Change to gratuity Act likely in coming session

Act applies to those establishments where the number of employees is not less than 10

 

Latest News - The government is likely to bring a change to an Act to make gratuity up to Rs 20 lakh tax-free in the upcoming second half of the Budget session of Parliament slated to begin on Thursday.

The change to the Payment of Gratuity Act will not only raise the tax-free portion of the gratuity but also allow the government to increase it through the executive order in the future, official sources said.

What is Gratuity?

Ceiling on gratuity will be linked to inflation and that way it would be raised through an executive order in the future, if the Bill is passed by Parliament.

Earlier, the labour ministry and trade unions reached an understanding in this regard.

Pavan Kumar, organising secretary of the Bharatiya Mazdoor Sangh, said the government has conveyed to the trade unions that the change to the Act is slated to be introduced in the Budget session.

Why are More People Applying for Personal Loans?

However, he said trade unions have also demanded other changes, including a change in the current formula of calculation of gratuity to increase the number of days for which gratuity is calculated from 15 days in a year to 26 days. Currently, gratuity received is tax-free to the extent that it does not exceed 15 days' salary for every completed year of service.

The unions, he said, have also demanded removal of the five-year ceiling. Currently, one gets gratuity only if he has completed five years of service. 

The Act applies to those establishments where the number of employees is not fewer than 10.(read source...)

Beware, taxman to watch your posts on social media

Don’t be surprised if you get a notice from the income tax (I-T) department for flaunting an expensive watch or car on social media platforms such as Facebook, Twitter or Instagram.

I-T department’s Project Insight, to be launched in the 2017-18 financial year, aims to mine big data from social media to scrutinise potential tax evaders. “If you flaunt that you have gone on an expensive trip to a foreign location on Facebook and other social media, we will gather that information to match it with your income declared,” a finance ministry official said.

Another official confirmed that Project Insight will include data from social media platforms. “Project Insight will essentially do data mining. It will use inputs from various sources. Social media would be one of those,” he said. The work on Project Insight has already begun and the department plans to launch it soon.

When asked whether the project would come into force from the beginning of the next financial year, an official said such details were yet to be finalised. 

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The great Indian jugaad: How some are beating the Rs 1000 note ban

Even as the Modi government on Tuesday declared that Rs 500 and Rs 1,000 would no longer be legal tender, the average Indian, with his prowess in the art of jugaad, found ways to beat the system, thanks to a 50-day window given for exchange of these banknotes.

Despite the panic visible across all cities, there always are some opportunists ready to take advantage of someone’s desperation. They always find ways to play the system. And, in this case, they have turned religious places, non-government organisations (NGOs) and gold jewellers into laundering centres. At many places, even the retail shops have become money-exchange centres, they are giving Rs 400 in exchange for Rs 500 notes. Even some bank managers are getting offers for a 20 per cent cut in lieu of exchange of Rs 500 and Rs 1,000 notes.

So, what are the ways and means the hoarders are employing to get rid of their old notes? Business Standard documents the ways that have come to light so far:

1. Buying gold
2. Paying salary in advance
3. Praising the lord
4. Banking on the Jan Dhan Yojana
5. Falling back on the family
6. Taking the hawala route
7. Offering a 20% cut to bankers
8.  Getting luxurious at gyms, salons and bars

However even as black-money hoarders scurried to offload their cache via sales of cash, distress bullion buying and questionable currency swaps, the taxman soon played catch-up by conducting raids on jewellers and suspected hawala operators across Mumbai, Delhi and parts of Punjab through Thursday.

 

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India will take up visa, trade issues with Donald Trump administration

India will take up the issue of visa for Information Technology (IT) professionals as well as other contentious issues with the new Donald Trump administration in the United States.

India will continue to negotiate with the US government once it takes charge in early January, next year, Commerce and Industry minister Nirmala Sitharaman said on Thursday. India will communicate its position on trade issues and brief the US government about Indian industry's contribution to the US economy, she added.

Related Story:      Michelle Obama Gives Melania Trump Tour Of White House

Trump during his election campaign expressed concerns about immigration and outsourcing of jobs.

India has time and again raised concerns over the American visa regime and hike in visa fees as it impacts Indian IT industry which earns about 60% of its revenue from that market.

India has also filed a case in the WTO against the US decision to impose high fees on temporary working visas.

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Rs.500 note & Rs.2000 note. This is what they look like

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Home buyer is finally king: How Real Estate Act protects you

The Real Estate (Regulation and Development) Act, which protects the interest of home buyers has finally started seeing light of the day though slowly.

Keeping up with the deadline to operationalise it from November 1, the Central government has notified it for the five Union Territories - Andaman and Nicobar Islands, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep and Chandigarh. None of the states except Gujarat has met the deadline.

Even though your state may not have implemented the Act; it will be similar to the one notified for the union territories and looking at the finer points covered can give you a sense of things to come.

The rules apply to all on-going projects that have not received completion certificate.

Here’s how the Act protect buyers’ interest:

No misuse of funds

No lopsided penalties

No false promises

Transparent project progress report

Key highlights

- 70 per cent of unused amounts collected for ongoing projects to be kept in a separate bank account.

- Developer needs to declare original sanctioned plans, changes made later, fresh timeline for completion of ongoing projects.

- The interest paid by both, developers and buyers, is pegged to SBI Marginal Cost Lending Rate plus 2 per cent.

- Developers will need to make a host of information public and report quarterly progress on the project to enable informed decisions by buyers.

- The rules apply to all on-going projects that have not received completion certificate.

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India up 21 places in WEF gender gap report

India has climbed 21 spots to rank 87th on the World Economic Forum's Global Gender Gap Report 2016. In 2015, it was ranked 108th. The improvement in ranking, the report says, is driven largely by major improvements in education, where it has managed to close its gap entirely in primary and secondary education. With this jump in ranking, India has now overtaken China which is ranked 99th out of 144 countries. Iceland tops the latest rankings followed by Finland, Norway and Sweden.

The report measures gender gap as progress towards parity between men and women in four areas - educational attainment, health and survival, economic opportunity and political empowerment.

A troubling finding of the report is that the global march towards parity in the key economic pillar has slowed down dramatically "with the gap - which stands at 59 per cent - now larger than at any point since 2008."As a consequence the report estimates that the "global economic gender gap will now not close until the year 2186."

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Why boycott calls against China, India's largest trade partner will fail

The Export-Import Imbalance

Cellphones, laptops, solar cells, fertilisers, keyboards, displays and communication equipment — including earphones — these are India’s chief imports from China, according to our analysis of ministry of commerce data.

 

Why China bazars are popular

IndiaSpend visited Manish market, the hub of imported Chinese goods in Mumbai’s heart. Chinese products here are cheaper, available in bulk, neatly packaged and easy to buy.

“If the 50 different types of LED lamps that I sell were available from say, Surat, at a cheaper rate and at my doorstep, why would I go for Chinese lamps?” asked a lamp distributor and retailer, requesting anonymity. “If I had to buy these in India, this collection would cost me double.”

Market access is easier in China

Customers rarely have to waste time in China searching for markets and products, said Kasliwal. It took him less than a week to buy a three-month consignment that ranged from jewelry to fabric.

“Even small market-towns like Yiwu — comparable to Varanasi in terms of population — have a one-stop, dedicated market for all consumer durables, from fashion to home accessories, with cost and quality options,” he said. “In India, it would take us weeks.”

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RBI to announce monetary policy review today

The Reserve Bank of India will announce its monetary policy review on Tuesday.

It will be announced in the afternoon at 2:30 pm against the existing practice of 11 am.

This will be Urjit Patel's maiden policy announcement as the RBI Governor.

Unlike his predecessor Raghuram Rajan who had the final say on interest rate cut decisions, Patel will have to go by the advice of a newly set up six-member monetary policy committee (MPC).

This is for the first time that decision-making on interest rates will shift to the six-member panel which has equal representation from RBI and the government.

Since January 2016, the RBI has cut the repo rate - the rate at which RBI lends to banks - five times. India's retail inflation has touched a five-month low of 5.05 per cent in August, triggering hopes of a rate cut.

The RBI and the government have set a retail inflation target of four per cent for the next five years with an upper tolerance level of six per cent and lower limit of two per cent.

Most analysts expect a status quo on rates. Mounting bad loans will remain another focus area of Patel's debut policy review.

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India jumps 16 spots on Competitiveness Index

India jumped 16 places for the second year in a row to the 39th rank on the World Economic Forum’s (WEF) Global Competitiveness Index 2016-17. It was ranked 55th in 2015-16. This is the largest gain made by any country on the list.

Switzerland was ranked the most competitive country for the eighth consecutive year, followed by Singapore, the United States, the Netherlands and Germany.

The rankings measure countries’ performance on three indicators — basic requirements, efficiency enhancers, and innovation and sophistication factor. Performance on these in turn is measured through sub-indicators.

“Thanks to improved monetary and fiscal policies, as well as lower oil prices, the Indian economy has stabilised and now boasts the highest growth among G20 countries. Recent reform efforts have concentrated on improving public institutions (up 16), opening the economy to foreign investors and international trade (up four), and increasing transparency in the financial system (up 15),” said the report.

While an improvement on the former is likely to be the result of government initiatives aimed at curbing corruption, the latter probably reflects measures taken on corporate governance and related party transactions by authorities such as the Securities and Exchange Board of India (Sebi). Surprisingly, on reliability of police services, the country moved from 86th in 2015-16 to 53rd in...  Read full Story

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Last Railway Budget: Promise vs performance

Railway Minister Suresh Prabhu was supportive of the proposal of the finance ministry and NITI Aayog to discard the 92-year-old practice of presenting a separate Railway Budget. The move itself may save a gross amount of Rs 10,000 crore for the railways in dividend payment. As the Narendra Modi government moves away from this colonial practice, Shine Jacob takes a look at the achievements against targets set by the last Railway Budget presented in February this year.

• Economic health

The railways is expecting a revenue of Rs 1,84,820 crore during the current financial year (FY17), which officials claim will be achieved this year. However, this appears to be unrealistic considering there was a 7.74 per cent fall in freight earnings in July, compared with the year-ago period. In the first three months, earnings from freight had dropped by 11 per cent. Coal traffic, too, has dropped rapidly from 253 rakes during the first three months of FY17 to about 180 rakes. As far as passenger services are concerned, except third AC, all other passenger services are loss-making now, because of no fare hike. However, through rationalisation of freight rate for coal and dynamic pricing in premium trains, it is hoping to get higher revenue.

• New trains

One of the major announcements of Prabhu's Budget in 2016 was about the introduction of trains like Antyodaya Express, Humsafar, Tejas and UDAY. All these four trains are set to hit the tracks in the next two months. While three-tier AC train Humsafar is targeted at low-budget commuters, who want to graduate to air-conditioned travel by paying a bit more, Tejas will have service attendants such as air hostess, besides bringing the speed advantage of 130 km per hour. On the other hand, Antyodaya Express, a long-distance, fully unreserved, super-fast train service will be targeting common man and UDAY (Utkrisht Double-Decker Air-conditioned Yatri) will be overnight trains plying on the busiest routes to  read full story & more about..

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• Food and catering services
• Passenger entertainment
• Make in India
• Insurance scheme
• Rail Development Authority
• Swachh rail
• Wi-Fi stations

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After 92 years, Rail Budget is history

The Cabinet on Wednesday approved the merger of the Railway and General Budgets from 2017-18, ending a 92-year-old colonial tradition.

It also cleared abolishing the classification of Plan and non-Plan expenditure in the Budget and agreed in-principle to advancing its presentation in Parliament from the last working day in February. The government wants the Finance Bill to be passed before April 1.

“The government is in favour of advancing the Budget date. However, a number of states are going to the polls early next year. We will take a call on a new date after studying the election calendar,” Finance Minister Arun Jaitley said at a press conference after the Cabinet meeting on Wednesday.

Uttarakhand, Manipur, Goa, Punjab and Uttar Pradesh are slated to go to the polls early next year.

Suresh Prabhu will be the last railway minister to have presented a Budget and Jaitley will be the first finance minister to present a combined one next year.

“India was the only country with a separate Railway Budget. We are breaking that tradition. However, the financial powers of the railways will stay. We will not have to pay a dividend of about Rs 10,000 crore annually. We will also be able to increase our capital spending,” Prabhu said, at the read full story

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THE 5 RAIL BUDGET ‘MISSES’

CABINET DECISIONS

HOW MODI BROKE FREE OF PAST LEGACIES…

…BUT THERE’S MORE EXPECTED

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“India was the only country with a separate Rail Budget. We are breaking tradition”

Suresh Prabhu,

Union rail minister

India not ready to privatise public sector banks: Arun Jaitley

India has not reached the point where it can consider selling majority stakes in the public sector banks that control seven tenths of assets in the financial system, Finance Minister Arun Jaitley said on Wednesday.

"I don't think that public or political opinion has converged to the point where we can think of privatisation in the banking sector," Jaitley told the Economist India Summit in New Delhi.

The government is consolidating some of the public sector banks to strengthen them, but does not plan to reduce the state's share below a threshold of 52 per cent, Jaitley said in a  read more..

Also Read:  GST, banks, infrastructure India's top priorities: Arun Jaitley

Petrol price hiked by Rs 3.38/litre, diesel by Rs 2.67/litre

Oil marketing companies increased prices of petrol by Rs 3.38 per litre and those of diesel by Rs 2.67 per litre from Wednesday midnight, following a steep increase of crude oil prices in the international market.

“During the current fortnight, crude oil prices in the international market have witnessed a steep increase of 13 per cent (over $5 per barrel) compared to previous fortnight, with a corresponding increase in international prices of petroleum products. The current level of international prices justify an increase in prices of petrol and diesel,” state-run Indian Oil Corporation said on Wednesday.

The retail (consumer) selling prices of petrol and diesel were reduced on four occasions in the past two months on the back of decreasing international oil prices. As a result, prices in Delhi were reduced by Rs 5.56 per litre for petrol and by Rs 4.92 per litre for diesel during the period. Following the current increase, the price of petrol in read more..

Centre hikes minimum wages and bonus, trade unions not impressed

The Centre on Tuesday increased the minimum wages and bonus for its employees to pacify trade unions that have called a nationwide strike on Friday.

The Minimum Wage Advisory Board on Tuesday announced a hike in the lowest wage for unskilled central government workers to Rs 350 a day from Rs 246. The increase will also be effective for central public sector undertakings.

“The government has effected a 43 per cent increase in the minimum wage. This was a major demand of the trade unions,” Union Labour Minister Bandaru Dattatreya (pictured) said.

Dattatreya has held meetings with trade unions over their charter of demands. The issues have been taken up by an inter-ministerial committee headed by Finance Minister Arun Jaitley.

“The bonus entitlements for 2014-15 and 2015-16 will be released on revised norms. This was pending for two years. After this, the bonus will be covered under the  read more..

India never been in stronger position than today: Deepak Parekh

HDFC Chairman Deepak Parekh on Monday said the country's economy is in a "stronger position" and demonstrating an immense growth potential with a strong leadership at the helm bringing in key reforms.

"India has never been in a stronger position than today from a macro-economic perspective. The country is demonstrating an immense growth potential helped by a strong leadership at the helm, driving key policy changes," Parekh said at a risk summit organised by CII.

He noted that with the present government, large scale corruption has been weeded out.He said India, with an expected GDP of above 7.5 per cent, stands out well in comparison to its global peers.

"We in India hold a key advantage by being a major economy with tremendous growth potential," he said.

The veteran banker said the country has benefited tremendously from lower crude oil prices.

He said the private sector capex has continued to be slow, so support has been boosted from public sector spending on infrastructure.

"Often when infrastructure projects are a work-in-progress, there tends to be a feeling that nothing is happening on the ground. But this is certainly not the case in read more..