Budget – Delhi Government:
The Government of Delhi has announced its Budget for Financial Year 2016-17 has proposed to reduce the Value Added Tax (VAT) rates from 12.5 percent to 5 percent. VAT on sweets and snacks, ready-made garments, footwear and school bags has also been proposed to be reduced from 12.5% to 5%. Textile and fabric are to be taxed at 5% however VAT rates for khadi and handloom fabrics remain unchanged. It has been proposed to increase the threshold limit of Luxury Tax from existing ₹ 750 to ₹ 1500 thereby reducing tax burden on citizens and tourists. The Government announced that a separate Stamp Act for Delhi is on the anvil and amendments have been proposed in Section 17 of Registration Act so as to make compulsory registration of several new instruments.
RBI:
Reserve Bank of India has clarified the provisions of Reserve Bank of India (Interest Rate on Advances) Directions, 2016 relating to the Marginal Cost of Funds based Lending Rate (MCLR) system. MCLR is a new method that banks will adopt to declare the lending rates, and it will replace the base rate. The new rate has to be a tenor-linked rate with a reset clause at least once a year. Earlier, for the customer, the MCLR, that is prevailing on the day the loan is sanctioned will be in application till the next reset even if the benchmark rate changes but now it is clarified, that MCLR that prevails on the date of first disbursement, whether partial or full, shall be applicable on the floating rate loan and future reset dates shall be determined accordingly. The RBI has also uploaded FAQs on MCLR.
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