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China manufacturing slowing, data show

HONG KONG (MarketWatch) — Rival manufacturing surveys released Thursday confirmed manufacturing activity in China slipped into contraction in November, with the grim conditions now seen as pushing Beijing towards monetary-policy easing to support growth.

The state-sponsored China Federation of Logistics & Planning reported its manufacturing Purchasing Managers’ Index fell to 49.0 on a 100 point scale, falling below the previous month’s 50.4 reading.

The result missed a 49.7 forecast from a Dow Jones Newswires survey.

Meanwhile, HSBC’s privately compiled China PMI dropped to 47.7, weaker than its initial reading of 48 released late last month, and indicating a deterioration of conditions from October’s reading of 51.

Analysts at IHS Global described the official PMI pointing to contraction as “shocking,” while HSBC’s economists described their own China PMI as indicating a “sharp deterioration” in business conditions.

Both survey results printed below the key 50 level that separates contraction from expansion, with HSBC’s result the weakest since March 2009, while the CFLP’s PMI was negative for the first time since February 2009.

Manufacturing output and new business orders were down sharply, while both input and output prices were falling at their fastest pace since March 2009, HSBC’s survey found.

Optimism check

IHS Global Insights China analyst Alistair Thornton said the result showed the Chinese economy was slowing much faster than had been expected, and that the cooling would be seen in weaker industrial production figures for November and slowing gross domestic product growth in the fourth quarter.

“This should provide a check on yesterday’s unbridled optimism in global markets,” Thornton said.

He linked the downbeat PMI reading to the central bank’s easing of required reserves for major lenders late Wednesday, saying: “The government has stepped into the ring. The loosening campaign has begun.”

HSBC economist Hongbin Qu also saw the data suggesting a reversal in Chinese policy, saying: “Growth is set to overtake inflation as Beijing’s top policy concern. This is likely to invite an across-the-board policy easing, which is likely to come as early as year-end.”

However, the HSBC survey did have a few bright spots, with new export business received by manufacturers picking up in November, while overall employment numbers rose fractionally. 

Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.http://www.marketwatch.com/story/china-manufacturing-slowing-data-show-2011-11-30?link=MW_latest_news

गिफ्ट पर टैक्स

कुछ महीने पहले मुंबई के सुनील उल्लाल उस वक्त चौंक गए, जब एक दोस्त ने उन्हें एक महंगी पेंटिंग गिफ्ट की और उनके चार्टर्ड अकाउंटेंट ने उन्हें बताया कि उन्हें इस पर टैक्स चुकाना होगा। 63 साल के उल्लाल ने कहा, 'पेंटिंग काफी मशहूर आर्टिस्ट की थी और उसकी मौजूदा वैल्यू करीब एक लाख रुपए है। मेरे दोस्त ने इसे मुझे इसलिए गिफ्ट किया क्योंकि उसे लगा कि मुझे यह अच्छी लगी है, लेकिन मुझे इस बारे में बिलकुल पता नहीं था कि मुझे इस पर टैक्स चुकाना होगा।'

आयकर अधिनियम (साथ ही डायरेक्ट टैक्सेज कोड, जिसके अगले साल 1 अप्रैल से लागू होने की संभावना है) के मुताबिक अगर आपको कोई ऐसा उपहार मिलता है, जिसकी वैल्यू 50,000 रुपए से ज्यादा है, तो इसको आपकी आमदनी में शामिल किया जाएगा और आपको इस पर टैक्स देना होगा। यह नियम आपको एक वित्त वर्ष में मिलने वाले सभी उपहारों की कुल वैल्यू पर भी लागू होता है। मुंबई के एडी ऐंड कंपनी चार्टर्ड अकाउंटेंट्स के सीनियर पार्टनर आनंद टिबड़ेवाल के मुताबिक, 'अगर आपके उपहारों की कुल वैल्यू 50,000 रुपए से ज्यादा है, तो आपको इस पूरी रकम पर टैक्स देना होगा, न कि 50,000 के ऊपर वाली रकम पर।'

मुंबई के ठक्कर कंसल्टेंट्स के निदेशक मनीष ठक्कर के मुताबिक, 'यह नियम उन मामलों में भी लागू होता है जिनमें आपने किसी से कोई उत्पाद इसकी उचित वैल्यू के मुकाबले काफी कम कीमत पर खरीदा हो।' मिसाल के तौर पर, अगर किसी कार की डेप्रेशिएटेड वैल्यू 4.5 लाख रुपए है, लेकिन आपने इसे 3 लाख रुपए में खरीदा है तो बचे हुए 1.5 लाख रुपए को गिफ्ट के तौर पर देखा जाएगा और इसे आपकी आमदनी में शामिल कर लिया जाएगा। हालांकि अगर आप 4.1 लाख रुपए चुकाते हैं तो आपको कोई कर नहीं देना पड़ेगा क्योंकि उपहार की वैल्यू इस दशा में 50,000 रुपए से कम होगी।

किसी उपहार की उचित बाजार वैल्यू वह कीमत होती है, जो तब निकल कर आती है अगर उस उपहार को खुले बाजार में वैल्यूअर की तय की गई तारीख को बेचा जाए। रीयल एस्टेट के लिए स्टैंप ड्यूटी को बाजार वैल्यू के तौर पर माना जाता है।

खास रिश्तेदारों के दिए गए उपहारों को टैक्स से छूट है, इसमें किसी वैल्यू को नहीं देखा जाता है। इस तरह के रिश्तेदारों में जीवनसाथी, भाई-बहन, माता-पिता या जीवनसाधी के भाई और बहनें, दादा-दादी और पौत्र और उनके जीवनसाथी शामिल होते हैं। साथ ही, अगर प्रॉपर्टी किसी इच्छापत्र के जरिए आपको वसीयत की गई है, मान लीजिए कि आपकी शादी के मौके पर दी गई है, या इसे किसी स्थानीय संस्थान या प्राधिकरण ने गिफ्ट के तौर पर आपको दिया है तो आपको इस पर कोई कर नहीं चुकाना होगा।

डेलॉयट हासकिंस के पार्टनर होमी मिस्त्री के मुताबिक, 'मृत्यु के विचार से दानदाता की गिफ्ट की गई संपत्ति को भी अपवाद के तौर पर रखा गया है। अगर कोई शख्स जानता है कि वह अगले कुछ दिनों में मरने वाला है और अपनी संपत्तियां किसी शख्स को गिफ्ट के तौर पर दे देता है तो इस तरह की संपत्तियों को हासिल करने वाले को कोई कर नहीं देना होगा।'
(http://navbharattimes.indiatimes.com/articleshow/10877931.cms)

Kanimozhi was one of the most obedient inmates ... Funny... isn't it

It's been a long seven months for DMK MP MK Kanimozhi but she had been rarely found losing her cool. Tihar authorities have said she was a model prisoner who always went by the rule book. Yes, there were emotional moments in her stay - she hardly controlled her tears last month when she was denied her bail and certainly her meeting her father, former Tamil Nadu chief minister Karunanidhi in jail and her son had all had been a test of her character. But, she took recourse to spirituality, read papers and watched television and kept herself 'engaged.' "We never had any trouble with her VIP status. She has been one of the most obedient high-profile inmates and has asked for nothing so far, unlike the others,'' said an officer at the jail.

On November 3, the 43-year-old Rajya Sabha MP, who is the daughter of DMK chief M Karunanidhi, had wept and hugged her mother Rajathi Ammal minutes after special CBI court rejected her bail plea in the 2G case. According to jail officials, after that Kanimozhi performed her meditations, engaging herself in introspection, spiritual empowerment and dhyan as part of the meditation lessons. These lessons are being imparted by Divya Jyoti Jagrati Sansthan, the biggest NGO within the Tihar Jail complex engaged in rehabilitation and reformation programme inside the jail premises.

Kanimozhi has participated in one of the activities --spiritual empowerment -- conducted for correction and reformation of inmates inside the prison premises," a jail official said. The DMK lawmaker was lodged in jail no. 6 since May 20. She also took interest in the work done by the NGO towards inmates involving spiritual empowerment for correction and reformation, positive engagements in cricket and music, drug abuse prevention and livelihood programmes.

During her initial days at Tihar, Kanimozhi learnt the skill of candle making in the jail premises. In fact, Kanimozhi has managed to remain quite involved in the Tihar jail functionings. She has also asked to be taken around the jail where there are a lot of vocational units in place like candle-making, potter-making, tailoring section, crochet work, etc. A candle-making unit exists in jail no. 6, which houses women inmates. These candles made by the prisoners are sold under the label of Tihar jail products. According to jail sources, Kani was also often seen engaged in reading books and was a regular visitor to the jail library.
(http://timesofindia.indiatimes.com/india/Kanimozhi-was-one-of-the-most-obedient-inmates-say-Tihar-Jail-authorities/articleshow/10923917.cms)

दिल्ली में मंत्रियों-विधायकों को मिलेगी 3 गुनी सैलरी

दिल्ली में मंत्रियों और विधायकों को इसी महीने से 3 गुनी सैलरी मिलेगी। सैलरी बढ़ाने का प्रस्ताव सरकार ने मार्च में केंद्र के पास मंजूरी के लिए भेजा था। इससे पहले भी पिछले साल सैलरी पैकेज में बढ़ोतरी का प्रस्ताव भेजा गया था लेकिन केंद्र ने उसे खारिज कर दिया था। 

दिल्ली कैबिनेट ने फरवरी में पास किए गए प्रस्ताव में महंगाई का वास्ता देकर 300 फीसदी तक इजाफे की मांग की थी। इसके तहत जिस विधायक को अब तक 32 हजार रुपये मिल रहे थे , उसे अब सभी भत्ते मिलाकर एक लाख रुपये महीने तक मिलेंगे। इसी तरह मंत्री का वेतन और भत्ता 43 हजार रुपये से बढ़कर 1.20 लाख रुपये हो जाएगा। नेताओं को सैलरी में ऐसा इजाफा पहले 2007 में मिला था।

गृह मंत्रालय ने पिछला प्रस्ताव खारिज करते हुए कहा था कि हर पांच साल में ही ऐसी बढ़ोतरी की जा सकती है इसलिए सैलरी बढ़ाने पर 2012 में ही सोचा जाएगा। अपने नए प्रस्ताव में दिल्ली सरकार ने पेट्रोल के कोटे की मांग को हटा दिया था और ब्याज रहित कार लोन की मांग को सात लाख से घटाकर चार लाख रुपये कर दिया था। नए प्रस्ताव में एमएलए की बेसिक सैलरी 6000 रुपये के बजाय 20 हजार रुपये हो जाएगा जबकि मंत्री की बेसिक सैलरी 10 हजार रुपये के बजाय 25 हजार रुपये हो जाएगी। सीएम की बेसिक सैलरी अब 30 हजार रुपये होगी।
http://navbharattimes.indiatimes.com/delhiarticleshow/10916194.cms

Sensex retreats, closes 159 pts down

The Sensex closed with 1% loss on Tuesday, weighed down by heavyweights Reliance Industries and Bharti Airtel. Among others, banks, realty and metal stocks added pressure on the market in the second half of trade. The Sensex was down 158.79 points at 16,008.34, which had rallied over 470 points yesterday. The Nifty tested an intra-day low of 4787.10, before closing down 46.20 points at 4,805.10.

Nitin Rakesh, chief executive officer of Motilal Oswal Asset Management Company says, while the market is looking at the gyrations of the world, the fact of the matter is that India still has a bunch of issues to work through domestically.

He has a slightly lower downside bias. “Till such time that we get a slightly clearer picture on things like interest rates, inflation and reform measures, I think we will continue to work through these limited moves in the prices.”

Index heavyweight Reliance Industries was down 2.5% after sources claimed that government may opt to hold on to inducting BP (which signed USD 7.2 billion deal with RIL for 30% stake in 21 coal blocks) as co-owner in KG-D6. Sources also say, BP's role will be uncertain till it becomes co-owner in KG-D6 basin and arbitration complete. Arbitration is likely to take at least 1-2 years.

Shares of Bharti Airtel tumbled 3.8% after Edelweiss report. The company strongly opposed Edelweiss' analysis of its annual report. The brokerage firm had highlighted telecom major’s significant exposure to USD loans due to the Zain acquisition in 2010. According to the report, if steep fall in INR sustains and the rupee cash flows are used to service debt, it will lead to higher cash outflow of Rs 4,200 crore.

The Edelweiss report also said that Bharti Airtel acquired 100% stake in Zain for Rs 42,190 crore, on which goodwill of Rs 34,470 crore has been recognised. According to the company, the management has no concern on goodwill impairment in African business. “Impairment, if any, is routed via P&L as per accounting policy.”

Among other largecaps, Infosys, ICICI Bank, HDFC, HDFC Bank, Tata Motors, ONGC and SBI were down 1-2%. In the realty space, DLF tanked 3%.

However, auto stocks like M&M, Bajaj Auto and Hero Motocorp bucked the trend - jumped 1-2%. FMCG sector too was quite supportive; ITC was up 0.6% and HUL up 1.25%.

Capital goods majors - BHEL gained 0.6% while L&T lost 0.5%.

Declining outnumbered advancing ones by 1523 to 1253 on BSE.

http://www.moneycontrol.com/news/local-markets/sensex-retreats-closes-159-pts-down-reliance-bharti-drag_626188.html

.... and the battle continues...

Tax saving Infrastructure bonds: 2011-2012

Government of India introduced Long term infrastructure bonds for tax saving purpose under section 80CCF in last year i.e. 2010-11.

Any individual or HUF can subscribe to notified long-term infrastructure bonds and can claim deduction of the whole amount paid from the total taxable income. The limit of deduction under section 80CCF is Rs. 20,000.

This deduction is over and above the existing overall limit of deduction on savings upto Rs. 100,000 under section 80C, 80CCC and 80CCD of the Income Tax Act, 1961, i.e., Section 80CCF allows you to invest an additional Rs. 20,000 in infrastructure bonds, and have that reduced from your taxable income in addition to the Rs. 100,000 deduction you get from the other instruments.

Bonds issued by Industrial Finance Corporation of India, Life Insurance Corporation of India, Infrastructure Development Finance Company and other RBI classified infrastructure finance companies are eligible for deduction u/s 80CCF of the Income Tax Act, 1961.

The tenure of the Bonds shall be a minimum of ten years with a lock-in period of five years for an investor. It will be mandatory for the subscriber to furnish permanent account number to the issuer for investment in the bonds.

Investment guide to infrastructure bonds.

As the end of financial year approaches, companies start approaching market with their infrastructure bonds issues. Currently two issues are open:

1. IDFC
2. L&T

Please click on the corresponding link to get more information.

Infrastructure Bonds Investment Guide

Should you invest in these bonds?

Before investing in these bonds, you should remember the following positives & negatives:

+ve

•  Addition tax benefit up to 20,000/- over & above 1 Lac limit of section 80C
• Good returns as compared to other market investments.
• Secure investments.

-ves

• 5 years lock-in period.
• Interest earned on bonds is taxable.
• Some bond issuers require DMAT A/C

Before investing, you should consider that do you really require this investment. For different tax slabs, the effective return varies. Approximate calculation is following:

Tax Slab	Absolute Return	Effective Return
10%	9%	11.13%
20%	9%	11.39%
30%	9%	11.70%

*Above returns are calculated without considering the tax on returns on this investment.

Additionally, one should keep the following points in mind while investing in infrastructure bonds:

• Reducing tax liability means invested amount will be deducted from the total taxable income.
• Different bond issuers have different terms. Some require Demat account while some also allow subscription in physical form.
• Lock-in period is the period till you can not sell you bond like any other tax saving instrument. It is 5 years for these bonds.
• Maturity date is the date after that the bond must be redeemed. It is 10 to 15 years depending on the bond issuer.
• Almost every bond issuer company provides two options for interest payment. One is annually and other is cumulative on redemption. To decide, which one to choose, keep following points in mind:
• 1.       Since interest is taxable, it will add to your taxable income. If getting interest annually reduces your tax liability, go for annual option.
• 2.       If you have better options to invest you money or you need your money soon, go for annual option.
• 3.       If your nature is to spend money if it is in your hand then better to go for cumulative option.
• Buyback option is to be decided while buying the bonds. If you choose this option, you will be able to sell the bonds to the issuing company after expiry of lock-in period. If you do not choose this option, either you should sell them on stock exchange or wait till maturity of the bonds.

• After lock-in period, there are two options with investors to get their money back:

1. If you have opted buy back option, you may write the bond issuers company to exercise this option and you will get your money + returns credited to your bank A/C
2.  These bonds will be listed in stock exchange. You can sell them like any other stock and get your money back. Remember, capital gain tax will come into picture in this case.

IDFC Infrastructure Bonds - 2011-2012

IDFC is issuing the bonds in two series. Basic difference between these is that interest on series 1 will be paid annually and series 2 will be paid on buyback or maturity.

IDFC bonds have following  Credit Ratings:
CARE AAA
[FITCH] AAA(ind)

Series	1	2
Face Value	5,000 per Bond
Minimum number of bonds per application	Two bonds and in multiples of one bond thereafter. For the purpose of fulfilling the requirement of minimum subscription of two bonds, an applicant may choose to apply for two bonds of the same or different series.
Interest payment	Annual	Cumulative
Interest  Rate	9% p.a.	N.A.
Maturity Amount per Bond	5,000	11,840
Maturity	10 years from the deemed date of allotment
Yield on  Maturity	9%	9% compounded annually
Buyback Facility	Yes
Yield on Buyback	9%	9% compounded annually
Buyback Date	Date following 5 years and one day from the deemed date of allotment
Buyback Amount	5,000 per bond	7,695 per bond
Buyback Intimation Period	The period beginning not before nine months prior to the buyback date and ending not later than six months prior to the buyback date

Please visit IDFC website for downloading application form and prospectus.

Following are the brokers of this issue. If you have Demat A/C with any of them, you should check with your broker, if they have easier process for subscription.

BROKERS TO THE ISSUE
Almondz Global Securities Limited	Karvy Stock Broking Limited
Bajaj Capital Investor Services Limited	Kotak Securities Limited
Enam Securities Private Limited	NJ India Invest Private Limited
Edelweiss Broking Limited	RR Equity Brokers Private Limited
HDFC Securities Limited	Sharekhan Limited
IDBI Capital Market Services Limited	SMC Global Securities Limited
JM Financial Services Private Limited	SBI Cap

Otherwise you need to submit you filled application form with cheque attached to any of the following banks.

BANKERS
HDFC Bank Ltd.	IndusInd Bank Ltd.
ICICI Bank Ltd.	Dhanalakshmi Bank Ltd.
IDBI Bank Ltd.	ING Vysya Bank Ltd.
Axis Bank Ltd.	Kotak Mahindra Bank