Merry Christmas and Seasons Greetings : IndiaER.blogspot.com

Merry Christmas and Seasons Greetings : IndiaER.blogspot.com

National Housing Bank (NHB) Tax Free Bonds - "Earn upto 9.01% p.a."

Issue Opens: Dec 30, 2013

Issue closes: Jan 31, 2014

Coupon Rate Ceilings for AAA rated Tax Free Bonds (NHB -  Opening from 30 DecProposed)
For Retail Individual Investors	8.51%	8.88%	9.01%
For QIBs, Corporates & HNIs	8.26%	8.63%	8.76%

SCUF - NCD End of Issue collection figures as on 24-12-2013

 Dear Team,

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Know your gratuity benefits :: Business Line

If you stay on with your employer for 5 years or more, you will be entitled to gratuity when you resign, retire or are retrenched.

Job-hopping can increase your pay, but good old loyalty also has its perks. Stay on with your employer for five years or more, and you are entitled to gratuity when you resign, retire or are retrenched. This monetary reward to be paid by your employer in recognition of your years of service is mandated by the Payment of Gratuity Act. Most establishments employing 10 or more workers fall under the Act.

The amount you get as gratuity depends on the number of years you have served and the last drawn monthly salary. Roughly, you get half a month’s Basic and DA for every completed year of service. Here’s the formula to calculate gratuity: (Number of years of service) * (Last drawn monthly Basic and DA) *15/26. So, if you have served 30 years and draw monthly Basic and DA of Rs 20,000 when you leave the job, you get gratuity of Rs 3,46,154 calculated as (30 * 20,000 *15/26). Your employer can choose to pay you more but the maximum amount of gratuity according to the Act cannot exceed Rs 10 lakh. Amount paid above this will be in the nature of ex-gratia — something voluntary and not mandated according to law.

If you serve more than six months in the last year of employment, it is considered as a full year of service. For instance, if your tenure is 30 years and 7 months, the years of service for gratuity calculation will be rounded off to 31. But if you serve 30 years and 5 or 6 months, then the number of years of service will be considered as 30.

Waiving the rule

Going by the book, gratuity is payable only if you have been with the employer for five years or more. But this rule is waived if an employee dies or is disabled. In such cases, gratuity is paid to the nominees or to the employee, even if the tenure is less than 5 years.

Even employees not covered under the Payment of Gratuity Act are entitled to gratuity. But in such cases, the formula for gratuity calculation differs. It is computed as the (number of years of service) * (average monthly salary in the last 10 months of employment) * (15/30). This computation makes the gratuity amount lesser than that under the Act. For instance, in the above example, an employee not covered by the Act will be entitled to Rs 3,00,000 as gratuity, calculated as (30 * 20,000 * 15/30). This is Rs 46,154 lower than employees covered under the Act are entitled to. Another difference is that only fully completed years of service are considered in the calculations, and partial service in the last year, even if it in excess of six months, is ignored. For instance, service of 30 years and 7 months, will be considered as 30 years and not 31 years.

Another positive is the favourable tax treatment that gratuity receipt enjoys. Tax treatment

If you are a government employee, then the entire amount you get is exempt from tax. If you are not a government employee but are covered under the Act, you get tax deduction for an amount which is the lower of the following:

a) Actual gratuity received

b) 15 days Basic and DA for each completed year of service (according to calculations in the example above)

c) Rs 10 lakh

Say, in the instance above, your employer paid you gratuity of Rs 5,00,000, which is more than the Rs 3,46,154 actually payable under the law. You will enjoy tax deduction on Rs 3,46,154 and the surplus Rs 1,53,846 will be subject to tax. Note that the total tax deduction on gratuity amounts received, including those from previous employers in earlier years, cannot exceed Rs 10 lakh.

Employees not covered under the Payment of Gratuity Act are also entitled to tax deduction on the amount they receive. The deduction rules are similar to those applicable for employees covered by the Act.

Morgan Stanley to sell India mutual funds assets to HDFC

Morgan Stanley is selling its Indian mutual fund assets to a joint venture between India's HDFC and Britain's Standard Life, becoming the latest foreign asset manager to quit India.

HDFC Asset Management Company Ltd, India's biggest fund manager in terms of assets, said it will acquire Morgan Stanley Investment Management's eight mutual funds, with a combined 32.9 billion rupees ($529 million) under management, for an undisclosed sum.

The sale comes after Morgan Stanley sold its Indian private wealth management business to Standard Chartered in May. No Morgan Stanley spokesman was immediately available for comment.
The sale of the fund assets marks the latest exit from India by a foreign player. Japan's Daiwa Asset Management offloaded its mutual fund schemes this year and Fidelity Worldwide exited last year.
Equity redemptions have reached $5.75 billion over the past five years because of volatile markets, taking a toll on management fees. On top of that the industry is struggling with rising regulatory costs.
"HDFC Mutual Fund has acquired a portfolio of strong performing domestic mutual fund schemes from Morgan Stanley and this acquisition is another step towards expanding our mutual fund customer base," Milind Barve, managing director of HDFC Asset Management said in a statement.
HDFC Asset Management is owned by India's Housing Development Finance Corp and Britain's Standard Life PLC.

Coupon Rate Ceilings for Tax Free Bonds

Coupon Rate Ceilings for AAA rated Tax Free Bonds (NHB -  Opening from 30 DecProposed)
For Retail Individual Investors	8.51%	8.88%	9.01%
For QIBs, Corporates & HNIs	8.26%	8.63%	8.76%

Coupon Rate on IRFC Public Issue of Tax Free Bonds (06-Jan-2014 to 20-Jan-2014- Proposed)

For Retail Individual Investors	8.48%	8.65%	NA
For QIBs, Corporates & HNIs	8.23%	8.40%	NA
Coupon Rate on IIFCL Public Issue of Tax Free Bonds (09-Dec-2013 to 10-Jan-2014)
For Retail Individual Investors	8.66%	8.73%	8.91%
For QIBs, Corporates & HNIs	8.41%	8.48%	8.66%

 

Coupon Rate Ceilings for Tax Free Bonds For public issues where prospectus is filed in the coming week i.e. between 23-Dec-2013 and 27-Dec-2013
G-Sec Yields (as per FIMMDA) (semi-annual)
Maturity	10 Years	15 Years	20 Years
Week - 1
Monday, December 09, 2013	8.9234%	9.2523%	9.3007%
Tuesday, December 10, 2013	8.8558%	9.2314%	9.3085%
Wednesday, December 11, 2013	8.8483%	9.2391%	9.3135%
Thursday, December 12, 2013	8.8719%	9.2337%	9.3302%
Friday, December 13, 2013	8.9362%	9.2714%	9.4207%
Week-2
Monday, December 16, 2013	8.8909%	9.2757%	9.4454%
Tuesday, December 17, 2013	8.9392%	9.3064%	9.3939%
Wednesday, December 18, 2013	8.8145%	9.2023%	9.3368%
Thursday, December 19, 2013	8.7694%	9.0663%	9.2753%
Friday, December 20, 2013	8.8267%	9.1885%	9.3591%
Average G-Sec Yield (semi-annual)	8.8676%	9.2267%	9.3484%
Annualized Yield	9.0642%	9.4395%	9.5669%
Annualized Yield (rounded off)	9.06%	9.43%	9.56%

Thanks & Regards