sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Budget Extravaganza »
 Will Budget 2019 be startup friendly? Know what major reforms can take place; from tax structure to reducing MAT
 Will interim Budget 2019 reduce your tax?
 IT exemption threshold may go up in interim Budget
 Ficci for cut in corporate tax rate in Budget
 Can You Expect Income Tax Changes In Budget? Here's What Experts Say
 How Union Budget 2018 impacts individual taxpayers
  How Budget 2018 will be different due to GST
 This is how Budget 2018 announcements may help you save tax
 Here's why the government advanced the Budget date
 Will Budget 2018 Reduce Your Income Tax? 10 Expectations
 How Budget 2018 will be different due to GST

Budget 2014: Government may give tax breaks on bonds issued by public sector banks; move to help them meet capital requirements
June, 23rd 2014

State-owned banks' need for funds and the government's inability to help out could spell an opportunity for ordinary tax payers. The budget may see tax breaks on bonds issued by public sector banks to help them meet capital requirements and drive long-term savings.

The government is mulling tax breaks on additional tier-I bonds issued by banks under Basel-III guidelines.

"We are examining the possibility of tax incentives on such instruments," said a finance ministry official, adding that these could be along the lines of infrastructure bonds. "We are assessing if such a rebate will actually help channelise longterm savings into the banking sector," said the official.

Tier-I bonds under Basel-III guidelines come with so-called loss absorbency features, which means that banks can write off such investments in case of stress.

The previous United Progressive Alliance government did not allot tax-free bonds for state-run companies in the interim budget. The 2012-13 budget axed the tax-saving infrastructure bonds, which had offered a .`20,000 deduction in addition to the existing .`1 lakh deduction available under the popular Section 80C basket.

The finance ministry wants banks to explore alternate measures of raising capital. Financial services secretary GS Sandhu has already ruled out higher fund allocations in the forthcoming budget to recapitalise government-owned lenders.

The government allocated.`11,200 crore towards bank captilisation in the interim budget, substantially lower than the amount infused in previous years. State-run banks need about .`4.15 lakh crore to meet Basel-III norms, according to the Reserve Bank of India. A fiscally-constrained government will not be able to capitalise banks over a long period.

The banks are also in talks with RBI to mitigate the risk associated with such bonds and make them more attractive.

"Discussions are on with the regulator if it can allow banks to write back such investments in case a bank turns around and posts profits," said the official cited above.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2019 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Company Search Engine Optimization Company US SEO Local SEO Company Website SEO Company Alabama SEO Company Alaska SEO Company Arizona SEO Company Arkansas SEO Company California SEO Company Colorado SEO Company Connecticut SEO Company Delawa

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions