PIB - Scheme of 1% interest subvention on housing loans upto Rs.10 lakhs

Scheme of 1% interest subvention on housing loans upto Rs.10 lakhs

The Government today launched an interest subvention scheme of 1% on all individual housing loans upto Rs.10 lakh for units costing upto Rs. 20 lakh. The scheme recognizes that cut in interest rates has an important role to play in reducing EMIs of borrowers & creating additional demand for housing. The Scheme will cover all regions of the country and support the low and middle income sections of society to become house owners. The scheme is also expected to give a boost to credit flow to the housing sector and create additional employment in the housing and allied sectors, such as steel and cement.

The scheme was formulated in response to an announcement made by the Finance Minister in the Lok Sabha on 27th July, 2009 where he stated that housing, particularly lower and middle income housing, deserved to be supported. In order to stimulate the demand for housing for this segment of the population he proposed an amount of Rs. 1000 crore to be allocated as interest subsidy for a period of one year of operation of the scheme. The allocation of the amount and the guidelines of the scheme were approved by the Cabinet on 10th September 2009.

The scheme will be in operation for a period of one year starting from 1st October 2009 to 30th September 2010. Subsidy of 1 per cent will be defined as reduction in interest rate by 100 basis points per annum from the existing rate of interest for a particular amount & tenor. It will be applicable to the first twelve instalments of all such loans sanctioned and disbursed during the currency of the scheme and will be computed for 12 months on the disbursed amount. The subsidy amount will be adjusted upfront in the principal outstanding, irrespective of whether the loan is on fixed or floating rate basis. The Scheme will be implemented through scheduled commercial banks (SCBs) and housing finance companies (HFCs) registered with the National Housing Bank. The RBI and the NHB will be the Nodal Agencies for this Scheme for SCBs and HFCs, respectively. The number of beneficiaries covered under the scheme will depend, interalia, upon the size of the loan amount and the number of beneficiaries approaching the nodal agency for interest subvention. Being a demand driven scheme no specific targets for coverage of beneficiaries have been fixed. An amount of Rs. 300 crore will be allocated in the Budget of 2009-10 for implementation of the Scheme. The balance amount will be allocated in the Budget of next year.

PIB - Gifts of property (gifts-in-kind) above value of Rs.50,000 become taxable from 1st October 2009

Gifts of property (gifts-in-kind) above value of Rs.50,000 become taxable from 1st October 2009

The Income Tax Act 1961 (the Act) has been amended with effect from 1st October 2009 to provide that any gift-in-kind, being an immovable property or any other property, the value of which exceeds Rs.50,000 (rupees fifty thousand), will become taxable in the hands of the donee, being an individual or a Hindu Undivided Family (HUF), as income from other sources under clause (vii) of sub-section 2 of section 56 of the Act. Therefore, any such person who receives a gift of any such property on or after 1st October 2009 must pay the income tax due on the value of the gift and disclose the taxable value of such property in the return of income for assessment year 2010-11 and subsequent years.

The following types of gifts will, however, not be subject to tax, i.e. gifts (a) from a person who is a relative; (b) on the occasion of marriage of the individual; (c) under a will or by way of inheritance; (d) in contemplation of death of the donor; (e) from any local authority as defined in the Explanation to section 10(20) of the Act; (f) from any fund or trust established under section 10(23C) of the Act; (g) from any trust or institution registered under section 12AA of the Act.

Relative is defined in the Act as (i) spouse; (ii) brother or sister; (iii) brother or sister of the spouse; (iv) brother or sister of either of the parents; (v) any lineal ascendant or descendant; (vi) spouse of any of the relative at clauses (ii) to (v); of the individual. Gifts received from these relatives will not be subject to tax.

Earlier cash gifts exceeding Rs.25,000 were subject to tax with effect from 1st April 2004. Later the Act was amended with effect from 1st April 2006 to tax all cash gifts having aggregate value exceeding Rs.50,000. Cash gifts also enjoy exemptions as is available for gifts-in-kind.

Important Announcement - November 2009 Examination

Important Announcement - November 2009 Examination

The Examination Committee has taken the following important decisions for the November, 2009 examinations. Students are advised to note them carefully.

A. CA course being a professional course, practical training is an essential part of it and accordingly all papers of Professional Competence Examination as well as Final should be practical oriented questions as also of the level of knowledge should be expert and not working knowledge. All questions should be compulsory at both Professional Competence Examination / Integrated Professional Competence Examination and Final examinations.

B. Students appearing for the Professional Competence Examination (PCE) for November, 2009 are advised to carefully note the following important decisions taken in relation to the syllabus and pattern of questions to be set in the examinations.

1. Paper 2 – Auditing and Assurance

Students may note that a detailed announcement regarding applicable Standards on Auditing and the publications of the ICAI relevant for the examination has already been published in the September, 2009 issue of the Newsletter. They may further note that since the fringe benefit tax has been abolished w.e.f. April 1, 2010 no question would be asked on tax audit relating to FBT. Further the provisions of CARO, 2003 would be applicable.

2. Paper 5 – Taxation

The question paper would be of practical nature. Students may note that the coverage of sections for the PCE syllabus is as follows:

PART – I: INCOME–TAX (75 MARKS)

Contents:
• Important definitions in the Income-tax Act, 1961 [Section 2].
• Basis of charge; Rates of taxes applicable for different types of assessees [Sections 4, 111A, 112 & 115BB].
• Concepts of previous year and assessment year [Sections 2, 3, 68 to 69D, 172 to 176].
• Residential status and scope of total income; Income deemed to be received/deemed to accrue or arise in India [Sections 5 to 9].
• Incomes which do not form part of total income [Sections 10 to 13A, 14A, 115BBC].
• Heads of income and the provisions governing computation of income under different heads [Sections 14 to 59, Sections 89, 111A, 112, 115BB, 145].
• Income of other persons included in assessee’s total income [Sections 60 to 65].
• Aggregation of income; Set-off or carry forward and Set-off losses [Sections 70 to 80].
• Deductions from gross total income [Sections 80A to 80U].
• Computation of total income and tax payable; Rebates and relief’s (Comprehensively covers all sections mentioned above).
• Provisions concerning advance tax and tax deducted at source [Sections 190 to 219, 234B & 234C].
• Provisions for filing of return of income [Sections 139 to 140, 234A].

PART – II: SERVICE TAX AND VAT (25 MARKS)

Contents:
• Service tax – Concepts and general principles [Section 64].
• Charge of service tax and taxable services [Sections 65 and 66].
• Valuation of taxable service [Section 67].
• Payment of service tax and filing of returns [Sections 68, 70,71,73A, 73B and 75].
• VAT – Concepts and general principles.

Note: If new legislations are enacted in place of the existing legislations the syllabus will accordingly include the corresponding provisions of such new legislations in the place of the existing legislations with effect from the date to be notified by the Institute. Students shall not be examined with reference to any particular State VAT Law.

3. Further students should clearly note that working notes should form part of the answers.

Note: Students may note that the first paragraph of this announcement is in addition to the announcement already published in the October, 2009 issue of the students’ newsletter – The Chartered Accountant Student.

Press Note :-Guidelines for foreign investment in Commodity Exchanges

Press Note :-Guidelines for foreign investment in Commodity Exchanges

Government of India had laid the guidelines for foreign investment in Commodity Exchanges vide Press Note 2(2008) dated 12th March 2008. As per the guidelines, a composite ceiling for foreign investment of 49% was allowed with prior Government approval, subject to the condition that investment under the Portfolio Investment Scheme will be limited to 23% and that under the FDI Scheme will be limited to 26%. Further, no foreign investor/entity including persons acting in concert will hold more than 5% of the equity in these companies.

It had been brought to the notice of the Government that some of the existing Commodity Exchanges had foreign investment above the permitted level, as on the date of issue of the said Press Note and, consequently, the Commodity Exchange(s) would be required to divest foreign equity, equal to the amount by which the cap was being exceeded, in accordance with Press Note 2(2008). Commodity Exchanges were permitted to avail of transition/complying/correction time for this purpose, up to 30.06.2009, vide Press Note 8 of 2008 dated 19 August, 2008. This time limit was further extended up to 30.09.2009, vide Press Note 5(2009) dated 14 May, 2009.

Difficulties have been brought to the notice of the government in complying with the provisions of the Press Note within the stipulated time frame. The Government, on consideration and in order to facilitate the existing Commodity Exchanges to comply with the guidelines notified vide Press Note 2(2008), has now decided to allow a further transition / complying/correction time to the existing Commodity exchange(s) beyond 30.09.2009. Accordingly, all such Commodity Exchanges are hereby advised to adhere to the conditions of Press Note 2(2008) by 31.03.2010. This would comprise the last opportunity for such compliance.

All Commodity Exchanges shall furnish a status report informing the foreign investment in the Commodity Exchange as on 30.09.2009, along with details of equity structure, as well as the steps already taken/proposed to be taken with regard to compliance with the guidelines notified vide Press Note 2(2008), to the Department of Industrial Policy & Promotion, Department of Consumer Affairs, Foreign Investment Promotion Board, the Forward Market Commission and SEBI.

Non-compliance of the conditions of Press Note 2(2008) after 31.03.2010 would be a violation of the Foreign Exchange Management Act, 1999.

Department of Industrial Policy & Promotion, Ministry of Commerce & Industry Press Note No.7 (2009), New Delhi, 30th September, 2009

India and Denmark sign MoU on Labour Mobility Partnership

India and Denmark sign MoU on Labour Mobility Partnership

India and Denmark signed a Memorandum of Understanding on Labour Mobility Partnership at Copenhagen, Denmark today. The MOU was signed by Shri. Vayalar Ravi, Minister of Overseas Indian Affairs and Ms. Birther Ronn Hornbech, Danish Minister of Refugee, Immigration and Integration Affairs.

This is the first MOU on Labour Mobility Partnership with any European Nation. It will facilitate promotion of orderly migration of workers from India to meet the growing demand for skilled and trained workers in the Danish economy and prevent illegal/irregular migration. The salient features of the MOU are:
(i) Cooperation between the two countries concerning the following branches of labour and employment for qualified workers within their national objectives and the relevant laws:
(a) Labour market expansion,
(b) Employment facilitation,
(c) Organized entry and orderly migration and
(d) Exchange of information and cooperation in introducing best practices for mutual benefit.
(ii) Equal treatment of workers with the nationals of the receiving state.
(iii) Undertaking mutually beneficial studies for recruitment and identifying emerging sectors in Danish economy that require qualified workers.
(iv) Promoting direct contact between the employers in Denmark and the state. managed or private recruiting agencies in India, without intermediaries to facilitate regular and orderly recruitment of workers.
(v) Protection and welfare of all categories of workers under the labour laws and other relevant laws of the host country.

The MOU also provides for constitution of a Joint Working Group of both the countries, with following mandate:
i. Study employment opportunities and suggest means for enhancing cooperation between states.
ii. To interpret the provisions of the memorandum of understanding and oversee its implementation.
iii. Create guidance material on rights and duties of employers and workers to minimize labour disputes and create information material about the existing system for dispute settlement
iv. Suggest amendments to the MOU for better achievements of its objectives.
v. Recommend measures to prevent misuse of visit visas by unscrupulous employers and recruiting agencies.
vi. Recommend initiatives to address any issues that might arise in the context of the MOU.

Issuance Calendar for Marketable Dated Securities

Issuance Calendar for Marketable Dated Securities

With a view to enabling institutional and retail investors to plan their investment in a better manner and providing transparency and stability in the Government securities market, it has been decided to continue with the system of releasing an indicative calendar for issuance of the Government of India securities. Accordingly, an indicative calendar for issue of dated securities for the second half of the year 2009-2010 covering the period from October 1, 2009 to March 31, 2010, as given below, is being issued in consultation with the Reserve Bank of India.

Calendar for Issuance of Government of India Dated Securities
(for the period October 1, 2009 to March 31 2010)

Sr. No.	Period of auction	Amount        (Rs. Crore)	Term of the Security
1	October 1-9	10,000	i) 5-9 year security for  Rs.3,000-4,000 crore ii) 10-14 year security for  Rs.4,000-5,000 crore iii) 20-year and above security for  Rs.2,000-3,000 crore
2		10,000	i) 5-9 year security for  Rs.3,000-4,000 crore ii) 10-14 year security for  Rs.4,000-5,000 crore iii) 15-19 year security for  Rs.2,000-3,000 crore
	October 9-16
3		10,000	i) 5-9 year security for  Rs.3,000-4,000 crore ii) 10-14 year security for  Rs.4,000-5,000 crore iii) 20-year and above security for  Rs.2,000-3,000 crore
	October 16-23
4		9,000	i) 5-9 year security for  Rs.3,000-4,000 crore ii) 10-14 year security for  Rs.4,000-5,000 crore iii) 20-year and above security for  Rs.2,000-3,000 crore
	October 30-Nov 6
5	November 6-13	10,000	i) 5-9 year security for  Rs.3,000-4,000 crore ii) 10-14 year security for  Rs.4,000-5,000 crore iii) 15-19 year security for  Rs.2,000-3,000 crore
6	November 13-20	10,000	i) 5-9 year security for  Rs.3,000-4,000 crore ii) 10-14 year security for  Rs.4,000-5,000 crore iii) 20-year and above security for  Rs.2,000-3,000 crore
7		10,000	i) 5-9 year security for  Rs.3,000-4,000 crore ii) 10-14 year security for  Rs.4,000-5,000 crore iii) 20-year and above security for  Rs.2,000-3,000 crore
	Nov 27-Dec 4
8	December 4-11	10,000	i) 5-9 year security for  Rs.3,000-4,000 crore ii) 10-14 year security for  Rs.4,000-5,000 crore iii) 15-19 year security for  Rs.2,000-3,000 crore
9	December 11-18	9,000	i) 5-9 year security for  Rs.3,000-4,000 crore ii) 10-14 year security for  Rs.4,000-5,000 crore iii) 20-year and above security for  Rs.2,000-3,000 crore
10	January 1- 8	10,000	i) 5-9 year security for  Rs.3,000-4,000 crore ii) 10-14 year security for  Rs.4,000-5,000 crore iii) 20-year and above security for  Rs.2,000-3,000 crore
11	January 8- 15	10,000	i) 5-9 year security for  Rs.3,000-4,000 crore ii) 10-14 year security for  Rs.4,000-5,000 crore iii) 15-19 year security for  Rs.2,000-3,000 crore
12	January 15-22	7,000	i) 10-14 year security for  Rs.4,000-5,000 crore ii) 20-year and above security for  Rs.2,000-3,000 crore
13	January 29- Feb 5	8,000	i) 10-14 year security for  Rs. 5,000-6,000 crore ii) 15-19 year security for  Rs.2,000-3,000 crore
Total		1,23,000

             As hitherto, all the auctions covered by the calendar will have the facility of non-competitive bidding scheme under which five per cent of the notified amount will be reserved for the specified retail investors.

            Variable rate securities may be issued depending upon the market conditions.

             As in the past, the Central Government/Reserve Bank will continue to have the flexibility to bring about modifications in the above calendar in terms of notified amount, issuance period, maturity, etc., keeping in view the emerging requirements of the Government, market conditions and other relevant factors after giving due notice.

New Website of Environment & Forest Ministry Launched

New Website of Environment & Forest Ministry Launched

WEBSITE MARKES FEATURES INCLUDING VIDEOS, PICTURES AND A BLOG BY SHRI JAI RAM RAMESH

 Environment and Forests Minister, Shri Jai Ram Ramesh launched his Ministry’s  New Website to create awareness among the people about the environment and  wild life. This is part of a continuous and ongoing process to make it more transparent and citizen-friendly. The Website has been redesigned after a lengthy consultation process involving a number of prominent civil society groups, key user groups and other stakeholders. An effort has been made to take all their suggestions on board in the development of the new website, the Minister added.

       The governing principle in this redesign has been to provide users with ready access to relevant information. To this end the interface has been imbued with  user friendly. In an attempt to draw more visitors to the website, a number of progressive features have been included such as videos, pictures and a blog by the Minister him self. The website is simultaneously a platform for the Ministry to provide the world with a window to its functioning and to receive feedback on its working. 

            The new website is available at http://moef.gov.in/  

Custom N/No 146/2009 Cus (NT) dated 25th Sep 2009 - Exchange Rate notification for Import / Export of goods with effect from 1st October, 2009

Exchange Rate notification for Import / Export of goods with effect from 1st October, 2009

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, PART-II, SECTION 3, SUB-SECTION (ii), EXTRAORDINARY]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification No. 146 /2009 – Customs (N.T.)
Dated the 25 th September, 2009
3 Asvina, 1931 (SAKA)

S.O. (E). – In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.125/2009-CUSTOMS (N.T.), dated the 27 th August, 2009 vide number S.O. 2193(E), dated the 27 th August, 2009, except as respects things done or omitted to be done before such supersession, the Central Board of Excise and Customs hereby determines that the rate of exchange of conversion of each of the foreign currency specified in column (2) of each of Schedule I and Schedule II annexed hereto into Indian currency or vice versa shall, with effect from 1 st October, 2009 be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the said section, relating to imported and export goods.

SCHEDULE-I

S.No.	Foreign Currency	Rate of exchange of one unit of foreign currency equivalent to Indian rupees
(1)	(2)	(3)
		(a)		(b)
		(For Imported Goods)	(For Export Goods)
1.	Australian Dollar	42.55	41.40
2.	Canadian Dollar	45.45	44.15
3.	Danish Kroner	9.70	9.35
4.	EURO	71.80	70.00
5.	Hong Kong Dollar	6.25	6.15
6.	Norwegian Kroner	8.45	8.15
7.	Pound Sterling	79.70	77.75
8.	Swedish Kroner	7.15	6.90
9.	Swiss Franc	47.55	46.20
10.	Singapore Dollar	34.40	33.60
11.	US Dollar	48.60	47.70

SCHEDULE-II

S.No.	Foreign Currency	Rate of exchange of 100 units of foreign currency equivalent to Indian rupees
(1)	(2)	(3)
		(a)	(b)
		(For Imported Goods)		(For Export Goods)
1.	Japanese Yen	53.70		52.20

 [F.No.468/14/2009-Cus.V]
(SATISH KUMAR REDDY)
DIRECTOR TO THE GOVT. OF INDIA
TELE. 2309 3380