PLA may push India out of Doklam with military op in 2 weeks: Chinese media

China is planning a “small scale military operation” to “expel” Indian troops from the Doklam area “within two weeks”, an article in a state-run daily here said on Saturday.

India and China have been locked in a prolonged standoff in the area in the Sikkim sector since June 16 after Chinese troops began constructing a road near the Bhutan trijunction.

 

Bhutan has protested to China, saying the area belonged to it and accused Beijing of violating agreements that aim to maintain the status quo until the boundary dispute is resolved.

India says the Chinese action to construct the road was unilateral and changes the status quo. It fears the road would allow China to cut off India’s access to its northeastern states.

ALSO READ: Modi’s hard line, Doklam recklessness pushing India to war: Chinese daily

“China will not allow the military standoff between China and India in Doklam to last for too long, and there may be a small-scale military operation to expel Indian troops within two weeks,” Hu Zhiyong, a research fellow at the Institute of International Relations at the Shanghai Academy of Social Sciences was quoted by the Global Times.

The “expert” wrote in the daily that the “Chinese side will inform the Indian foreign ministry before its operation.”

To peacefully resolve the impasse, India’s External Affairs Minister Sushma Swaraj has said that both the sides should first pull back their troops and hold dialogue.

ALSO READ: Doklam: Our army will ‘annihilate’ Indian troops, Chinese media warns Modi

Swaraj on Thursday again asserted that war cannot resolve anything. She said India was engaged with China to resolve differences and advocated patience.

Her ministry’s spokesman Gopal Baglay yesterday said India was in close coordination with Bhutan over the Dokal issue.

But the Chinese media, particularly the Global Times tabloid, has unleashed a barrage of anti-India rhetoric in recent weeks amid tensions between the two countries.

ALSO READ: Restraint shown by our army has limits: China to India amid Doklam standoff

In Saturday’s article, the researcher also cited a state-run CCTV report about live fire exercises in Tibet recently.

Hu continued: “India has adopted an immature policy toward China in recent years. Its development is not at the same level as China’s. It only wants to seek disputes in an area which originally has no disputes to gain bargaining chips.”

The military standoff comes ahead of the BRICS Summit in the Chinese city of Xiamen early next month, where leaders of Brazil, Russia, India, China and South Africa will meet.

PLA may push India out of Doklam with military op in 2 weeks: Chinese media

Last day to file ITR: Don’t forget to pay tax on rent from foreign property

Many high net worth individuals who own houses abroad have in recent times been questioned by income tax officials for not having paid tax on the “deemed rental income” from those properties. It, therefore, becomes important for owners of foreign properties to understand the concept of deemed rental income and their tax liability on it.

For tax purposes, one house (in India or abroad) is treated as self-occupied. The owner has to pay tax on rental income on the other house (or houses). If the other house is not rented out, he has to arrive at a deemed or notional rental income and pay tax on it. “A person resident in India is liable to pay tax in India on his global income. Hence, rental income from house property — let out or on deemed basis — situated abroad is taxable in India. The income tax law does not make any distinction between house properties situated in India or abroad for computing income from house property,” says Suresh Surana, founder, RSM Astute Consulting Group.

In case of the taxpayers owning more than one house (all used for own purpose) and where one or more of them is situated outside India, they will have to do some calculation and arrive at the taxable value of each property by considering it first as self-occupied and then as let out. “The taxpayer can then choose a combination which results in the lowest taxable income from house property,” says Chetan Chandak, head of tax research, H&R Block India.

To calculate the deemed rental, the person needs to use the standard rent or let-able value of the property. “Obtain quotes from property brokers in the area or browse on websites that provide rental rates for that overseas location. Estate tax bills can also provide some indication in this regard,” says Nidhi Seksaria, partner and leader–real estate and construction, BDO India.

The rent you receive or the deemed rent is the gross annual value, from which you can reduce the municipal taxes paid during the year to arrive at the net asset value (NAV). From this, you can avail of two deductions under Section 24 of the I-T Act. One is the standard deduction under Section 24(A), wherein you can deduct 30 per cent of the NAV. Next, under Section 24 (B) you can deduct the interest paid on home loan. You will then arrive at the income from house property, which is added to your other sources of income and taxed according to the slab rate applicable to you. “You also need to check your eligibility for availing foreign tax credit related to taxes paid abroad on a house situated abroad under the relevant tax treaty provisions. If available, this will reduce your net tax outgo in India,” says Seksaria.

In countries such as the US, the property is usually managed by a real estate management agency, which charges a commission and a property management charge. This is over and above the property tax, mortgage amount, etc. paid by it on behalf of the client. The property management fee is assumed to be included in the standard deduction (30 per cent of NAV) which one gets under Indian tax laws. But there are differing views regarding the deductibility of the commission charged as percentage of rent collected from the tenant. “Some consider it as deductible from the amount of gross rent as it is in the nature of diversion of income. Others opine that this should be part of the 30 per cent standard deduction and no separate deduction is admissible for it. This needs to be evaluated in the light of the facts of each case based on the terms of agreement with the agency,” says Chandak.

Last day to file ITR: Don’t forget to pay tax on rent from foreign property

Modi’s hard line, Doklam recklessness pushing India to war: Chinese daily

By adopting a “hard line stance” towards China, India’s Prime Minister Narendra Modi is pushing his country into war and “gambling” with the destiny of its people, a Chinese daily said.

An editorial in the state-run Global Times said Modi should be aware of the “overwhelming” strength of the People’s Liberation Army which is capable of “annihilating” Indian troops in Doklam.

 

The tone of the Chinese government and its media have become shriller over the past few days, with its Defence Ministry telling India not to test its patience.

India’s response has been measured, always calling for dialogue to solve the crisis in Sikkim sector.

The editorial said India had challenged a country which was far more superior in strength.

“It is a war with an obvious result,” the editorial pronounced.

It said India’s recklessness had “shocked” the Chinese.

“The government of Prime Minister Narendra Modi should be aware of the PLA’s overwhelming firepower and logistics. Indian border troops are no rival to PLA field forces. If a war spreads, the PLA is perfectly capable of annihilating all Indian troops in the border region.”

“The Modi government’s hard line stance is sustained by neither laws nor strength. This administration is recklessly breaking international norms and jeopardizing India’s national pride and peaceful development.”

“Its move is irresponsible to regional security and is gambling against India’s destiny and its people’s well-being. If the Modi government refuses to stop, it will push its country into a war that India has no power to control,” it went on.

The daily said India cannot bully China like other countries in South Asia.

The editorial comes a day after the Chinese Defence Ministry said that India should not test its patience over Doklam and that “restraint has a bottom line”.

The Ministry told India to “give up the illusion of its delaying tactic, as no country should underestimate the Chinese forces’ confidence and capability”.

Adding to the growing belligerence, Global Times said that the PLA was combat-ready but has exercised restraint as it “cherishes peace”.

“We want to give peace a chance and allow India to recognize the grave consequences.”

“The PLA did not strike in the past month when Indian troops savagely trespassed into Chinese territory. If the Modi government takes China’s goodwill for weakness, its recklessness will only lead to devastation.

Despite China raising the ante over the Doklam stand-off, India has maintained that it will continue to engage with Beijing diplomatically to resolve the border standoff and that war is not a solution.

“Our stand is that we maintain restraint in language and keep patience and engage in diplomacy. No solution will be gained out of war because even after war, talks are required. A solution cannot be derived out of war,” India’s External Affairs Minister Sushma Swaraj said in Parliament on Thursday.

“Times are changing and it is economic power and not strategic power that decides strength of a nation…If there is a dialogue there will be a solution,” she said.

A standoff between Indian and Chinese troops is continuing along the border in Doklam in Sikkim sector close to the tri-junction of India, China and Bhutan, since June 16. The standoff started after China attempted to build a road in Bhutanese territory and Indian soldiers stopped them.

Modi’s hard line, Doklam recklessness pushing India to war: Chinese daily

Vice Presidential election 2017: Venkaiah Naidu to become 13th VP of India

Former Union Minister and National Democratic Alliance (NDA) candidate M Venkaiah Naidu is elected as the 13th Vice-President of India on Saturday. Out of 760 valid votes, he secured 516 votes while Opposition candidate Gopalkrishna Gandhi secured 244 votes.

Of the 771 votes polled, 760 were valid and 11 were declared invalid; 14 lawmakers were absent from voting. Ninety per cent votes were polled within the first two hours, till 12 pm.

 

Naidu will take oath as new Vice-President of India on August 11. He will be appointed as the ex-officio Chairman of the Rajya Sabha.

The term of incumbent Vice-President Hamid Ansari, who held the position for two consecutive terms, will come to an end on August 10.
ALSO READ: The meat lover in a vegetarian political party

After the result was announced, Naidu took to Twitter to thank the MPs who voted for him.

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M Venkaiah Naidu ✔ @MVenkaiahNaidu
With all humility, I express my gratitude to every MP who supported my candidature cutting across party lines.
7:40 PM – Aug 5, 2017
213 213 Replies 664 664 Retweets 2,033 2,033 likes
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M Venkaiah Naidu ✔ @MVenkaiahNaidu
I promise to uphold the Constitution and the high standards set by my esteemed
predecessors.
7:41 PM – Aug 5, 2017
393 393 Replies 784 784 Retweets 2,383 2,383 likes
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Prime Minister Narendra Modi congratulated Naidu on his success.

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Narendra Modi ✔ @narendramodi
Congratulations to @MVenkaiahNaidu Garu on being elected India’s Vice President. My best wishes for a fruitful & motivating tenure.
7:14 PM – Aug 5, 2017
783 783 Replies 3,699 3,699 Retweets 10,362 10,362 likes
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Narendra Modi ✔ @narendramodi
My mind is filled with memories of working with @MVenkaiahNaidu Garu, in the Party & Government. Will cherish this aspect of our association
7:16 PM – Aug 5, 2017
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The vice-president is selected through a secret ballot by the members of the Electoral College consisting of the members of both Houses of Parliament in accordance with the system of proportional representation by means of the single transferable vote. The nominated Members of Rajya Sabha as well as of Lok Sabha are also eligible to be included in the Electoral College and, therefore, are entitled to participate in the election. ALSO READ: Difficult shoes to fill: Hamid Ansari retiring as Vice-President of India

Unlike the president, the vice-president is not allotted any special residential privileges while in office. While the president of India stays at the Rashtrapati Bhavan, the vice-president is not subjected to any such benefits during his or her tenure.

Members of Parliament used special pens for marking their choice. The votes marked with any other pen were liable to be rejected. The ballot paper contained the names of the contesting candidates but did not contain any election symbol.

Vice Presidential election 2017: Venkaiah Naidu to become 13th VP of India

A 3-year lock in? The many challenges for Jio’s 4G feature phone

Mukesh Ambani-controlled Reliance Jio Infocomm recently announced 4G-enabled feature phone, JioPhone, which you can purchase by paying a security deposit of Rs 1,500, refundable after three years. The bundled Jio connection will come with three different usage plans ranging from Rs 24 for two days, Rs 54 for a week and Rs 153 for a month.

However, according to a report by JP Morgan, there are several challenges related to the feasibility of the device, and there also are concerns over the product being attractively priced to induce habit-changing consumption.

According to JP Morgan, in India, where there is the prevalence of multi-SIM phones and the pre-paid monthly churn stands at around 5 per cent, it may be unrealistic to expect consumers to embrace single-SIM phones and get locked in for three years with them.

 

“In all likelihood, if the consumer can afford to pay at least Rs 153/month for three years, she is quite likely a smartphone user well before this three-year period runs out,” JP Morgan said in a report.

The report said a lot depends on the phone and its perceived smartness. The report said smartphone penetration of Airtel and Idea has crossed 40 per cent of their subscriber base even as a significant percentage of them are not broadband (3G+4G) subscribers yet. “We think the low-end of this smartphone subscriber base operates at clear sub-Rs 200 average revenue per user (ARPU). Consumers here will likely consider the pros and cons of downtrading to JioPhone from a smartphone they own now or intend to own in the future,” the report said.

However, what makes down trading even more challenging is the three-year lock-in imposed by JipPhone. “How willing would a sub-Rs 200 ARPU (non-smartphone) subscriber be to stay anchored to a 4G feature phone and not gravitate towards a smartphone,” it wonders, adding three years seems a long time to expect a subscriber to commit.

JP Morgan said it expects uptrading is going to much more likely than downtrading on JioPhone, an implication which should be benign for peers and the industry.

According to the report, Reliance Jio’s pitch with JioPhone is aimed at the feature phone segment and much less so at the entry-level smartphone or soon to-be-smartphone segment.

Also as the JioPhone comes preloaded with Reliance Jio apps, it is not known to what extent the device support embraces open and popular apps like WhatsApp and Paytm etc. There is also the matter of whether packing a phone with pre-loaded proprietary apps and closing off other popular free apps constitutes a violation of net neutrality, an issue the incumbents have raised in investor calls.

“Unlike Battle 1.0 (fought on ARPU i.e packing a lot more data content within a downsized ARPU bundle), Battle 2.0 is product-based, so we expect incumbents to bring to the market their version of VoLTE feature phones with pre-packaged plans,” JP Morgan said.

However, given the limited VoLTE network of incumbents, Jio has 9-12 months of head-start before equivalent offerings from incumbents.

A 3-year lock in? The many challenges for Jio’s 4G feature phone

RBI likely to cut rates again by 2017-end: Chris Wood of CLSA

There is more room for the Reserve Bank of India (RBI) to cut rates even after the recent 25 basis point (bps) cut earlier this week, and it is likely that the central bank will do so one more time before the end of calendar year 2017 (CY17) given the high real interest rates in India, writes Christopher Wood, managing director and equity strategist at CLSA in his weekly note, GREED & fear.

Also Read: Monetary policy focuses on rate transmission: Here are the highlights

The real interest rate in India (difference between the yield on risk-free sovereign treasury-bill and the headline CPI) stands at around 4.7%, is also the reason why the rupee has remained strong, Wood notes.

Recently, the largest state-owned bank, State Bank of India (SBI) cut interest rates on savings bank deposits by a 50 bps citing high real interest rates. It introduced a two-tier interest rate structure on savings bank deposits. With effect from July 2017, a savings bank balance of over Rs 1 crore will earn an interest rate of 4% per annum (p.a.), while the ones with Rs 1 crore or less will earn an interest rate of Rs 3.5% p.a.

Also Read: Bank reforms make India best equity story in emerging markets: Chris Wood

 

Markets, especially the banking stocks, gave a thumbs down to the RBI’s move to cut the repo rate by just 25 bps earlier this week – the first cut since October 2016 – making it the first Asian central bank to do so thus far in calendar year 2017 (CY17).

While reviewing the monetary policy, RBI continued to maintain a ‘neutral’ stance, citing risks to inflation going ahead. This triggered a negative reaction in the stock market, which expected the central bank to be more accommodative and cut rates aggressively given that the recent consumer price inflation (CPI) print came in at 1.54% for June – much below the Monetary Policy Committee’s (MPC’s) target range of 2% – 6%.

The local mutual fund boom, Wood says, is not just confined to stocks. Inflows into bond funds have also been surging, which has helped drive a boom in corporate bond issuance.

“The growing mutual fund ownership of corporate bonds is also leading to a more active secondary bond market. Still one risk to this bond issuance boom is that foreigners have nearly reached the limit of what they can own in terms of corporate bonds,” he says.

Also Read: Investors are willing to bear GST pain for long-term gains, says Nandurkar

As regards the stock market, CLSA is of the view that a correction, if it happens, is more likely to be a globally correlated one, since the Indian domestic fund flow momentum remains robust. CLSA is also of the view that the long-awaited earnings rebound should finally occur in the fourth quarter of CY17 (Q4CY17) given the low base effect from last November’s demonetisation.

Banking sector, Wood says, is on the right track as regards addressing the bad asset problem with the non-performing loans (NPLs) of 12 corporate groups formally being referred by the RBI to the National Company Law Tribunal (NCLT).

Also Read: Bad loans: RBI to take up more cases, says Jaitley

“The political reality is that the growing likelihood that Modi will be re-elected in 2019 is another reason for these delinquent corporate borrowers to agree to some form of a deal. This is because it means there is no near-term prospect of returning to “business as usual”, which historically for many Indian “promoters” has meant effectively treating state-owned banks as their own private piggy banks,” he writes.

RBI likely to cut rates again by 2017-end: Chris Wood of CLSA

Nitish Kumar – BJP remarriage: End of secularism as the main theme?

The carefully orchestrated denouement of the Nitish-Laloo-Modi game may have been sudden and ferocious but the movement had been building up for months. In the last one year, Nitish Kumar had demonstrably moderated his language against Prime Minister Modi; had supported policy gambles like demonetization; and clearly expressed his discomfit with the Laloo Yadav family and its taint of corruption. In hind sight, it was the UP elections and the huge BJP victory which broke the camel’s back. Narendra Modi is the tallest leader in the Hindi heartland and any regional satrap which challenges him risks total oblivion. Three broad themes.

First, Nitish Kumar has emerged as perhaps the biggest loser from this episode. Even though he had been in alliance with the BJP for nearly two decades, Kumar had always stressed that this was an alliance of convenience orchestrated to slay the greater evil—Laloo Yadav and the jungle raj which has indubitably been his legacy in Bihar. In the ten years the NDA was power in Bihar, Kumar was its unchallenged leader with the BJP playing a second fiddle. The one politician Nitish Kumar viscerally disliked was Narendra Modi. From his reluctance to share any kind of stage with Modi to the multiple personal humiliations Kumar effected on him, he emerged as perhaps his strongest non-Congress rival. And finally, in 2013, unable to accept Modi’s rise within the BJP, he walked out of the alliance with the halo of a secular martyr. It was a huge political gamble which failed spectacularly as the NDA was virtually guaranteed to retain power in Bihar with Nitish Kumar as its leader. And now he returns to the same alliance headed by his former rival who is the strongest Indian leader in three decades. Not only are Kumar’s national ambitions effectively over, his role within Bihar would be much diminished. The BJP will not be as accommodative as it has been in the past and Kumar would be little more than Bihar’s nominal leader. Modi needed Nitish Kumar once; now Kumar needs him far more. Despite the homilies and courtesies on social media, both Kumar and Modi understand this and its first expression would be in the 2019 elections where the BJP would demand a lion’s share of Lok Sabha seats. With his inability to win elections on his own, capitulation would be Kumar’s only option and in the medium term, BJP would attempt to make him simply irrelevant.

Second, Narendra Modi fought the 2014 elections on the slogan of Congress-mukt India. As Omar Abdullah has correctly pointed out, India in 2017 is staring at an opposition-mukt India. India would still have all the formal trappings of a democracy—regular, well-organized elections—but for all practical purposes, it would be a one-party state. The BJP has expanded more aggressively in the last three years than at any time since its inception in 1980. India will run out of states far before Narendra Modi and Amit Shah run out of time and energy. And what is truly remarkable is its vision which is to a build a party which lasts beyond the Modi era and is India’s only party of governance. The one politician who has truly grasped the import of the Modi project is Laloo Yadav while the rest continue to pretend that this is politics as usual and not a seismic shift.

 

Contrast that to the opposition. It gives the impression of rearranging the chairs on the deck and worrying about the exact notes of the music being played while the ship lists dangerously. The Communists are worrying about who to send to Rajya Sabha while Mayawati still thinks that her resignation drama would enable her to recapture the Dalit voters currently enamored with Modi. And then there is the greatest whodunit in Indian politics: Will Rahul Gandhi finally become the Congress president when the more pertinent question is whether he will be left with a party to preside over. It is the theater of the absurd.

The prescriptions for the revival of the Congress party have been discussed threadbare and need not detain us here. But in the short-term, only one thing matters: election victories and the ability to form governments. Politics is a brutal sport and complaining plaintively about the BJP stealing our government in Goa interests no one. If it requires forming alliances; form them; if it requires the humility to acknowledge that the Congress party is in severe decline; acquire it. Instead of giving speeches to sympathetic liberal think tanks, Rahul Gandhi should park himself in Gujarat and fight the election as a local leader—from one booth to the next. For shorn of his famous last name and the legatee of the Congress party, Rahul Gandhi is no national leader. Political parties can survive electoral defeats—they are a part and parcel of democracy. What causes politicians to jump ship is the sense of despair which is exactly what surrounds the Congress party and the opposition currently. And if Bihar still hasn’t drilled that message home, nothing will.

Finally, India’s pluralistic secularism has been its defining political currency since the formation of the modern Indian republic. Despite all its imperfections, politically it has been very useful. It facilitated political parties in justifying all sorts of alliance and permutations and combinations in defense of secularism. A Mamata Banerjee could seamlessly move from NDA to UPA as and when political expedient under the rubric of saving secularism. In the Modi era, as secularism is being replaced substantively by an increasingly naked majoritarianism, thematically, it has been replaced by the war against corruption.

Consider demonetization for instance. The defining argument for this politically risky move was the war against black money and it has paid handsome political dividends. Even Modi critics cannot deny that the upper echelons of this government generally enjoy a reputation of probity. So careful has Modi been about his anti-corruption image that one of the reasons he has been reluctant to divest loss-making public-sector units is that they inevitably are accompanied by cries of having sold off national assets to favored parties. Only now when Modi feels politically invulnerable has he made the initial moves in privatizing Air India. It is his that image which Nitish Kumar now embraces.

But wasn’t Laloo Yadav a convicted politician when Nitish Kumar allied with him? He was but even political opportunism requires a cover—previously it was the halo of secularism, now it is the halo of the anti-corruption warrior.

“Secularism should not be used to justify corruption” said Nitish Kumar seeking the vote of confidence in the Bihar assembly. Three years back, he may have made a different argument. But then that wasn’t Modi’s India.

Nitish Kumar – BJP remarriage: End of secularism as the main theme?