Taxation
Modi calls for 10 crore people to be drawn into tax net
Prime Minister Narendra Modi on Thursday called for 10 crore people to be brought into the tax net, up from the current 5.3 crore, in a bid to expand the revenue base.
 
"There are a total of 25 crore households in the country, out of which 10 crore have non-agricultural income. The Prime Minister, in his address, called for the expansion of the tax net to 10 crore people," said Revenue Secretary Hasmukh Adhia.
 
Adhia, however, did not give any timeline to reach the 10 crore tax payers base.
 
The Prime Minister also asked the taxmen to remove the fear of harassment from the minds of people and advocated what he termed as RAPID -- revenue, accountability, probity, information and digitisation.
 
"The Prime Minister gave the RAPID formula, which he said are the five pillars of tax administration," Minister of State Jayant Sinha told reporters.
 
The Prime Minister also called for bridging the trust deficit between the taxpayer and tax department, he said.
 
Sinha and Adhia were briefing the media after an address by Modi at the two-day Rajasva Gyan Sangam - Annual Conference of Tax Administrators 2016 of top officials with the Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC). The conference will prepare a roadmap for tax officials for the current fiscal.
 
The revenue secretary said that Modi heard various suggestions from officials of CBDT and CBEC. The officials suggested formulation of a tax facilitation act and also conveyed their dilemma between tax enforcement and tax friendly measures, he said.
 
Sinha however clarified that the tax officials should not see any trade-off between the two.
 
In his address, the Prime Minister also emphasised on the CBDT and CBEC moving towards digitisation.
 
"Out of the total returns, 90% returns are filed through e-filing. And out of that 67%  income tax returns happen via the online route," Sinha said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Your smartphone loses half of its value in a month!
Planning to buy a new smartphone? Remember that the device may lose half of its value in a month which is even faster than your car, says an interesting study.
 
While cars typically lost 20% of their value a year after being driven off, money-draining smartphones went down up to 65% of their value in just a month of being released, musicMagpie.co.uk reported on Thursday.
 
The findings showed that only iPhones could retain their value much better than android-based devices.
 
While the iPhone 4 continues to retain 39% of its value even five years after its launch, the iPhone 6 (16 GB) has managed to keep 50% of its 539 British pounds market value a year after its release.
 
However, iPhone 5 showed a significant depreciation, losing 66% of its value after eight months, the report stated.
 
The highly anticipated Samsung Galaxy S4, which released in 2014 lost half of its value within two months of appearing on the market.
 
That's nearly a £300 loss off its original selling price of £579, the study said.
 
HTC One M9 has suffered the worst in the android sector. It was sold for 579 British pounds when released in March 2015 but lost a staggering 65% of its value in just a month.
 
Phones go down in value because better, faster and technologically superior models replace them.
 
Demand for a certain phone model can also affect its popularity and consequently depreciate its value, the report concluded.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Air passengers to benefit from new Aviation Policy
The Union Cabinet has cleared the National Civil Aviation Policy (draft released in October 2015), which among other things has capped airfares on un-served regional routes to push regional connectivity and making flying more affordable to the masses. The new civil aviation policy reflects a more liberal regime and a pro-growth approach that seeks to create a level-playing field and promote regional connectivity, say brokerages. In a research report, Edelweiss says, "The regional connectivity scheme augers well for players like SpiceJet, though dilution of the 5/20 rule will undoubtedly heighten competitive intensity in the international market over medium to long term for the incumbents."
 
According to ICICI Securities Ltd, increase in airports and development of maintenance, repair and overhaul (MRO) sector can significantly boost the sector from a long term view. "Essentially, a long term plan, the policy aims to boost regional connectivity through Government support and industry levy but will not have any short term impact. However, regional scheme will open up more routes for the airlines with regional aircraft like SpiceJet, Air India and Jet who already have such fleet of aircraft. Economics of viability remain to be tested. The biggest beneficiary of this policy will be the MRO industry which has been given a slew of incentives along with the commercial aero related manufacturing. An efficient domestic MRO industry has the potential of structurally reducing the cost of the domestic airlines, but again it is a long shot from here," it said in a research note.
 
Ratings agency CRISIL feels that the new aviation policy has potential to level the runway. "However, further clarity on regional connectivity is awaited. Also the policy does not dwell on the long-pending structural issue of high sales tax on aviation turbine fuel (ATF), which diminishes the attractiveness of the sector," it says.
 
Here are the key highlights of the National Civil Aviation Policy...
 
Enhance regional connectivity: Fares capped at all inclusive Rs2,500 per passenger per hour to regional destinations, with some aid in the form of viability gap funding (VGF) for the airlines under the regional connectivity scheme (RCS). VGF funded by way of a small levy per departure on all domestic flights (except regional) to be decided by the Ministry. States and other stakeholders to offer concessions for being eligible under this scheme – 20% of VGF to be funded by states, VAT on ATF to be 1% or less, airport charges waived off, reduced service tax on tickets and lower excise duty of 2% on ATF.
 
 
Replace 5/20 Rule: Now a requirement of 20 aircraft or 20% of capacity, whichever is higher, has to be deployed in domestic operations before an airline goes international. The draft policy released in October 2015 had kept all options open on this count. The final policy replaces it with 0/20, which implies that airlines can commence international operations provided they deploy 20 aircraft or 20% of total capacity -- whichever is higher -- for domestic operations. With this, new entrants such as Vistara and AirAsia India can fly overseas once they have 20 aircraft. As on date, Vistara and AirAsia India operate 10 and 6 A320s, respectively. "This will level the field on overseas routes for all domestic airlines -- IndiGo, Jet Airways, SpiceJet, Go Air and the new entrants such as Vistara and AirAsia India," CRISIL says.
 
Rationalise MRO: Ministry to persuade state governments for zero VAT on MRO activities, ensure adequate land for providers and no airport royalty and additional charges on MRO service providers. According to ICICI Securities, the MRO business of Indian carriers alone is around Rs50bn, 90% of which is currently spent outside India – in Sri Lanka, Singapore, Malaysia and United Aran Emirates (UAE). "The tax regime has been a key dampener for MRO activity in India. Abolition of these taxes may now encourage Indian airlines to get MRO work done domestically and save some costs. The MRO industry also can grow significantly with the large number of additions expected to the Indian fleets," it added. 
 
Route Dispersal guidelines (RDG): Category I routes rationalised on a more transparent criteria that is  flying distance of more than 700km, average seat factor of 70% and above and annual traffic of five lakh passengers. To that extent the current routes under this category get revised from earlier 12 to 18 (2 go out and 8 get added under the current criteria). Review of these routes will be done by MoCA once every five years. While the percentage of Cat I capacity to be deployed on Cat II/IIA remain the same as earlier (10% and 1%) the requirement for Cat III stands revised from earlier 50% to 35%. 
 
 
Bilateral traffic rights: Open sky policy with SAARC and countries located beyond 5000km from Delhi. Method will be recommended for allotment of additional capacity entitlements to those foreign airlines that have utilised their limits.
 
ICICI Securities, which initiated coverage on the civil aviation sector, says its supply-demand model for domestic air traffic implies 14% growth in passengers as evidenced from firm aircraft orders and latest delivery schedules. "With yield management becoming the singular strategy lever for Indian low-cost carriers (LCCs), cost structures assume high importance and structural asymmetries will decide the competitive edge for the airlines. However, much of these asymmetries in cost structure are inherited from the fleet strategy adopted by various airlines, hence normally have a long-lasting impact on their balance sheets. High operating leverage proves fatal in a cyclical downturn where balance sheet strength is vital. At the comfort of hindsight, bulk orders have benefitted IndiGo with valuable incentives, which have given it the structural advantage of lower rentals, while single fleet focus and strong balance sheet have lent IndiGo asymmetrical advantages on maintenance costs, redelivery expenses and supplementary rentals. That the other airlines have missed the plot thus far is a given, but the current growth phase of domestic aviation and low crude price outlook provide opportunity for them to shore up their balance sheet," it concluded.

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