Board of India (Sebi) has sent a list of market scenarios that can be kept out of the Union Budget’s proposal of levying capital gains tax on transactions of shares that were acquired by not paying the securities transaction tax (STT). According to sources, the market regulator has recommended to the finance ministry that transfer of shares on account of inheritance, restructuring within companies and employee stock options (Esops) can be part of the exempt list. Some of the transactions involving foreign funds made without any consideration can also be included in the list, Sebi has said. Sebi has not raised any reservations over providing relief to transactions such as acquiring shares through initial public offerings (IPOs) or through a bonus or rights issue, where typically the STT is not paid. These types of transactions were suggested in the Finance Bill by the government. The Centre is expected to finalise an exhaustive list of exemptions in t...

Kingfisher Airlines Ltd is back in the news. According to reports, lenders to Kingfisher Airlines are likely to issue a wilful defaulter notice to the beleaguered airline after a scheduled meeting of the lenders’ consortium, over the next one week. If the airline is indeed declared a wilful defaulter, it would lose access to any further bank funding as per existing norms. Who is a wilful defaulter? When you take a loan from a bank or a non-banking finance company, you have an obligation to repay the loan. Due to various reasons, many borrowers default on their loan repayment. Individuals, or companies, who fail to repay the loan are called wilful defaulters under the following circumstances. If you are financially capable of repaying the loan and yet fail to repay; if you use the loan amount for other purposes than what you had availed it for; if you use the money for illegal purposes; if you sell the property that you have kept as security with the lender for availing the loan. ...

The stocks of cigarette makers rallied on Friday as concerns on a higher ‘sin tax’ abated with the government keeping the rates on cigarettes unchanged in the goods and services tax (GST) regime. The Centre has capped the tax rate on cigarettes at 290 per cent over the next five years on expectations that the initial tax rate on this industry will have a neutral impact. ITC Ltd, which has a 79 per cent market share, rose by over 7.5 per cent to touch Rs288.90 on the BSE in intra-day trade, close to its lifetime high of Rs292. The scrip closed at Rs281.20, registering 4.85 per cent growth. Shares of VST Industries also shot up by 11 per cent in intra-day trade to touch Rs2,929.85 and finally ended at Rs2,839.45, registering an upswing of 7.55 per cent. Shares of Godfrey Phillips also peaked at Rs1,283.75 in the intra-day trade, closing at Rs1,298.50, an increase of 1.04 per cent. Sector analysts attributed the rise in stocks to the markets’ perception that the proposed tax rat...

Government's intention is to increase the revenue base but raising the taxation level could at times be a "retrograde" method, Finance Minister Arun Jaitley said on Friday. Jaitley, who also holds the additional charge of Defence Ministry, told the Lok Sabha that the intention of the government was to expand the revenue base. "The revenue mobilisation of the states must increase, that is the primary resource that the government gets, and this is not necessarily to be done by raising the level of taxation. That could at times be a retrograde method of trying to raise the revenue," he said. Jaitley made the remarks while making an intervention during a debate on the demands for grants for the Defence Ministry. "Therefore, whenever we take political positions on those issues, at the end of the day, we must realise that the size of the entire revenue cake has to increase. It is only then that the slice, which will be available for national security, w...

There will not be many changes in the goods and services tax (GST) rates compared to what’s prevailing in the current indirect taxation regime, according to officials. They also said the rates would not be inflationary because foodgrains are likely to be exempted.  The next big thing in the GST regime will be rules and the item-wise rate structure. “We don’t want to make many changes in rates for goods under the new GST rate structure,” an official said. Another official said there would be a smooth landing for industry with respect to the rates. He said the fitment of items in the GST rates would be done to ensure that the consumer price index (CPI) did not spike. “We will do calculations to see to it that rates don’t lead to consumer price inflation,” he said. The GST Council, an official said, would decide if cesses over the peak rate of 28 per cent should continue after five years. All other cesses will be subsumed in the GST.  The official said the Centre would lose s...