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Union Budget 2016 and Indian rupee: "The rupee is expected to maintain a downward trajectory over the short-term. The Union Budget can either arrest the downward trend or accelerate it," Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, said. (Reuters)
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Easing Funding: Banks need to be recapitalised to be able to start lending for new PPP projects. The budgeted R25,000 crore is inadequate, and the shortage will potentially delay growth in private investment in the longer term. However, the tight funding keeps lenders focussed on carefully resolving stressed assets, instead of promoting moral hazard. It will hopefully be clarified later how the National Infrastructure Investment Fund is going to complement the infrastructure financing system. (Reuters)
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Union Budget 2016 and Indian rupee: In addition, investors will look out for any positive budgetary announcements and news on expected banking sector reforms. Market participants are hopeful that the central government may increase expenditure, announce tax concessions and pave the way to reduce the NPAs (non-performing assets) levels of the banking sector. (Reuters)
EPFO MAY NOT BE MANDATORY FOR YOU<br> Many may not know they can opt out of the Employee's Provident Fund (EPF) scheme and invest that money on any other avenue of their choice. However, this is limited to people who earn a basic salary above Rs 15,000. For those with basic below Rs 15,000 it is mandatory. Also, you should have never been a subscriber of EPF in the past.</br> -
Budget 2016 on taxing EPF: This essentially means when a person withdraws from EPF, the 60 per cent of the corpus, accumulated post April 1, 2016, will attract tax and the remaining 40 per cent will not. At present, the deposits, the interest and withdrawals of the EPF are tax free as it is an EEE scheme. It is not clear if the Public Provident Fund (PPF) will also come under taxation but it would need a modification of the PPF Act. The budget has also proposed to increase the threshold for deducting tax deducted at source (TDS) on payment of accumulated balance due to an employee in EPF Rs 50,000 from existing Rs 30,000. Last year budget had provided that the members of private provident fund trusts will not have to pay tax on pre-mature withdrawals provided the amount is either less than Rs 30,000 or their tax liability is nil even after including the withdrawn sum to their income. (Reuters)
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Union Budget 2016 and Indian rupee: The National Securities Depository Limited (NSDL) figures showed that the FPIs (Foreign Portfolio Investors) sold Rs.6,763.11 crore or $986.13 million in the equity and debt markets from February 22-26. Data with stock exchanges disclosed that the FPIs divested stocks worth Rs.3,841.63 crore during the week under review. According to Hemal Doshi, chief currency strategist, Geofin Comtrade: "USD/INR spot is facing resistance near 68.80/85 levels. A close above 68.85 will lead to a rally towards 69.20/30. Till that time, we can expect spot to move lower towards 68.45 and then 68.30."(Reuters)
