Union Budget 2018: Unfair to judge me on demonetisation and GST only, says Narendra Modi

Countering the allegation that his government had reneged on the promise of making 10 million jobs a year, high Minister Narendra Modi quoted a current take a look at showing seven million jobs had been created inside the formal zone by myself inside the cutting-edge economic 12 months.

Union Budget 2018 : “This statistics of 7 million jobs is not like building castles within the air. it has been calculated with the aid of an independent organization on the basis of EPFO (personnel’ Provident Fund business enterprise) figures,” Modi said in a tv interview, days before leaving for Davos to wait the arena monetary discussion board meet.
One have to additionally remember the opportunities that had been being created in the informal sector, he introduced.

“As many as one hundred million people have taken loans from the high Minister Mudra Yojana with none financial institution guarantee. Loans to the tune of Rs 4 trillion have been distributed. New entrepreneurs are being created. won’t you matter these figures as activity creation?” he asked.

“you could counter these figures at the political traces, however these numbers aren't primarily based on simply wishful questioning,” he said. “we're at the proper tune so far as activity introduction is worried.”

In step with a study authored by SBI group leader financial guide Soumya Kanti Ghosh and IIM Bangalore professor Pulak Ghosh, 590,000 jobs have been generated each month till November within the contemporary monetary 12 months. because of this seven million jobs will be created within the formal zone in 2017-18 if one expands the fashion on a seasoned-rata foundation.

The study, titled “in the direction of a Payroll Reporting in India”, calculated the variety of jobs in corporations from the membership of the EPFO, the personnel’ nation insurance organisation, the overall Provident Fund, and the countrywide Pension gadget (NPS). so far as information from the EPFO is worried, the observe estimated that three.68 million jobs have been generated till November of FY18, which would imply 5.five million within the complete 12 months. this will be higher than the four.5 million created the previous economic year, a length which saw disruption from demonetisation.

when requested as to what type of finances, the closing complete one of the Narendra Modi government, it will be, the top minister said the mantra of his authorities become improvement. “whether or not this is the final finances or the primary budget, whether there are elections or no longer, the mantra of Modi is best improvement, improvement and improvement. the mantra of the Bharatiya Janata birthday celebration is best improvement. Sabka sath, sabka vikas (Cooperation from all, development for all).”

The PM spoke at length about the want for simultaneous Lok Sabha and assembly polls. He stated there has been a want for multiplied debate on the difficulty. “This cannot be the time table of 1 political birthday party or person. It isn’t Modi’s or BJP’s agenda only. there is a need for discussion in this,” he stated.

Modi stated the united states of america ultimate inside the perennial election mode no longer simplest affected governance, however also hurt the federal structure of the united states of america.

speaking about how elections lead to battle of phrases among political rivals, Modi likened elections to the pageant of Holi. Holi, he said, turned into celebrated on a specific day in which it changed into proper to throw hues or dust on people. “further, the Lok Sabha and assembly elections ought to take vicinity at a fixed time, for example in the second week of February.”

Budget 2018: Soon, tax-free Rs 2-mn gratuity for employees may be a reality

At present, formal sector workers with 5 or more years of service are eligible for Rs 1 mn tax-free gratuity after leaving a job or at time of superannuation

Payment of Gratuity Amendment Bill 2017 is likely to be passed in the forthcoming Budget session, which will make formal sector workers eligible for tax-free Rs 2 million (Rs 20 lakh) gratuity.

At present, formal sector workers with five or more years of service are eligible for Rs 1 million (Rs 10 lakh) tax-free gratuity after leaving a job or at time of superannuation.

"The Payment of Gratuity (Amendment) Bill, 2017, will be passed in the Budget 2018session of Parliament, expected to begin by the end of this month," a source said.

The source further said, "The government wants to provide tax-free gratuity of Rs 2 million (Rs 20 lakh) to organised sector workers at par with central government."

The Bill was introduced in the Lok Sabha in the winter session of Parliament last month. Once the Bill is passed by Parliament, the government will not be required to go to it again for deciding the quantum of tax-free gratuity.

The Bill seeks to allow the government to notify the period of maternity leave and gratuity that can be availed by employees under a central law.

The Payment of Gratuity (Amendment) Bill, 2017, was introduced by labour minister Santosh Kumar Gangwar in the Lok Sabha on December 18, 2017.

The Payment of Gratuity Act, 1972, was enacted to provide for gratuity payment to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments.

The law is applicable to employees who have completed at least five years of continuous service in an establishment that has ten or more persons.

The amendment will also allow the central government to notify the maternity leave period for "female employees as deemed to be in continuous service in place of existing twelve weeks".

The proposal comes against the backdrop of the Maternity Benefit (Amendment) Act, 2017, enhancing the maximum maternity leave period to 26 weeks.

With respect to gratuity, the amount is calculated on the basis of a formula which is 15 days of wages for each year of completed services, subject to the ceiling of Rs 1 million (Rs 10 lakh). This limit was fixed in 2010.

After implementation of the 7th Central Pay Commission, the ceiling of gratuity amount for central government employees has been increased from Rs 1 million (Rs 10 lakh) to Rs 2 million (Rs 20 lakh).

Budget 2018: Real estate expects lower GST rate, infrastructure status

Stamp duty continues to remain in force even after implementation of GST and the rates vary from state to state

Severely impacted by various reforms like RERA, GST and demonetisation, the realty sector is pinning its hopes on Budget 2018-19 for relief measures like lower taxes and infrastructure status.

The year 2017 was an eventful one for the sector with many structural policy reforms, which resulted in a significant decline in home launches to 1,03,570 units compared to 1,75,822 in 2016.

Industry players are expecting rationalisation of the GST rates from the current 12 per cent to 6 per cent and bringing stamp duty under the ambit of GST.

"Also, industry status to the full real estate sector will help in creating surplus housing demand along with financing at lower rate for long-term projects.

"Rationalisation of GST by capping it at 6 per cent with input tax credit for the entire segment in real estate will help revive and boost demand," Naredco National President Niranjan Hiranandani said.

During the pre-GST era, service tax was around 4.5 per cent and VAT 1 per cent -- resulting in total tax outgo of 5.5 per cent.

"Further, stamp duty continues to remain in force even after implementation of GST and the rates vary from state to state which increases the costs for the consumer.

"We hope that state governments abolish the same or merge with the existing GST rates," House of Hiranandani Chairman and MD Surendra Hiranandani said.

Tata Housing Managing Director and CEO Brotin Banerjee said, "We look forward to seeing the additional stamp duty and registration on properties be reduced or merged with GST. A reduction of the taxes and add-on costs, inclusive of brokerage, on under-construction properties, will also ease the financial burden from a consumer perspective."

Apart from GST, infrastructure status to the entire sector tops the list of their expectations from the budget.

" Budget 2018 Real estate sector should be allotted infrastructure status, which will lead to construction funds being available to the developer at much lower interest rates.

"This will eventually benefit EWS and LIG customers, as the developers would be in a position of making the projects really affordable in its true sense," Poddar Housing and Development Managing Director Rohit Poddar said.

The industry is also expecting certain tax sops to homebuyers like increasing the Rs 2 lakh tax deduction limit for housing loans, and tax incentives for first-time home buyers hiked from Rs 50,000 to Rs 2 lakh, Omkar Realtors Chief Financial Officer Manoj Paliwal and Transcon Triumph Vice President, Sales and Marketing Sarojini Ahuja said.

Credai National President Jaxay Shah said the developers' apex body expects deep concessions in income tax of at least Rs 5 lakh per annum for home buyers.

The industry is also expecting reforms in land acquisition.

"Some allocations towards accessing of loans for acquisition of land parcels would be needed to act as an accelerant for growth of affordable housing," Puravankara Managing Director Ashish Puravankara said.

Shree Krishna Group Managing Director Sundeep Jagasia said, "We expect that government will focus on the issue of land costs being high. Lowering the costs for land acquisition will boost many private players. If the government does so, there will be many new launches and quick delivery of projects by the private players.

20 things Jaitley changed in India through this budget

Income Tax investigators given more power & carbon traders get concessions

Budget 2017 : There were many things that Finance Minister Arun Jaitley said during his budget speech but there are many more that went unsaid. Here is a list of 20 things that could have a direct or indirect impact on your life:

• With regard to a foreign company, sale of leftover stock of crude oil in case of strategic petroleum reserve after the expiry of the agreement, subject to the fulfilment of certain conditions, shall not be liable to tax in India.
• In case of income arising from sale of carbon credit, a concessional tax rate of ten per cent will be given
• Government, foreign missions and state PSUs engaged in the passenger transport business will be exempted from Tax Collection at Source (TCS) provisions relating to purchase of vehicles.
• Conditions of special taxation regime for offshore funds under section 9A of the Income-tax Act has been modified. Now, maintenance of minimum fund size would not be necessary for the year in which the fund is being wound up.
• Income from Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund shall be exempted from tax.
• Certain entities like Investor Protection Funds, Core Settlement Guarantee Fund, Tea/Coffee/Rubber Boards, enjoying exemption from levy of income-tax under section 10 of the Income-tax Act, shall be required to furnish return of their income.
• In order to ensure timely filing of returns of income, it is proposed to levy a fee in case of delay in filing the return. Read more

Budget 2017 has sops for selling property but restrictions on buying

Holding period for long term capital gains tax brought down to two years from earlier three

Budget 2017 : Your tax liability would now be lower when you sell a house in the third year after purchase. You can now claim long term capital gains (LTCG), if you sell a house after holding it for two years from the date of completion. Earlier, one could claim LTCG only after a holding period of three years. The rate for LTCG tax usually works out to be lower compared to short term capital gains (STCG) tax.

LTCG is paid either at flat 10% or 20% after adjusting the property price for inflation. STCG is added to the income of the seller and taxed as per his income tax slab, which comes to 30% if the gains are Rs 10 lakh or more.

While announcing the move, Finance Minister Arun Jaitley said: “This move will significantly reduce the capital gain tax liability while encouraging the mobility of assets."

“The government seems to have made the changes to revive the property market that has suffered due to demonetisation,” says Rahul Garg, partner and leader direct tax, PwC.

Preeti Khurana, a chartered accountant with ClearTax, says that it was a surprise move to see the government giving sops for selling a house for a shorter holding period.

While the government has given relief for selling of property, it has brought down a benefit provided on buying a second house. The government has restricted the interest deduction for second home that buyers get under Section 24. Read more

Highways allocation stepped up to Rs 64,000 crore: Arun Jaitley

'For transport sector -- railways, road, shipping, govt provides Rs 2,41,000 cr,' Jaitleysaid

Budget 2017 : Finance Minister Arun Jaitley on Wednesday announced enhancing the outlay for National Highways by 11 per cent to Rs 64,000 crore for 2017-18.

Presenting the Budget in Parliament on Wednesday, Jaitley said, "In the road sector, I have stepped up the budget allocation for the National Highways from Rs 57,676 crore in the budget estimate of 2016-17 to Rs 64,000 crore in 2017-18."

"For transport sector, including railways, road and shipping, government provides Rs 2.41 lakh crore," he added.

Jaitley said 2,000 km of coastal connectivity roads have been identified for construction and development. This will facilitate better connectivity of ports and remote villages, he said.

"The total length of roads including those under the PMGSY built from 2014-15 to current year is about 1,40,000 km, which is significantly higher than the previous three years," Jaitley said.

He said 133-km roads per day were constructed under the Pradhan Mantri Gram Sadak Yojana (PMGSY) as against 73-km in 2011-14.

Budget relief to middle class, 5% income tax for Rs 2.5-5 lakh earners

However, earners in between Rs 50 lakh and Rs one crore will have to pay 10% surcharge

The Budget gave relief to on personal income tax front, mainly the salaried group in the middle class, by halving the tax to five per cent up to the income of Rs 5 lakh to ease the pains of demonetisation. However, those earning above Rs 50 lakh and up to Rs one crore will have to shell out additional 10 per cent surcharge.

The cut in the tax rate for the lowest slab will also save up to Rs 12,500 for incomes in other slabs, increasing disposable income of the middle class that can provide spur to the slowing down economic growth. The present super rich tax in the form of 15 per cent surcharge will remain for those earning income over Rs one crore.

The finance minister also put more money in the hands of small and medium enterprises by reducing the corporate tax rate to 25 per cent from the current 30 per cent for annual turnover up to Rs 50 crore. Ninety six per cent of companies which file returns come under this category.

Besides middle class and SMEs, the finance minister also addressed the concerns of foreign portfolio investors by exempting India-based funds them from the indirect transfer provisions. The government had put on hold the recent rules by the Central Board of direct taxes in this regard.

Budget 2017 News, India Union Budget 2017-18, Latest News & Stories, Live Updates, Headlines & Highlights for Budget 2017-2018 | Business Standard

Big relief to middle class! I-T rate for Rs 2.5 lakh to Rs 5 lakh annual income bracket halved to 5%

The Foreign Investment Promotion Board (FIPB) has been decided to be abolished, Finance Minister Arun Jaitley declared in his budget presentation on Tuesday.

While, the FIPB had the final say in approving Foreign Direct Investment (FDI) proposals in the country for long, its power has been systematically reduced under the current government. Most notably, back in June, 2016 the government had announced relaxed FDI norms in single brand retail, civil aviation, airports, pharmaceuticals, animal husbandry and food products.

It had allowed up to 100% FDI in defence through the approval route, 100 per cent FDI in food product e-commerce, 100 per cent FDI in greenfield pharma via the automatic route, 100% in browfield pharma — of which 74% will be through automatic route — 100 per cent FDI in scheduled airlines, and up to 49 per cent FDI in airlines through automatic route.

In the last two years, the government has brought major FDI policy reforms in a number of sectors, including defence, construction development, insurance, pension sector, broadcasting sector, tea, coffee, rubber, cardamom, palm oil tree and olive oil tree plantations, single brand retail trading, manufacturing sector, limited liability partnerships, civil aviation, credit information companies, satellites - establishment/operation and asset reconstruction companies.

Incoming FDI grew 27 per cent in the first seven months of the fiscal to $27.82 billion, from $21.87 billion a year ago. Manufacturing accounted for 41.5 per cent of the total equity inflows into the country during April-October, according to the Department of Industrial Policy and Promotion’s (DIPP) year-end review.

This happened at a time when the government made a fervent pitch abroad for ‘Make in India’ to make India a manufacturing hub of the world and generate large scale employment. Services, telecom, trading, computer hardware and software and automobiles were among the major sectors that attracted FDI during this period. Read more

• Big relief to middle class! I-T rate for Rs 2.5 lakh to Rs 5 lakh annual income bracket halved to 5%
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• Budget 2017 News, India Union Budget 2017-18, Latest News & Stories, Live Updates, Headlines & Highlights for Budget 2017-2018 | Business Standard

Budget highlights: Fiscal deficit target for 2017-18 at 3.2%

Allocation under MNREGA increased to 48,000 cr from Rs 38,500 cr; highest ever allocation

 

Here are the highlights of Jaitley's budget for the 2017/18 fiscal year that begins on April 1.

FISCAL DEFICIT

* The 2017/18 budget seeks to pursue prudent fiscal management to preserve financial stability.

*Fiscal deficit at 3.4%

*Revenue deficit stands reduced to 2.1% in Fy18

GROWTH

* Jaitley says India seen as an engine of global growth

DEMONETISATION

* Demonetisation "a bold and decisive measure", will make GDP bigger and lead to higher tax revenues - finance minister

* Hit to economy from government decision to outlaw high-denomination notes will be "transient", effects of demonetisation not expected to spill over to next year

* Pace of remonetisation has picked up and will soon reach comfortable levels

* Surplus money in the banking system will lower borrowing costs, increase credit flow

INFLATION

*Consumer price index inflation is expected to remain within the central bank's mandated range of 2 to 6%

SPENDING

* India to spend more in rural areas, infrastructure and poverty alleviation

* The government will continue process of economic reforms for the benefit of poor

* Allocation under MNREGA increased to Rs 48,000 cr from Rs 38,500 cr; highest ever allocation

*Dedicated micro-irrigation fund will b set up by NABARD to achieve goal of 'Per Drop More Crop'.Initial corpus will be Rs 5,000 crore

*Mission Antyodaya to bring 1 crore households out of poverty and to make 50,000 Gram Panchayats poverty-free: FM Jaitley

*Propose to double the lending target of Pradhan Matri Mudra Yojana and set it up at Rs 2.44 lakh crore for 2017-18: FM Arun Jaitley. Read more

• Budget 2017 : India Union & Railway Budget 2017 News, Live Updates, Result & Highlights

Jaitley presents Union Budget despite Oppn protest

Mallikarjun Kharge urged Speaker for postponement of the budget, after the IUML MP Ahamed's death

Finance Minister Arun Jaitley has begun presenting the Union Budget in Parliament on Wednesday amid expectations of an increase in income tax exemption limits, to incentives for the Micro Small and Medium Enterprises (MSME) sector post the November 8 demonetisation drive.

Lok Sabha Speaker Sumitra Mahajan paid tribute to former union minister and Indian Union Muslim League (IUML) leader E Ahamed, who passed away this morning.

"I would have adjourned the House. But today's sitting has been fixed by the President for presentation of the Budget. Instead the House will be adjourned tomorrow as a mark of respect for E. Ahamed ji," the Lok Sabha Speaker said.

"Madam Speaker, on this auspicious day of vasant panchami I rise to present the union budget 2017-18. I am presenting this Budget when the world economy faces ," Jaitley said, as he stood to present the Budget.

However, Leader of Opposition in Lok Sabha, Mallikarjun Kharge, urged the Speaker for postponement of the budget.

Jaitley, earlier on Wednesday called on President Pranab Mukherjee at Rashtrapati Bhavan.

It was earlier speculated that the budget could be postponed by a day after former minister of state for external affairs and Lok Sabha MP Lok Sabha E Ahamed passed away at the RML Hospital in the national capital in the wee hours of Wednesday after suffering from heart attack. Read more

Live Blogs:

• Budget 2017 : India Union & Railway Budget 2017 News, Live Updates, Result & Highlights | Business Standard
• Service tax on railway tickets books via IRCTC withdrawn

Budget speech to be delivered as per schedule: Govt sources

There had been some confusion over presentation of the Budget following the death of MP E Ahamed

Budget 2017 India : Government and Parliament secretariat sources said the Budget speech by Finance Minister Arun Jaitley would be delivered according to schedule on Wednesday.

Amid confusion over whether the Parliament would be adjourned following the death of sitting member of Parliament E Ahamed, sources said the Budget presentation would not be postponed. Ahamed, who was an Indian Union Muslim League Lok Sabha member and former Minister of State for External Affairs E Ahamed, passed away early morning on Wednesday.. He had suffered a cardiac arrest at the time of President Pranab Mukherjee's address to the joint sitting of Parliament on Tuesday afternoon.

Government sources said there was needless confusion about the issue. Usually, the House proceedings are adjourned if a serving member passes away. But sources said there was no rule to this, and this was only a convention.

The Lok Sabha, therefore, will meet and pay its respects to the departed soul but the Budget presentation will go on as per schedule. All that the government needs to do is get half dozen parties on its side even if the Congress and others might protest.

The Congress is likely to protest what it has alleged to be the intent to keep the news of Ahamed's passing away under wraps. On Tuesday midnight, Congress President Sonia Gandhi and other leaders reached RML Hospital to complain that Ahamed's family member were not being allowed to meet him. Ahamed was declared dead a couple of hours later.

Live Blog : Cabinet meeting on Budget ends, FM to present Budget shortly

Budget 2017 to try and ease pain from cash crunch

Budget 2017 to try and ease pain from cash crunch

Finance Minister Arun Jaitley will likely boost spending and ease back on cutting the deficit when he presents his fourth budget on Wednesday, as he seeks to lift growth hit by the government's drive to purge the economy of "black money".

Prime Minister Narendra Modi's surprise decision last November to scrap high-value banknotes worth 86 percent of India's cash in circulation has hit consumer demand, disrupted supply chains and hurt capital investments.

Jaitley will present the 2017/18 budget at 11 am (0530 GMT) to the lower house of parliament.

The finance ministry forecasts that growth could dip to as low as 6.5 percent in the current fiscal year to March, before picking up in the coming fiscal year to between 6.75 and 7.5 percent.

While opinions vary on how long the disruptions caused by Modi's crackdown on untaxed and illicit wealth will last, there is near unanimity among economists that Asia's third-largest economy needs a helping hand.

Arvind Subramanian, Jaitley's chief economic adviser, on Tuesday advocated slashing personal income tax and accelerating cuts in corporate tax rates. He cautioned, however, against pursuing debt-fuelled fiscal expansion.

Still, economists are pencilling in a federal fiscal deficit of 3.3 percent of GDP for 2017/18. That would be higher than the 3 percent pledged earlier but lower than 3.5 percent that the government has budgeted for the year soon to end.

"Expectations are running high for an expansive budget," said Radhika Rao, an economist with DBS Bank in Singapore.(Read more)

BUDGET LIVE: Budget on schedule, Arun Jaitley leaves for Rashtrapati Bhawan

Staffing industry seeks resolution of tax woes in Budget

Wants TDS cut from 10% to 2%, and applied on commission earned, not on gross invoice value

Wants TDS to be cut from 10% to 2%, and applied on commission earned, not on gross invoice value

The staffing industry, representing companies such as Team Lease and Quess, wants finance minister Arun Jaitley to resolve the tax anomalies it faces, in the upcoming Budget 2017 India.

The Indian Staffing Federation says that its demand assumes significance since post-demonetisation it is the formal sector which will grow and the staffing industry will play a crucial role in that.

The industry represents contract hiring in organised industry done through tri-partite agreements -- between the company that is hiring, the person hired and the staffing industry.

The Federation said tax deducted at source (TDS) is imposed on the gross invoices received by its members from its client companies, whereas it should be on just the commission received by the staffing companies.

While this amount is adjusted later, it takes about a year to happen, creating cash flow problems for staffing companies, says Suchita Dutta, executive director of the Federation.

At the same time, the Federation said its members topped the list of India staffing firms, as per the recent report published by Staffing Industry Analysts. The report indicated that the Indian staffing industry was estimated to be worth Rs 27,000 crore in 2015 and is forecast to grow by 12 per cent in 2016 and 10 per cent in 2017.

When asked when there is cash flow problems, how come the industry is performing so well, Dutta said the results are based on top lines and not bottom lines. Read more

'Budget 2017 must focus on housing, infrastructure for pro-poor thrust'

Considering that the welfare of the poor and middle class is the priority area of the government and the assembly elections manifestos of all the major political parties centre around housing and urban development, this year's budget is expected to give a major thrust on real estate housing & infrastructure.

The Budget 2017 should be seen in the backdrop of a tough year for real estate and housing, with the problem of weak sales and high unsold inventory getting further precipitated by demonetisation. It's a matter of concern that the sale of housing units declined by 10 percent in the six month period ending September 2016.

This poses a major challenge to NDA government's flagship programme of 'Housing for All', as housing besides infrastructure, is a major booster to GDP especially in a slowdown economy and has a multiplier effect on allied sectors.

It's time to build on the foundation of structural and institutional reforms, addressing the vital issue of seamless implementation of key reforms like Real Estate Regulation Act (RERA), Smart Cities Mission, REITs (real estate investment trusts), GST and Bankruptcy Act and carry out the unfinished reform agenda of 'Ease of Doing Business and Single Window Clearance'.

As the government is rightly giving boost to affordable/low-cost housing for the success of its 'Housing for All' mission,the budget needs to come up with policy initiatives/incentives to give a fillip to affordable and low cost housing by way of direct benefits to home buyers, resulting in enhanced affordability.

In order to widen the scope of interest rebate on affordable housing,there's a need to enhance the 30 sq mtr area limit of houses, especially when the government has already broadened the scope of interest subsidy under Pradhan Mantri Awas Yojana (PMAY) by enhancing the loan eligibility limit from 6 lakh to 12 lakh by creating two additional loan slabs of 9 lakh and 12 lakh with interest subsidy of 4 percent and 3 percent respectively. Read more

Measures expected from India's annual budget that could impact markets

Govt set to announce additional details behind GAAR, which will be implemented starting April 2017

Investors in India are bracing for higher taxes and less incentives from the government's annual Budget 2017 Date to be unveiled on February 1 as the focus shifts to wringing out revenues to finance giveaways and higher public investment to support the economy.

Below are the main elements expected in the measures that could impact markets:

Guidelines for General Anti-Avoidance Rules (GAAR)

- Government set to announce additional details behind GAAR, which will be implemented starting on April 2017.

- GAAR is meant to crack down on tax havens, making it harder to claim some tax exemptions.

- The government on Friday said GAAR would not apply for foreign investors based on a jurisdiction because of genuine commercial reasons and not just to benefit from exemptions under India's tax treaties with other countries.

- India also said investors who meet so-called limitation of benefits criteria for individual tax treaties would be exempt from GAAR.

- Limitation of benefits seeks to ensure foreign companies or investors based in countries with special tax treaties with India meet certain criteria such as minimum level of investment and a commercial presence in the relevant jurisdiction.

Taxes under indirect transfer rules

- Government expected to say whether foreign portfolio investors, private equity funds and venture capitals are liable to pay indirect transfer taxes

- Confusion created after tax department said in December such investors could be liable to pay taxes if more than 50 pct of a fund's or investment vehicle's assets are based in India under some conditions

- Tax department also said indirect transfer tax could be charged under certain ownership and investment levels. Read more

Weekly roundup: Best week in 8-month; Sensex surges a whopping 848 points

A pre-Budget rally defied the negative results from Wipro, Ashok Leyland, HUL and M&M

The market put a stellar show in a holiday-truncated expiry week with benchmark indices rising to eighth-month highs thanks to higher rollovers to February series ahead of Union Budget 2017 as a pre-Budget rally defied the negative results from companies such as Wipro, Ashok Leyland, HUL and M&M. Positive sentiment abroad after Dow Jones, Wall Street’s closely-watched index, hit its fresh lifetime high of 20,000-mark, also aided the sentiment.

During the week ended January 27, the S&P BSE Sensex added 3.1% or 848 points to settle at 26759, while Nifty50 gained 3.5% or 291 points to close the week at 8641.

Midcap and Smallcap stocks jumped. The BSE Midcap index rose 3%, while the BSE Smallcap index surged 2.8%.

"With signs of FIIs taking interest in Indian equities, and with January derivatives’ expiry witnessing a 5-month high rollover in Nifty, investors continued to chase price higher, with only a few days left before budget is presented. It also helped that Dow continued to close above-20000 mark lending positivity to global markets,” said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.

Sectors and stocks

All sectoral indices settled in green.

The week saw BSE Metal index gaining 5.9%, followed by the BSE Consumer Durables and the BSE PSU index, which gained 5.5% each. The BSE Oil & Gas index (4.9%), the BSE Bankex (4.8%) and the BSE Auto (4.5%) were other sectoral gainers.

Among individual stocks, HDFC, Adani Ports and SBI surged 10.8%, 6.7% and 6.1%, respectively for the week. Bajaj Auto gained 5.7%, Hero MotoCorp advanced 5.1%, while Mahindra & Mahindra added 5%.

Losers included Wipro (2.4%), Infosys (0.7%), Hindustan Unilever (0.6%) and Sun Pharma (0.2%). Read more

Farm insurance, credit access schemes expected in Budget 2017: Kakra of PwC

The PwC leader (Food and Agriculture), PwC was replying during a Business Standard live chat

In an effort to double the agriculture production by 2020, the government should introduce schemes for greater access to farm credit in Budget 2017, Ajay Kakra, leader (Food and Agriculture) PwC, said.

Kakra also underlined that Union Finance Minister Arun Jaitley should also introduce policies for incentives towards irrigation and insurance of farm crops. He further highlighted the need for a digitised farming economy in the longer run.

Kakra was answering questions on what announcements related to the agriculture sector are expected in Budget 2017 during a Business Standard live chat. Excerpts:

In his New Year's eve speech, Prime Minister Narendra Modi talked about giving certain concessions and incentives to farmers. It is hoped that the government will follow that up with further concessions and incentives for the agriculture sector and the agro-input industry in the coming Budget. What can we expect?

One of the key focus areas of the honourable prime minister is to provide greater access to farm credit. In my view as well this can be a key area of focus to strengthen the farming sector. As far as the agriculture input sector is concerned, access to seed, agrochemical and fertiliser is an essential requirement for ensuring farm output. The Budget can look at strengthening the distribution network of agri-inputs to ensure availability at the time of sowing or beginning of the season. The rabi sowing has been more or less normal while the offtake of fertiliser has also not been dampened due to cash crunch at the time of demonetisation.

In the financial year, the overall agricultural output was expected to grow at 4 per cent. But with the government's demonetisation move that has likely caused some roadblocks, what kind of favourable policies can we expect to heal the agriculture sector?

Agricultural growth is fundamentally governed by the output of food grain and other crops which are showing no signs of decrease. The Rabi crop is also expected to be normal except a shortfall in rabi paddy. Therefore, the sector will see a growth over the last year. Demonetisation had only a one-time effect on the agricultural transactions but has not shown any sign of slow-down in food storage and distribution and even consumption. I believe the policies will look at strengthening the coverage of a greater number of farmers in the formal banking system and providing more credit in terms of crop loans, equipment purchase, technology adoption. Currently, only 52 per cent of the total farming community of 9.2 crore is covered under the financial net. The government should aim at increasing it by another 10 per cent. Apart from this we may see policies and incentives towards irrigation and insurance of farm crop. Read more