According to analysts, FIIs have been pumping funds into India because of its strong growth potential. They feel that in the coming days too, foreign fund houses are likely to infuse money in the Indian bourses
Mumbai: Betting big on the Indian market, foreign fund houses invested $1.61 billion (about Rs7,213 crore) in Indian equities in the month of April, reports PTI.
Foreign institutional investors (FIIs) were gross buyers of shares worth Rs54,174.40 crore, while they sold equities amounting to Rs46,961.10 crore, translating into a net investment of Rs7,213.30 crore, or $1.61 billion, as per data available with capital markets regulator Securities and Exchange Board of India (SEBI).
According to analysts, FIIs have been pumping funds into India because of its strong growth potential. They feel that in the coming days too, foreign fund houses are likely to infuse money in the Indian bourses.
"The FII (segment) has been witnessing inflows in the last two months in India because they (investors) don't have many choices left. Besides, they are taking advantage of the country's growth potential," CNI Research CMD Kishore P Ostwal said.
In contrast, foreign fund houses were negative on the debt market and pulled out Rs17.20 crore. This takes the overall net investment by FIIs into stocks and bonds to a total of Rs7,196.10 crore.
In January 2011, overseas investors had pulled out Rs4,813.2 crore from the stock market. The outflows continued in February too, with Rs4,585.5 crore being taken out from equities. However, the scenario changed in March when they were net investors in equities worth Rs6,749.60 crore.
This has taken the gross purchases of equities in the country by FIIs so far this year to over Rs2.22 lakh crore. After taking into account the outgo of Rs2.17 lakh crore, overseas investors have made a net investment of Rs4,712.60 crore.
Right from the definition of a ‘senior citizen’ for tax evaluation to the definition of a ‘Non-Resident Indian’, our tax and forex laws are full of inconsistencies and discrepancies. It is high time the government removed these lacunae
Our laws—mainly those dealing in economic matters like the Income-Tax (I-T) Act and Foreign Exchange Management Act (FEMA) are flawed, and riddled with inconsistencies. They leave the common citizen utterly confounded.
In fact, when I was having an informal chat with a top bureaucrat, he remarked in a lighter vein that if all our laws were crystal clear, a citizen would not find the need to approach the sarkari babus, who would then become redundant… and sent home! This, he quipped, was the reason behind legal provisions that are often confusing.
Let’s examine a few of the lacunae:
In the first place, the term “senior citizen” is nowhere defined in the Income-Tax Act, 1962. For “senior citizen“ assessees, the Finance Act 2011 has lowered the age for the threshold limit from 65 years to 60 years in Part III of the First Schedule dealing with tax slabs and rates.
The same Act has additionally created a new category of “Very Senior Citizens”—above 80 years. According to a report there are only 15,000 tax assessees in this 80+ age bracket, and one of them will be Manmohan Singhji!
On the other hand, corresponding or consequential changes on the same lines have not been brought in elsewhere in the Income-Tax Act in Section 80D for granting enhanced deduction for premium on health insurance to assessees completing 65 years. Similarly Section 80DDB (allowing deduction for expenses on treatment of prescribed diseases) is also applicable to those completing 65 years. Corresponding changes to lower the age to 60 years in these Sections ought to have been brought about at the same time. This is a glaring flaw, and necessary amendments need to be brought about immediately.
The other grey area is the term NRI (Non-Resident Indian), both in the I-T Act and FEMA (Foreign Exchange Management Act). This term, with its variants ‘PIO/OIC’, (Person of Indian Origin/Overseas Citizenship of India), is freely and very loosely bandied about—both by bureaucracy and citizens. Yet there is no common definition.
The Income Statute classifies assesses into ‘Citizen’, ‘Resident but not Ordinarily Resident’ and ‘Not Resident’ depending upon the number of days of their stay in India and outside India.
FEMA (and FERA—the Foreign Exchange Regulation Act, now repealed) has an altogether different take on the criteria for defining an NRI—it lays down the purpose of the stay outside India, irrespective of the number of days spent outside India. Thus anyone, other than a person staying abroad to pursue business, profession or vocation but on a tour, for studies, prolonged medical treatment or to spend time with family staying there, is not considered an NRI under FEMA, even though he may be an NRI under the I-T Act.
The tax status of staying out has been imported by the Limited Liability Partnership Act. The authorities related to foreign exchange like the Reserve Bank of India (RBI), and the Enforcement Directorate (ED) adopt the FEMA criteria. There are references to non-residents in the Companies Act, too. The FCRA (Foreign Currency Regulation Act) however, refers to “Foreign Citizens”.
The US IRS (Internal Revenue Service) has rightly targeted our diaspora who were trying to get the best of both worlds—residing abroad and not paying taxes on their funds parked in Indian banks in NRE (Non-Resident External)/FCNR (Foreign Currency Non-Resident) Accounts, which are tax exempt. The laws both in the US/UK as well as in India are very clear—declare the income earned anywhere in the world and claim legitimate exemptions/deductions like those provided by the Avoidance of Double Taxation Agreements entered into between the countries of their residence and India.
Since both the taxation and forex statutes fall within the ambit of the legislative jurisdiction of the finance ministry, both these definitions need to be appropriately synchronised. There is no legal justification for applying two differing standards to a same individual.
(The author is a Chartered Accountant and has been an auditor of a number of insurance companies)
Lately, insurers and other agencies have been fitting the cars with transponders, as well as bugging devices, which work globally on mobile phone or satellite phone technology, which gives them a fairly good idea of where the cars are going. It seems that some of this information is being made available to the authorities here
The luxury car market in India is abuzz again, as it comes under the microscope—yet again—of the Directorate of Revenue Intelligence (DRI), certainly the most-feared and stringent organisation in the business of catching smugglers and tax-evaders. Media reports are sketchy on the subject, after all the offending car and bike manufacturers are among the biggest advertisers, so due caution will be exercised by commercial departments over the editorial reportage.
This comes on top of the after-effects of the anti-corruption movement that is increasingly taking on the colour of a campaign to identify and prevent theft of national assets, and the luxury car business is square in the sights of both the widening view of the public as well as investigating arms of the government. (Read, “High-end cars, bikes seized: DRI”; “Bentleys, Rolls, stolen in Europe, sold to desi rich”.)
The fact remains that there is not a single name from the range of luxury car manufacturers—Ferrari, BMW, Mercedes, Porsche, Lamborghini, Aston Martin, Masserati, Buggatti, Humvee, Audi, among others—which are not currently in the picture here. Information on numbers also is still opaque, with confirmed figures mentioning around 40 cars, but with the speculation going up to over 300-400 cars, as many of these cars are possessed by the high and mighty.
If galley rumour and grapevine is to be believed, then many high-end cars which were seen on the streets of our larger cities have quietly been, over the last few days, re-located to farmhouses and secret locations, till things cool down. This includes cars used as media loaner and demo models, which is why every so often you see media-test cars onscreen and in magazines with their registration numbers missing or covered up.
Most of these cars are owned, or operated, or intended for no less than the high and mighty of our country, including many of our law-makers as well as elected representatives, who get away with more than a few crimes, because their vehicles sport fancy red beacons and sirens, and race through check-posts and toll-gates without having to provide identity or documentation. The head of Delhi's Traffic Police, in a message to this writer, bemoaned the fact that he had orders "from above" not to check cars belonging to people in governance, public servants, whether they were officials or elected, and that's the simple truth which we all know too.
That some of the high and mighty are currently guests of the state in assorted jails, especially Tihar jail, is another related issue. Suresh Kalmadi made Audi famous by driving up to the offices of the Central Bureau of Investigation (CBI) in a brand new Audi A8(L) version, equipped with member of Parliament sticker on the front windscreen and red beacon discreetly tucked away inside. That's OK, he could have come in a private jet, and that's about par for the course too. But, the fact remains, this business of too many grey luxury cars on our streets has been coming for a while. MoneyLife has been reporting regularly on this racket for the last few years. (Read, “Numbers game”)
As a matter of fact, this writer was approached by somebody from the UK a few months ago, wanting to know more about the luxury car business in India. The conversation soon turned to second-hand luxury cars, and once we exchanged more information about each other, to the more direct topic of where the stolen luxury cars were going and who was maintaining them, since that is how these cars are usually tracked. It turned out that we had common friends, including somebody who had been in my school and was now a senior policeman in London, and that's one reason why they had touched base with me. The other reason was that I had been writing about the subject.
The way it goes in the UK is that somebody buys a luxury car in England or South Africa and then declares it stolen, or simply steals a luxury car, and ships it to India via certain entry points. The countries mentioned are Turkey, Cyprus, Albania and of course, Nepal and the UAE. While this is in the realm of speculation, there is no smoke without a fire. The car then enters India through a variety of routes, including—it is reported—diplomatic channels, and then gets absorbed into the local Indian market. Even this is not new, it has been going on for decades.
But what is new is that since late, insurers and other agencies in the UK have, in some cases, been fitting the cars with transponders, as well as bugging devices, which work globally on mobile phone or satellite phone technology, and this gives them a fairly good idea of where the cars are going. This has often been done without the knowledge of the manufacturers, who in some cases are suspected to be accomplices in such crimes, as it helps them get the cars across to a market and customer.
It is now being assumed that this information on cars that have been stolen abroad and are being tracked down with the help of these devices is open domain and details may have been provided to the authorities here. That our authorities may act in some cases and may choose not to act or continue listening in some other cases, is best illustrated with this anecdote—a friend who is in the business of confidential information adding to his business prospects, used to regularly get his office and home checked for bugs. Once in a way he would get his cars checked too. Very recently, he upgraded the team used for this, and they found that not only were a few of his cars transmitting everything spoken inside—they were also reporting back the location and movement. And that this was suspected to be part of the original equipment in the car, not some after-market fitment, which says something again about customer service.
In the motoring media, we always knew that cars loaned to media persons for road tests often had bugging devices fitted inside, or were in some way or the other monitored. Very often, these cars did not have proper documentation too, and after some time for both these reasons I stopped really going out for road tests on such cars. But just about a month ago, one of these European luxury car manufacturers offered me a test car, a new version of their existing luxury car. When it reached my home, I took a close look at the documents (it sported an out-of-state number) and found that the registration was for one number, the insurance was another, and neither of them matched the engine and chassis numbers in actual fact.
I took my own modest little Maruti Swift for the drive. And as on date, I know for a fact that more than a few of my friends who drive expensive luxury cars, are quietly getting the documents re-verified and also getting them scanned for bugging and tracking devices. This is in addition, of course, to the simple fact that the number of expensive luxury cars parked in the areas where I go for a walk every morning seem to have come down.