Economy & Banking Current Affairs

Business, Economy and Banking in Current Affairs 2019 with latest news and current affairs in Agriculture, Industry, Banking, Capital Markets, Import and Export and Government schemes in commercial sector.

TCS set to replace Genpact as top BPO

The BPO unit of Tata Consultancy Services (TCS) is set to take the No. 1 slot in the business category in India, replacing long-time leader Genpact. The change in BPO market ranking could happen either in the just-concluded December quarter or the ongoing January-March quarter.

Tata Consultancy Services (TCS)
  • An Indian multinational information technology (IT) services, business solutions and consulting company.
  • Founded: 1968 by J.R.D Tata.
  • Headquarters: Mumbai, Maharashtra.
  • Operates in 46 countries and has 199 branches across the world.
  • Offers:  BPO services for the banking, financial and insurance sector, retail and consumer packaged goods, drug development, telecom, media and manufacturing. It has invested in building domain expertise and made acquisitions to fill gaps in their portfolio. TCS bought the captive BPO arm of Citigroup for $505 million in October 2008, one of the largest acquisitions in the IT-BPO space till then.

Uniform tax rate for foreign portfolio investors

The Union Government stated that Foreign Portfolio Investors (FPIs) will attract uniform tax rate in all categories. The Central Board of Direct Taxes notified that the new class of investors, FPIs, would be treated as FIIs under the Income Tax Act, 1961. As per their risk profiles, FPIs are divided into three categories.

These are as follows:-

  • Category I – the lowest risk entities comprises foreign government and government-related foreign investors.
  • Category II – regulated entities such as university funds, university-related endowments and pension funds, etc.
  • Category III – other entities viz. Qualified Foreign Investors (QFIs), etc.

FPIs brought together all the three investment categories — Foreign Institutional Investors (FIIs), their sub-accounts and Qualified Foreign Investors (QFIs). The tax rate for FPIs would be the same as that extended to FIIs. The new system would be especially beneficial for QFIs, who were subjected to higher tax rate earlier.

As per the new norms:-

  • FPIs have been divided into three categories as per their risk profile and the KYC (Know Your Client) requirements, and other registration procedures would be much simpler for FPIs compared to the current practices.
  • The new class would be given a permanent registration, as against the current practice of granting approvals for one year or five years to the overseas entities seeking to invest in Indian markets.
  • Such registration would be permanent unless suspended or cancelled by SEBI or surrendered by the FPI.

In the new tax regime, there would be no deduction of tax at source on income earned by way of capital gains by FPIs (including erstwhile QFIs) but a discharge of tax by QFIs themselves only post which remittances outside India would be permitted.