Top headlines: SBI cuts lending rates, India's tax-GDP ratio falls and more

From US entering recession, FM considering corporation tax rate benefit extension to PMLA court ordering seizure of Nirav Modi's assets, here are the top headlines on Tuesday morning

The US economy entered a recession in February, a group of economists declared Monday. State Bank of India (SBI) gave huge relief to its customers on Monday by sharply reducing lending rates by 25-75 basis points (bps). Here are the top 10 business headlines.

Prove financial capability: Cidco puts GVK in dock over Navi Mumbai airport

Maharashtra government body City and Industrial Development Corporation (Cidco), which owns 26 per cent in the Rs 17,000-crore Navi Mumbai International Airport (NMIAL) project, has asked the GVK group to prove it has the financial capability to complete the project after its group companies were downgraded by a series of rating firms. Read More...

Will consider corporation tax rate benefit extension: FM Sitharaman

Finance Minister Nirmala Sitharaman said on Monday the government would consider an extension in the deadline for availing of the lower 15 per cent corporation tax rate on new investments. The concessional corporation tax rate against the existing 25-30 per cent is available for new manufacturing firms incorporated after October 1, 2019, and starting operations before March 31, 2023. “I will see what can be done. We want industry to benefit from the 15 per cent corporation tax rate on new investments and I take your point for considering an extension in the deadline of March 31, 2023,” Sitharaman said, addressing members of industry body Ficci. Read More...

After deposit rate cuts in May, SBI now slashes lending rates by 25-75 bps

State Bank of India (SBI) gave huge relief to its customers on Monday by sharply reducing lending rates by 25-75 basis points (bps). This will have to be matched by other lenders at a time when margins are under pressure due to extended moratorium on loans and a ruling due on whether they can indeed charge interest on the moratorium. The lending rate cuts come after the country’s largest lender slashed its interest rates on retail term deposits by up to 40 bps across all tenors, from May 27. In fact, the bank reduced its deposit rates twice in May, as it dealt with the challenge of managing a large pool of surplus funds, in the absence of robust credit demand. It had revised deposit rates by 20 bps (effective May 12). Read More...

IBC suspension will fuel innovative options outside the Code: IBBI's Sahoo

Even with corporate insolvency having been suspended for six months, the Insolvency and Bankruptcy Board of India has its hands full with existing cases, designing a special framework for MSMEs and implementing individual insolvency process. M S Sahoo, chairman of IBBI, in an email interview with Ruchika Chitravanshi said that best use of the Insolvency and Bankruptcy Code (IBC) is not using it at all and that the suspension will give momentum to innovative options for lenders outside the Code. Read More...

South Korean court denies arrest warrant against Samsung heir in fraud case

A South Korean court on Tuesday denied an arrest warrant request for Samsung Group heir Jay Y. Lee after prosecutors accused him of accounting fraud and stock manipulation. The ruling provided temporary relief for the vice chairman of Samsung Electronics. But he may face further pressure from the case at a time when the world's top maker of smartphones and memory chips contends with the impact of the COVID-19 pandemic on demand. Shares in Samsung Group affiliates rose broadly in early Tuesday trade, with Samsung Electronics rising 2%, Samsung BioLogicsup 2.4%, and Samsung C&T climbing 2.2% compared to a 1.2% rise in the benchmark. Read More...

India's tax-GDP ratio plunges to 9.88% in FY20, lowest in 10 years

The ratio of central taxes -to-GDP slid further in FY20 to a 10-year low of 9.88 per cent, driven by a decline in collections from customs duties and corporation tax, while excise duty posted marginal growth. This was despite the fact that only a week was under lockdown in the year. The ratio stood at 10.97 per cent in FY19, and at 11.22 per cent in FY18. It is only estimated to decline further, with revenues falling on account of a slump in economic activity. While the ratio determines the extent to which the government is able to finance its expenditure from tax collections, it is also an indicator of tax compliance. Read More...

US entered recession in February, ending record-long expansion: Economists

The US economy entered a recession in February, a group of economists declared Monday, ending the longest expansion on record. The economists said employment peaked in February and fell sharply afterward, marking the beginning of the downturn. The economists make up a committee within the National Bureau of Economic Research, a trade group that determines when recessions begin and end. It defines a recession as a decline in economic activity that lasts more than a few months. Read More...

New ITR forms call for filing return even if your income isn't taxable

The Central Bureau of Direct Taxes (CBDT) recently notified the income tax return (ITR) forms I-VII for the assessment year 2020-21. This year’s forms contain several features that were necessitated by changes introduced in the Finance Act, 2019. The forms have also been modified to accommodate the leeway the government has granted taxpayers in the wake of the lockdown. ITR I and IV were released in January also. At that point, a restriction was imposed. People who own a single-house property, but in joint name, were not allowed to use these two simplified forms. Read More...

PMLA court orders seizure of Nirav Modi's assets worth Rs 1,400 crore

A special PMLA (Prevention of Money Laundering Act) court on Monday issued an order confiscating assets worth Rs 1,400 crore owned by fugitive diamond jeweller Nirav Modi. This is the first ever order on confiscation of an offender’s property, under the newly created Fugitive Economic Offenders (FEO) Act, 2018. Nirav is in custody at Wandsworth prison in the UK, awaiting an extradition trial scheduled for September. Read More...

PPE makers told to prepare for global certification

Sensing an opportunity in crisis, the government has asked industry to prepare for global certification to be able to export Personal Protective Equipment (PPE) once India’s demand for the specialised protective suits, critical for medical personnel dealing with Covid-19 cases, is fulfilled. Officials said while industry is keen to export, they have to be prepared with international certifications and the government would take a decision based on new projections of domestic requirement, Economic TImes reported.