Income tax regime without exemptions may see overhaul with new tax slabs
The central government has held discussions to overhaul the new personal income tax regime without exemptions, with a new plan expected to be announced in the budget on 1 February. One of the proposals examined was to add more slabs to the new income tax scheme so that the income range covered in each slab is narrower, preventing taxpayers with diverse incomes from clustering in wide slabs. Currently, there are six slabs in the new personal income tax regime, while the old tax filing regime has only three slabs.
Why it’s important: The new tax regime without exemptions has seen few takers till now. The challenge for the government is to make it more acceptable by keeping it simple, while ensuring that it is revenue-neutral for the exchequer.
Indian business entities face tax scrutiny over deductions claimed on surcharges
The Central Board of Direct Taxes has asked income-tax officers to ask businesses that had claimed deduction on account of cess or surcharge over the past several years to voluntarily pay the differential tax to avoid penalties. The deadline to resolve and rectify tax returns is March 31. After that date, the amount claimed or taken will be treated as underreported income and will be subject to a 50 per cent penalty. Estimates show that the exercise could earn the tax authorities Rs 5,000 crore, further shoring up direct tax revenue for 2022-23.
Why it’s important: Faced with a high penalty rate, most entities that have claimed deductions on surcharges over the past several years are likely to cough up the difference.
Vedanta Resources in talks to raise $2 billion in bridge loans
An entity linked to Vedanta Resources is in discussions with big global banks to raise up to $2 billion in bridge loans to finance bond redemptions and debt repayments due for the conglomerate’s holding company and its associates over the next few months. Twin Star Holdings, a unit of London-based Vedanta Resources, is talking to JP Morgan, Barclays, Deutsche Bank and Standard Chartered for the bridge loans. These financiers already have relationships with the Anil Agarwal-led conglomerate.
Why it’s important: Vedanta is opting for bridge finance, the tenures of which can extend from a few months to up to two years. It has $4.7 billion in bonds maturing over the next four years. Vedanta eventually plans to repay its debts from the proceeds of the sale of its global zinc assets to Hindustan Zinc.
Maruti Suzuki sees 130 per cent rise in net profit on higher demand, prices hikes
Maruti Suzuki India has reported a 129.7 per cent year-on-year jump in consolidated net profit for the December quarter of 2022-23 to Rs 2,391 crore, mainly due to price hikes, better demand for its top-end models and declining raw material costs. Revenue for India’s largest carmaker with over 40 per cent market share in the passenger vehicle segment surged 26.9 per cent on year to Rs 29,918 crore in the fiscal third quarter, while its expenses were up 20.6 per cent at Rs 26,960 crore in the same period.
Why it’s important: Robust demand for higher-end models, successful cost reduction, improved realizations, easing commodity prices, and higher non-operating income have led to the dramatic rise in net profit in the third quarter.
Tata Trusts, largest shareholder of group holding company, names new chief executive
Tata Trusts, the philanthropic arm of the Tata group and largest shareholder in the group holding company, has named Siddharth Sharma (58) as its chief executive officer, and Aparna Uppaluri (48) as chief operating officer. Sharma, a career bureaucrat, retired from government service in 2018 to join the Pranab Mukherjee Foundation. He joined Tata Sons in February 2019 as chief sustainability officer under N Chandrasekaran’s chairmanship. The appointment of Sharma follows Srinath Narasimhan’s retirement in October last year.
Why it’s important: The trustees have followed tradition in appointing an in-house candidate for the key job that involves disbursing funds from the profits made by the business house to charitable causes.
Acko General Insurance close to raising $150 million from multiple investors
Digital insurance provider Acko General Insurance will raise $100-150 million from new and existing investors. Existing investors Canada Pension Plan Investment Board, General Atlantic and Multiples Private Equity have agreed to infuse more capital. While the latest round is significantly higher than the previous fundraise, it may not be at the expected valuation of over $2 billion.
Why it’s important: Acko became a unicorn in October 2021, but the flat valuation of the firm indicates caution by investors betting on loss-making start-ups. However, insurance tech start-ups will likely see more investments this year, going by early trends.
Google to start unbundling mobile apps to meet Friday deadline
Google is working with mobile device manufacturers to unbundle the distribution of Play Store, which is currently linked to OEMs having to mandatorily preinstall a suite of around nine leading apps. Its implementation is expected to happen immediately after Google informs and discusses its plan with the Competition Commission of India to comply with the antitrust body’s order on Friday.
Why it’s important: Google has told the Supreme Court that it would unbundle Google Search and Google Chrome from Google Play and Google Chrome from Google Search. It might ask the antitrust regulator for more time to comply with the other parts of its order.
India’s debut of Rs 8,000 crore green bonds likely to see strong demand
The central government is likely to kick off its first-ever issuance of green bonds on a strong note, with debt market participants predicting firm demand. The encouraging response to the maiden sale is likely to be reflected in a pricing premium relative to prevailing levels on corresponding regular government bonds. The maiden tranche of sovereign green bonds is set to go to auction today. A total of Rs 8,000 crore worth of green bonds, Rs 4,000 crore of 5-year bonds and Rs 4,000 crore of 10-year bonds, will be on the block.
Why it’s important: The key differentiator between regular sovereign bond auctions and green bond auctions is the pricing benefit that issuers globally enjoy for selling eco-friendly securities.
Seven nations to sign up for India’s public digital platforms, minister says
As many as seven countries are expected to sign up with India to use India Stack’s digital public goods, electronics and IT minister Rajeev Chandrasekhar has said. These agreements will be signed at the World Government Summit to be held from February 13-15 in Dubai. More than 140 countries are expected to participate in the summit. Countries are mostly interested in DigiLocker, a secure cloud-based platform for storage, sharing and verification of documents and certificates. So far, 144 million Indian citizens use the platform.
Why it’s important: The interest in India’s digital platforms signals that the country’s transformative services have come of age., particularly in the realms of financial inclusion and data privacy.
Airtel extends price hikes in prepaid tariffs in seven more regional markets
Bharti Airtel has extended the sharp rise in base prepaid rates it announced recently in Odisha and Haryana to seven more markets and will take the hikes pan-India later this week in a bid to boost average revenue per user beyond Rs 200. Airtel on Tuesday discontinued its lowest recharge plans in Andhra Pradesh, Bihar, Himachal Pradesh, Rajasthan, northeast India, Karnataka, and Uttar Pradesh West, effectively increasing the base rates in these states by 57 per cent.
Why it’s important: The significant hikes in base rates by India’s second largest telecom company raises the possibility of another round of industry wide rate hikes just over a year after the last one.
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