Ultra-rich must declare cost price of expensive assets: CBDT

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People with annual income of over Rs 50 lakh will have to disclose the acquisition cost of all the assets like land, building and jewellery in the Income Tax return forms for assessment year 2016-17.

The luxury items to be disclosed will also include utensils, apparels and furnitures studded with precious stones and ornaments made of gold, silver, platinum or any other precious metal or alloy.

“The amount in respect of assets to be reported will be the cost price of such assets to the assessee,” the Central Board of Direct Taxes ( CBDT) has said while issuing instructions on the new ITR forms.

In case the precious items had been received as gifts, the assessee will have to declare the cost of acquisition by the previous owner along with value additions.
“In case where the cost at which the asset was acquired by the previous owner is not ascertainable and no wealth-tax return was filed in respect of such asset, the value may be estimated at the circle rate or bullion rate, as the case may be, on the date of acquisition by the assessee as increased by cost of improvement, if any, or March 31, 2016,” the instructions said.

The assessee will also have to declare whether such items and their value were disclosed at the time of filing wealth tax returns earlier.

The tax department had in April notified the new ITR forms for assessment year 2016-17 and introduced a fresh reporting column in ITR-1, ITR-2 and 2A called ‘Asset and Liability at the end of the year’ which is applicable in cases where the total income exceeds Rs 50 lakh.

“There are only 1.5 lakh individuals whose total income would be above Rs 50 lakh. This schedule in ITR only applies to ultra-rich and will not affect the common man,” Revenue Secretary Hasmukh Adhia had earlier said.

As per the new schedule in ITR forms, individuals and entities coming under this total income bracket will have to mention the total cost of movable and immovable assets.

While immovable assets include land and building, movable assets to be disclosed were cash in hand, jewellery, bullion, vehicles, yachts, boats, aircraft etc.

ITR-1 can be filed by individuals having income from salaries, one house property and from other sources including interest. ITR-2 is filed by Individuals and HUFs not having income from business or profession. ITR-2A is filed by those individuals and HUFs who do not have income from business or profession and capital gains and who do not hold foreign assets.

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Financial inequality highest in India, China: International Monetary Fund

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According to IMF, China and India have grown rapidly and reduced poverty sharply, however, this impressive economic performance has been accompanied by increasing levels of inequality.

Financial inequality is highest in India and China among Asia Pacific countries despite the two being among the fastest growing economies, IMF has said.

According to the International Monetary Fund, China and India have grown rapidly and reduced poverty sharply, however, this impressive economic performance has been accompanied by increasing levels of inequality.

“In the past, rapid growth in Asia came with equitable distribution of the gains. But more recently, while the fast-growing Asian economies have lifted millions out of poverty they have been unable to replicate the ‘growth with equity’ miracle,” the Fund said.

As per the report, China managed to increase middle class in urban areas, as did Thailand, while India and Indonesia struggled to lift sizeable portions of their populations toward higher income levels.

“In India, differences between rural and urban areas have increased, and have been accompanied by rising intra-urban inequality,” it said.

Many factors have been identified as key drivers of the inequality between rural and urban areas in China and India.

In China, rapid industrialisation in particular regions and the concentration of foreign direct investment in coastal areas have led to substantial inequalities between coastal and interior regions. Other factors also include low educational attainment and low returns to education in rural areas.

On India, the report said inter provincial inequality is lower in India than in China, and rising inequality in India has been found to be primarily an urban phenomenon.

Moreover, the rural-urban income gap has increased, and higher rural inflation has been found to be a key driver of this. Educational attainment has also been identified as an important factor explaining rising inequality in India over the past two decades, the Fund said.

The two countries have introduced a number of policies to tackle the rising inequality.

China introduced the Minimum Livelihood Guarantee Scheme (Dibao) for social protection in the 1990s. Moreover, various social programs are aiming to expand social safety nets and provide support for the development of rural areas and western regions.

In India, the government introduced the Mahatma Gandhi National Rural Employment Guarantee Act to support rural livelihoods by providing at least 100 days of employment. Programs to improve education include the National Education Scheme and Midday Meal Scheme.

The Fund lauded the JAM (Jan Dhan-Aadhaar-Mobile) initiative and said that “the JAM trinity initiative helped India in making substantial advances in financial inclusion. More recently, programs aiming for universal bank account coverage were launched”.

Source:
http://economictimes.indiatimes.com/articleshow/52106291.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

 

Clean energy projects get Rs 86,000 crore investment

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Renewable energy projects have received Rs 86,000 crore investment, most of it from private sector, in the last three years with Madhya Pradesh at top garnering Rs 14,313.80 crore.

“Most of the investment in renewable energy came from private sector. Total estimated investment in renewable energy power projects during the last three years is around Rs 86,000 crore,” New and Renewable Energy Minister Piyush Goyal said in a written reply to Lok Sabha today.

According to the statement, around 15,400 million units has been generated through solar power projects during the last three years.

Madhya Pradesh remained at the top, recording maximum investment in clean energy projects at Rs 14,313.80. It was followed by Maharashtra at Rs 13,743.01 crore, Rajasthan at Rs 11,632.96 crore, Karnataka at Rs 9,586.31 crore, Andhra Pradesh at Rs 9,539.12 crore, Tamil Nadu at Rs 8,961.28 crore and Gujarat at Rs 6,646.35 crore.

The minister also stated that Pondicherry, Laskhwadeep, Dadar & Nagar Haveli, Sikkim, Manipur, Meghalaya and Goa received no investment at all for renewable energy projects in last three years.

According to a separate reply to the House, as on March 31, 2016, a cumulative capacity of 42.76 GW has been installed from various renewable energy sources, which include 26.78 GW from Wind, 6.76 GW from solar, 4.27 from small hydro power and 4.95 GW from bio power.

In another reply to the House, the Maharashtra will require the maximum solar power generation capacity of 13,270 MW by 2021-22 as per tentative renewable purchase obligation (RPO) requirement estimated by the ministry.

The ministry has estimated 1,02,021 MW solar power generation capacity to be installed in the entire country by 2021-22.

After Maharashtra, Uttar Pradesh’s solar power generation capacity by 2021-22 as per RPO requirement would be the second highest at 12,124 MW followed by Gujarat at 9,796 MW, Tamil Nadu at 9,398 MW and Rajasthan 6,953 MW.

Under RPO, states are mandated by power regulators to have certain proportion of renewable energy capacity in their total power mix to promote clean and green sources like solar and wind.

The minister in another reply to the House stated that the new pithead thermal power plants have the lowest tariff of Rs 3.75 per unit in the first year of operation compared Rs 4.5 per unit for solar, Rs 4.6 for hydro, Rs 4.94 for atomic power and Rs 5.49 for non-pithed thermal plants.

However, the levellised tariff for hydro power plants is the lowest at Rs 4 per units compared Rs 4.5 for solar, Rs 5 for atomic power, Rs 4.57 for pithead based thermal power and Rs 7.57 per unit for non-pithead based thermal power plant.

Source:http://economictimes.indiatimes.com/articleshow/52125394.cms

IRDAI okays 16 FDI proposals worth Rs 14,592 crore

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Insurance regulator IRDAI has approved as many as 16 proposals amounting to Rs 14,591.9 crore as foreign investment, Parliament was informed today.

“Post notification of the Insurance Laws (Amendment) Act, 2015, Irdai has approved 16 proposals amounting to Rs 14,591.89 crore as foreign investment in the insurance sector,” Minister of State for Finance Jayant Sinha said in a written reply in the Rajya Sabha.

The Insurance Laws (Amendment) Act, 2015, provides for an increase of foreign investment cap in an Indian insurance company to 49 per cent from 26 per cent with the safeguard of Indian ownership and control, he said.

The government had notified the Indian Insurance Companies (Foreign Investment) Rules, 2015, to facilitate foreign investment in the insurance sector.

“Indian Insurance Companies (Foreign Investment) Rules, 2015, have been amended on March 16, 2016, to allow foreign investment up to 49 per cent through automatic  route in the insurance sector,” Sinha said.

To bring clarity on ‘Indian owned and controlled’, the Insurance Regulatory and Development Authority of India (Irdai) has issued guidelines on the same.

In December, Irdai chief T S Vijayan had said higher foreign participation in the insurance sector will attract more capital and increase sectoral penetration in India.

Source : http://economictimes.indiatimes.com/articleshow/52094191.cms

IMF Sees Rising Debt Challenge as Asia Stays Global Outperformer

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The International Monetary Fund said rising debt levels in major Asian economies have become a significant risk, even as the region remains on track to post solid economic growth.

Asia-Pacific economies as a group will decelerate only slightly, to 5.3 percent this year and next, from 5.4 percent in 2015, the Washington-based fund said in an annual regional report published Tuesday. The IMF last month trimmed its global forecasts, and said the world was more exposed to negative shocks thanks to a prolonged weaker pace of expansion.

In Asia, domestic demand, particularly consumption, should be a key driver, but worsening global conditions and high leverage in the region may curb growth, the fund said.

“Downside risks continue to dominate the economic landscape,” the IMF said. “In particular, the turning of the credit and financial cycles amid high debt poses a significant risk to growth in Asia, especially because debt levels have increased markedly over the past decade across most of the major economies in the region, including China and Japan.”

Downward Spiral

The IMF’s singling out of debt as a growing worry is in line with recent statements. The institution warned in a report last month against what it called a self-reinforcing “spiral” of weakening growth and rising debt that could require a coordinated response by the world’s major economies.

In Asia, the IMF said Tuesday, debt levels are high, while credit growth and corporate issuance have remained strong as companies try to take advantage of still-favorable global liquidity conditions.

The ratio of corporate debt to gross domestic product has risen faster in Asia than anywhere else in the world since 2009, the IMF added, and the measure is particularly elevated in China and South Korea. Household debt is a growing worry in Hong Kong, Malaysia, Singapore and Thailand, the IMF said.

“Although part of the credit growth reflects financial deepening, some growth has been above that implied by fundamentals,” the IMF said. Financial deepening refers to the spreading availability and use of banking.

Reform Refrain

As in previous reports, the IMF called on policy makers to push ahead with structural reforms to raise productivity, including measures to boost consumption in China. The fund also flagged the risk of an over-reliance on monetary or credit policies to hold up demand, particularly if job losses in manufacturing exceed the gains in services.

On Japan, the only developed economy where it anticipates economic contraction next year, the IMF recommended moves to reduce the difference between life-time and non-regular labor contracts to allow for higher wage increases. It also suggested deregulation and a drive to increase female labor market participation.

The IMF said that recent economic policies in Japan — so-called “Abenomics” — have been “supportive,” but added that “durable gains in growth” are yet to be seen.

The fund also warned against an excess reliance on monetary stimulus. The remark comes less than a week after a surprising Bank of Japan decision to hold off on stepping up its monetary expansion jolted markets and led to a surge of the yen against the U.S. dollar.

Source: http://www.bloomberg.com/news/articles/2016-05-03/imf-sees-rising-debt-challenge-as-asia-stays-global-outperformer

Facebook revenue smashes expectations, rises more than 50 per cent as mobile ad sales surge

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Riding on advertisement growth, social media giant Facebook on Wednesday reported a stellar $1.5 billion first-quarter profit or 52 cents per share in 2016

Facebook Inc’s quarterly revenue rose more than 50 per cent, handily beating Wall Street expectations as its wildly popular mobile app and a push into live video lured new advertisers and encouraged existing ones to boost spending.

The company’s shares rose 9.5 per cent in after-hours trading on Wednesday to $118.39, setting it on track to open at a new high on Thursday, at nearly triple its initial public offering four years ago.

Facebook also announced it will create a new class of non-voting shares in a move aimed at letting Chief Executive Officer Mark Zuckerberg give away his wealth without relinquishing control of the social media juggernaut he founded.

The company plans to create a new class of non-voting shares, which would be given as a dividend to existing shareholders. That would allow Zuckerberg, who wants to give away 99 per cent of his wealth, to sell non-voting stock to fund philanthropy and keep the voting stock that assures his control.

Alphabet Inc passed a similar proposal in 2014 that ensured its founders’ control by creating new non-voting shares.

Some 1.65 billion people used Facebook monthly as of March 31, up from 1.44 billion a year earlier. Zuckerberg said users were spending more than 50 minutes per day on Facebook, Instagram and Messenger, a huge amount of time given the millions of apps available to users.

Advertisers are shifting money from television to web and mobile platforms, and Facebook is one of the biggest beneficiaries. It faces fierce competition in the mobile video market, where rivals Snapchat and YouTube also garner billions of video views every day.

Facebook recently expanded its live video product, rolling out several new features and making it more prominent on the app to encourage users to create videos and share them. The quarterly results showed success attracting advertisers with the move, and the company was able to expand its operating profit margin to 55 per cent from 52 per cent a year earlier.

“The company consistently ‘warns’ about higher spending, but they consistently manage their spending to deliver earnings upside. They’re an impressive company, and they leave very little room for criticism,” said Wedbush Securities analyst Michael Pachter, who called the operating margin a good surprise.

Facebook did not offer details on sales of its Oculus Rift virtual reality headset, but emphasized that it was early days and said that sales would not significantly impact 2016 revenue.

The results come after disappointments for investors from several major Silicon Valley firms.

“After Intel and IBM last week, and then Twitter and Apple yesterday, this is by far the best number I’ve seen in technology,” said Daniel Morgan, senior portfolio manager at Synovus Trust Company which owns about $40 million worth of Facebook shares, commenting specifically about Facebook ad revenue.

Facebook has not begun advertising on some of its most popular apps. “They haven’t yet turned on the monetization spigot for Messenger or WhatsApp, so there should be significant headroom still,” said Jan Dawson, chief analyst at Jackdaw Research.

The company’s net income attributable to common shareholders nearly tripled to $1.51 billion, or 52 cents per share, in the first quarter from $509 million, or 18 cents per share, a year earlier.

Excluding items, the company earned 77 cents per share, beating Wall Street’s 62-cent consensus.

Total revenue rose to $5.38 billion from $3.54 billion, with ad revenue increasing 56.8 per cent to $5.20 billion. Mobile ad revenue accounted for about 82 per cent of total ad revenue, compared with about 73 per cent a year earlier.

Analysts on average had expected revenue of $5.26 billion.
If the stock proposal is approved – and Zuckerberg has a majority of voting stock – the company will effectively carry out a 3-for-1 stock split, issuing two shares of non-voting Class C capital stock as a one-time stock dividend for each share of Class A and Class B common stock.

Zuckerberg and his wife, Priscilla Chan, announced last year that they would give away 99 per cent of their Facebook shares to fund charitable endeavors.

Investors said they were not concerned that Zuckerberg would have increasing control, pointing to the company’s consistent ability to grow and exceed expectations.

“I honestly don’t think anyone cares if he has more power, since he’s done everything right since they went public,” said Pachter.

Source: http://economictimes.indiatimes.com/articleshow/52020175.cms

Renewable Energy Growth Will Remain Strong Through 2040

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“In its forward-looking report for the year, the U.S. Energy Information Administration forecasts renewable energy will be the fastest-growing power source through 2040,” writes Scientific American .

 

“New investments in renewable energy rose from $9 billion in the first quarter of 2004 to $50 billion for 2015’s first quarter…and the volume of installed photovoltaic systems in the United States has grown every year since 2000.”

 

“The story that renewable energy advocates often share of how their favorite power sources have grown so rapidly over recent years belies the reality that those industries have expanded from small market shares to start. Yet with increasing interest, investors are targeting renewables as strong assets, not dodgy options.”

 

Source: http://www.rollcall.com/news/renewable-energy-growth-will-remain-strong-through-2040#sthash.xUP8XuIh.dpuf