Money Laundering Current Affairs - 2019

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Govt relaxes norms for Start-ups

The government has relaxed the norms under the definition of Start-Ups. The changes brought in are:

  • The investment limit of angel investors to seek exemption under the Income Tax Act, 1961 has been increased to Rs 25 crore from 10 Crore.
  • An entity shall be considered a start-up up to 10 years from its date of incorporation/registration instead of the previous period of 7 years.
  • An entity would be considered as a startup up to a turnover of Rs 100 crore as against the earlier limit of Rs 25 crore.

Exemptions Proposed

  • A start-up cannot invest in a building or land unless it is for its business or used by it for purposes of renting or held by it as stock-in-trade.
  • A start-up cannot offer loans or advances, other than those where lending money is part of its business.
  • A start-up cannot make any capital contribution to any other entity or invest in shares, car, any vehicle or mode of transport that costs more than Rs 10 lakh.

These exemptions were brought in to allay the fears of CBDT that start-ups could be used for money laundering or receive investment from shell companies for tax evasion.

The relaxations are in line with the government’s vision to promote the culture of entrepreneurship and ease of doing business in India.

Month: Categories: Business, Economy & BankingUPSC

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India and Cyprus sign 2 MoUs

India and Cyprus have signed two agreements on combating money laundering and cooperation in the field of environment. These agreements were signed after wide-ranging talks between President Ram Nath Kovind and his Cypriot counterpart Nicos Anastasiades in Nicosia (capital of Cyprus).  President Kovind visited Cyprus on the first leg of his three-nation visit to Europe including Bulgaria and Czech Republic to continue India’s high-level engagements with European countries.

Key Facts

The MoU on combating money laundering was signed between Financial Intelligence Unit, India, and Unit for Combating Money Laundering of Cyprus. This agreement will further strengthen institutional framework to facilitate investment cross-flows.

India-Cyprus ties

Cyprus is the eighth largest foreign investor in India with a cumulative foreign direct investment of about $9 billion in areas such as financial leasing, stock exchange, auto manufacture, manufacturing industries, real estate, cargo handling, construction, shipping and logistics. The Double Taxation Avoidance Agreement (DTAA) between both the countries was revised in 2016.

Diplomatic ties between India and Cyprus were established in 1962. Cyprus got the support of India during its struggle for independence from British colonial rule. Bilateral trade between both the countries stood at EUR 76.5 million in 2015. The major commodities exported by India to Cyprus are organic chemicals, vehicles & accessories and iron & steel. India’s main imports are aluminium and its products, wood pulp, machinery, boilers, engines, and plastic.

Month: Categories: National

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