In order to arrest the declining growth rate, industry associations have demanded raising the tax limit ceiling for housing loans. According to Ficci secretary general Rajiv Kumar the exemption should be harmonised with the rising interest rates and increased to at least Rs2.5 lakh
New Delhi: In a bid to boost housing sector credit, the government is contemplating to enhance income tax exemption up to Rs3 lakh paid as interest on housing loans in a year, from the existing limit of Rs1.5 lakh, reports PTI.
The government is considering raising the tax deduction limit for housing loan in the coming Budget, which is scheduled to be tabled on 16th March, sources said.
At present, a deduction of up to Rs1.5 lakh is available from taxable income towards interest on loan taken for house.
Besides, borrowers can enjoy exemption on payment of principal amount. However, it is part of exemption to savings capped at Rs1 lakh per annum.
With the property prices and interest rates rising with each passing year, there is need to revise the limit, sources said.
In order to arrest the declining growth rate, industry associations have demanded raising the tax limit ceiling for housing loans.
According to Ficci secretary general Rajiv Kumar the exemption should be harmonised with the rising interest rates and increased to at least Rs2.5 lakh.
“We recommended that the existing tax deduction limit on income tax of an individual should be increased from the current level of Rs2.5 lakh to at least Rs5 lakh,” CII director general Chandrajit Banerjee said.
Of this, Rs3 lakh should be towards interest payment to offset the impact of high interest rates, he said, adding the remaining Rs2 lakh should be exclusively towards principal loan repayment as the present limit of Rs1 lakh is already overcrowded with several other items.
Echoing views, Assocham and PHD chamber said that exemption limit needs to be raised both for interest and principal.
As per the Direct Taxes Code (DTC), which would replace the decades old Income Tax Act, there is income tax exemption for up to Rs1.5 lakh paid as interest on housing loans in a year.
The petrochem sector, which employs more than 10 lakh people, would attract foreign funds as the global petrochemical industry moves eastwards—in Asia and the Middle East—with major hubs being set up in these regions, an Assocham study said
New Delhi: The $40-billion Indian petrochemicals industry is expected to grow at 12%-15% annually over the next five years and generate millions of new jobs, reports PTI quoting an Assocham study.
The sector, which employs more than 10 lakh people, would attract foreign funds as the global petrochemical industry moves eastwards—in Asia and the Middle East—with major hubs being set up in these regions, it said.
With sales of $2.5 trillion in 2010, the global petrochem industry is moving eastwards which presents opportunity for India to attract investments in the sector, it added.
“This (movement) simultaneously represents a tremendous window of opportunity for Indian chemical and petrochemical industries,” Assocham said in the study, ‘Mark Up for Growth: PCPIR in Andhra Pradesh’.
India can take advantage of this shift and attract large funds from investors keen to invest in the region near mega demand centres—India and China.
However, the Indian industry faces major competition from hubs in China, Singapore and the Middle East to grab a share of the investment pie. India needs to maintain certain levels of competitiveness and cost effectiveness to tackle this competition, it said.
The government, so far, has notified four petroleum, chemicals and petrochemical investment regions (PCPIRs)—Dahej in Gujarat, Haldia in West Bengal, Paradeep in Orissa and Vishakhapatnam in Andhra Pradesh.
The proposal of the Tamil Nadu government for a PCPIR at Cuddalore is in the pipeline. Another project at Mangalore in Karnataka is at planning stage.
In Andhra Pradesh investment zone, major players like Hindustan Petroleum, LG Polymers, Coromandel Fertilisers, Andhra Petrochemicals, Godavari Fertilisers & Chemicals and Nagarjuna Fertilisers & Chemicals have shown interest to set up units.
Meanwhile, according to the global consultancy firm McKinsey, about one-third of the specialty chemicals business worldwide could move to Asia by 2020.
By 2020, approximately $350 billion of the projected $1 trillion global specialty chemical industry could move to Asia (excluding Japan), driven by downstream demand and competitive manufacturing costs, the firm had said.
Various foreign investors have together sold banking stocks worth an estimated Rs10,000 crore (over $2 billion) since October 2011. While foreign investors have sold shares of at least 28 Indian banks, they have purchased fresh shares of only nine banking stocks during this period
New Delhi: Overseas investors seem to be on a selling spree when it comes to the Indian banking stocks, as they have pared their holdings in at least 28 public and private sector banks of the country in the past few months, reports PTI.
Various foreign investors have together sold banking stocks worth an estimated Rs10,000 crore (over $2 billion) in about four-and-a-half months since October 2011.
While foreign investors have sold shares of at least 28 Indian banks, they have purchased fresh shares of only nine banking stocks during this period.
The value of fresh banking shares purchased during this period is also much less at just about Rs600 crore, as per an analysis of shareholding pattern and open-market transaction data available with stock exchanges.
The banks where foreign investors have pared their holdings include private players like ICICI Bank, Axis Bank, Kotak Mahindra Bank, Yes Bank and DCB, as also public sector giants like State Bank of India (SBI) and Punjab National Bank (PNB).
Those having seen an increase in the holding of overseas investors include HDFC Bank, South Indian Bank and IDBI Bank.
In one of the biggest share-sale transaction in the banking sector during this period, a unit of Singapore government’s investment arm, Temasek Holdings, sold shares worth about Rs1,500 crore in ICICI Bank on 8th February.
Market analysts said the shares could have been sold to book profit after a sharp rally of about one-third in ICICI Bank shares since the beginning of 2012.
Indian banking and financial sector stocks have witnessed many share transactions in the recent past, given a sharp surge in their value since the beginning of 2012.
While US-based Carlyle group sold shares worth about Rs1,350 crore in HDFC on 1st February, Warburg Pincus sold shares accounting for about 2.4% stake in Kotak Mahindra Bank for about Rs800 crore on the same day.
Besides, the shareholding pattern data for the October-December 2011 quarter shows that FIIs (Foreign Institutional Investors) lowered their holding in 26 banks.
These included ICICI Bank, SBI, Axis Bank, DCB, Yes Bank, Allahabad Bank, Indian Bank, Corporation Bank, Bank of Baroda, Canara Bank, Dhanlaxmi Bank and Karnataka Bank, among others.
In fact, the banking sector witnessed the highest level of share sale by FIIs during that quarter. Also, a few like PNB, SBI, Syndicate Bank, Allahabad Bank and Central Bank have seen their FII holdings declining for four consecutive quarters now.
On the other hand, the FII holding increased during the last quarter of calendar year 2011 in banks like South Indian Bank, Bank of India, City Union Bank, IDBI Bank, Indian Overseas Bank, Federal Bank, Andhra Bank, HDFC Bank and ING Vysya Bank.