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LAST WEEK, the interest rate on Public Provident Fund (PPF), and a number of other deposit schemes run by the government (Kisan Vikas Patra, the girl child scheme, senior citizens deposit etc) were cut by 0.1% per annum. PPF went down from 8.1 to 8.0%.  There were some protesting noises on social media and from some of the usual suspects, but they were mostly just murmurs, probably because of the marginal quantum of the cuts. In fact, a lot of people wondered what was the point of such a small cut. This shows that the idea that these rates are now market-linked is not widely known. They are reset every quarter, depending on the interest yield on government securities. Give how things are going, it won’t be too surprising if these rates fall further. PPF rates are already at a historic low and if they go below 8% then the psychological impact of hearing 7-point-something will be huge on savers. The KVP is already down to 7.7%. It’s also worth noting that there’s a maths trick to this 0

The comptroller and auditor general has initiated an audit of entities claiming tax exemption on agricultural income amid suggestions from some political parties and income tax authorities that a blanket exemp tion be done away with and tax be levied after a threshold. The auditor has written to the finance ministry seeking details of entities which have declared agricultural income and the amount of tax exemption granted to them. Recently, tax authorities had raised concerns about possible misuse of the exemption availab le to agricultural income, although the government has clearly said that there was no move to impose tax. Finance ministry data showed that nearly four lakh people declaring farm income had been granted exemption during 2013-14. Total agricultural in come exempted from tax in 2013-14 was Rs 9,338 crore. The details were as per the list of those who had filed their returns till November 2014. During 2013-14, the top 10 entities had claimed tax exemption of Rs 628 cror

To Meet Top Mgmt Of These Cos To Set Up Shop In India. After a high deci bel `Make in India' pitch, the government has now turned to a more targeted approach to boost foreign direct invest ment (FDI) inflows. In a first, the departmen of industrial policy and pro of industrial policy and pro motion (DIPP), along with In vest India, has identified 150 companies as potential inves tors and is meeting their top management teams individu ally as it seeks to ensure tha FDI inflows rise for the fourth straight year. The idea is to tap companies looking to set up shop in India or are eyeing expansion. Re cently , a team led by DIPP secre tary Ramesh Abhishek met Fi at Chrysler COO Alfredo Alta villa in Italy to address the com pany's concerns. Similarly there has been a fresh outreach to Italian chocolatier Ferrero the maker of Ferrero Rocher which decided to set up a plan in China to cater to demand in Japan and Korea after its run ins with the Food Safety and Standards Authority o

RBI May Do the Expected, Cut Policy Rate by 25 bps 14 of 18 banks and financial institutions polled expect central bank to cut rate. Borrowers can look forward to cheaper loans as most bankers expect the Reserve Bank of India, backed by the newly formed Monetary Policy Committee (MPC), to cut the policy rate by 25 basis points in its bi-monthly credit policy on Tuesday . A majority , 14 of the 18 banks and financial institutions polled by ET, expects the central bank to cut the policy rate, while the rest feel the rates may remain unchanged as the country steps into the league of developed nations by having a panel to decide policy rates. “There are structural factors for price stability, which are consistent with a case for a rate cut,“ said Saugata Bhattacharya, chief economist at Axis Bank. “While a normal monsoon looks to have stabilised prices, capex still remains weak with low credit demand,“ he said. “There are indeed upside risks to inflation, be it the Seventh Pay Commission

Wants CBDT To Find Out If Small Traders Are Unhappy Prime Minister Narendra Modi on Monday ticked off the Central Board of Direct Taxes (CBDT), pointing out that the number of taxpayer complaints have gone up and wanted the agency to find out who was unhappy with its service. During his monthly Pragati meeting with secretaries at the Centre and state chief secretaries, he also asked the direct taxes wing of the government to ready a roadmap to address complaints, which has been a key thrust of the Modi administration since it came to power nearly twoand-a-half years ago. Sources said the PM asked the department to examine if the number of complaints have increased due to more people coming forward to register grievances or if small shopkeepers and businessmen were unhappy . CBDT has also been asked to probe if the re are more complaints from a region and what is the “exact cause“ for rising grievances. This is the second time since revenue service officials protested against “interfer

Expects disclosures worth Rs 25,000-30,000 cr by Sept 30 The government's Income Declaration Scheme (IDS) has seen a revenue of Rs 6,750 crore for the Income Tax department, as unaccounted money to the tune of Rs 15,000 crore has been disclosed as on September 28, said an official. The government had opened a four-month window for declaring unaccounted money, which would attract 45 per cent tax, penalty and cess. The tax department is expecting the number to touch between Rs 25,000 crore and Rs 30,000 crore in the next two days. The four-month window for disclosing domestic black money deposits will close on September 30. The informal target for the scheme was a tax collection of Rs 40,000-50,000 crore on black money declaration of Rs 1 lakh crore. On Wednesday, Mumbai topped the 18 income-tax circles in the country with disclosures in the range of Rs 6,000-7,000 crore. New Delhi and Gujarat circles followed at second and third positions, respectively, said the source. A tax exper

A panel tasked with drafting a bankruptcy code for financial service providers such as banks, insurance companies and payment systems has proposed classifying companies into five categories based on their vulnerability and also suggested setting up a Resolution Corporation. The panel's report was made public on Wednesday for comments. It has also recommended that some of the bigger firms be classified as systemically important financial firms (SIFIs). "These are financial institutions whose failure might pose a risk to not just their consumers or the sector they operate in, but rather to the overall financial stability of the country itself," the panel said it in its reportIn the report, the panel said the proposed resolution corporation would contribute to the stability and resilience of the financial system by carrying out speedy and efficient resolution of financial firms in distress, providing deposit insurance to consumers of certain categories of financial services