27th May 2009

INCOME TAX
I-T dept finds Rs 1,200 cr in frozen demat accounts
Delhi : The I-T department has found over Rs 1,200 crore lying unaccounted in lakhs of frozen demat accounts across the country and has sought a detailed probe on the possibility of their use for illegal transaction and tax evasion.The department has now sent the reports of such accounts to the respective Chief Commissioners of Income Tax (CCITs) in various parts of the country to check the veracity of such accounts in their regions.More than 6.5 lakh frozen demat accounts were taken under scanner and investigated by the income tax department in December last year on the suspicion of huge evasion of taxes and ‘benami’ transactions.
Misc. - Indirect Tax

Cenvat rate taxes Ministry
Delhi : There is a difference of opinion in the Finance Ministry on the way the Cenvat rate (excise duty rate) should move in the coming days. Different groups are pulling in different directions. Some senior officials advocate that the median Cenvat rate should remain at 8 per cent, the level at which it was fixed after the interim Budget. But others in the Revenue Department think that the rate needs to be raised at the earliest to the pre-December 2008 level of 14 per cent.

Misc. Corporate Laws & Other Commercial Policies
Short of cash, govt plans to revive disinvestment ministry
Delhi : The government plans to resurrect the ministry of disinvestment in a bid to raise resources by selling its shareholding in public sector companies. Sources said Montek Singh Ahluwalia, former deputy chairman of the Planning Commission, was a front-runner among the names shortlisted to head the new ministry. The new disinvestment minister is likely to hold Cabinet rank.
Govt may relax FDI caps for insurance, defence production: Nath
Delhi : The new UPA Government may liberalise the entry of foreign direct investment in defence production and insurance, and reform the civil aviation policy, senior Cabinet Minister Kamal Nath has said. "I think there is some room ... we can liberalise the defence sector ... We need more capital in insurance. We should be looking at it. We will see how we frame it and structure it. We are all for getting in more capital in our insurance sector," Nath said in a panel discussion on a private TV channel.
Interest subsidy scheme for state utilities likely
Maharashtra : The Centre will soon decide on the establishment of a national electricity fund (NEF), with a corpus of Rs 1,00,000-1,50,000 crore, to finance the development of transmission and distribution (T&D) systems by state utilities, earlier proposed by the Planning Commission to reduce T&D losses.The Congress-led government, in its second term, plans to introduce an interest subsidy scheme instead of the NEF, with an annual budgetary allocation of Rs 10,000-25,000 crore.
Audit & Acc - Misc.
Banks advised to replace CAs with qualified auditors
Delhi : Accounting regulator, Institute of Chartered Accountants of India (ICAI) has asked the private and public-sector banks to hire the services of qualified auditors instead of chartered accountants who render ‘compilation engagement’ services.In a compilation engagement, a chartered accountant uses his accounting expertise as opposed to the auditing expertise to collect, classify and summarize financial information.
Finance & Money Markets
Banks increase margin to 25% on housing loans
Delhi : n what could reverse the effects of lower interest rates on home loans, some financial institutions have increased the margin requirement on housing loans to 25%. By doing so the financiers have made owning a home difficult, as people will have to contribute a higher sum from their own pockets.LIC Housing Finance and HDFC have increased the margin requirement to up to 25%, which means they would finance only up to 75% of the house cost.
Rupee may appreciate to 46 a dollar in 12 months: Goldman Sachs
Delhi : Rupee is likely to appreciate to 46 a dollar in the backdrop of a stable government at the centre and relatively resilient domesticrupee.jpg Where Re comes from & goes Forex Converter Remittances made easy demand, says a report by global financial servicesgiant Goldman Sachs."We expect the INR to appreciate further from current levels as the stable government and relatively resilient domestic demand become key catalysts for foreign inflows," the report said, adding that the Indian currency "may touch Rs 46 to a dollar within 12 months".Noting that there are significant pressures for rupee appreciation, the report said that the Indian currency gained about 5 per cent against dollar since the victory for the Congress-led UPA in the general elections.
Foreign investors can cut comex stake by Sept
Delhi : Deadline for foreign investors to bring down their holdings in commodity exchanges to below 5% has been extended by three months till September 30.Holding more than 5% of equity in these exchanges after the deadline by a foreign investor or entity, including persons acting in concert, will be considered as a violation of the Foreign Exchange Management Act (FEMA), a statement released by the department of industrial policy and promotion (DIPP) said.The move will give Goldman Sachs, Intercontinental Exchange (listed with the New York Stock Exchange) and Fidelity more time to comply with the new regulations. While Gold Sachs and Intercontinental hold 7% and 8% stakes, respectively, in National Commodity and Derivatives Exchange (NCDEX), Fidelity holds around 9% stake in Multi Commodities Exchange (MCX).
Overseas investors indulge in profit booking
Maharashtra : The FIIs who have been net buyers of equity for Rs 11,580 crore in May so far, have sold equities for a net amount of Rs 1,750 crore in the last three trading sessions of last week. (On Monday though, they were net buyers for Rs 428 crore.Market-men said that FIIs could be taking advantage of the market’s rally to dizzying heights after the election results were announced.The price-to-earnings ratio of shares has gone up from about seven or eight to around 15 now even when liquidity is hard to access and nothing has changed fundamentally. Such a rise is unwarranted for. “The FIIs have started to re-think on this exuberance and have become a little bit more cautious now,” said Mr Saurabh Mukherjea, Head of Indian Equity at Noble Group.