1. CBDT unveils single ITR form for all taxpayers
Tags: Economy/Finance National News
The Central Board of Direct Taxes (CBDT) on 1 November has proposed a single income tax return (ITR) form for all taxpayers.
Important facts
All taxpayers, except trusts and non-profit organisations, can file returns with the proposed new common ITR form, on which the CBDT has invited stakeholder comments by 15 December.
Currently, taxpayers are required to furnish their income tax returns in ITR-1 to ITR-7, depending on the category.
What is Income Tax Return (ITR)?
ITR is a form which a person is supposed to submit to the Income Tax Department of India.
It contains information about the income of the individual during the year and the taxes to be paid on it.
Kinds of ITR forms
There are seven types of ITR forms, which are used by different categories of taxpayers.
ITR Form 1 - ALSO called ‘Sahaj’, is for small and medium taxpayers. Sahaj forms can be filed by individuals who have an income up to Rs 50 lakh, with earnings from salary, one house property/ other sources (interest etc).
ITR-2 - It is filed by people with income from residential property.
ITR-3 - It is intended for people who have income as profits from business/ profession.
ITR-4 (Sugam) - It is, like ITR-1 (Sahaj), a simple form, and can be filed by individuals, Hindu Undivided Families (HUFs) and firms with total income up to Rs 50 lakh from businesses and professions.
ITR-5 and 6 - These are for limited liability partnerships (LLPs) and businesses respectively.
ITR-7 - It is filed by trusts and non-profit organisations.
The changes that has been proposed
As per the proposal, all taxpayers, except trusts and non-profit organisations (ITR-7), will use a single ITR form, which will include a separate head for disclosure of income from virtual digital assets.
The current ITR-1 and ITR-4 will continue.
The purpose of the draft form is to make return filing easier, and save the time of individuals and non-business-type taxpayers.
2. Bank of England makes biggest interest rate hike in 33 years to cool rampant inflation
Tags: Economy/Finance International News
The central bank of the United Kingdom, Bank of England (BoE) raised its interest rates by the most since 1989 on 3 November 2022. It joins the US Federal Reserve and other central banks worldwide in rapid hikes as it tries to beat back high inflation fuelled by the conflict between Russia and Ukraine.
The BoE increased the Bank Rate to 3% from 2.25% and warned that the British economy might not grow for another two years.
The BoE Governor Andrew Bailey said that “High energy, food and other bills are hitting people hard. Households have less to spend on other things. This has meant that the size of the UK economy has started to fall,”
The BoE said it now expects inflation will hit a 40-year high of around 11% during the current quarter, more than five times its 2% target. But it also thinks the economy has entered a recession.
When there is a negative growth in the economy for the two consecutive quarters then the economy is in recession.
Problem of Gas in Europe
Europe has been particularly hard hit by a jump in natural gas prices as Russia responded to Western sanctions and support for Ukraine by curtailing shipments of the fuel used to heat homes, generate electricity and power industry and European nations competed for alternative supplies on global markets.
Important Central Banks in the world
Country | Central Bank | Central Bank Head |
India | Reserve Bank of India | Shaktikanta Das |
United States of America | Federal Reserve | Jerome Powel |
Japan | Bank of Japan | Haruhiko Kuroda |
China | People’s Bank of China | Yi Gang |
United Kingdom | Bank of England | Andrew Bailey |
European Euro Zone | European Central Bank | Christine Lagarde |
European Central Bank (ECB)
It is the Central Bank of the 19 European Union countries which have adopted Euro as their common currency.
Member countries of Eurozone: Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland, Slovenia , Cyprus, Malta, Slovakia, Estonia , Latvia, Lithuania.
3. India tops list of countries with cheapest manufacturing costs
Tags: Economy/Finance
According to a report published by the US News and World Report, India has been ranked as the country with the cheapest manufacturing cost, far ahead of China and Vietnam. The report was compiled on the survey conducted by the US media company amongst 85 countries.
The report evaluates 85 countries on 73 attributes. The attributes are grouped into 10 sub categories like adventure, agility, and entrepreneurship, open for business, social purpose and quality of life.
Performance of India
On a scale of 100, India has scored cent percent when it comes to cheap manufacturing costs.
According to the report India has an overall score of 37 out of 100 in the ’Open for Business' category.
However India has scored low on certain attributes. India has scored low 16.2/100 when it comes to 'favourable tax environment', 18.1/100 in the 'not corrupt' sub-category and 3.5 in 'transparent government policies'.
The report comes at a time when the Modi government is attempting to make India a hub of global manufacturing. The 'Aatmanirbhar Bharat' was launched by the government months after the COVID-19 outbreak in 2020, is aimed at boosting the country's production capacity by attracting foreign players.
Best Country Ranking
In the overall Best country ranking, Switzerland has topped the chart, followed by Germany, Canada, US and Sweden.
India has been ranked 31st in the best country ranking amongst 85 countries.
4. Vadodara becomes the second city to successfully issue municipal bonds with assistance from US Treasury
Tags: Economy/Finance
Vadodara city of Gujarat became the second city in India to successfully issue its municipal bonds with the assistance of the US Treasury Department’s Office of Technical Assistance.
Earlier Pune was the first city in India to issue Municipal bonds in 2017 with the assistance of US Treasury Department’s Office of Technical Assistance, Finance Ministry in the United States of America is known as Treasury department.
The successful issuance of the bond was celebrated by the US Embassy and the US Treasury officials, the Union Ministry of Housing and Urban Development, Vadodara city and the Securities and Exchange Board of India (SEBI) on 3 November 2022.
The Rs 100 crore fund raised by the bond will be used for infrastructure development in Vadodara.
What is a Municipal Bond?
Municipal Bonds also known as Muni bonds. It is a debt instrument which is issued by Urban Local Bodies in India. The fund is used to develop Infrastructure developments in the municipal areas.
The first Municipal bonds were issued in 1997 by the Bangalore Municipal Corporation.
SEBI guidelines on Municipal bonds
The municipality which meets the following criteria can issue municipal bonds:
- The municipality must not have a negative net worth in each of the three previous years.
- The municipality must have no default history in repayment of loans to financial institutions in the last year.
- The municipality, promoter and directors must not be enlisted in the wilful defaulters published by the Reserve Bank of India (RBI).
- The municipality should have no record of default in the payment of interest and repayment of principal with respect to debt instruments.
Other features of the Bond
The time period of the bonds shall be 3 years.
The bonds must be rated by Credit Rating agencies with a rating above investment grade.
5. India Post Payment Bank launches India’s first Floating Financial Literacy Camp in Srinagar
Tags: place in news Economy/Finance
The Government of India owned India Post Payment Bank (IPPB) launched India’s first floating financial literacy camp around the world-famous Dal Lake of Srinagar, Jammu and Kashmir. The financial literacy camp was organised under the Niveshak Didi or female Dakiya initiative of the IPPB.
Niveshak Didi scheme
Niveshak Didi '' or female dakiya, is a joint initiative of Investor Education and Protection Fund Authority ( IEPFA),Ministry of Corporate Affairs with India Post Payment Bank.
The aim of the scheme is to promote financial and investor education amongst the women.
Trained women agents of the IPPB educate the general female population to develop adequate knowledge, skills, attitude and behaviour which are needed to manage their money better and plan for their future. This is also called as Financial Literacy.
Objectives of Financial Literacy
To promote and strengthen financial inclusion in India, government of India and the four financial sector regulators Reserve Bank of India (RBI), Securities Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI) and Pension Fund Regulatory and Development Authority (PFRDA) have launched National Strategy for Financial Education.
Currently the 2nd National Strategy for Financial Education (2020-2025) is being implemented in India. It has laid down the following objective to create a financially aware and empowered India:
- Inculcate financial literacy concepts among the various sections of the population through financial education to make it an important life skill
- Encourage active savings behaviour
- Encourage participation in financial markets to meet financial goals and objectives
- Develop credit discipline and encourage availing credit from formal financial institutions as per requirement
- Improve usage of digital financial services in a safe and secure manner
- Manage risk at various life stages through relevant and suitable insurance cover
- Plan for old age and retirement through coverage of suitable pension products
- Knowledge about rights, duties and avenues for grievance redressal
- Improve research and evaluation methods to assess progress in financial education
India Post Payment Bank (IPPB)
It is a payment bank which has been promoted by the Department of Post under the Ministry of Communication, Government of India .
IPPB was launched as a pilot project on 30 January 2017 in Ranchi (Jharkhand) and Raipur (Chhattisgarh).
It was formally launched on 1 September 2018 by Prime Minister Narendra Modi.
The Headquarter of IPPB : New Delhi
Punchline of the bank : Apka Bank Apke Dwar
Managing Director and Chief Executive Officer : J. Venkatramu
6. Union Cabinet approves naming Hollongi Airport as Donyi Polo Airport
Tags: Economy/Finance National News
The Union Cabinet, chaired by Prime Minister Narendra Modi, on 2 November approved naming of greenfield airport at Hollongi, Itanagar, as ‘Donyi Polo Airport.
Important facts
A resolution was passed by the state government of Arunachal Pradesh to name this airport 'Donny Polo Airport, Itanagar'.
The 'Doni Polo' reflects the people's respect for the Sun (Doni) and the Moon (Polo), symbols of the state's traditions and rich cultural heritage.
The Government of India had given 'in-principle' approval for the development of Hollongi Greenfield Airport in January 2019.
The project is being developed by the Airports Authority of India (AAI) in collaboration with the Central Government and the State Government of Arunachal Pradesh at a cost of Rs 646 crore.
Hollongi Airport is the third airport in the state and the only airport in the capital city after Pasighat and Tezu airports.
Doni Polo Airport in Itanagar is the 16th airport in Northeast India.
Operational airports in the north-eastern region
Guwahati, Silchar, Dibrugarh, Jorhat, Tezpur, Lilabari, and Rupsi (Assam); Pasighat and Tezu (Arunachal Pradesh); Agartala (Tripura); Imphal (Manipur); Shillong (Meghalaya); Dimapur (Nagaland); Lengpui (Mizoram) and Pakyong (Sikkim).
7. RBI Governor Shaktikanta Das inaugurates the FIBAC 2022
Tags: place in news Economy/Finance Summits
Reserve Bank of India Governor Shaktikanta Das inaugurated one of the largest annual banking conferences of Asia, FIBAC 2022 in Mumbai on 2 November 2022.
The FIBAC 2022 has been organized by Federation of Indian Chambers of Commerce and Industry (FICCI) and Indian Banks’ Association (IBA) on 2nd and 3rd of November 2022 at Mumbai, Maharashtra.
Theme of the Conference: 'Helping India step change its growth: How tech enabled banking can contribute to realization of $5 trillion economy goal’.
Speaking on occasion the governor said that the e-rupee launch on 1 November 2022 was a landmark moment in the history of currency in the country as it will transform the way business is done and transactions are conducted.
He added that the central bank hopes to launch digitized Kisan Credit Card loans in a full-fledged manner by the calendar year 2023.
Indian Bank Association is an association of Banks and Financial institutions in India which was set up in 1946.
8. Invest Karnataka - 2022 Summit
Tags: Economy/Finance Summits National News
The Prime Minister, Narendra Modi, addressed the inaugural function of the Global Investors Meet Invest Karnataka 2022 through video conferencing on November 2, 2022.
Important facts
More than 80 speakers will present their views in the three-day event to be held in Bengaluru from November 2-4.
The key themes to be addressed during the event will be related to innovation, sustainability, equity and resilience.
Speakers include some top industry leaders including Kumar Mangalam Birla, Sajjan Jindal, Vikram Kirloskar among others.
The aim of the Summit is to attract potential investors and establish a growth agenda for the next decade.
The sessions of the conference will be hosted separately by Germany, Netherlands, South Korea, Japan and Australia who are in India along with high level ministerial and industrial delegations from their respective countries.
The global scale of the event will give Karnataka an opportunity to showcase its culture to the world as well.
9. RBI to launch a pilot project on Digital Rupee in the Wholesale segment on 1 November 2022
Tags: Economy/Finance
The Reserve Bank of India (RBI) has on 31 October 2022 announced that it will begin a pilot launch of the Digital Rupee (e₹) for specific use cases. The first pilot project of the Digital Rupee will be launched in the Wholesale segment (e₹-W) on November 1, 2022.
Where it will be used?
The digital rupee will be used for settlement of secondary market transactions in government securities. According to the RBI, nine banks including State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank, and HSBC will participate in the pilot project.
Digital Currency in India
Union Finance Minister Nirmala Sitharaman had earlier announced that the RBI will launch a Central Bank Digital Currency (CBDC) in 2022-23. According to the FM, the introduction of CBDC will boost the digital economy and will be based on Blockchain technology.
What is Central Bank Digital Currency (CBDC)?
According to the Reserve Bank of India the CBDC has the following features:
- It is a legal tender issued by a central bank in a digital form,
- It is similar to sovereign paper currency (Indian Rupee) but takes a different form. It will not be in paper form but in digital format,
- It shall be exchangeable at par with the existing currency and shall be accepted as a medium of payment, legal tender and a safe store of value,
- CBDCs would appear as liability on a central bank’s balance sheet.
Advantage of a CBDC
- Unlike the paper currency, a digital currency can never be torn, burned, or physically damaged. In comparison to currency notes, the lifeline of a digital form of currency will be indefinite.
- It will promote cashless financial transactions which will reduce the cost of financial transactions.
- Central bank digital currencies would also reduce the risks of using other digital currencies like Bitcoins. Cryptocurrencies are highly volatile, with their value constantly fluctuating which could cause severe financial stress in many households and affect the overall stability of an economy.
- CBDCs, backed by a government and controlled by a central bank, would provide households, consumers, and businesses with a stable means of exchanging digital currency.
10. Income Tax Department launches HARIT Aaykar initiative on the occasion of the National Unity Day
Tags: National Economy/Finance
The Income Tax Department on the occasion of the National Unity Day has launched the HARIT Aaykar initiative to increase greenery and create micro forests. National Unity day is observed in India on 31 October to commemorate the birthday of the first Home Minister and Deputy Prime Minister of Independent India Sardar Vallabah Bhai Patel.
Under the HARIT (Hariyali Achievement Resolution by Income Tax) initiative, the Department resolves to increase the green cover by planting trees and creating micro-forests in and around the Income Tax Department's buildings and other public areas.
Income Tax in India
Income tax is a direct tax which is imposed on the income of an Individual or Corporates.
It was first imposed in India on 24 July 1860.The first income tax was imposed in India in 1860 by Sir James Wilson.
Income Tax day is observed every year on 24 July .
When the Income Tax Act 1922 was introduced it laid a proper framework for the direct tax administration in the country. After Independence the Income Tax act 1961 consolidated and replaced the 1922 Act.
Applicability
It is applicable all over India. Sikkim was brought under the Income Tax act 1961 in 1989 and Jammu and Kashmir was brought under the act in 2019.
Tax administration Structure in India
In 1924, the Central Board of Revenue was constituted as a statutory body with functional responsibilities for administering the Income Tax Act.
In 1963, the Central Board of Revenue was bifurcated, and a separate Board for Direct Taxes known as Central Board of Direct Taxes (CBDT) was constituted under the Central Board of Revenue Act, 1963.
Who can levy Income Tax in India?
Income tax is levied by the central government on the income of a person or a company as specified by the Income Tax act.
However Income tax on agricultural income is levied by the respective state government.
