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Super-rich Indians are rushing to buy tax-free bonds, which offer an effective double-digit return in the proposed new tax regime, at a time when uncertainty has gripped the stock market.   While there aren’t any fresh issues of tax-free bonds, those issued during 2011-2015 by the National Highway Authority of India, RECNSE -0.13 %, Power Finance Corp and HudcoNSE 1.85 % and other state-run firms with tenures of 10, 15 and 20 years are available for purchase on the secondary marke ..  These bonds currently yield 5.5- 5.9 per cent, compared with 6.1-6.5 per cent a month ago. What makes these attractive to the ultra high-net-worth individuals is that the returns are tax free — that is an enticement for those who are taxed at as high as 42.74 per cent as per the new tax proposals. If the tax benefit is accounted for, the “return for the highest tax-bracket investor will be more than 10 per cent, making for an attractive investment opportunity”, said Vikram Dalal, MD, Synergee Capital.

The regulator said it has been receiving various references from listed firms regarding violations related to code of conduct.  Markets regulator Sebi Friday came out with standardized format for reporting violations of code of conduct, formulated under Prohibition of Insider Trading (PIT) norms.  Under PIT norms, all listed firms, intermediaries and fiduciaries are required to formulate a code of conduct for designated persons as well as for their relatives and inform the regulator about any such violation.  Under the code of conduct, the designated persons and their relatives are barred from trading while in the possession of unpublished price sensitive information (UPSI). Besides they are required to maintain the confidentiality of the UPSI, among others restrictions are placed.  The regulator said it has been receiving various references from listed firms regarding violations related to code of conduct.  However many of such references provide incomplete details about the nature

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday came down heavily on public sector banks (PSBs) for not reducing their lending rates despite liquidity remaining ample, bond yields being at a multi-year low, and policy rates being lowered by 75 basis points (bps) in the past six months.  “Bond yields have come down, policy rates have fallen, the borrowing cost for banks is low, as is evident from softening rates on certificates of deposit (CD), and liquidity is in surplus. I am surprised banks are still not lowering lending rates,” Das told top PSB executives during a meeting, confirmed multiple sources.  According to a statement uploaded on the RBI website, the governor discussed credit and deposit growth amid a slowing economy. Even as credit growth remains muted, the flow of credit to the needy sectors should not be hampered “while following prudent lending, robust risk assessment and monitoring standards”, he said.  Sources said the governor had a word of caution fo

The Securities and Exchange Board of India (Sebi) has told the government that recent budget proposals could undermine its role as regulator, particularly with respect to the recommendation that the minimum public shareholding be raised to 35 per cent from 25 per cent. Already, government-owned companies are laggards in raising this level to the current 25 per cent norm, said a senior Sebi official.   “Going forward, this has to go up from 25 per cent to 35 per cent and ensuring compliance would be greatly impacted particularly from PSUs as Sebi has to depend on government for funding,” the official said. FM Nirmala Sitharaman’s July 5 budget proposals require the regulator to transfer its surplus funds to the Consolidated Fund of India (CFI). It will also need prior government approval for its annual capital expenditure plans, she has proposed.   That could lead to a conflict of interest with respect to the regulator having to enforce the shareholding cap and PSUs being unable to me

An increase in the effective tax rate will affect only high net-worth individuals, and according to government policy they should contribute more to nation building, the finance minister said  The controversial super-rich tax on foreign portfolio investors (FPIs) that are organised as trusts will stay undiluted as Parliament passed the Finance Bill, 2019, on Thursday.  Replying to a debate on the Bill in the house, Finance Minister Nirmala Sitharaman dismissed the argument of the Opposition that the tax would lead to a flight of FPIs.  “It will have an impact on FPIs registered as trusts. There is an option for FPIs to register as companies. If they are registered as companies, they don't have a problem with this new tax,” Sitharaman said.  She said a trust was treated as an individual entity and came under the tax.  She recalled finance ministry officials had been saying that FPIs registered as trusts might consider the option of dressing up as companies. An increase in the effe

Govt looks to plug a loophole in buybacks as these are not taxed like dividend payouts.  Cash-rich Indian IT services companies may now offer more dividends to return cash to shareholders, against the recent norm of share buybacks that have become less attractive with the budget proposing to introduce a new tax.   “Buyback is the most efficient way to return capital in India because it was not taxed earlier. It also helps companies improve the value when they think the market is not fairly pricing the stock,” said V Balakrishnan, a former finance chief of InfosysNSE 0.27 %. “Suddenly you tax buyback, companies will shift to dividend because buyback comes with its own hassles.” Share buybacks by listed companies aren’t taxed currently, but there is a 15% tax on dividend payment. To discourage companies from using this loophole, the budget has proposed a 20% tax on the money spent on share buybacks. Technology services companies have been rewarding shareholders by buying back share

CBDT chief says after the Budget proposals only biometric ID is enough for tax purposes The assessing officer of the department will use his powers to allot PAN to an entity New Delhi: The taxman will 'suo motu' allot a fresh PAN to a person who files tax returns with only Aadhaar as part of a new arrangement to link the two databases, the CBDT chief said after the Budget proposed that only the biometric ID is enough for tax purposes. The PAN (permanent account number) is "certainly not dead" and the recent Budget announcement of interchangeability of the two databases is an "additional facility" to ensure their linkage, which is now mandatory under the law, Central Board of Direct Taxes (CBDT), chairman, Pramod Chandra Mody, said. "In cases where Aadhaar is being quoted and PAN is not there, we could possibly think on the terms of allotting a PAN to the person (who is filing income tax return)," he told PTI in an interview. Mody was aske