Weekly Digest - 02 Oct 2009

Contents:

• Ernst & Young (Hong Kong) in trouble
• Ex-CFO of Satyam, PW auditors guilty: ICAI
  
• Good news for those who live on Savings Bank interest
• Gift in kind above Rs.50,000 is taxable from 1-Oct-09
• IMF says after recession, world economy to grow by 3% in 2010
• Indian economy to grow 5.4% in 2009 : IMF
• Why the Bharti-MTN deal failed

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Police in Hongkong raided Ernst & Young amid fraud =========================================

The Hong Kong offices of accounting giant Ernst & Young were raided by police as part of a fraud investigation linked to the city’s biggest corporate collapse, local media said Wednesday.The search, which occurred Tuesday, came after Ernst & Young was accused in court earlier this month of falsifying documents to shield itself from a negligence claim brought by the liquidators of electronics company Akai Holdings, the South China Morning Post reported. Continue Reading Source : TaxGuru.in

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Ex-CFO of Satyam, PW auditors guilty: ICAI
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The Institute of Chartered Accountants of India (ICAI) has found two top officials of Satyam Computer and four auditors of Price Waterhouse prima facie guilty in the Rs 7,800-crore fraud case, a top ICAI official said on Monday.

Besides, the apex body of chartered accountants has also found audit firms — Price Waterhouse, Kolkata and Price Waterhouse, New Delhi — prima facie guilty of misconduct. “The director (discipline) has found two officials of Satyam Computer, Price Waterhouse and its four auditors prima facie guilty of professional misconduct in the Satyam case,” ICAI president, Uttam Prakash Agarwal, said. Click for further reading. Source : Times of India

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Payment of Interest on Savings Bank Account on a Daily Product Basis ========================================================

Now, your savings bank account earns interest around 3% on the lowest balance maintained between the 10th and the last date of a calendar month. From April 1, 2010, the interest will be calculated on the daily balance. How is this beneficial? For example,

• your balance is Rs.10,000 on 1oth of a month
• deposit Rs.10,00,000 on 11th of that month
• withdraw the Rs.10,00,000 on 29th of that month.

You will earn interest only on the 10,000, which was the lowest balance between 1oth and the end of that month and your deposit of Rs.10,00,000 will not earn any interest though you kept it for 19 days.

With the new rule coming in, you will get interest on this Rs.10,00,000 also. Click here for the RBI circular. Source : RBI Website

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Gift in Kind above Rs.50,000 value to become taxable from 1st Oct 2009 ==============================================================

Any gift in cash above Rs.50,000 was taxable and did not cover the gift in kind. Now the new Finance Bill 2009 made it (with effect from 1-Oct-2009) clear that any gift in KIND (other than Cash) is also taxable, if it exceeds Rs.50,000.
Why this is, most of the people trying to avoid the tax incidence, gift non-cash items (like gold, silver, shares) and escape the tax. Later the person, who received the gift can sell those items and take cash.
Now it is not possible. Further reading Source : CAClubIndia

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IMF says after recession, world economy to grow by 3% in 2010
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As the world economy comes out of a deep global recession, global activity is forecast to expand by about 3 percent in 2010 after contracting by about 1 percent in 2009, according to the International Monetary Fund (IMF) projections. Click for further reading. Source : Times of India

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Indian economy to grow 5.4% in 2009 : IMF
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The International Monetary Fund on Thursday retained its projection for Indian economic growth at 5.4 per cent in 2009, implying a slower growth in the second half of this calendar year. In its twice-yearly World Economic Outlook released in Istanbul, the Fund lowered the projection for the next year by 0.1 per cent to 6.4 per cent.

The Indian economy grew by 5.8 per cent in the first quarter and 6.1 per cent in the second quarter of this calendar year. Click for further reading. Source : Times of India


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Why the Bharti-MTN deal failed
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The fate of the unsuccessful Bharti-MTN deal was sealed by the South African government s treasury as much as three weeks back, according to sources. CNBC-TV18 now learns that the treasury wrote to MTN Phuthuma Nhleko on September 11 insisting that for the deal to go through, the potential merged company should remain domiciled in South Africa and should be listed in both companies, something that was not a possibility under existing Indian laws.

MTN, South Africa s largest telecom company, and India s Bharti were exploring a deal that could lead to a merger between the two companies resulting in a USD 23 billion entity. This was the second failed attempt between the two companies to strike a deal. Earlier in May 2008, the two companies had initiated talks to explore the possibility of a similar deal. Click for further reading. Source: MoneyControl.com

Happy Birthday to Gandhiji !!!

Cheers & Have a nice and long weekend,
Gopal