RBI
RBI has allowed Indian banks to raise Tier I, Tier II and funds for lending to the infrastructure sector by issuing rupee denominated masala bonds within the Rs 2.44 lakh crore foreign investment ceiling for corporate bonds. Indian Banks can raise perpetual debt which qualifies as Tier I capital through rupee denominated bonds overseas and can also raise long term funds to finance infrastructure and affordable housing projects in India. Until now masala bonds could only be issued by companies and NBFCs. These bonds are different from other overseas instruments because the currency risk is borne by the investor. The changes / revised instructions in respect of issuance of Rupee denominated bonds will be applicable from the date of issuance of this circular.
CBDT
The CBDT has issued Circular through which, it has accepted the settled position, that if the disallowances made under sections 32, 40(a)(ia), 40A(3), 43B, etc. of the Act and other specific disallowances, related to the business activity against which the Chapter VI-A deduction has been claimed, result in enhancement of the profits of the eligible business, the deduction under Chapter VI-A is admissible on the profits so enhanced by the disallowance. The issue of the claim of higher deduction on the enhanced profits has been a contentious However, the courts have generally held that if the expenditure disallowed is related to the business activity against which the Chapter VI-A deduction has been claimed, the deduction needs to be allowed on the enhanced profits. The CBDT has also directed that appeals should not be filed on this ground by the Department and appeals already filed should be withdrawn/ not pressed upon.
Speak Your Mind