...Some Understanding About LoUs (From RBI Website)

Available at: https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=10201

RBI, Master Direction 17 – Import of Goods and Services

Issue of Guarantees by an Authorised Dealer

B.8.1 An authorised dealer may give a guarantee in respect of any debt, obligation or other liability incurred by a person resident in India and owned to a person resident outside India, as an importer, in respect of import on deferred payment terms in accordance with the approval by the Reserve Bank of India for import on such terms.

B.8.2 An authorised dealer may give guarantee, Letter of Undertaking of Letter of Comfort in respect of any debt, obligation or other liability incurred by a person resident in India and owned to a person resident outside India (being an overseas supplier of goods, bank or a financial institution), for import of goods, as permitted under the Foreign Trade Policy announced by Government of India from time to time and subject to such terms and conditions as may be specified by Reserve Bank of India from time to time.

B.8.3 An authorised dealer may, in the ordinary course of his business, give a guarantee in favour of a non-resident service provider, on behalf of a resident customer who is a service importer, subject to such terms and conditions as stipulated by Reserve Bank of India from time to time:

Provided that no guarantee for an amount exceeding USD 500,000 or its equivalent shall be issued on behalf of a service importer other than a Public Sector Company or a Department / Undertaking of the Government of India / State Government:

Provided further that where the service importer is a Public Sector Company or a Department / Undertaking of the Government of India / State Government, no guarantee for an amount exceeding USD 100,000 or its equivalent shall be issued without the prior approval of the Ministry of Finance, Government of India.

B.8.4 An authorised dealer may, subject to the directions issued by the Reserve Bank of India in this behalf, permit a person resident in India to issue corporate guarantee in favour of an overseas lessor for financing import through operating lease effected in conformity with the Foreign Trade Policy in force and under the provisions of the Foreign exchange Management (Current Account Transactions) Rules, 2000 framed by the Government of India vide Notification No. G. S. R. 381 (E) dated May 3, 2000 and the Directions issued by Reserve Bank of India under Foreign Exchange Management Act, 1999 from time to time.

Certificate of Deposit (Specimen Copy)

Investment Schemes: How They Have Been Modified Under Budget 2018?

Investment Scheme	Employee’s Contribution	Employer’s Contribution	Lock-in period	Taxability at the stage of withdrawal
ELSS	Deduction under section 80C within the cap of INR 150,000 per year	Not applicable	3 years	1) Long term gains subject to Securities Transaction Tax (‘STT’) – Exempt; 2) Long term gains not subject to STT – Taxable at 20% (plus applicable Surcharge and Education Cess)
Public Provident Fund			15 years	Exempt
Life Insurance Premium			Depends on the tenure of policy	Exempt subject to the provisions of section 10(10D)
NSC			NSC up to VIII Issue – 5 years. NSC IX Issue – 10 years	Interest is taxable
Tax saving fixed deposits			5 years	Interest is taxable
Recognised Provident Fund (RPF)		Exempt under section 10(12) up to contribution of 12% of salary	58 years / early withdrawal (subject to conditions specified)	Exempt under following circumstances: 1) Completion of 5 years of continuous service; 2) Employee’s ill health or by contraction or discontinuance of the employer’s business or other cause beyond the control of the employee; 3) Transfer of accumulated balance to the new RPF at the time of change of employment; 4) Transfer of entire accumulated balance to NPS
National Pension Scheme (NPS)	Deduction under section 80CCD(1B) up to INR 50,000 ; in addition to INR 150,000 under section 80C	Deduction up to 10% of the salary under section 80CCD(2)	60 years / partial withdrawal option available (subject to conditions specified)	At the time of withdrawal upon retirement: * 60% of accumulated balance can be withdrawn and 40% to be invested in purchase of annuity; * 40% of accumulated balance is exempt and 20% is taxable.Withdrawal before retirement: * 20% of accumulated balance can be withdrawn, which is fully exempt; * 80% of accumulated balance to be invested in purchase of annuity.
Approved Superannuation	Deduction under section 80C within the cap of INR 150,000 per year	Taxable as a perquisite if the same is in excess of INR 100,000 per year under section 17(2)(vii) Maximum contribution including Provident Fund cannot exceed 27% of salary as per Rule 87		Retirement: Exemption subject to the provisions of section 10(13) Resignation: Fully Taxable