Citizens' Issues
PAN mandatory in hotel bill payments, foreign travel tickets
The government on Wednesday announced mandatory quoting of income tax permanent account number (PAN) for payment of hotel bills and buying of foreign travel tickets costing Rs.50,000 and above.
 
PAN would also be mandatory for cash payments of more than Rs.50,000 for cash cards or prepaid instruments, as well as for acquiring shares in unlisted companies for Rs.1 lakh and above.
 
The new norms aimed to curb domestic black money generation will be effective from January 1, 2016, Revenue Secretary Hasmukh Adhia told reporters here.
 
Furnishing of PAN for post office deposits of over Rs.50,000 has been dispensed with to facilitate small investors.
 
Adhia said PAN has been mandatory for opening all bank accounts, except Pradhan Mantri Jan Dhan Yojana accounts.
 
He said on purchase of jewellery or bullion, major sources of generation of black money, PAN would be required if the sum involved is Rs.2 lakh per transaction. Currently, it is mandatory for transaction of Rs.5 lakh and above.
 
PAN will also be mandatory on purchase of immovable property of Rs.10 lakh and above.
 
Non-luxury cash transactions of Rs.2 lakh will also require submission of PAN details.
 
Finance Minister Arun Jaitley told parliament on Tuesday that the government had made PAN mandatory for cash transactions of Rs.2,00,000 and above. 
 
An official notification in this regard would be issued shortly, he told the Lok Sabha while presenting his ministry's supplementary demand for grants.
 
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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US Fed raises interest rates for first time since 2006
 In a historic move, America's central bank, the US Federal Reserve, for the first time in nearly a decade raised its key interest rate from a range of 0 percent to 0.25 percent to a range of 0.25 percent to 0.5 percent
 
Wednesday's rate hike though a small one, is seen as a sign of how much the US economy has healed since the 2007-2008 financial crisis. The central bank apparently believes the US economy is strong now and no longer needs crutches.
 
The announcement of the widely expected move came at the conclusion of the crucial two-day meeting of the policy making federal open market committee's (FOMC). 
 
Explaining the Fed's historic decision, Janet Yellen, the first woman Fed Chair in the bank's 112-year history, told a press conference that Fed decided to move now because it felt it was on course to hit its goals. 
 
"We decided to move at this time because we feel the conditions we set out, for a move, namely further improvement in the labour market and reasonable confidence that inflation would move back to 2 percent in the medium term, we felt these conditions had been satisfied," she said. 
 
"We have been concerned about the risks from the global economy and those risks persist, but the US economy has shown considerable strength," Yellen said. But "don't "overblow the significance of this first move," she said reminding reporters, "It's only 25 basis points. Monetary policy remains accommodative." 
 
Earlier the Fed said in its statement: "The Committee judges that there has been considerable improvement in labour market conditions this year, and it is reasonably that confident inflation will rise."
 
Stocks rallied with the Dow rising over 100 points after the announcement, CNN reported. Investors were pleased to see that the Fed expects "only gradual increases" in interest rates next year.
 
The Fed put interest rates near zero during the financial crisis in December 2008 to help stimulate the economy and boost the collapsed housing market.
 
But the economy is now a lot healthier with unemployment at 5 percent, half of the 10 percent rate it hit in 2009 during the worst of the jobs crisis.
 
Over 12 million jobs have been added since the recession ended. Wages -- which have barely grown during the recovery -- have also started to pick up recently.
 
On Wednesday, the Fed's committee improved its economic outlook. Compared to its last forecast in September, the Fed raised its expectations for economic growth next year to 2.4 percent from 2.3 percent.
 
It also lowered its projection for unemployment in 2016 to 4.7 percent from 4.8 percent.
 
The Fed still has low expectations for inflation -- a key measure when it decides to raise rates again.
 
The Fed's target for inflation is 2 percent, but right now its close to zero. The Fed sees inflation inching up in the years to come, but not hitting 2 percent until 2018.
 
Known as "liftoff," the Fed's action is expected to be the first of more rate increases that will probably come in 2016, CNN said.
 
The last rate hike was in June 2006 culminating a steady series of rate hikes that began two years earlier.
 
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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Nifty, Sensex on course to head higher – Wednesday closing report
While the market will be volatile tomorrow following the US Fed decision on Wednesday, if Nifty stays above 7,650, the rally would continue
 
We had mentioned in Tuesday’s closing report that Nifty, Sensex were headed higher and that Nifty was at the start of several days of rally. The Indian stock markets saw a minor rally in continuation of the last two days of trading and the major indices closed with small gains of upto 1.1%. The trends of the major indices in Wednesday’s trading are given in the table below:
 
 
Initially, both the bellwether indices of the Indian equity markets opened on a positive note in sync with their Asian peers. In addition, investors seem to have priced-in the possibility of a 25 basis points hike in key US interest rates. The hike is expected to be announced by the US Fed's Federal Open Market Committee (FOMC) early Thursday, India time. A hike in US interest rates, which have been at near-zero levels since the last decade, will lead to a massive pull-back of foreign funds from emerging economies like India. It is also expected to dent business margins as access to capital from the US will become expensive. However, foreign institutional investors (FIIs) were net buyers on Tuesday. According to data with stock exchanges, FIIs bought stocks worth Rs48.67 crore. 
 
With the Indian basket of crude oils going below $35 a barrel, the government on Wednesday hiked excise duty on petrol by 30 paise a litre and on diesel by Rs.1.17 to gather additional revenue of Rs.2,500 crore. Basic excise on unbranded petrol has been increased from Rs.7.06 per litre to Rs.7.36, and on unbranded diesel from Rs.4.66 per litre to Rs.5.83. Finance minister Arun Jaitley said the increase in duty will yield an additional Rs.2,500 crore in the remainder of the current fiscal up to end-March 2016. Along with other levies, the total cess on unbranded, or normal, petrol will come to Rs.19.36 per litre as against Rs.19.06 currently. On unbranded diesel, the total excise duty, after including special excise duty, will be Rs.11.83 per litre as compared to the current Rs.10.66. The basic excise duty on branded petrol has been raised from Rs.8.24 per litre to Rs.8.54, and on branded diesel from Rs.7.02 to Rs.8.19 per litre. Excise duty was last raised on petrol by Rs.1.60 per litre and on diesel by 30 paise a litre. State-run Indian Oil Corp (IOC) has announced price cuts on petrol by 50 paise a litre, and of diesel by 46 paise in Delhi, with corresponding decrease in other states, effective from Wednesday. The oil marketer said that allowing for local levies, the price of petrol per litre from Wednesday will be Rs.59.98 in Delhi, Rs.65.53 in Kolkata, Rs.67.04 in Mumbai and Rs.60.28 in Chennai. Diesel will cost Rs.46.09 a litre in Delhi, Rs.49.70 in Kolkata, Rs.53.28 in Mumbai and Rs.47.28 in Chennai. The Indian basket of crude oils, comprising 73% sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, plunged to $34.25 on Tuesday for a barrel of 159 litres, as per data compiled by the state-run Petroleum Planning and Analysis Cell. The government policy on oil prices will increase government revenues without a significant inflationary push and will be favourable to the stock markets.
 
Finance Minister Arun Jaitley said on Wednesday the government will achieve its fiscal deficit target without any cuts in this financial year. He made the statement in the Rajya Sabha after several members objected to the rise in excise duty on petrol after a supplementary list of business mentioning this was circulated. The opposition parties, led by the Congress, said that the benefit of a fall in international oil prices was not being passed on to the consumers.
 
The US central bank, the Federal Reserve began a two-day crucial meeting on Tuesday amid widespread speculation that it would raise interest rates for the first time in nearly a decade. The decision to hike rates if it comes as expected on Wednesday would mark the end of a historic effort to lift growth and create jobs since the 2007-2008 financial crises. Before the 12-member policy making federal open market committee (FOMC) takes a vote, it will discuss the unemployment situation, inflation and the global economy to determine if the US economy is strong enough for an interest-rate hike, analysts said. Persistently low inflation has been a big reason the Fed hasn't yet lifted its benchmark rate despite strong job growth and near-normal unemployment of 5%, USA Today said. Low oil prices and a strong dollar, which makes imports cheap for US consumers, have tamed consumer prices, but Fed officials expect those effects to fade.
 
The government is poised to raise Rs.10,000 crore revenue annually from levy of the 0.5 percent Swachh Bharat cess (SBC), parliament was told on Tuesday. Though the government did not fix any target for SBC in the current or upcoming fiscal years, revenue is expected to touch Rs.10,000 crore in a full financial year, Minister of State for Finance Jayant Sinha told the Rajya Sabha in a written reply. Introduced on November 15, the SBC is applied on all services falling under purview of service tax, and will be used for Swachh Bharat initiatives.
 
Shares of Infosys gained 1% in early trade Wednesday as its product subsidiary has received order for banking solution from a Hong Kong-based bank. "Infosys Finacle and Fubon Bank (Hong Kong) announced the bank’s decision to adopt the new generation Finacle Core Banking solution. This transformation initiative will significantly improve the bank’s operational efficiency, strengthen innovation capabilities and support rapid growth," says the software services provider. Finacle is the banking solution from EdgeVerve Systems, a wholly owned product subsidiary of Infosys. Fubon Bank (Hong Kong) is a wholly owned subsidiary of Fubon Financial Holding Company. Shares of Infosys closed at Rs1,095.40, up 1.72% on the BSE.
 
Gayatri Projects in Joint Venture with Vishwa Infrastructure and Services Pvt Ltd has won an order worth to Rs143.42 crore from the Mizoram government. The order is from State Investment Program Management and Implementation Unit (SIPMIU), Urban Development and Poverty Alleviation Development (UD&PA), Government of Mizoram for contract of water distribution networks and feeder mains at Aizawl. With this the total order book would be Rs10,000 crore It is an ADB-funded project to be completed in 48 months. This is the company’s first foray into the fast growing and specialized water supply EPC industry and it expects a significant ramp-up in this space over next 2-3 years. Shares of Gayatri Projects closed at Rs711.50, down 0.25% on the BSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
The closing values of the major Asian indices are given in the table below:
 

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