CA Online

Move will shield Indian financial institutions from facing penal taxes in the US for failing to disclose dealings of American entities India and the United States have inked an accord that will help detect and discourage offshore tax evasion and shield Indian financial entities such as banks, insurance companies, custodians and broking houses from facing penal taxes in the US for failing to disclose the dealings of American citizens and US entities.The Foreign Account Tax Compliance Act or FATCA was signed on Thursday by Revenue Secretary Shaktikanta Das and US Ambassador Richard Verma. “FATCA is a mutual effort to combat tax evasion and it would be mutually beneficial for both the countries...FATCA would detect, discourage offshore tax evasion.This kind of exchange of information is top priority for governments,“ Verma said. India has opted to sign inter-governmental agreement with the US under FATCA, which will save finan cial institutions the bother of inking the agreement i

Sebi’s recently cleared regulations for listing of these entities allow QIBs, which include funds; minimum trading size is Rs.10 lakh Retail investors intending to play the start- up theme will have to take the mutual fund ( MF) route. To keep retail investors away from the soon- to- belaunched start- up trading platform, the Securities and Exchange Board of India ( Sebi) has prescribed a high trading size of Rs.10 lakh. However, it has included MFs in the definition of qualified institutional buyers, enabling indirect entry of non- wealthy individuals in the trading segment. “Considering the risks involved in investing in companies proposing to access the said platform, it is proposed that retail investors may not be permitted to directly participate,” said Sebi in a board note. Equity MFs are predominately aretail investment product. So, if a fund choose to invest in start- ups, retail investor would be automatically invested in these. It is believed that fund managers ar

The government of India has given a three-month window to people with undisclosed foreign assets to come clean or else face prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The government also introduced the Benami Transactions (Prohibition) Amendment Bill, 2015, in Parliament during the budget session, which seeks to impound benami properties. Remember, the Bharatiya Janata Party-led National Democratic Alliance government was voted to office last year on the promise of curbing the menace of black money, among other things. While these are steps in the right direction, more will be required to control the flow of black money. The government will not only have to check the creation of black money, but also its use. The existing banking infrastructure and the use of Aadhaar can help attain this objective to a large extent. Recently, the government also released draft proposals for facilitating electronic transactions and propos

Securities and Exchange Board of India (Sebi), which is set to take over regulation of commodities markets as well, is not comfortable with forward contracts in commodity exchanges, two people directly involved in the discussions between Sebi and exchange officials said. According to them, Sebi’s concern stems from two facts: one, unlike futures contracts, forward contracts are not standardised; two, there’s greater counterparty risk associated with forward contracts. Under the Forward Contracts (Regulation) Act, 1952, which regulates commodity trading in India, a forward contract is a contract for the actual delivery of goods, unlike a futures contract where the buyer can settle the contract in cash as well. Forward contracts were introduced in the commodity market last year, but they are not permitted in stock market. Globally, the bulk of the forward contracts in commodities happens outside the exchange platform. Only futures and options are traded on leading commodity excha

The Securities and Exchange Board of India ( Sebi) has written to the cabinet secretary that women directors and independent directors (IDs) be appointed for public sector undertakings ( PSUs), in compliance with the updated corporate governance norms. “ Sebi has taken up the matter with the cabinet secretary through its letter dated June 3,” stated the regulator in a board note. As of April, almost 90 per cent of listed PSUs had failed to meet the requirement of appointing an equivalent number of IDs as the number of functional directors on their boards, the criteria set by the markets regulator. There are 68 governmentowned companies on the National Stock Exchange (NSE). Of these, says primary market advisory firm Prime Database, 31 did not have a woman director. Private companies are far better, with only 149 of the 1,672 non- PSU companies on the NSE being non- compliant, according to data as of March 31. “The government shouldn’t have needed this prompting from the regulat

The Securities and Exchange Board of India ( Sebi) has written to the cabinet secretary that women directors and independent directors (IDs) be appointed for public sector undertakings ( PSUs), in compliance with the updated corporate governance norms. “ Sebi has taken up the matter with the cabinet secretary through its letter dated June 3,” stated the regulator in a board note. As of April, almost 90 per cent of listed PSUs had failed to meet the requirement of appointing an equivalent number of IDs as the number of functional directors on their boards, the criteria set by the markets regulator. There are 68 governmentowned companies on the National Stock Exchange (NSE). Of these, says primary market advisory firm Prime Database, 31 did not have a woman director. Private companies are far better, with only 149 of the 1,672 non- PSU companies on the NSE being non- compliant, according to data as of March 31. “The government shouldn’t have needed this prompting from the regulat

DAMAGE CONTROL Statutory body fears it can lose to NPS; plans hike in benefits under EDLI to 30 times the monthly wage After decades of wielding a monopoly over the retirement funds of workers in the organised sector, the Employee Provident Fund Organisation (EPFO) is worried it could lose subscribers to the National Pension System (NPS), which has been offering better returns in the last few years--as much as 20% versus 8.75%. To stem a possible exodus, the EPFO has proposed an increase in benefits from the Employee's Deposit Linked Insurance Scheme (EDLI), benchmarking it to deposits under the primary Provident Fund (PF) account. “EPFO is exploring various options to incentivise its subscribers to keep money in Provident Fund accounts,“ central provident fund commissioner KK Jalan said. “We have proposed to enhance the insurance benefits under EDLI to 30 times the monthly wage as against 24 times now and have linked it to Provident Fund deposits.“ Currently , EDLI subscribe