The Budget comes as a relief to taxpayers whose taxes are deducted at source (TDS). Every person responsible for payment of any sum is required to deduct TDS at the prescribed rate and deposit it with the central government. Deduction would be in order if the payments exceed the prescribed maximum limit. The present budget has increased the maximum limit for a number of items, rental income being one of them.

This is a relief to ordinary taxpayers and particularly to those senior citizens whose total income falls below the taxable income limit of Rs.2,40,000/-. The maximum limit for rental income has been increased from Rs. 1,20,000/- to Rs. 1,80,000/-.

For example, take the case of a senior citizen whose total income is less than the taxable income limit of Rs 2,40,000/- and who has a rental income of Rs. 1,80,000, which he receives from a company. As per the earlier system, the company would pay him the rental after deducting tax at source at the rate of 10%. However, his total income being below the taxable limit of Rs.2,40,000/- he is eligible for refund of the TDS amount. But for claiming this refund, he would have to file a return with the department and thereafter be prepared for a long wait to get his refund.

However, under the new system, the TDS would not be deducted from his rental income as it does not exceed  the revised maximum limit of Rs 1,80,000/-. This will relieve him from the process of filing the return as also the undue delays in getting refund.

Similarly, the threshold limit for insurance commission for TDS has increased to Rs 20,000 from Rs 5,000. This will save an agent inconvenience if income is less than the taxable income. Otherwise also, he will not have to wait for a refund. These amendments will take effect from July 1, 2010.

 Source: economictimes.indiatimes.com

In order to bring in greater competition in securities market, more specifically capital markets, The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has emphasised the need for creation of more “Stock Exchanges” to ensure wider participation of corporates particularly SMEs and retailers.

In this regard, the Chamber has demanded changes in SEBI guidelines as regards to opening up of Exchanges so that the proposed Exchanges are created with no hurdles to ensure better price discovery to investors specifically retail investors with much lesser transaction costs.

In a representation addressed to Competition Commission of India by Mr. D. S. Rawat, Secretary General ASSOCHAM, it is pointed out that the present position in the country is very dismal as regards competition and highly favoured and weighing in favor of National Stock Exchange (NSE). The NSE which commands 98% of turnover in futures and options and has about 70% in cash section needs to be countered with competition.

According to ASSOCHAM, the various reformative steps taken by SEBI in the last few years have not been able to bring value competition in the market place which has resulted in almost monopolistic status of NSE.

With a view to bring sufficient competition in the capital markets, the regional Stock Exchanges should be encouraged with fiscal benefits so that regional companies are attracted to be listed their for better price discovery and lower charges to investors. The suggested fiscal benefits can be in the form of concessional security transaction tax, exemptions from VAT as also Income-tax.

Therefore, the SMEs should be permitted to be listed in such regional Stock Exchanges after the suggested listing norms of SEBI for listing SMEs are further fine tuned to address concern for capital raising costs, said Mr. Rawat.

The currency derivative market in India is of recent origin. While NSE commenced trading in currency derivatives on 29th August 2008, MCX Stock Exchange which received recognition under SCR Act from SEBI on 18.9.2008, commenced trading in currency derivatives segment on 7th October 2008.

As a result of competition, the combined average daily turnover in these Exchanges in the currency derivatives segment has increased from Rs.24.20 billion in January 2009 to Rs.284.54 billion in January 2010. While the average daily turnover of MCX-SX increased from Rs.12.21 billion in January 2009 to Rs.146.17 billion in January 2010, the average daily turnover of NSE increased from Rs.12.00 billion to Rs.138.37 billion during the corresponding period. The better performance of entire segment is on account of the competitive environment prevailing in the currency derivatives. Such an environment is also required in the cash market for securities and for futures and options.

The ASSOCHAM representation also points out that the Indian public and consumers have benefited immensely on account of competition in sectors such as telecommunications, banking, insurance and aviation. As a result of competition, the number of wireless subscribers has increased from 7.3 million in June 2002 to little more than 500 million in early 2009.

If the government and the regulators encourage competition in the stock market, India can achieve similar results in the securities market with a steep increase in the number of investors, greater financial inclusion and substantial reduction in transaction costs. Greater competition will also strengthen corporate governance in Stock Exchanges.

In the light of above, there is urgent need to ensure greater competition among Stock Exchanges by government and the regulators with a view to providing greater benefits in the investing public and further developing the securities market. Stock Exchanges need to be allowed to compete in a fair and equitable manner so that the welfare of the investing public can be maximised.

Source : assocham.org

Mr. Harsh Pati Singhania, President, FICCI, while congratulating the Finance Minister for focussing strongly on growth while simultaneously dealing with fiscal deficit and providing a roadmap for fiscal consolidation.  The increased thrust on agriculture, infrastructure, education and health along with unorganised sector, which employs 92% of our people, he said, was the right prescription for growth.  While relief on personal taxation for the Aam Adami was heartening, he expressed disappointment in the increase in MAT from 15% to 18%.

Highlighting FICCI’s action agenda for the next decade, the FICCI President said that India should aim at attaining 5% share in global GDP by the end of the decade from the current 2% and bring the poverty ratio down to under 10%. “To achieve this we need to give a strong push to agriculture, manufacturing, infrastructure and focus squarely on skills, in a mission mode.  We will also have to meet the challenge of climate change, national security, and ensuring competitiveness in the evolving knowledge economy. Finally, we must focus on integrating ourselves more with the global economy in step with domestic reforms”.

Mr. Singhania underlined the need to achieve and sustain a 3 to 4% growth in Agriculture if we are to maintain and even better a 9% GDP growth. Inclusive growth can be achieved by developing this sector and focusing our energies on the rural economy. Unless agriculture grows and achieves increase in productivity, food shortage will become endemic and will result in inflationary pressures – like the one that we have been seeing now. He stressed the need for second Green Revolution. We need to revamp the agriculture sector covering the entire gamut of activities with active and greater private sector participation in the entire agri-value chain.

He said that in the developed countries manufacturing sector is on the decline and with the right set of policies India can position itself as the next big manufacturing hub with the stated objective of increasing the share of manufacturing in GDP from 17% to 30% by 2020.   

While Infrastructure had been a weak link in the chain, he said that the government needed to be applauded for having doubled the investment in infrastructure to GDP ratio from 4% to 8% in the last five years.  “While we see increased activity in this sector we are also constrained by factors like limited public resources, inadequate availability of long term project financing, lack of a robust inventory of infrastructure projects and shallow debt and capital markets. In addition, securing land and environmental clearances have routinely plagued projects. All these issues, particularly those relating to project implementation, will have to be addressed if the pace of infrastructure development has to be hastened,” he pointed out.

The FICCI Chief said that if India’s growth had to be sustained in the long run, major investments would have to be made in social sectors like health and education. He suggested according infrastructure status to the health care sector, initiation of work on a national policy for PPP initiatives in the healthcare sector and the higher education sector, setting up of an Education Promotion Finance Company on the lines of HDFC to provide low cost educational loans.

The core objectives of growth and development had to be achieved within the parameters of certain compelling contemporary developments and perspectives, including climate change imperatives, calibration of India’s global integration by simultaneously undertaking internal reforms. Introduction of GST, the Direct Tax Code, imparting flexibility in labour regulations, cutting down on transactions cost are some of the areas which deserve immediate attention.

He also emphasised the need to deal with both external and internal sources of terror and ensure that the political and security risk associated with our country goes down sharply.

Source : www.ficci.com