Dircet Tax code

1. Dircet Tax code • Typically, for a person earning a gross salary of Rs 10 lakh a year today, cash and perks is in the ratio of 60:40. At present, he is taxed on the entire 60 per cent cash part, while the remaining 40 per cent is either tax-free or partially taxed. The new code would tax both cash and perk • expanding the tax slabs, thereby putting more money in his hands • Another major plus is expansion of the exemption limit on savings to Rs 3 lakh from Rs 1 lakh earlier • individuals in the higher bracket will benefit hugely from the removal of surcharge and education cess as well • The new code also proposes to bring the various saving schemes under the EET (exempt-exempt-tax) regime from the current EEE (exempt-exempt-exempt) rule. • This would mean that investments in schemes such as the Public Provident Fund, National Savings Certificate, National Savings Scheme, Unit-linked insurance policies (ULIPs) and money back insurance plans schemes will be exempt from tax at investment and during the investing phase but the withdrawal amount will be added to your total income and taxed as per the applicable income tax rates at the time of withdrawal • However, there will be no tax on rollover of money withdrawn from one account of the permitted savings scheme to another as it will not be considered a withdrawal • life plan and policies of life insurance and policies whose premium is less than 5 per cent of the sum assured have been kept tax-free

2. equity-linked savings schemes (ELSS) and fixed deposits (FDs) with a tenor exceeding five years will no longer enjoy the tax benefits. “This is a big shift • In addition to taxing the house rent allowance, it disallows waiver on interest payment up to Rs 1.5 lakh if a person is staying in his own house • The code scraps the distinction between long-term and short-term capital gains, and does away with the securities transaction tax (STT) • if a person sells the asset, whether property or stock or debt fund, capital gains will be included as a part of income and taxed accordingly.

3. RillyondellBasell • non-binding offer for cash for LyondellBasell, an international chemicals company •  figure for the offer, it is reported to be around $12 billion. • “The offer is preliminary and subject to customary conditions, including conduct of due-diligence, documentation and receipt of creditors support • one of the largest by any Indian company overseas • the largest acquisition of an overseas firm was Tata Steel’s purchase of Corus for $13 bn • LyondellBasell is the world’s third largest capitalisation of $55 bn • LyondellBasell, based in the US but headquartered in the Netherlands

4. Dubai Crisis • Bank of Baroda, said, Rs5,000 crore • SBI said it had only minimal lending exposure in the UAE - less than Rs 1,500 crore • Nagarjuna Construction, said, " The firm has only one venture in Dubai - a 440- apartment project, and is going slow on it. It is also doing a Rs 100- crore water pipeline project at Dewa, Dubai

5. Iran – Nuclear • In the middle of October, there was news that a draft nuclear fuel deal was being worked out between Iran, the United States, Russia and France, mediated by International Atomic Energy Agency (IAEA) • ran had agreed to send three-fourths of its stockpile of low-enriched uranium to be processed in Russia and France • In mid-September, Iran had come in for much criticism from the West after it announced the existence of a nuclear enrichment complex near the holy city of Qum • Iran would consider other options, including that of buying nuclear fuel from other countries or enriching uranium domestically. As an NPT signatory, Iran has the right to exercise both options. • Teheran has already indicated its willingness to ship out limited amounts of uranium and wait for its return as fuel rods before sending more of it • Khamenei said the U.S. continued to be hostile to Iran despite Obama talking about the need for cooperation between the two countries to resolve regional problems. • e Western media have carried reports about the U.S. secretly funding militant ethnic groups in Iran to put pressure on the Iranian government to give up its nuclear programme. • Iran has also blamed Pakistani intelligence agencies for their support to the Jundallah. Senior Iranian officials have given an ultimatum to Pakistan to crack down on the activities of the terrorist group

6. MadhuKoda • It took a year and a half after Koda’s departure from office and an investigation by the income tax (I.T.) authorities and the Enforcement Directorate (E.D.) to understand the independent legislator-turned-Chief Minister had indeed operated on a scale unmatched by any other leader in the State. • According to estimates doing the rounds, Koda and his associates allegedly amassed approximately Rs.4,000 crore in his 23-month tenure as Chief Minister and laundered it using various means during this term and the period following his ouster from office • According to investigating officials in the E.D. and the I.T. Department, Koda had amassed a large portion of the money by facilitating mining contracts for iron ore and coal.  • igning 26 Memorandums of Understanding (MoUs) and by giving recommendations, on the basis of ministerial discretion, to an equal number of applications seeking mining leases for iron ore and coal • e Chief Minister and, in some cases, the Minister for Mines, had discriminatory powers to recommend that an institution or an individual could be granted a mining lease. • oda had “charged” Rs.2 crore to Rs.20 crore for signing an MoU, depending on the quantum of coal or iron ore that the respective mine would have produced. The recommendations were sold at a price of Rs.30 crore to Rs.80 crore, again depending on the produce of a particular mine • The E.D. has booked Koda under the four-year-old Prevention of Money Laundering Act (PMLA), 2005, which prescribes punishment of up to seven years of rigorous imprisonment for the guilty. The PMLA also provides for the freezing, seizure and confiscation of the proceeds of crime. 

7. It imposes obligations on banking companies, financial institutions and intermediaries to verify the identity of clients, maintain records and furnish information to the authoritie • He had reportedly made secret visits to Switzerland and other foreign countries as part of this. The E.D. suspects that the former Chief Minister has one or several accounts in Swiss banks and other banks in tax havens • harkhand’s iron ore is reportedly rich in ferrous content and is in great demand across the globe, particularly in China where a construction boom has been for sometime now.

8. Judiciay controversial Choices • HE Supreme Court’s collegium comprising the Chief Justice of India (CJI) and four senior judges, which recommends appointees to the Supreme Court, exercises a crucial responsibility • hough the government can return a recommendation for reconsideration by the CJI and the collegium for specified reasons, they can reiterate their recommendation, which will be binding on the government • collegium’s deliberations shrouded in secrecy, it was inconceivable that any wrong recommendation of the collegium would come to public notice • Responsible legal circles in Chennai who read The Hindu’s report were perturbed to learn the background of one of the appointees, Justice Dinakaran. The Forum for Judicial Accountability (FJA), of which R. Vaigai, an advocate in Chennai, is the convener, received information about certain allegations against him. The allegations related to land-grabbing, acquisition of assets disproportionate to known sources of income and abuse of office. • The most serious of the allegations, on which substantial evidence is available, pertained to land-grabbing at Kaverirajapuram village, Tiruttanitaluk in Tiruvallur district in Tamil Nadu. Justice Dinakaran was a judge of the Madras High Court between December 19, 1996, and August 6, 2008, before his elevation as the Chief Justice of the Karnataka High Court. • The FJA’s investigation revealed that the encroachment of government land and public property meant for the villagers deprived them of their resources and livelihood

9. Access to the water source for the village was also restricted by the extensive use of water for the judge’s farm, the investigation found • usticeDinakaran is in possession of approximately 440 acres in the village alone, almost one-fourth of the village. Of these, more than 300 acres are owned by him, his wife and two daughters • Even the district administration has admitted that the current land records of the village are not accessible, even though records for other villages are available

10. Climate Change • UNfCCCC-united nations framework convection for climate change was adapted in 1992 and signed by 192 countries. • The parties to convectin have met annualy from 1995 in Conference for paries( COP) • The copenhagen meeting is 15th Cop • Kyoto Protocal was treaty adopted in KYOTO (Japan) cop in 1997 • It came into for in 2005 and expired in 2012 • 187 countries singed and ratified. Exception US • Under the protocol 39 industrialised countries committed to reduce emmission 5.2% below 1990 level by 2012. • Set up mechanism for carbon trading • 70% of emmission comes from developed countries of the west. • US emmssion 20 tonnes per person , India .8 tonne per person. • CARBON INTENSITY: Ration of carbon emission to GDP. • Scientiest argue develped countries to reduce emmissin by 50% of 1990 level developing country 30% of 1990 level

11. Everyone agreed to common but differential responsibility. • Technological transfer from rich to poor. • A Trillion tonne of carbon emmission will increase 2 degree centrigrade which is the tripping pointn • 50% is already used up, Fight for remaining 50%. IT will be exhausted in just 40 years. • To stay withing the safe zone emmissoin to be brought down to 80% of 1990 level. • One third live in india and china. Less than 10% from them • India – 2.2% • Japan 4.1% • UK 6.3% • Germany 7.3% • China 7.6 • Russia 8.1% • EU 26.5% • US 29%.

12. Country wise annual emmission • China 21% • US 20% • Russia 5.6% • India 4.7 • Us estimated $500-600 needed annualy to combat change. • JUSSCANS- japan us canadanewzeland and australi • They don’t prefer emission cut pact • Pledge and review –pefer, reluctant to technology transfer. • G77+china • Lowest contribution but growing faster • Vulnerabe 14 – maldivesbangladesh.weak economies, just above sea level

13. Oil producing countries fear drop in all prices. • AOSIS ==alliance of small island states • Sea level rising 3.5mm a year. • Co2 concentratin 430ppm now . Prior to industrial revolution 280ppm • Emssion per person india 1.9tones • Us 7.1 and china 7.2 • Montreal agreement cut ozone layer gases fast and cheaply. • Not included all gases in one agreement.

14. Economist View • Lord Stern releases a report that was in favors of it. • He used near zero discount rate. • If we use 3% benefit is half the cost. • me economies argues that future generations would be richer than us and let them pay the cost. • It would take 2% of GP to limit I to 550ppm. Buying insurance and giving away 2 wealth. • Do anyone want not to act just to get 2% richer.? • Bp: lOng Beyond petroleum. Linked with bright and clean energy.. IT has sold most of its renewable investment in india and slowing fresh investment. • Shell Admits its strategy has changed. • They are renewable with high upfront cost and low running cost. Most suited for debt finance.

15. Policy menchanism • Regulation: Govt like regulation since they are cost free • Carbon market: economist like this since they are efficient. • Subsidies: Business man like this because they are handouts.

16. Europe has carbon tax. Australi and japan are trying to set one. • Tax keeps govt out of management decision and companies make technology that is cheapest • Cabon market $122 billion.Priced at $22 a tonne. • 50% new capacity added in eu 2000-2006 was non renewable with 25 decade earlier. • To induce innovation carbon price estimated to be around $129 and America considering $11.