![]() The tax would also affect GDP by reducing the number of financial transactions and the total resources used to conduct those transactions …….In fact, a number of research studies have concluded that higher transaction costs are associated with more, not less, volatility ……… Empirical evidence provides little indication that a transaction tax would reduce volatility.the tax’s overall impact on output would depend on whether the tax increased or decreased cumulative investment, either of which is possible. ……… most likely be an increase in financing costs, because the economy is weak, interest rates are already extraordinarily low, and the introduction of the tax might not appreciably change investors’ expectations about future deficits.The CBO noted that it was not clear what would be the overall impact to the USA economy. The tax would be imposed on trading within the United States and on transactions outside the country if any party to the transaction is a U.S. The tax would not apply to the initial issuance of stock or debt securities, to trading in debt instruments that have fixed maturities of no more than 100 days, or to currency transactions (although transactions involving currency derivatives would be subject to the tax). For a transaction involving a derivative, the tax would be 0.03 percent of any payment made under the terms of the derivative contract, including the price paid for the contract when it was written, any periodic payments, and any amount paid when the contract expired. For a transaction involving a stock, bond, or other debt obligation, the tax would be 0.03 percent of the value of the security. 1787 would impose a tax on most purchases of securities and transactions involving derivatives. A summary of this legislation:īeginning on January 1, 2013, H.R. The CBO noted that the tax could be avoided by investors moving transactions offshore, and could diminish the USA as a global financial market. In cases where the tax was high relative to current transaction costs for a security or derivative, the volume of trading would drop more than in cases where the tax was low relative to current transaction costs. The tax would also decrease the volume of transactions and would make some types of trading activity-such as derivatives transactions to manage risk and computer-assisted high-frequency trading-unprofitable. Securities that are traded frequently, such as Treasury securities, would be more affected than securities that are traded less frequently. The tax would raise the cost of financial transactions. The employer’s Contribution to NPS upto 10% of basic plus DA is allowed deduction under section 80CCD(2) and excluded from the limit of Rs.1.5 lakh.().Econintersect : The Congressional Budget Office (CBO), responding to various questions posed by Sen. The investment option for the Tier-II account needs to be exercised by the subscriber, which can be different from Tier-I account.ġ0% of the salary (basic and dearness allowance) of employers Contribution can be deducted as “Business Expense” from their Profit & Loss Account. A corporate can also select a PFM at a corporate level and allow the underlying subscriber to decide the allocation of funds among the three asset classes viz: Equity, Corporate Debt and Government Security.Ī corporate subscriber can open both Tier I and Tier II account simultaneously at the time of initial registration or can activate Tier II account subsequently through the associated POP. In NPS, a Corporate would have flexibility to decide investment choice either at subscriber level or at the corporate level centrally for all its underlying subscribers. However, contribution in Tier II account can be done through any POP. Contribution from either the employer or the employeeĪ Corporate subscriber can also voluntarily contribute in their Tier I through their associated POP.Unequal contribution by the employer and the employee.Equal contributions by employer and employee.There are three variations of contributions from employer and employee: ![]() NPS provides platform for corporate to co-contribute for its subscribers or facilitate them to contribute for their pension. In addition to these features, a corporate / subscribers under corporate sector can opt for the following: The features applicable under All Citizens of India are available under corporate sector.
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