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Govt may offer more income tax deductions to those who invest in its infra projects The current limit for income tax deductions is Rs2 lakh, which may be raised to Rs2.5 lakh but only for those who invest in government infrastructure projects The finance ministry is considering offering higher income tax deductions on investments made by taxpayers in securities used to raise funds for government infrastructure projects, two government officials familiar with the matter said.The current limit is Rs2 lakh and discussions are on to increase it to at least Rs2.5 lakh, but the extra deduction will be available only on investments made in government infrastructure projects. “Discussions are on to give relief to taxpayers in the form of higher tax deduction. The higher deduction will be for investing in infrastructure projects in the form of bonds or through equity-linked savings schemes,” said one of the officials cited above, requesting anonymity. But these investment routes are lik

RBI warns banks about crypto risks, wants higher scrutiny The Reserve Bank of India (RBI) has warned lenders about cryptocurrencies, telling them to step up scrutiny of financial transactions by companies and exchanges involved in the trade of bitcoins and similar digital tender, said two people aware of the matter. While the central bank stopped short of directing banks to desist from dealing with such entities, the formal communication is expected to lead to a near freeze as no lender would want to get on the wrong side of the regulator, they said. Both RBI and the government have issued warnings on bitcoin previously. The central bank's note asks banks to understand how such currencies work before dealing with such companies, sources said."RBI has told us to carefully evaluate businesses of these cryptocurrencies, but the wording of the RBI letter does not prohibit us in dealing with bitcoins," said one of the persons. "The regulator's remarks raise qu

Centre proposes fixed-term labour contracts The Union labour ministry recently issued a draft notification that would allow fixed-term employment across sectors and also approved moves by some states to amend the Industrial Disputes Act so that factories employing up to 300 workers can close or retrench labour without seeking government approval. The draft notification on fixed term contracts is part of the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018, and enables companies to hire workers for short term assignments and terminate their services when projects are completed. Once notified by the Centre, states can amend their rules accordingly. The draft notification has been uploaded on the ministry's website for stakeholder comments. Under fixed-term employment, workers are entitled to statutory benefits available to a permanent worker in the same factory, including work hours, wages, and allowances. However, employers need not give notice to fixe

FinMin asks PSU banks to be in hot pursuit of bad loans The finance ministry has directed state-run banks to set up a separate stressed asset management and recovery team that will be responsible for stringent recovery follow-up. While most top public sector banks already have set up teams to manage bad loans, market watchers believe that the finance ministry's directive will push midsized and small PSU banks to take bad loan recovery seriously. "Most state-run banks already have stressed asset management teams who only focus on recovery from such assets but, yes, we agree that a focused approach is required and the government push should help in bringing in that discipline among lenders," a PSU bank official said on condition of anonymity. Experts also said a separate vertical for managing bad loans would accelerate resolution of the bad loans mess and help recovery, which could lead to write back of provisions in the next two years, boosting profits."These

GDP may grow to 7% in FY19 as GST impact wanes: HSBC It can be noted that International Monetary Fund has come out with an estimate of 7.4 percent growth two days ago. British lender HSBC said waning effects from the GST impact will help push the Indian GDP growth to 7 percent in FY19.It can be noted that International Monetary Fund has come out with an estimate of 7.4 percent growth two days ago."For India, we are expecting the economy to grow in the next three years (FY18-20) by 6.5 percent, 7 percent and 7.6 percent," the bank’s chief economist Pranjul Bhandari told reporters on a conference call. She added that the growth has slid from previous year’s 7.1 percent to 6.5 percent in FY18 due to the implementation of the Goods and Services Tax (GST)."As some of the short-run disruptions caused by GST get ironed out, we expect growth to rise in the next couple of years," she noted. Bhandari added that from a medium-term perspective of about three years, th

GST may prove a drag on India’s ease of doing business ranking Govt officials are worried that complex returns filing procedures and delays in refund of input tax credits under GST regime may prove a drag on India’s ease of doing business ranking for 2019 A year after India recorded its sharpest jump of 30 places to 100th place in the 2018 World Bank’s ease of doing business rankings, government officials are worried that complex returns filing procedures and delays in refund of input tax credits under the goods and services tax (GST) regime may prove a drag on the country’s ranking, to be released in October. “The survey for the next Doing Business ranking will start in February and will continue till May. Unless government takes quick corrective steps, GST may prove to be a dampener in the first (post-GST) year of the ranking though it will improve our ranking in subsequent years,” a commerce and industry ministry official said, speaking on condition of anonymity. The offic

E-commerce firms may get 6-month tax breather The provision of tax collected at source (TCS) imposed on suppliers selling products on e-commerce websites like Flipkart and Amazon in the goods and services tax (GST) regime is likely to be deferred by six months.The recommendation by the law review committee may come as a breather for e-commerce players, which have been strongly opposing the additional levy. The TCS of 1 per cent to be charged collectively by the Centre and states was kept in abeyance till April 1, 2018, by the GST Council in October along with the reverse charge mechanism and the e-way bill. However, in light of revenue leakage concerns, the e-way bill to track movement of inter-state supply of goods will be implemented from February 1, while reverse charge mechanism on composition dealers may be implemented any time now. “The provision pertaining to TDS and TCS can be kept in abeyance for at least six more months, is the view taken by the law committee,” said a