The government has allowed qualified foreign investors (QFIs) from six member-countries of the Gulf Cooperation Council (GCC) and 27 countries of the European Commission (EC) to invest in the Indian capital market to enhance foreign capital inflows. The GCC nations include Saudi Arabia, Bahrain, UAE, Oman, Qatar and Kuwait. With this, a $1 billion window over and above the current $20 billion limit has been created for QFI investment in corporate bonds and mutual fund debt schemes. The window is meant to test the waters for the time being and could be widened if required. Norms for opening accounts in India and keeping funds in them have also been relaxed substantially. A QFI is an individual, group or association resident in a foreign country that is compliant with Financial Action Task Force (FATF) standards and is a signatory to the International Organization of Securities Commission’s (IOSCO’s) Multilateral Memorandum of Understanding (MMoU). QFIs do not include FIIs (f More

The FIPB has cleared 25 FDI proposals worth Rs. 2,973.40 crore. The application of AIF III Sub Pvt. Ltd. to bring in FDI worth Rs. 1,000 crore has been approved. The Mauritius-based firm proposes to induct foreign investment in the units of a fund constituted as a trust. Mumbai-based Microqual Techno's application to increase Rs. 522.90 crore in foreign equity to carry out its wireless telecommunications business was also approved. The proposal of Mauritius-based Mozart for infusion of Rs. 300 crore in foreign investment in an existing company in the pharmaceuticals sector (brownfield investments) has also been approved. Sun Pharma Research Company's proposal for infusion of foreign equity by way of issue of partly paid up shares to carry out the development of new proprietary drugs has been cleared. Other proposals which have been approved are those of Genworth Financial Mortgage Guaranty India (Rs. 124 crore), Plethico Pharmaceuticals (Rs. 500 crore) and Kintetsu World Expr More

SEBI has shut the exit door to two FIIs holding shares in Essar Group firm India Securities. SEBI has told Essar Capital, the acquirer, not to accept the shares tendered by the FIIs till further instructions. The two FIIs together hold 19% in India Securities. They bought into India Securities through a preferential allotment of compulsorily convertible preference shares (CCPS) in March 2010 which were later converted into equity shares. More

The government has cut the long-term capital gain tax from 20% to 10% on investments made by PE funds into shares of unlisted companies. Currently, long-term capital gains arising from sale of unlisted securities in the case of FIIs are taxed at the rate of 10%, while other non-resident investors, including PE investors, are taxed at the rate of 20%. For listed securities, however, there is no tax on long term capital gains. More

India's economic growth rate has slipped to 5.3 per cent in the fourth quarter of 2011-12, lowest in nearly 9 years due to poor performance of the manufacturing and farm sectors. The Gross Domestic Product (GDP) growth in the January- March quarter of 2010-11 was 9.2 per cent. GDP in 2011-12 also moderated to 6.5 per cent from 8.4 per cent in the 2010-11. During the quarter ending March 31, growth in the manufacturing sector contracted to 0.3 per cent, from 7.3 per cent in the corresponding period of 2010-11. Farm output also exhibited a similar trend and expanded by just 1.7 per cent during the quarter, compared to 7.5 per cent in the Q4, 2010-11. However, mining and quarrying production growth stood at 4.3 cent during the quarter under review, as against a growth of meagre 0.6 per cent in Q4 of in 2010-11. Growth in the construction sector slowed to 4.8 per cent during the January-March quarter of 2011-12, from 8.9 per cent in the year-ago period. The trade, hotels, transport an More

The Finance Bill 2012 which was passed by the Lok Sabha earlier in May 2012 has received the assent of the President. Thus, it has become the Finance Act, 2012 The Finance Bill 2012 had proposed retrospective changes to the income tax law to bring all indirect transfer of shares into the tax net. More

Finance Minister has proposed to exempt foreign banks from paying tax for setting up local units. The RBI favours operating foreign banks to expand by opening wholly owned local units rather than opening branches, to shield them from liquidity shocks and capital constraints in their home markets. Foreign banks operating in India have cited high stamp duty and capital gains tax as a hindrance to floating local subsidiaries. Existing laws require overseas lenders to pay up to 30 percent of the market value of their assets as capital gains and stamp duty while converting branches to a new entity. More

The Copyright Amendment Bill which will help artists, professionals and content creators to protect their work, has been passed by the Lok Sabha. The Bill will bring the Indian Copyright laws in conformity with global norms. The bill also seeks to remove operational difficulties and address newer issues related to the digital world. The bill was passed by the Rajya Sabha on 17th May 2012. The bill tackles seven broad areas: right of author and music composer, right to visually impaired, extending compulsory regime to unpublished work and imposition of punitive action, amongst others. The bill makes it mandatory for broadcasters - both radio and television - to pay royalty to the owners of the copyright each time a work of art is broadcast. It bans persons from bringing out cover versions of any literary, dramatic or musical work for five years from the first recording of the original creation. More

The Union Cabinet has approved the amendments sought to be made in the Marriage Laws. One of the key recommendations that have received the nod of the cabinet relates to the distribution of residential property after divorce. It has now been proposed that any residential property that is in the name of any one amongst the couple will be distributed in half. It also does not matter whether the residential property was acquired before or after marriage, both the partners will be equally entitled to have the residential property after divorce. This provision will be applicable even in the case of ancestral property, but it should be in the name of one of the couple. In case of all other assets, the court will decide the distribution. The second amendment that has been approved relates to the timing and procedure of divorce. According to this recommendation, if both the partners mutually agree that their marriage has broken down irretrievably, then divorce can be granted after six month More

22nd May 2012, the Parliament passed the bill to protect children below 18 from sexual abuse. The bill envisages setting up of special courts for speedy trial of cases against children and provides stringent punishment extending up to life term for offenders. Under the Bill, all persons below 18 years would be treated as children. The bill also contains provisions for in-camera trial of offences. Provision has also been made to deal with offences of false complaints. As per the Bill, "whoever commits penetrative sexual assault on children shall be punished with imprisonment of either description for a term which shall not be less than seven years but which may extend to imprisonment for life and shall also be liable." It said "whoever uses a child for pornographic purposes shall be liable for rigorous imprisonment which may extend to five years and shall also be liable to fine and in the event of second or subsequent conviction with imprisonment of either description for a t More

In a landmark judgment, on 28th May, 2012, the Andhra Pradesh High Court set aside central government order providing OBC minorities a sub-quota of 4.5% in central educational institutions and public sector establishments on the grounds that it has been implemented based on religious grounds and not on the 'backwardness' of the intended beneficiaries. In December 2011, the Centre Government had issued two memos providing 4.5% reservation for OBC minorities within the 27% OBC quota in central education institutions and central government jobs. More

In the case of Parveen Begum and Anr. vs. Appellate Authority And Anr., the Delhi High Court has held that a donor, who is not a near relative of the recipient may by reason of “affection, or attachment towards the recipient or for any other special reasons” More

In its judgment dated 11th May, 2012, in the case of State of M.P. Vs. Rakesh Kohli & Anr the Supreme Court has held that the state can fix higher stamp duty More

n the matter of All India Institute of Medical Sciences vs. Vikrant Bhuria, the Delhi High Court on 28th May, 2012 held that holding that the Courts should not interfere with decisions of the academic authorities who are experts in their field. Once the experts of More

In the case of Minni vs. High Court of Delhi thr. R.G. New Delhi, the Delhi High Court has held that the Criminal Procedure Code 1973, does not mandate that first, the permission of this Court is required, to proceed with a complaint case disclosing More

In judgment dated 8th May, 2012 on a special leave petition filed by Union of India, the Supreme Court has directed the government of India to progressively put an end to Haj More

Vide its Circular No. RBI/2011-12/542 A. P. (DIR Series) Circular No.121 dated 8th May 08, 2012 said that prior approval of the Government (FIPB) would be required only for FDI component and Government approval would not be required for investment by registered FIIs in commodity exchanges. All other conditions contained in A.P (DIR Series) Circular No.41 dated April 28, 2008 shall remain unchanged. It has further been clarified that FDI is permitted only in ‘financial leases’ (financial leasing activity) and not in ’operating leases’ (operating leasing activity). More

Vide its Circular No. RBI/2011-12/537 A. P. (DIR Series) Circular No.118 dated 7th May, 2012, RBI has raised the limit for foreign exchange remittance for miscellaneous purposes without documentation formalities from USD 5000 to USD 25000 with immediate effect. More

RBI vide its Circular no. RBI/2011-12/536 A. P. (DIR Series) Circular No.117 dated 7th May, 2012 has said that a NRI as defined in Foreign Exchange Management (Deposit) Regulations, 2000 contained in Notification No. FEMA.5/2000-RB dated 3rd May 2000, as amended from time to time, shall be eligible to transfer funds from NRO account to NRE account within the overall ceiling of USD one million per financial year subject to payment of tax, as applicable (i.e. as applicable if funds were remitted abroad). More

In its Circular No. F.No 354/69/2012- TRU dated 8th May 2012, the Ministry of Finance has clarified the rate of service tax that would be applicable from 1st April, 2012. It has been stated in the Circular that the rate of service has been restored to 12% w.e.f. 1st April 2012. The rate of service tax prevalent on the date when the point of taxation occurs is rate of service tax applicable on any taxable service. In case of the 8 specified services to which Rule 7 of Point of Taxation Rules 2011 was applicable and services wherein tax is required to be paid on reverse charge by the service receiver the point of taxation is the date of payment. Thus in case of such 8 specified services provided by individuals or proprietary firms or partnership firms and in case of services wherein tax is required to be paid on reverse charge by the service receiver, if the payment is received or made, as the case maybe, on or after 1st April 2012, the service tax needs to be paid @12%. The invoices More

Vide its Notification No. 16/2012 [F. NO. 149/72/2011-SO (TPL)], dated April 30, 2012 Central Board of Direct Taxes has issued Income Tax (5th Amendment) Rules, 2012 inserting Rule 2F in then Income-tax Rules, 1962. Rule 2F provides the guidelines for setting up an Infrastructure Debt Fund for the purpose of exemption under clause (47) of section 10. According to the guidelines issued, the Infrastructure Debt Fund shall be set up as a Non-Banking Financial Company and shall be invested only in the Public Private Partnership Infrastructure Projects and Post - Commencement Operation Date Infrastructure Projects. The terms and conditions of any bond issued by the Infrastructure Debt Fund shall be in accordance with directions of the Reserve Bank of India and the regulations under the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000. More