Rise With Profit: IT Notices On Bogus Refund Claims, RBI Framework On FPI Classification | Podcast

This is the daily morning update from NDTV Profit. Over the next few minutes, we’ll bring you up to speed with everything you need to know to start your day ahead of the curve.

You can listen to this as the All You Need To Know podcast here.

Let’s start with news from overseas first. The war in West Asia continues, with Israel concentrating its military action in the north and central parts of the Gaza region. The chances of a ceasefire currently are not very high, particularly because Qatar, which has been playing the role of mediator, said it was suspending its efforts, until both Israel and the Hamas showed greater willingness to reach an agreement.

Despite the ongoing conflict, crude prices have remained muted, largely because of expectation of softer demand. China’s growth has been flagging and the government has, so far, stopped short of announcing major stimulus. Brent crude this morning was at close to $72 to the barrel.

In other international news, North Korea has ratified a mutual defence treaty with Russia, which was signed by the leaders of the two countries in June. The treaty calls for each side to come to the other’s aid in the event of an armed attack. That’s based on a report by state media KCNA.

The report came amid international criticism over increasing military cooperation between the two countries, with North Korea having sent tens of thousands of troops to Russia to support its war against Ukraine.

In international markets, US stocks eked out gains, with the Donald Trump rally looking like it may be petering out. The Dow gained 0.7%, while the S&P 500 and the Nasdaq ended higher by about 0.1%. In the Asia Pacific region, two of the three early risers were trading in the red. The exception was the Nikkei 225 in Japan, which was higher by about 0.5% last I checked.

In the top story back home, the Income Tax Department has issued notices to several taxpayers who have claimed disproportionate refunds. The department has raised concerns over the rising number of suspicious tax returns and refund claims, particularly from unscrupulous individuals. It has targeted chartered accountants and agencies that promise large refunds, often using fraudulent means, adding that many of the refund claims involve bogus expenses, disability, and medical claims. That’s an exclusive update picked up by NDTV Profit.

Speaking of taxes, India's net direct tax collection grew 15.4% year-on-year to Rs 12.1 lakh crore during the period April 1-Nov. 10. The growth was led by non-corporate taxpayers, which paid 20.7% more than the same period last year at Rs 6.61 lakh crore. The corporate tax mop-up stood at just over Rs 5 lakh crore, about 7% higher. The largest rise in collections was in securities transaction tax, which rose 90% to close to Rs 36,000 crore.

The Reserve Bank of India has shared an operational framework for the reclassification of foreign portfolio investment as foreign direct investment, upon the breach of the prescribed limit imposed on FPI. Under the Foreign Exchange Management Rules, FPI holding in a company should be less than 10% of the total paid-up equity capital on a fully diluted basis.

If the 10% cap gets breached, then the foreign portfolio investors have the option of divesting their holdings or reclassifying such holdings as FDI. This reclassification should be completed "within five trading days from the date of settlement of the trades causing the breach", RBI said in a notification.

Foreign investors, as you know, have been selling Indian equity quite aggressively over the past month. In Monday’s session, they sold an additional Rs 2,300 crore. They’ve now remained sellers for 31 straight sessions, selling a total of close to Rs 1.5 lakh crore on a provisional basis.

There is also action in the primary market to tell you about. The initial public offering of Niva Bupa Health Insurance has been subscribed 1.8 times on the third day of bidding, led by demand from retail investors. Today, you’ll want to watch for the listing of Sagility. And in case you were wondering, the Swiggy listing is tomorrow.