Cryptocurrency in India 2020

Recent History

With the popularisation of internet technologies, virtual currency - called as cryptocurrency came into existence.

As cryptocurrency became popular, people started investing and trading in these. The trades happened across the globe even though these trades were not regulated. (including in India)

Hence acting in the interest of consumers, the govt. cautioned people about the risks in dealing in cryptocurrencies. 

Reserve Bank notification and court case 

The Reserve Bank of India through its notification dates 06.04.2018 prohibited dealing of virtual currencies in India (including cryptocurrencies).

However the Supreme Court of India in case of Internet and Mobile Association of India vs Reserve Bank of India, set aside the RBI notification of 06.04.2018. 

Current Exchanges of Cryptocurrencies in India (a few)

1. CoinSwitch 
2. CoinDCX
3. ZebPay
4. WazirX
5. Unchain

New Bill - proposed- by the Govt. 

In 2019 the Department of Economic Affairs, Govt Of India has proposed a draft bill called the "Cryptocurrency and Regulation of Official Digital Currency Bill" 

Not only does this intend to ban use of all private cryptocurrencies but also suggests a blockchain based central digital currency (digital rupee maybe).

This development, if this bill as proposed becomes a law, will then change the way cryptocurrencies are currently held and traded in India. 

(Disclaimer : This blog is for educational purposes and not to sollicit any business and provide any kind of advise.)

Options to save Income Tax - Investments under Section 80C

There are various deductions a taxpayer can claim from his total income - on which Income Tax is applicable in India. 

This will bring down his taxable income and reduce his tax outgo.

Some of the important deductions available are 

• Section 80C: Investments
• Section 80TTA: Interest on Savings Accounts 
• Section 80GG: House Rent Paid 
• Section 80E: Interest on Education Loan 
• Section 80D: Medical Insurance 
• Section 80G: Donations 
• Section 80RRB: Royalty on Patents
• Section 80TTb: Interest Income

SECTION 80C : POSSIBLE OPTIONS 

The maximum amount of deduction that can be claimed for the Financial Year 2018-19 is Rs.1,50,000/-

Investments can be made in 

• Employees Provident Fund and Voluntary Provident Fund: This option is for salaried employees. A part of your salary is deducted monthly as your contribution towards EPF.  The total amount deducted annually can be claimed by you as deduction while computing your total taxable income.  However, you must check with your employer how much interest is earned on the corpus during the financial year. Interest earned above the limit of 9.5 per cent is taxable in the hands of the employee. Similarly, if the contribution from your employer is more than 12 per cent of your salary, then the excess is taxable in your hands.

• Public Provident Fund: PPF is a scheme provided by the government and the investment in it is eligible for deduction under Section 80C.  Minimum Investment: Rs500/- per year, Maximum Investment: RS.1,50,000/- per year. Maturity Period: 15 years, cumulative scheme - all monies including interest are paid at the end of 15 years. Interest is tax free and is compounded annually.  A point worth noting is that the interest rate is assured but not fixed. The rate is subject to revision every quarter. The interest rate effective for January-March 2019 quarter is 8 per cent.

• Life Insurance Premiums: Amount paid towards life insurance purchased for oneself, spouse and children can be included in Section 80C deduction. However premiums paid by you for your parents, brother, in-laws is not eligible. If an HUF buys an insurance for its member, it can claim deduction under Section 80C. 

• Home Loan Principal Repayment: The EMI (Equated Monthly Instalment) that you pay has two components, principal and interest. The principal qualifies under Section 80C.

• National Savings Certificate: Minimum Investment: Rs.500/- Maximum Investment: No Limit. Maturity Period: 5 years, cumulative scheme - all monies including interest are paid at maturity  Current Interest Rate: 8% p.a.

• Five year Bank Deposits: Any term deposit for a period of 5 years also qualifies for deduction under 80C.  Interest earned on these deposits are taxable. 

• ELSS (Equity Linked Saving Schemes): There are some mutual fund (MF) schemes specially created to offer you tax savings and these are called Equity Linked Savings Scheme (ELSS). The investments that you make in ELSS are eligible for deduction under Section 80C. ELSS has the potential of earning higher returns compared to other tax-saving investments as it is equity-linked, but this means that it comes with higher risk. There is no limit on the amount that can be invested in any of these schemes, but the tax benefit is available only for Rs 1.5 lakh. 

DISCLAIMER :  THIS BLOG IS FOR INFORMATION AND NOT TO SOLICIT ANY BUSINESS.

EMBASSY PARKS - INDIA's First REIT IPO, TAXATION OF REITs and other DETAILS.

EMBASSY OFFICE PARK REIT 

ISSUE OPENS: 18TH MARCH 2019

ISSUE CLOSES: 20TH MARCH 2019

SIZE : RS4750/- CRORES 

PRICE BAND: RS299-300/-

MINIMUM LOT SIZE:800 UNITS, THEREAFTER MULTIPLES OF 400 UNITS

MINIMUM APPLICATION SIZE: RS300X800=RS.2,40,000/-

WHAT IS REIT

A REIT is an investment vehicle that own, finances or operates income (generally rental) producing real estate. 

In India REITs are allowed to only hold commercial properties. 

Which means that all the rental income of the properties owned by REIT are paid to REIT.  A REIT is then supposed to pass on at least 90% of the income it receives to unit holders/shareholders. 

When you subscribe to an IPO of a REIT and you are given an allotment, you will become a unitholder or shareholder of REIT. Thus you will be allowed units or shares. 

TAXATION OF REIT

As per law a REIT is supposed to pass on ( i.e. distribute to unit holders/shareholders) 90% of the income it receives.  This income can be distributed either as rental income or as dividend or a combination of both.  This income will be received by unit holders/shareholders in their respective bank accounts.  Taxation of this income is as shown

Shares/Units of REITS will be traded on stock exchanges -  NSE and BSE.   

If you sell these shares/units the tax is as follows. 

• IF YOU SELL AFTER THREE YEARS : 10% (plus surcharge and cess) capital gains tax 
• IF YOU SELL WITHIN THREE YEARS: 15% (plus surcharge and cess) capital gains tax 

As per the red-herring prospectus, Embassy Office Parks posted consistent revenue growth in the last 3 years from Rs 1,575 crore in FY16 to Rs 1,766 crore in FY18. The Embassy REIT has been given a long-term rating of [ICRA] AAA by ICRA.

Do remember REIT is a new category of product which is getting listed on our stock exchanges. It will take time to stabilise.  

Many Indian investors also have a significant exposure to Real Estate.  Do not go overboard if you already have a significant exposure to real estate. 

It might hence be prudent to see the listing of this REIT and let it establish a track record so as to make one more comfortable.  One can then take a decision to participate in a REIT.

 A significantly traded REIT will provide you ample and faster liquidity than a real estate property does today.  That for many will be a significant advantage. 

(Source :  www.moneycontrol.com, , SEBI.GOV.IN)

DISCLAIMER :  THIS BLOG IS FOR INFORMATION AND NOT TO SOLICIT ANY BUSINESS.

COMPANY FIXED DEPOSITS - AREY THEY SAFE TO INVEST INTO

It is always great to have a higher return on our deposits. But by the term deposit, some of us may understand it as bank fixed deposit but there is also another type of deposit available in the market which is Company Fixed Deposit. Just like the Bank Fixed Deposit, Company Fixed Deposit works in the same manner but the difference lies in the return or interest they are offering and there is also a chance of default.

TO READ MORE....

https://blog.elearnmarkets.com/company-fixed-deposits/

SOVEREIGN GOLD BOND SCHEME IS BACK - OCT15-19,2018

The Government of India has announced fresh issue of Sovereign Gold Bonds ( SGBs).  The second series for this financial year would be open for  

subscription from October 15-19, 2018. 

Price 
Average of the latest three business day's price as fixed by the India Bullion and Jewellers Association Ltd. 
Minimum Investment 
One Gram 
Maximum Investment 
4 kg per anum ( 20 kg for Trusts) 
Interest Rate 
2.5% per anum 
Tenure 
8 years. 
You can prematurely encase them after 5 years or sell them on a stock exchange. 
Where to buy
Banks, Post Offices, Stock Exchanges  ( NSE and BSE).
You can also buy them online through the websites of these agencies. 
Online Purchases carry a discount of Rs.50 per gram 
When will SGBs get issued 
for the applications received during a given week, the bond shall be issued on the second business day of next week. For this particular tranche it would be October 23, 2018
Redemption Value 
Based on the price of gold of 999 purity on the three business days prior to redemption date. 
Taxation 
The interest paid on these bonds is fully taxable. Capital Gains on redemption are exempt from tax. Of sold before 8 years the benefit of indexation on long term capital gains ( if held for more than 1 year) is available. 
Allotment
Almost assured 
How to hold them. 
Certificates or in Demat form.