Tax saving mutual fund schemes or equity linked saving scheme (ELSS) are one of the most preferred options to save tax for most individuals. It comes with a three-year lock-in period. Although there is no restriction on the amount one can invest in it, investments up to Rs 1.5 lakh in a financial year is exempt under section 80C of the Income Tax Act. The recent budget kept the section 80C limit of Rs 1.5 lakh intact.Although no rule bans investments in excess of Rs 1.5 lakh per year, one should not invest money in excess of what is required in ELSS. Primary reason behind this is the three-year in lock in period. Financial planners advise investing in equity mutual funds with long-time frame – typically in excess of five years and in that case three-year lock-in is not a hindrance. It makes sense to invest in a product for long-term by choice and not out of force.ELSS portfolios comprise stocks of companies of all sizes – large, mid and small. This is akin to a … [Read more...] about Explainer | Should you invest more than Rs 1.5 lakh in tax-saving funds?
Multi million dollar tax break
The Reserve Bank of India (RBI) on March 26 injected Rs 34,561 crore liquidity through its maiden long-term dollar-rupee swap auction. A better-than-expected market response signalled more such auctions in future.“The response was higher than anticipated. This clears the deck for more such money market operations going ahead,” said Ashish Vaidya, Head of Trading, DBS Bank.The RBI received 240 bids worth $16.31 billion at an average premium of Rs 7.92. The central bank accepted 89 offers totalling $5.02 billion at a cut-off premium of Rs 7.76. These premiums represent what banks are willing to pay to the central bank at the end of the swap tenor, which is fixed at three years.Close The RBI had aimed to infuse around Rs 35,000 crore into the system through this new liquidity management tool. “Markets were expecting cut off premium between Rs 7.60 to Rs 7.80, so it is in line with market expectations,” said Ashutosh Khajuria, Chief Financial Officer, Federal … [Read more...] about RBI’s maiden dollar-rupee swap auction a hit; more such operations likely in future
The central bank's decision to inject rupee liquidity by swapping dollars at a market-determined premium is being hailed as an "unconventional" move that could highly benefit corporate borrowers, if successful.On March 13, the Reserve Bank of India (RBI) introduced a new liquidity management tool to the markets in the form of a dollar-rupee swap. There would be an auction on March 26 wherein RBI will buy dollars from market participants and inject rupee liquidity amounting to Rs 35,000 crore into the Indian banking system. The tenure of the swap has been fixed at three years.RBI said once the auction window is closed, all the bids would be arranged in descending order of the swap premium quoted and the cut-off will be arrived at the premium corresponding to the notified dollar amount of the auction, which is $5 billion in this case. Successful bidders would be those who have placed their bids at or above the cut-off premium.Close While a similar move was undertaken in 2013, the … [Read more...] about RBI’s $5 billion swap: A window of opportunity for the corporate
The rupee appreciated by 10 paise to end at 68.86 against the US dollar Tuesday following a robust response to RBI's maiden rupee-dollar swap auction. Sustained foreign fund inflows and heavy buying in domestic equities also propped up the local unit, forex traders said.Under the rupee-dollar swap auction conducted Tuesday, the Reserve Bank received bids for $16.31 billion, against the notified amount of $5 billion.At the Interbank Foreign Exchange (forex) market, the rupee opened strong at 68.88 against the greenback but surrendered the gains to slip to a low of 68.98.Close However, it clawed back lost ground and finally ended at 68.86, up 10 paise against its previous close of 68.96 per dollar. related news Cabinet clears bill to replace ordinance on tax reduction Glitches at NSE need to be fixed, says Sebi chief Sebi tightens loan default disclosure norms, reduces time for rights issue "The success of India's $5 billion swap auction will decide whether it will become a … [Read more...] about Rupee rises 10 paise to 68.86 vs USD as RBI swap auction elicits strong response
India has raced ahead of Korea Exchange, in terms of the ratio of equity derivatives turnover to the cash market turnover, according to data by World Federation of Exchanges Forum. The derivatives to cash market ratio for India has increased to 29.6 from around 15.0 two years ago, and is way ahead of Korea, which had a ratio of 18.8 at the end of March 2018.As per the forum, March data shows that NSE cash market volume stands at USD 90,968.9 million and derivatives volume at USD 2,689,055 million dollars. Cash volumes for the Korea exchange were USD 240,760 million while derivative volume was at USD 4,529,445.1 million.A discussion paper on the development of equity derivatives had recently raised concern over the high ratio of derivatives to cash following which the Securities and Exchanges Board of India (SEBI) had proposed introduction of physical delivery for single stock futures and options in a phased manner. … [Read more...] about India’s derivatives to cash market turnover ratio at highest among world markets