Benchmarks continue to trade firm amid buying in banking stocks

Indian equity benchmarks continue to trade firm in early noon session, on back of value based buying by funds and retail investors in blue-chips counters. Besides, covering-up of short positions by speculators also supported the recovery. Sentiment got boost with the report of India Ratings & Research that the Indian economy is expected to grow by 7.9 percent in the next fiscal and may progress at a similar pace over a couple of years extending beyond 2019.  It also added that the various macro parameters show that India has and is likely to perform better than its peers in the near term. Moreover, Appreciation in Indian rupee too aided the sentiment.

On the global front, Asian markets were trading mostly in green, after data pointing to slower Chinese economic growth fanned stimulus hopes. Back home, the market breadth on BSE was positive, out of 2438 stocks traded, 1387 stocks advanced, while 919 stocks declined on the BSE. In scrip specific development, share of Bharat Bijlee advanced over 16% after the company posted 317.36 per cent year-on-year growth in its net profit figures to Rs 8.89 crore for the quarter ended December 2015. The company made a net loss of Rs 4.09 crore in the corresponding quarter a year ago.

The BSE Sensex is currently trading at 24409.79, up by 221.42 points or 0.92% after trading in a range of 24247.23 and 24414.26. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.80%, while Small cap index up by 0.90%.

The top gaining sectoral indices on the BSE were Bankex up by 1.87%, Capital Goods up by 1.32%, Power up by 0.98%, Realty up by 0.77% and TECK up by 0.51%, while Consumer Durables down by 0.58% and Metal down by 0.18% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 4.62%, ICICI Bank up by 3.32%, Tata Motors up by 2.45%, Larsen & Toubro up by 2.22% and SBI up by 2.13%. On the flip side, Coal India down by 1.59%, Asian Paints down by 1.47%, Mahindra & Mahindra down by 1.30%, Maruti Suzuki down by 0.76% and Wipro down by 0.68% were the top losers.

Meanwhile, in order to improve the ease of doing business, reduce litigation and accelerate the resolution of tax disputes, the committee, headed by retired high court judge R.V. Easwar, has suggested several taxpayer-friendly measures. The committee which was set up by the government to change direct tax laws, has recommended raising the threshold limits for deduction of tax at source as also slashing the rate of withholding tax, considering the importance of the long overdue revision of these puny limits.

The committee in its report, recommended enhancement and rationalization of the threshold limits and reduction of the rates of TDS (tax deducted at source). It proposed that 'TDS rates for individuals and HUFs (Hindu undivided family) to be reduced to 5 percent as against the present 10 percent. It has proposed raising the threshold for TDS to Rs 15,000 from Rs 2,500 annually and reducing the tax rate to 5 percent for interest on securities.  Besides, for other interest earnings it recommended raising the limit to Rs 15,000 from the present Rs 10,000 for bank deposits, and Rs 5,000 for others. For payments to contractors, the panel has proposed raising the TDS limit from the current Rs 30, 000 for single transaction and Rs 75,000 annually, to Rs1 lakh limit per annum.  The TDS threshold limit on rent income has been proposed to be raised from Rs 18 lakh annually to Rs 2.4 lakh. The threshold for fees for professional or technical services is recommended to be raised to Rs 50,000 from Rs 30,000, but it said the TDS rate here may be retained at 10 percent.

The committees in its 78 page draft report has said that nearly 65 percent of the personal income-tax collected in India was through TDS, whose provisions need to be made more friendly and less 'tedious', as they have remained over the years.

Furthermore, the committee also recommended deferring implementation of Income Computation and Disclosure Standards (ICDS) and making the process of refunds faster, to provide more time to taxpayers to deal with changes in law such as to the Companies Act, 2013, and the proposed Goods and Services Tax (GST) Act.  Besides, it suggested an increase in turnover limit for tax audit applicability from Rs. 1 crore to Rs.2 crore for business and Rs.1 crore for professionals.

In order to minimize human interface, the committee recommended that most of the processes of the income-tax department should be conducted electronically. Accordingly, it suggested that processes such as filing of tax returns, rectification of mistakes, appeal, refunds and any communication regarding scrutiny including notices, questions and documents sought should be done electronically.

Some of these recommendations that require amendments to the income-tax act are likely to be a part of the Union budget to be presented on 29 February, while some other changes in administrative procedure can be implemented through official notifications by the income tax department The committee has invited comments from the public till January 23, following which it will finalise the report's first part by January 31.

The CNX Nifty is currently trading at 7414.50, up by 63.50 points or 0.86% after trading in a range of 7364.15 and 7418.50. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 4.64%, Tata Power up by 3.49%, Yes Bank up by 3.48%, ICICI Bank up by 3.16% and Tata Motors up by 2.78%. On the flip side, Asian Paints down by 1.36%, Coal India down by 1.34%, Tech Mahindra down by 1.28%, Mahindra & Mahindra down by 1.21% and BPCL down by 1.10% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.89 points or 0.18% to 1,625.53, KOSPI Index increased 10.12 points or 0.54% to 1,888.57, Taiwan Weighted increased 43.7 points or 0.56% to 7,854.88, Nikkei 225 increased 56.75 points or 0.33% to 17,012.32, Shanghai Composite increased 92.42 points or 3.17% to 3,006.26 and Hang Seng increased 279.82 points or 1.45% to 19,517.27, while Jakarta Composite decreased 10.47 points or 0.23% to 4,470.81.