[aaykarbhavan] Business standard news updates 14-9-2013

I- T dept sends 35,000 more letters to non- filers

BS REPORTER New Delhi, 13 September The Income Tax Department on Friday said it had written to 35,000 non- filers. This raises the number of such letters sent by the department this year to 245,000. The department is also planning to write to those who carried out high- value transactions in 2010- 11 and 2011- 12. By mining its database, the Income Tax Department has identified about 1.2 million non- filers. The letters are part of a massive exercise to identify highrisk non- filers of income tax returns and ask them to file returns and pay taxes. To contact taxpayers who had shifted to different locations or those who refused to receive these letters, the department had sought help of field formations, the finance ministry said in a statement on Friday. " Assessing officers posted all over the country have been supplied the details of such taxpayers on an online monitoring system. They have been asked A total of 344,365 The finance ministry said this exercise would continue till all potential non- filers were covered. It is developing a dedicated module on the e- filing portal to provide the details of returns not filed, ITR- V not submitted, demand not paid, etc, to taxpayers. Taxpayers can also post comments on the portal. As about a quarter of permanent account number (PAN) cardholders who were sent letters for failing to file income tax returns didn't get an intimation because of a change in address, the Income Tax Department had started an exercise to identify these tax evaders in eight major cities — Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Bangalore, Hyderabad and Pune. While 140 million people in India have PAN cards, the number of taxpayers is only 34 million. Many of those who don't file returns secure PAN cards because these serve as a proof of identity. About 13,00,000- 14,00,000 new PAN cards are issued every year by the tax department, while the details of just 0.2 per cent of the applicants are verified by it. Also plans to write to those who carried out high- value transactions in 2010- 11 and 2011- 12

 

Sebi eases FII investment in debt BS REPORTER Mumbai, 13 September The Securities and Exchange Board of India (Sebi) has allowed foreign institutional investors to get directly in the debt market, by doing way with the auction process. "FIIs/ QFIs can now invest in government debt without purchasing debt limits till the overall investment reaches 90 per cent, after which the auction mechanism shall be initiated for allocation of the remaining limits, as currently in place for FII investments in corporate debt," Sebi said on Friday. The investment limit for FIIs in government debt is capped at $ 30 billion. Foreign investors, until now, had to purchase limits through periodic auctions, to be able to invest in the debt market. The acquired limits used to lapse once the securities were sold. Sebi has also eased restrictions on re- investments till the FII investment reaches 90 per cent of the overall limit. Sebi had, earlier, scrapped the auction system in corporate debt, where the FII investment cap is $ 51 billion. In April, the Reserve Bank had decided to merge all debt groupings into only two broad categories. The move could help get critical foreign inflows at a time when the government is struggling to rein in the current account deficit. "This would help in simplifying the process of utilising the debt limits. After the increase in the limits in the past, it is logical to do away with the auction process till such time as the utilisation nears the available limits, and is a pro- active move in the right direction," said Gautam Mehra, executive director, tax & regulatory services, at PricewaterhouseCoopers. Sebi on Thursday had done away with the requirements for obtaining photo identities, address proofs or any other documentary requirements of the beneficial owner, senior management personnel and authorised signatories for entities which are government- related or those regulated in other jurisdictions. Sebi also highlighted in a separate press release on Friday that intermediaries can rely on third- party due- diligence in verifying the records of the identity of clients. However, some believe that the macroeconomic situation also has to improve for India to get robust foreign flows. Siddhartha Sanyal, chief India economist with Barclays Capital, said, " Simplifying norms and auction processes may boost sentiment at the margin but there are a lot of other macro economic uncertainties, both Indiaspecific and global, which concerns foreign investors more at the moment. Currently, FIIs are already sitting on unutilised debt limits, so this notification may ease procedural issues but not result in quick inflows." Rajesh Cheruvu, chief investment officer at RBS Private Banking, added: " A large part of the debt limits are unutilised by FIIs. The government has decided to send out a message that this is liberalising and opening up markets but I don't think this would result in increased flows into bonds in the immediate term, as the risk appetite is low for emerging market assets. These measures should be seen as an effort to win back the confidence of global investors and to seek capital flows into the market." Does away with much of auction process in this market and reinvestment checks The investment limit for foreign institutional investors in government debt is capped at $ 30 billion

 

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CS A Rengarajan

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