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Our Editorial Team: Shri. George John - Chief Manager Shri Lalson Jacob - Assistant Vice President (PBBU) September 2013
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Recent developments
Chief economic advisor Raghuram G Rajan, a former International Monetary Fund (IMF) chief economist and Chicago University professor famed for his perceptive warnings about the global financial crisis of 2008, will become one of the youngest governors of the Reserve Bank of India (RBI), when he takes charge on 5th September 2013. Deregulation of Interest Rates In a bid to attract foreign currency, the Reserve Bank deregulated interest rates on NRI fixed deposit schemes (FCNR, NRE) and exempted such term deposits from CRR and SLR requirement. These instructions will be valid up to November 30, 2013, subject to review. SBI expects Rs 4,000 crore in capital infusion After the finance ministry announced it intended to complete the state-run banks' recapitalisation effort by September, State Bank chairman Pratip Chaudhuri has said he expects Rs 4,000 crore infusion.
SBI have opened 15,000th Branch in Sooranam (TN) on 17th August 2013 by Shri P. Chidambaram, Hon'ble Union Finance Minister. SBI has also opened a new Branch in Seoul thereby making 189 foreign offices in 35 countries.
the same time ease pressure on the domestic currency, which has been touching new lows over the past couple of months. The proposal will also help companies gain access to othermarkets at a time when the domestic stock market is witnessing massive sell-offs. The government reduced the import tariff value of gold to $458 per 10 grams due to fall in its global prices. It also cut the import tariff value of silver to $783 per kg. Earlier, tariff value - the base price on which the customs duty is determined to prevent under-invoicing of gold and silver stood at $461 per 10 grams and $803 per kg, respectively RBI relaxes PIS for NRIs In order to attract inflow of foreign currency, the RBI on Tuesday simplified rules governing investments by nonresident Indians (NRIs) portfolio investments like equities and debt. RBI has now dispensed with the unique code for branches and said banks shall be "free to permit its branches to administer the PIS scheme for NRI. The designated branch of the bank will grant one time permission to the NRI applicant for purchase and sale of shares or convertible debentures of an Indian company, RBI said in a notification. Shares or debentures purchased will be held and registered in the name of the NRI.
Government looking at allowing unlisted Cos to launch IPOs overseas Faced with the sliding rupee, the government is considering allowing unlisted companies to launch public offers in overseas markets and raise funds in foreign currency. Under the current norms, only those companies that are listed on the domestic stock exchanges are permitted to list on bourses overseas. The move is expected to help the companies meet their foreign exchange requirements and at
TAX EXEMPTION CERTIFICATE: The rate prescribed for TDS from NRIs income is the maximum rate of tax at which the relevant income is taxable in India. However in majority of the cases, the actual tax liability will be less than this. In order to assist such a situation, the Income Tax Act has prescribed a procedure under Section 197, whereby a NRI can apply to the Income tax Assessing officer to issue a Tax Exemption Certificate , authorizing the payer of the income to deduct tax at a lower rate or nil rate as the case may be. Any NRI who has obtained Income tax Exemption certificate needs to submit it to the payer of the income who will follow the certificate and not deduct tax or may deduct at a lower rate as given in the certificate. DEEMED RENTAL INCOME: NRIs who have more than one property in India , only one property in India is considered to be self occupied and the remaining property even if it is not let out is considered to be rented out and tax is to be paid on the calculated rent amount for such properties. TAX TREATMENT OF OVERSEAS FINANCIAL ASSETS: Foreign Exchange and overseas assets held/acquired/owned by NRI while he was abroad can be continued to be so held and owned even after the NRI returns to India for permanent settlement. Such foreign exchange and overseas assets can continue to accumulate or accrue income outside India and the balances can be utilised for reinvestment or repatriated to India (without attracting Wealth Tax ) at any time within 1 year immediately preceding the date of his return or later. This exemption period is limited to 7 successive years which immediately follow the year in which the NRI permanently returns to India. Property deals This year's budget has changed the TDS laws relating to property transactions. When a resident Indian purchases a property valued at over Rs 50 lakh, he has to deduct 1% TDS and deposit it with the government. However, if the property belongs to an NRI, the TDS is 20% even if the property is worth less than Rs 50 lakh. FILING OF TAX RETURNS A NRI should file income tax returns for 2012-2013 if he fulfill either of these conditions: Taxable income in India during the year 2012-2013 was above the basic exemption limit of Rs 2 lakh OR If an NRI have earned short-term or long-term capital gains from sale of any investments or assets, even if the gains are less than the basic exemption limit. RECENT CHANGES This year, the income tax department has made two important changes that you must be aware of. These changes apply to residents as well as non residents. 1. Mandatory efile if taxable income over Rs 5 lakh If you had taxable income in India that exceeded Rs 5 lakh in 2012-13, you must efile your tax returns. You can either do it yourself using online efiling portals or take the help of assisted tax preparers. 2: Match your tax credits From this year, the Income Tax department has introduced a system by way of which you can match your income tax credits with your actual tax return. The tax credit statement is available in the form of Form 26AS.
Try to figure out sensible letters and words, which cryptically represent a word, phrase, or saying from the following
Answers of these ribuz puzzles will be published in the next issue Answers of Lateral thinking No. 5 from July 2013 issue
RATES OF INTEREST ON NON RESIDENT DEPOSITS* Non Resident Ordinary (NRO) deposit interest rates (%) (w.e.f. 31/08/2013 (% p.a.)) 7 days to 60 days 61 days to 1 year 1 year to 10 years Deposit below Rs.1 Crore 6.50 6.50 8.75 Deposit of Rs.1 Crore and above 9.00 8.25 8.75
Duration
NRE Term Deposits-Retail and Bulk Deposits (w.e.f. 01/03/2013 (% p.a.)) Interest rates (%) p.a.
8.75
FOREIGN CURRENCY NON-RESIDENT DEPOSITS (FCNR(B)) (% P.A.) CURRENCY 1 year to less than 2 years 2 years to less than 3 years 3 years to less than 4 years 4 years to less than 5 years 5 years USD 2.67 2.57 3.95 4.38 4.77 GBP 2.87 2.84 4.13 4.45 4.73 EURO 2.48 2.64 3.87 4.13 4.36 CAD 3.37 3.56 4.83 5.11 5.34 AUD 4.51 4.76 6.07 6.39 6.63 JPY 2.41 2.27 3.31 3.36 3.45 CHF 2.24 2.23 3.39 3.60 3.82
w.e.f 01/09/2013 DKK 2.67 2.89 4.11 4.41 4.67 NZD 4.93 5.45 6.86 7.15 7.39 SEK 3.40 3.69 4.97 5.21 5.40
RESIDENT FOREIGN CURRENCY A/C. (RFC) w.e.f 01/09/2013 PERIOD 1 year and above but less than 2 years 2 years and above but less than 3 years 3 years only
(%P.A.) USD 2.67 2.57 3.95 GBP 2.87 2.84 4.13 EURO 2.48 2.64 3.87
Note : - Minimum Amount USD 1000 or equivalent for RFC deposits All these interest rates are subject to change, without notice . The revised interest rates are applicable only on fresh deposits and renewal of maturing deposits.
*Subject to change. Visit our website www.onlinesbi.com/nri for latest interest rates. For more details scan the QR Code below;
Assumed Housing Loan Amount Rs. 30 Lacs EMI at the other Bank (Assumed Interest rate 10.75%) 28,863 30,457 33,629 EMI at SBI (Interest rate 9.95%) 27,155 28,851 32,146 Savings per month 1,708 1,606 1,483 Savings due to reduction in EMI over total tenure 5,12,400 3,85,440 2,66,940 Interest income on account of deposit of the difference in EMI as RD 12,45,469 6,21,053 2,70,497 Total Gain on account of switchover to SBI Home Loan 17,57,869 10,06,493 5,37,437
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In the coming issues . . . Investment Services Health tips Cross words NRI Quiz