Investment Valuation in India

The Direct Tax Code (DTC) Bill, which will replace the existing Income-Tax Act, 1961, has been presented in the Parliament and will be enacted as a law if approved by both Houses, effective from 1-April-2012. TAX SLABS Income Exemption limits are as follows: For men: Upto Rs 2.0 lakh (Raised from Rs 1.6 Lakh) NIL* Between Rs 2.0 Lakh and Rs 5 Lakh: 10% (From Rs 1.6 - 5 Lakh) Between Rs 5.0 Lakh and Rs 10 Lakh: 20% (From Rs 5 – 8 lakh) Above Rs 10 Lakh: 30% (From Rs 8 lakh) *For women: Raised from Rs 1.9 lakh to Rs 2.0 lakh The minimum tax saving is Rs 4000 (Rs 1000 for women assessee) and the maximum tax saving is Rs 24000. Deductions Deductions under Sec 80C has been enhanced to Rs 1.5 lakh (From Rs 1.2 lakhs currently). However, the basket of investments has been modified for deduction under this clause. Investments include: a) Contribution to PPF b) Contribution to PF c) Contribution to superannuation fund d) Contribution for New Pension Scheme (NPS) Sum a – d) ...

This is an interesting article from Forbes... Excerpts: China has often underestimated its actual growth rate and, as a result, the degree by which its actual growth exceeded its potential growth in the past few years, as well as all the problems associated with overheating. Such underestimation often compromised the Chinese government’s efforts at timely and effective macro-control. Given the revised data, the Chinese economy experienced full-blown overheating – not the so-called “slight speeding” or “partial overheating” – right before the global financial crisis. Of course, double-digit inflation was absent this time because China had permanently switched from shortage economy to surplus economy around the mid-1990s. .... ...It was an unprecedented phenomenon that China’s actual growth rate exceeded its potential growth rate for six consecutive years of 2003-2008. After years of overheating, the Chinese economy was destined to undergo a downward adjustment process even if without th...

This is a link to a post that I read on one of the blogs..... Most Americans still appear to be operating under the delusion that the "recession" will soon pass and that things will get back to "normal" very soon. Unfortunately, that is not anywhere close to the truth. What we are now witnessing are the early stages of the complete and total breakdown of the U.S. economic system. ...... Read more

After a long global political battle, China’s decision to open (appreciate) its currency have come as a breather for metal prices, but the long-term impact of Yuan appreciation on metals prices may not be as simple as it looks. China’s purchasing power in the international markets will increase along with the Yuan’s appreciation. China’s demand for commodities is driven by multiple factors such as real demand from manufacturers, construction industry and stockpiling besides speculative demand from traders. However alignment to bulk orders may not encourage buying based on real demand due to appreciation. China being the world’s largest importer of metals and ores, appreciation of Yuan will lower the import price of metals for Chinese importers and manufacturers. This will potentially help push up international prices of these commodities (including in India). This is a positive development for Indian metal and ore producers. However, purchases are eventually determined by demand...

As a continuation to my previous post on reducing carbon footprint, I hope there have been some viewers to the post and at least some who are doing their bit in reducing carbon footprint. CYCLE to WORK This is yet another way of reducing carbon foot print. And for those who don't give a damn to reducing carbon footprint, this will certainly save you money, here are reasons why you should cycle to work. It does not cost you fuel, it is eco-friendly It improves health and you dont even have to spend multiple grands at the Gym. Bicycling is no more a "middle class" or "lower class" trait. And anyways, to protect your "image", you can always buy a high end bicycle. It portrays you as a responsible citizen, improving social image. You can proudly say you are doing this to save environment. So just go ahead, save money, save environment, improve health and reduce carbon footprint.

Unemployment Insurance or Employment Insurance as it is called in some countries provides temporary financial assistance for unemployed citizens while they look for work. In times of distress such as the global financial crisis when people get laid off, this is an effective way to protect people financially, well to an extent at least. At the same time this does not promote or encourage unemployment among people. HOW IT WORKS? This insurance is not applicable for people who have not started working yet. This only applies if you were working as an employee. Eligibility Generally you need to be ‘qualified’ to be insured. Qualification includes Insurable hours - Continuous period of work for a certain minimum hours (eg. 52 weeks) Unemployment – you need to be without work and without pay for some minimum days (eg 7 days) No fault – you should have been fired for no fault of yours and should not have left the job without any ‘valid’ reason. Insurance Premium: A portion of salary (e...

RBI, wide notification no. Notification No. FEMA 20 / 2000-RB dated 3rd May, 2000 have amended the pricing and valuation guidelines for a private company issuing shares to a person resident outside India. RISGHTS ISSUE The offer on right basis to the persons resident outside India shall be at a price which is not less than the price at which the offer on right basis is made to resident shareholders. ISSUE OF SHARES Current Provision - Price of shares issued to persons resident outside India is required to be issued at a value arrived at by a Chartered Accountant who would determine the price in accordance with the erstwhile Controller of Capital Issues (CCI) Guidelines [conservative method of valuation by considering an average of the Net Asset Value (NAV) of the company and the company’s Profit Earning Capacity Value (PECV), which was arrived at based on its past financial performance]. Revised Guidelines - Price of shares issued to persons resident outside India, shall not be...