After unit-linked insurance plans, the Insurance Regulatory and Development Authority (IRDA) have
introduced stringent guidelines for universal life policies (ULIPs). The guidelines stipulated that VIPs
should provide only mortality cover and no other contingency. The policy should be for a minimum of five years. The sum assured should be at least ten times that of the annualized premium. On death, a benefit equal to the guaranteed sum assured plus the balance in the policy account will be provided. On maturity, a benefit equal to the balance in the policy account together with a terminal bonus, if any, will be paid to the policyholder.

IRDA came out with guidelines on outsourcing by all insurers, both in life and general, which will come into practice with immediate effect. Insurers will have to terminate all outsourcing - especially core activities such as investment, underwriting and policy servicing - to third-party companies. New guidelines for mergers and acquisitions among non-life insurance companies are expected soon with the Insurance Regulatory Development Authority (IRDA) initiating the process after receiving proposals for the same from two non-life Insurance Companies.

Concerned over large- scale outflow from mutual fund (MF) schemes, market regulator Securities and Exchange Board of India (SEBI) wants fund houses to invest part of their profit on cementing ties with investors and curtail commissions and freebies to agents.

The Securities and Exchange Board of India (SEBI) in an attempt to bring in more transparency in the manner liquid schemes operate, has directed fund houses not to deploy investor funds unless credited in the scheme account. The market regulator has also extended the daily cut-off time limit for investors to avail of the previous day's net asset value (NAV).

An RBI circular on willful defaulters issued in July last says banks and financial institutions should not depend entirely on the certificates issued by chartered accountants, but also strengthen their internal controls and the credit risk management system.

Stock brokers will now have to pay more service tax. The Central Board of Excise & Customs (CBEC) has clarified that turnover charges, exchange transaction charges, dematerialization charge and regulator fees recovered by brokers from clients will be added to the brokerage amount while calculating the tax. The stamp duty and securities transaction tax would be kept out of the taxable amount.

Close to five lakh demat accounts have been frozen by the Central Depository Services Ltd. (CDSL) and the National Securities Depository Ltd. (NSDL) for want of PAN details.

The National Stock Exchange (NSE) has started mobile trading for all its registered clients. Till now,
only a few member brokers had the option of providing this facility to clients, that too, at their own expense.

Capital Market regulator SEBI has told fund houses to stop selling Fixed Maturity Plans (FMPs) on the basis of indicative returns - a practice banned by regulations but increasingly used by mutual funds in recent months to lure investors.

The inquiry reports of the NSE in the alleged defaults by a brokerage firm should be made public, the Central Information Commission has told the SEBI. The Chief Information Commissioner, Mr. A.N. Tiwari, said, If the averment of the respondents (SEBI) that all such inquiry reports should be withheld from disclosure as these might contain commercial and business related information of the broker or brokerage firm investigated by the stock exchange or SEBI is accepted, no wrongdoing of the brokers would ever be known to the investors- the very victims of the broker's wrongdoings.

The Bombay Stock Exchange (BSE) has launched its Sen sex Realised Volatility (REALVOL) index- the first of its kind in India. REAL VOL Index will provide with an accurate measure of the historic volatility of the Sen sex over fixed one, two and three-month horizons.

The Government is not in favour of allowing foreign companies to delist their share through an exchange offer of Indian Depository Receipts (IDRs). IDRs allow foreign companies to raise funds through Indian equities markets. The finance ministry believes the IDR channel should laid foreign companies in raising resources locally rather than become a tool for delisting, an official said.

• Indian Depository Shares

In IDR, MNC issues shares to a depository, which issues receipts to Indian investors. Helps MNC
raise funds in India & investors take exposure

• Minimum public shareholding rule

The Securities & Exchange Board of India (SEBI) has notified the increase in retail investment limit to Rs2 Lakh in initial public offers. The new norms will be applicable to issues that have not opened for subscription.

The RBI of India has set up a committee under Y H Malegam to study MFIs and suggest ways to make their interest rates more reasonable. RBI regulates only MFIs registered as non banking finance
companies, which cover over 80 percent of the micro finance business.

The SC last week dismissed the appeal of Nava Bharat Ferro Alloys Ltd. against Transmission
Corporation of Andhra Pradesh Ltd. and confirmed the demand of additional charges/surcharge
payable on delayed payment. The power-intensive company had challenged the demand of a higher
rate in the Andhra Pradesh high court. It passed certain interim orders in its favour. However, the
petition was ultimately dismissed, leading to the demand of the charges. The company disputed it
based on the interim relief. The SC ruled that a party who fails in the proceedings cannot benefit from the interim order issued during the pending of such proceedings.

The management of an establishment has discretion in fixing the hours of duty of its employees, the SC stated last week while dismissing the appeal of the Transport & Dock Workers Union against the
judgment of the Bombay High Court in which it had upheld the enhancement of working hours of the
clerical recruits of Mumbai Port Trust. The new employees had to work one hour more. This was
challenged as discriminatory. However, the SC stated that fixing of hours of work, provided they do not violate any statutory provision or statutory rule, are really management functions and the court must exercise restraint and not ordinarily interfere with such management functions.

The Supreme Court has set aside the Bombay high court judgment and allowed the prosecution of a
criminal complaint filed by Iridium India Telecom Ltd. against Motorola Incorporated. According to the complaint, Motorola induced Iridium India and several others to invest in a project which turned out to be a technological disaster. They collectively invested $70 million for purchasing equity in a subsidiary company as well as spent a sum of about Rs. 150 crore in setting up a gateway at Delhi in Pune. The complaint stated that the representations made by Motorola proved to be fraudulent and deceitful.

India has tightened norms for the withdrawal of provident fund (PF) by overseas workers in the
country, prohibiting them from taking back this money until they were 58 years old or were incapacitated. However, analysts said theses norms had been tightened for those countries that didn't have social security agreements with India and the move may prompt them to go in for such pacts.

The Reserve Bank of India (RBI) issued a cautionary note warning the public not to deposit money with unauthorized non-banking finance companies (NBFCs).The RBI has put up a list of NBFCs that
are permitted to accept deposit on its website. No NBFCs outside of this list can accept deposits from
public .Doing so is clearly fraudulent & has to be investigated by law enforcement in the normal course.

A five-judge Constitution bench of the Supreme Court in its unanimous judgment stated that the Thermax case was decided on the facts of that case and was not applicable in other case like the present one. The firm in this case, manufacturers of chewing tobacco products, claimed benefit as it maintained that their intermediate goods were captively consumed for manufacture of final goods. They argued that the court should consider the 'intended use' and 'substantial compliance' of requirements of Chapter X of the Central Excise Rules 1944. The court allowed the appeal of the excise authorities, rejecting the argument of the assessee firm stating that non-compliance of those conditions enumerated under various excise rules and non-furnishing of various statutory forms are fatal to the plea of substantial compliance and intended use.

The Punjab and Haryana High Court has upheld the Constitutional validity and retrospective levy of service tax on renting of immovable property. The ruling, in favour of the government, will protect over Rs. 1,000 crore of revenue the tax department was expecting from the service.

The directorate general central excise intelligence (DGCEI) has asked three electronic media companies to pay service tax worth Rs 325crore. DGCEI show-cause notice where issued on Oct 21 to Turner International India (TII), a Time Warner company which beams a banquet of channels like HBO, POGO, Cartoon Network CNN & WB , ESPN software India (ESI) & ZEE Turner Limited , a company jointly promoted by the promoter & ZEE Groups. The major issue against TII & ESI the Indian subsidiaries of foreign holding is over the companies procuring TV channels Programme distribution rights and selling advertising time slots on channels on behalf of their foreign parents. The programmes are broadcast by foreign broadcasters & signals is encrypted form are disseminated by them in electro magnetic waves by up linking to satellites. The encrypted signals on electro magnetic waves are then down linked, received and encrypted by the Indian subsidiary companies holding the distribution rights for India. The Tv channels received and encrypted by TII & ESI with the help of integrated receiver decoders commonly known as set top boxes. According to DGCEI receiving programmes by down linking of signals in INDIA by TII & ESI tantamount to import of broadcasting service & the money paid to their parent companies for import of tv channel signals is liable for service tax deduction under reverse charge mechanism as per the provisions of finance act 1994 & taxation of services (provided from services outside India & received in India) RULES, 2006. TII & ESI had not discharged their service tax liabilities towards the import of broadcasting services their by attracting DGCEI worth. TII has been asked to pay more than Rs 90 Crore & ESI Rs 225 Crore. TII was found evading service tax on several other issues including intellectual properties right service by undervaluing and wrongfully claiming exemption from service tax  on 98% value of services and paying service tax on only 2% value of services. It has also evaded service tax under the business auxiliary service category. ZEE turner limited was found to be engaged I undervaluation of business auxiliary service provided by it to various broadcasters while distributing their tv channel services. It was discovered that it collected certain amounts from broadcasters under the head
reimbursement of expenses and not including the amount of such reimbursement in its assessable value thereby evading service tax. Show-cause notice has also proposes to cover wrongly availed Cenvat credit of service tax from ZTL on services which were not input services for the company. Total service tax demand raised by DGCEI on ZTL is more than Rs 5 Crore. It subsequently cleared some Rs4crore by paying the amount to the service tax department. When contacted on ESPN Star Sports spokesperson said the company was studying the contents of the notice and would respond in due course. Executive VP(legal) of ZEE group MR A Mohan said, we will contest this legally so far as the status issue is concerned . If we have to pay more service tax that won't make a difference because will get Cenvat benefit.

Worried over reports alleged corruption, especially, in issuing refunds to taxpayers, the Income Tax
Department has brought its own officials under strict vigilance scanner and has issued instructions to the top brass to constantly monitor the process. The I-T vigilance wing has also decided to conduct surprise inspections to check the process of issuing refunds from both the department and the bankers side.

The Central Board of Excise and Customs (CBEC), the apex indirect tax body, has directed its officials that an appeal will not be filed in the appellate tribunal if the amount involved, including fine and penalty, is Rs. 1 Lakh and less. Similarly, appeals will not be filed in high courts if the disputed amount is Rs. 2 Lakh and less.

The tax department will take a close look at the expense accounts of real estate giants Emaar
MGF, Parsavnath, Unitech, DLF and others in the wake of the bribes-for-loan racket unearthed
recently.

Multinational companies in the country could find it difficult to reduce their tax liability by claiming
expenses in the name of a service bought from their overseas associated companies. They will be required to pass a benefit test for making such claims as per arms length conditions. The test is to prove that the tax payer benefited from the service and the amount it paid to its group firm as an expense on the service was justified.

CLOSE WATCH

• The benefit test has assumed great significance when it comes to transfer pricing issues.
• The co should also be able to demonstrate that it derived some benefits when it paid that amount and thus comply with the benefit test.
• Allowing illegitimate expenses by firms can also be seen as a way to avoid tax liability in India.
• In a recent ruling, the Bangalore tax tribunal said expenses shown on account of mgmt services fee cannot be allowed as the company concerned Gem plus India Private- failed the benefit test.

India is one of the 40 most improved economies that made significant changes in business regulation
at a stead pace in 2009 to make it easier for firms to operate, according to a new World Bank report.

The Reserve Bank of India (RBI) allowed Regional Rural Banks (RRBs) to open branches without its
permission in cities with population less than 50,000. However, such RRBs should meet certain regulatory provisions like capital adequacy ratio of at least 9 per cent. Besides, the RRB should have net profit in the last financial year, RBI said in a notification.

The National Payment Corporation of India is rolling out an instant inter-bank mobile payment service that will enable retail customers of seven banks to enjoy 24x7 funds transfer. As the IMPS architecture is envisaged, down the line. The mobile will prove handy. The State Bank of India, Bank of India, Union Bank of India, ICICI Bank, HDFC Bank, Axis Bank and YES Bank became the first set of banks to go live with the IMPS. While seven banks are in the process of going live with IMPS, 22 others are in the preliminary phase. To avail themselves of the mobile banking service, the customers need to register with their banks, which will issue them a unique seven digit mobile money identifier (MMID) and mobile banking personal identification number (MPIN). Irrespective of whether their mobile is low-end or high-end, customers can download and activate the mobile banking application. To initiate a mobile payment, all that a sender has to do is key in the beneficiary's mobile number, the beneficiary's MMID, the amount to be sent and the MPIN. The sender will get SMS confirmation for the money sent.

Market Regulator Securities and Exchange Board of India (SEBI) has asked fund industry to stay away from volatile sectors such as realty and not to buy its papers.

A quarter of Indian micro finance companies may fail after a clampdown last month in their biggest market pared debt payments and curtailed bank financing. As many as 60 to 70 of the 260 micro finance institutions are likely to collapse in coming months as banks halt lending to them to curb risks.

Reserve Bank of India (RBI) governor D Subbarao made a strong case for foreign banks to operate as
wholly-owned subsidiaries in the country as opposed to functioning through the branch model.

The RBI chief said banks needed to increase their deposit rates and reduce lending rates to accelerate
the savings, investment rate and boost a double-digit growth. This means banks need to raise the interest rates offered to depositors and reduce the lending rates charged on borrowers-in other words, reduce their inter mediation costs, or in technical terminology, reduce the net interest margin (NIM).

The Reserve Bank of India (RBI) has cautioned that going ahead management of non-performing assets (NPAs) and liquidity will become critical for banks.

The RBI has asked banks to disclose all charges involved in processing and sanction of loan application in a transparent manner.

The Naxalim is growing not only in Andhra Pradesh, Orissa, Manipur and West Bengal but also in Bihar, U.P. and Punjab. The challenge of Naxalism is more deeper and has to be addressed on a top priority even as compared to the problem of drug or terrorism. The impact of naxalism is deep and widespread among the youths and the landless farmers who are in needy besides tribal community.
India has grown economically very significantly and the pace of growth has taken momentum. The crores have been replaced by the bullion for businesses and service sector. The mine workers and the intelligentsia have also grown in its economic stature and is in a commending position now. The politicians, doctors, engineers, chartered accountants, scientists, lawyers, teachers, economists and all other professions have grown from strength to strength both economically as well as strengthening their roles in the society. On the other hand, the hand-workers, poor farmers, craftsmen, fitters, carpenters, plumbers, drivers, peons, labours and other artisans of the society who depend on the manual skill and labour for their livelihood have not got their rightful share in the growth the economy, business, income and wealth. The mine owners have become wealthy whereas the mine workers, and the people living around the mines have not gained adequate shares out of the same. It is important for all of us and specially the leadership of India, business leaders and professionals to plan and promote the economic affairs in a manner that the benefit of the economic growth is percolated down to the lowest run of the society. We need to ensure that every Indian should have a proper home, reasonable good employment, adequate food, nutrition, medical support and education.
The gap in the society should not be too wide. While on the other hand we all to work as capitalist society towards growth of business, industry, service sector and agriculture at the same time we need to ensure that the growth is shared in a reasonable proportion at all levels. We will not only kill the problem of Naxalism but India will also grow and prosper as world's most developed economy, with inclusive growth.

The CA profession is the most attractive profession these days which is apparent from the fact it is
attracting a very large number of students to its fold. The current number of students undergoing CA
education consist of

• CA Final                                1.0 lakh
• PCC (Intermediate)              1.0 lakh
• IPCC (Intermediate)            1.0 lakh
• CPT                                      3.5 lakh