The Finance Minister recently said that the employee’s contribution to PF will be reduced from 12% to 10%. Will it not increase our tax burden since PF is non-taxable? Also, is it to be done by choice of the employee or is it compulsory?Jayant R. Pai CFP and Head - Products, PPFAS, Mutual Fund replies: The reduction in contribution will lead to an increase in your takehome pay which, in turn, will be taxed at your income-tax slab rate. This reduction has to be undertaken by all companies falling within the ambit of EPF. As far as I am aware, employees too will have to mandatorily opt-in for this reduction. My wife and I bring home around Rs 1.2 lakh per month. My wife’s income doesn’t fall in any tax bracket. We are planning to buy a budget home in her name under the Pradhan Mantri Awas Yojana (PMAY) scheme. We will be taking a loan of Rs 15 lakh. Can I show the housing loan interest in my tax return?Homi Mistry Partner, Deloitte Haskins & Sells replies: If the … [Read more...] about Employee’s contribution to PF will be reduced to 10%. Will it increase the tax burden?
Turning money into wealth
Kapoor was arrested on March 8 in connection with the illegalities at YES Bank during his stint as the head of the lender. The Reserve Bank of India (RBI) slapped a moratorium on the bank and superseded its governing board the same month, and co-opted State Bank of India (SBI), the nation’s largest lender, to rescue it. … [Read more...] about Rana Kapoor used YES Bank for illegal activities, says ED
Mumbai: Banking stocks were barely beginning to look up from the bad loans mess that had been haunting them since the 2018 IL&FS crisis, the coronavirus-induced lockdown surfaced. That coupled with the subsequent moratorium on payments for three months, which has since been extended till August 31, has now raised the possibility of a fresh wave of bad loans for the domestic lenders, forcing investors to steer clear of them. In a surprise announcement to cushion the impact of lockdown on the economy, the Reserve Bank of India (RBI) on Friday cut the policy rate by 40 basis points from 4.4 per cent to 4 per cent. The reverse repo rate has been reduced to 3.35 per cent. The central bank also extended the moratorium on loan repayments by three more months. So, what lies ahead for the Indian banks? Don’t expect good news any time soon, say analysts. “Every bull market has a leader, and banks were on the forefront of the previous bull markets as such markets were backed … [Read more...] about When will bank stocks look up? Not anytime soon, say analysts
A week of frenetic activity ended on Saturday with the government announcing stringent restrictions on foreign direct investments (FDIs) from countries sharing land borders with India. There were similar restrictions already in place for Bangladesh and Pakistan. So the fresh action is clearly aimed at monitoring and regulating Chinese FDIs into India and buyouts of Indian companies by Chinese entities. The trigger for the announcement had come on April 11, 2020, when HDFC Ltd had revealed in a filing that the Chinese central bank, People’s Bank of China (PBOC), had raised its stake in India’s largest housing finance company to 1.01%. It held 0.8% earlier. The Securities and Exchange Board of India (SEBI) swung into action last week, first seeking details of shareholding in Indian companies by entities whose beneficial owners are based in China or Hong Kong and then expanding its query to entities from other Asian nations like Pakistan, North Korea, Taiwan and Iran. … [Read more...] about Keeping an eye on Chinese FDI
The BJP has surmounted many political and social problems, but until it surmounts this particular intellectual problem, it is, I am afraid, going to remain incomplete. … [Read more...] about BJP’s Big Problem: No economic thinkers