Page 13 - Banking Finance April 2019

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Sale of 'enemy shares', buybacks by CPSEs yield Rs. Income-tax exemption

11,300 cr in FY'19 limit on gratuity doubled
Sale of 'enemy shares' and buyback of stocks by CPSEs have together yielded to Rs. 20 lakh
the government over Rs 11,300 crore, thus helping
the exchequer mop up Rs 85,000 crore from disinvest- The labour ministry said that the in-
ment in the current fiscal -- the second highest receipt come tax ex-
ever. The government has garnered Rs 700 crore emption limit
through the first ever sale of 'enemy shares' after the on gratuity
Cabinet in November 2018 gave its go-ahead to the has been
Department of Investment and Public Asset Management (DIPAM) to sell such doubled to Rs
shares held in companies. 20 lakh from
Enemy property refers to the assets left behind by people who migrated to the existing Rs 10 lakh, a move that
Pakistan or China and are no longer citizens of India. Besides, over Rs 10,600 will benefit employees who are not
crore has come in from buyback of government shares by Central Public Sector covered by the Payment of Gratuity
Enterprises (CPSEs). In 2018-19, the government for the second time in a row Act, 1972.
exceeded the disinvestment target by mopping up Rs 85,000 crore as against "Ministry of Finance has enhanced
the budget estimate of Rs 80,000 crore.
the income tax exemption for gratu-
SEBI seeks greater powers to inspect records of listed ity under Section 10 (10) (iii) of the
Income Tax Act, 1961 to Rs 20
firms lakhs," a labour ministry statement
Sebi has sought powers to conduct inspection of books of accounts of listed com- said.
panies for contravention of any securities law and also
to take direct action against the fraudsters. Besides, Sebi Labour Minister Santosh Kumar
Gangwar has said in the statement
has proposed a heavy penalty for altering, destroying,
that this would benefit those em-
mutilating, concealing or falsifying records and docu-
ments or other tangible objects with an intent to ob- ployees of public sector undertakings
struct, impede or influence a legal investigation. (PSUs) and other employees not cov-
ered by the Payment of Gratuity Act,
At present, Sebi is empowered to conduct such inspections in case of violations 1972, and has thanked Finance Min-
relating to insider trading and fraudulent or unfair trade practices. However,
the regulator has now asked the government that its power to undertake in- ister Arun Jaitley for enhancing the
exemption limit.
spection of books at listed companies should be for contravention of any secu-
rities laws without limiting it to violations relating to one or two regulations, a The ceiling of gratuity amount under
senior official said. the Payment of Gratuity Act, 1972,
has been raised from time to time
Cabinet okays amendments in Bill to ban unregulated keeping in view overall economic

deposits condition and employers' capacity to
The Union Cabinet approved proposals to amend the Banning of Unregulated pay and the salary of employees,
Deposit Schemes Bill, 2018. This will further strengthen the Bill in its objective which have been increased in private
to effectively tackle the menace of illicit deposit-taking activities, and prevent sector and in PSUs.
such schemes from duping the poor, Law Minister Ravi Shankar Prasad said while The latest enhancement of tax ex-
briefing the media after the Cabinet meeting here. The Bill provides for severe emption limit on gratuity follows a
punishment and heavy pecuniary fines to act as deterrent, he said.
government notification issued on
It has adequate provisions for disgorgement or repayment of deposits in cases March 29, 2018, under which the
where such schemes nonetheless manage to raise deposits illegally, Prasad added. ceiling was increased from Rs 10 lakh
The CBI has lodged about 166 cases in the last four years in chit funds and multi- to 20 lakh effective March 29, 2018.
crore scams, with the maximum in West Bengal and Odisha, he said.

BANKING FINANCE | APRIL | 2019 | 13