Indian Economy -Civil Service Gurukul

2022-05-31 18:34:27 Understanding SEBI Rules on Passive Funds

The Securities and Exchange Board of India (SEBI) recently issued a circular on passive funds covering matters related to transparency, liquidity and operational aspects of exchange-traded funds (ETFs) and index funds.

What are Passive Funds?

A passive fund is an investment vehicle that tracks a market index, or a specific market segment, to determine what to invest in.

Unlike with an active fund, the fund manager does not decide what securities the fund takes on.

This normally makes passive funds cheaper to invest in than active funds, which require the fund manager to spend time researching and analysing opportunities to invest in.

Tracker funds, such as ETFs (exchange traded funds) and index funds fall under the banner of passive funds.

What is a passive ELSS scheme?

Passive funds mimic an underlying index. By contrast active funds are actively managed by fund managers.

The SEBI has now introduced a passive equity-linked saving schemes (ELSS) category, which will give taxpayers another investment option to avail of tax benefits.

According to the circular, the passive ELSS scheme will be based on any index comprising equity shares from the top 250 companies in terms of market capitalization.

Beginning 1 July, a fund house will be able to either have an active ELSS scheme or a passive ELSS scheme, but not both. Open / Comment

2022-04-20 03:48:33 TAXATION ON VIRTUAL DIGITAL ASSETS
To take effect from 1st April, 2022, under Section 115BBH of the Income Tax Act, any income from transfer
of any virtual digital asset shall be taxed at the rate of 30%.
Effective from 01 July 2022, 1% TDS (Tax Deducted at Source) will be deducted under Section 194S on
payment made above a monetary threshold in relation to transfer of virtual digital assets.
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2022-04-17 14:35:49 Open / Comment

2022-04-16 09:44:37 Civil Service Gurukul Team are happy to announce that we are going to launch Daily Answer Writing Practice (free of Cost) for UPSC Commerce Optional and GS Paper -3 for UPSC Mains 2022 from 06-06-2022.

Program will be guided by IAS Shubham Kumar (AIR-1), IAS Raunak Agarwal ( AIR-13) , IAS SAMEER KISHAN ( AIR-350 ) and CA Pranay Sharma ( CA, LLB, CCAB, FAFD,DISA,MBA).
For more details Contact @capranaysharma Open / Comment

2022-04-07 08:46:16 Open / Comment

2022-03-20 09:18:52 Open / Comment

2022-03-19 06:28:05 What is Special Drawing Rights?

The SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries.

The SDR is not a currency.

It is a potential claim on the freely usable currencies of IMF members.

As such, SDRs can provide a country with liquidity.

A basket of currencies defines the SDR: the US dollar, Euro, Chinese Yuan, Japanese Yen, and the British Pound.

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2022-03-02 23:16:20 https://civilservicegurukul.com/what-are-participatory-notes/ Open / Comment

2022-02-20 11:09:18 What are Participatory Funds and Non-Participatory Funds?

The amendment to Section 24 of the LIC Act, brought prior to commencing the IPO, segregated the previously single 'Life Fund' into the participatory and non-participatory funds.

Under a participatory policy, a policyholder can get a share of the profits of the company.

This is received as a bonus. Examples of such products offered by LIC include Jeevan Labhand BachatPlus.

No such sharing of profits happens under non-participatory products, which under the LIC fold includes policies such as Saral Pensionand Nivesh Plus.

As all insurance companies do, LIC also reinvests premium monies that policyholders pay.

The profits or surplus that comes about, as a result, was till September last year held in one single fund. This was the Life Fund.

The surplus was divided in the 95:5 ratio between policyholders(in the form of bonuses)and shareholders(in the form of dividends).


What has the Amendment changed?

But the amendment to Section 24 of the LIC Act has necessitated the segregation of the Life Fund into participatory and non-participatory funds, depending on the nature of the policies they support.

The amendment stipulates terms on how surplus is to be shared with respect to participatory and non-participatory funds.

As for non-participating funds, surplus from the non-participating business would be transferred to shareholders.

Surplus from participatory business, however, would be shared between policyholders and shareholders.

How does this change impact the shareholder?

The change, especially the one that has enabled 100% of the surplus in non-participatory funds to flow to the shareholder, has led to a massive jump in the Indian Embedded Value, or IEV.

IEV is a measure of future cash flows in life insurance companies and the key financial gauge for insurers.

The embedded value will help establish the market valuation of LIC and determine how much money the government raises in the flotation.

That will be crucial for the government to help meet its divestment targets and keep its fiscal deficit in check.

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2022-01-18 18:12:17 Asian Clearing Union (ACU)

The ACU with headquarters in Tehran, Iran, was established on December 9, 1974, at the initiative of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

The primary objective of ACU was to secure regional co-operation as regards the settlement of eligible monetary transactions among the members of the Union/

It now aims to provide a system for clearing payments among the member countries on a multilateral basis.
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The unit of settlement of ACU transactions is a common unit of account of ACU, and the unit is equivalent to one USD, and the Asian Monetary Unit may be denominated as ACU dollars and Euro. Open / Comment