While there is a strong case for a relook at the LTCG tax, simply because globally most developed markets with which India competes for capital do not have it, the other irritant for Indian financial markets has been the dividend tax, which has a rather skewed structure. It taxes the same income repeatedly at multiple points: companies pay tax on profit, then they pay distribution tax when they pass on the same profit to its rightful owners, and then shareholders pay income-tax when they earn that dividend. A perfect way of disincentivizing risk capital.
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded nearly 7 points lower at 7 am (IST), signalling indecisiveness on Dalal Street. Asian shares inched higher after global stock indices and Wall Street posted more records, as strong corporate earnings and upbeat US economic data added to the optimism over the China-US partial trade deal.
HERE'S WHAT TO WATCH  | In early trade, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.19%, taking gains for the month to 3.4%. Australian shares gained 0.49% while Japan's Nikkei added 0.55%. |
| Wall Street witnessed another day of record closing in overnight trade. The Dow rose 0.92% to 29,297, the S&P500 gained 0.84% to 3,316 and the Nasdaq added 1.06% to 9,357. |
| Oil prices were steady on Friday as investors braced for data expected to show China's economic growth last year slid to its slowest pace in 29 years. Brent rose 3 cents to $64.65, after gaining nearly 1% on Thursday. WTI crude gained 6 cents to $58.58 |
| The rupee fell 11 paise to close at 70.93 against the US dollar on Thursday due to strengthening crude oil prices and dollar demand from importers. |
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Hero-Max Deal… US private equity buyout group Bain Capital is looking to join hands with Sunil Munjal's Hero Corporate Services to buy a controlling stake in Max Financial Services from Analjit Singh. Munjal, along with Bain, may buy 28.3% from Singh and make an open offer to minority shareholders. If successful, the consortium could end up holding 54.3% in Max Financial. The acquirers are also considering the option of buying just below 26% stake to avoid triggering the mandatory open offer, and replacing Singh as the promoter.
Read More The French Route... France is fast emerging as the gateway for foreign investors to route their trades — mainly equity derivative – into the country following the renegotiation of tax treaties with Mauritius almost three years ago. Almost a quarter of the outstanding positions in India's F&O contracts and a growing chunk of the bets on India through Offshore Derivative Instruments like P-notes and swaps are being executed through French banks or subsidiaries of some global firms based in Paris. Under the tax treaty between India and France, the right to tax capital gains on investments lies with Paris.
Read More Bankers' Relief… All big suspected bank fraud cases will have to be vetted by a panel before lenders agencies such as the Central Bureau of Investigation to initiate action. The framework has been designed to allow bankers to take decisions without fear and free up credit flows, a top government official said.
Read More | WHO'S |  |
Body Blow to Telecom… The Supreme Court rejected pleas by Vodafone Idea, Bharti Airtel and Tata Teleservices to review the October 24 verdict that widened the definition of adjusted gross revenue, leaving the three telcos collectively facing more than Rs 1.02 lakh crore in additional licence fees, spectrum usage charges, penalties and interest. Analysts and industry executives said Vodafone Idea and Bharti Airtel are likely to file curative petitions, besides applying to the court for more time to make the payments — a combined Rs 89,000 crore for the two.
Read More Goyal Rocks the Boat… Commerce and industry minister Piyush Goyal said Amazon was not doing India any favours a day after the company's CEO Jeff Bezos pledged to invest an additional $1 billion in the country, adding that this was probably on account of a need to fund losses, remarks that are likely to be seen as a stinging rebuke to the world's richest man. "How can a marketplace make such a big loss unless they are indulging in predatory pricing or some unfair trade practices? These are real questions which will need answers," Goyal said. Top executives at several MNCs and Indian companies took umbrage at Piyush Goyal's comment, saying it did not "reflect well" on India.
Read More Meanwhile... Will RBI start targeting core inflation? Pronab Sen, the newly appointed chairman of the Standing Committee on Statistics, says core inflation target of 3% with an upper tolerance level of 4% and lower limit of 2% should be part of RBI's mandate, along with the headline retail inflation. Core inflation, excluding telecom tariffs, has entered deflationary territory, which is a cause for worry, Sen said.
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