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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Rel Info’s New Year gift
Launches one nation, one tariff plan;
STD call at Re 1
New Delhi, January 1
Anil Ambani-owned Reliance Infocomm today became the first telecom operator to launch IndiaOne tariff "One nation, one tariff" plan offering STD call anywhere in the country for just Re 1 per minute. Claiming a subscriber base of over 1.7 crore across the country, Reliance Infocomm said the new tariff plan, to come into effect from tomorrow would break the circle barrier.

MTNL’s 3-in-1 offer
In a major exercise to reposition itself amid fierce competition from the private sector, state-run MTNL is all set to launch 3-in-1 services (phone, cable TV and broadband) on a single phone line this month and had tied up with Mumbai-based Time Internet Broadband as a content provider.

Gazprom stops gas supply  to Ukraine
Moscow, January 1
Russia's natural gas monopoly Gazprom today halted sales to Ukraine in a price dispute and began reducing pressure in transmission lines to the country that also carry substantial gas supplies to western Europe.



EARLIER STORIES

 
A brand new A319 aircraft of Indian, which was inaugurated at the eastern region route for the first time at Netaji Subhash Airport in Kolkata
A brand new A319 aircraft of Indian, which was inaugurated at the eastern region route for the first time at Netaji Subhash Airport in Kolkata on Sunday. It will operate on the Port Blair and Aizawl route from Kolkata. — PTI

MARKET UPDATE

Select sectors to outperform market in 2006
Bulls never had such a good going. On the back of excellent returns in 2003 and 2004, Sensex gained a hefty 42 per cent and Nifty added 36 per cent in 2005. The rally on the Indian bourses in 2005 was broad-based as stocks spanning across sectors gained weight. The growth in corporate earnings triggered the steep rise in indices.

Tax Advice

No ceiling on gift amount to daughter
Q. The marriage of my daughter is due in coming November. I want to give a Santro Car. The boy is living at Mumbai. My queries are:- 1. Whether I can gift an FD (fixed deposit) of Rs 3,50,000 in the name of my daughter for the purchase of a car at a later date convenient to them?

Videos

Chocolaty Kareena 'n' Lux celebrate 75 years of stardom.
(28k, 56k)

Finance Minister wishes nation.
(28k, 56k)

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Rel Info’s New Year gift
Launches one nation, one tariff plan; STD call at Re 1

New Delhi, January 1
Anil Ambani-owned Reliance Infocomm today became the first telecom operator to launch IndiaOne tariff "One nation, one tariff" plan offering STD call anywhere in the country for just Re 1 per minute.

Claiming a subscriber base of over 1.7 crore across the country, Reliance Infocomm said the new tariff plan, to come into effect from tomorrow would break the circle barrier.

Earlier Communication and IT Minister Dayanidhi Maran had announced that IndiaOne would come into effect from January 1, but could not be launched. According to sources, deliberations were on to work out tariff plan. It may be in the form of two tariffs — one for local and one for STD calls across the nation.

Announcing the initiative, Mr S.P. Shukla, President, Wireless, Reliance Infocomm, said, "It's our New Year gift to our millions of subscribers. They can now exchange greetings without worrying much about the calling rate.

Reliance has always been known for its customer-friendly tariffs. Coming close on the heels of the lifetime validity voucher, this aggressive plan will further increase the options for our subscribers."

The one nation tariff will be applicable on e-Recharge of Rs 1,100, inclusive of service tax. This e-Recharge comes bundled with 1,100 free SMSs that can be sent to any phone within the state.

Similar plan is available for the post-paid subscribers on New Joy 499. They can make calls to anywhere in country to any mobile or fixed line phone at just Re 1 a minute. They can even call any Reliance IndiaMobile within the state at just 40 paise a minute.

Reliance Infocomm has established a pan-India, high-capacity, integrated (wireless and wireline), convergent (voice, data and video) digital network to offer services spanning the entire Infocomm value chain. — PTI

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MTNL’s 3-in-1 offer

In a major exercise to reposition itself amid fierce competition from the private sector, state-run MTNL is all set to launch 3-in-1 services (phone, cable TV and broadband) on a single phone line this month and had tied up with Mumbai-based Time Internet Broadband as a content provider.

“We shall start the services this month. The content provider will offer video-on-demand and such required services. There will be a virtual convergence of voice, data and video,” MTNL CMD R.S. P. Sinha said.

Asked whether MTNL is authorised to offer cable TV services and the mechanism to operator, Sinha said we have cable licence with us. As far as operational part is concerned the contest provider Time Internet Broadband will be executing it.

Asked about the charges, Sinha said different models have been worked out and a major emphasis has been given to the quality of services but as always like in other services MTNL’s tariffs would be extremely affordable.

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Gazprom stops gas supply to Ukraine

Moscow, January 1
Russia's natural gas monopoly Gazprom today halted sales to Ukraine in a price dispute and began reducing pressure in transmission lines to the country that also carry substantial gas supplies to western Europe.

Gazprom had demanded from Ukraine this year more than quadruple the amount it pays for Russian gas, which accounts for about a third of the consumption in the country of 48 million.

Gazprom had said its official sales cutoff to Ukraine would be 10 a.m. However, even before that deadline, company spokesman Sergei Kuprianov said pressure in the pipelines was being reduced.

"Export gas for Europe is moving at full volume," Kuprianov said in comments shown on Russian television.

Gazprom provides about half the gas consumed in the European Union and some 80 percent of that amount is sent in pipelines that cross Ukraine. — AP

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MARKET UPDATE

by Lalit Batra

Select sectors to outperform market in 2006

Bulls never had such a good going. On the back of excellent returns in 2003 and 2004, Sensex gained a hefty 42 per cent and Nifty added 36 per cent in 2005.

The rally on the Indian bourses in 2005 was broad-based as stocks spanning across sectors gained weight. The growth in corporate earnings triggered the steep rise in indices. Inflows from FIIs were robust and local funds, too, accumulated stocks. FII inflows in 2005 crossed the $ 10 billion mark.

Certain sectors of the economy would continue to show secular growth and stocks of such sectors would outperform the market in 2006. Sectors that would benefit in 2006 are infrastructure, banks, telecom, FMCG and retailing.

The Indian markets will remain bullish over the long run and Indian equities is one place to remain invested in for the next three to five years. Investors must strictly follow a bottom-up approach in investing and avoid getting lured by rumours and extra-ordinary stock price movements.

Review of 2005 recommendations

As a critic pointed out that a review recommendation is a must, I decided to review last year’s recommended stocks to see how these have fared and what is my current view on these stocks.

Four stocks — Ranbaxy, Kirloskar Pneumatic, HPCL and Welspun — have declined from the date of recommendation. We stay positive on two of these stocks (Ranbaxy and Kirloskar Pneumatic) and advise a sell on HPCL and a hold on Welspun.


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Tax Advice

by S.C. Vasudeva

No ceiling on gift amount to daughter

Q. The marriage of my daughter is due in coming November. I want to give a Santro Car. The boy is living at Mumbai. My queries are:-

1. Whether I can gift an FD (fixed deposit) of Rs 3,50,000 in the name of my daughter for the purchase of a car at a later date convenient to them? It may also be possible that her husband gets car from the company or purchase a car by raising a loan and thus may not use the FD amount at all for the purchase of a car.

2. Besides, how much amount in cash I can gift to my daughter in marriage.

Please advise as to what will be my tax liability or any formality etc. to avoid such tax, if any.

— Kuldeep Jain, Patiala

A. 1 You can gift a fixed deposit of Rs 3,50,000 to your daughter or a Santro car without any hassles. A gift can be made by an exchange of letters between the donor and the donee. The donor’s letter should state that the gift is being made to the donee out of natural love and affection. The donee should accept the gift by a letter in response to the letter of the donor.

1. You can gift any amount to your daughter without any tax liability.

Gift to in-laws

Q. Kindly advise:

(a) Can an NRI son-in-law gift money to his parents-in-law to buy property in India?

(b) To what extent is the gift money tax-free?

— Bhupesh Sood

A. An NRI son-in-law can gift any amount to his parents-in-law in India. The money so gifted can be used by them for any purpose, including for buying a property in India.

(a) There is no limit to the amount which can be gifted to your parents-in-law as gifts made to relatives are exempt as per Section 56 of the Income Tax Act, 1961 The gift of movable property can be made by an exchange of letters. However, since you are based outside India, it would be a letter to make out a gift deed for the purpose and get it attested from a notary designated by the court.

NROR account

Q. You mentioned in response to a question asked by Mr K.S. Rana that an NRI can transfer $ 1 million annually. But the issue here is that he is not an NRI. Can he open an NROR account even before he leaves the country or he has to sell the house after going to Canada. Since he wants to take the money to Canada before he leaves, so advise what he should do.

— Ken

A. A non-resident ordinary account can be opened by a person who is a non-resident. In my opinion, therefore, it may not be possible for a person to open such an account until and unless a person has migrated abroad. Any transfer of money by a resident to a country outside India can only be with the approval of the RBI.

Section 80C

Q. Kindly advise whether the Rs 1 lakh exemption provided in the year 2005-06 Budget would cover the following items and up to what amount, separately and together:

1. Interest amount of Rs 8,000 on old NSCs maturing in March, 2006.

2. Interest amount of Rs 7,000 on old NSCs maturing in 2007 and 2009.

3. New NSCs worth Rs 40,000 purchased during FY 2005-06.

4. Tuition fee amounting to Rs 30,000 paid for one child in MCA course.

5. Rs 20,000/- deposited in the senior citizen scheme in post-office during 2005-06.

— S. Kaushel

A. 1. & 2. The interest amount of Rs 8,000 and Rs 7,000 earned on the NSCs is taxable and the amount of deduction of Rs 1,00,000 specified in section 80C of the Act would not cover the above interest.

3. & 4. An amount of Rs 40,000 invested towards the purchase of NSCs would be covered within the above limit of Rs 1,00,000. The tuition fee would also be covered within the above amount of Rs 1,00,000/- provided the same has been paid to any university, college, school or other educational institution situated within India for full-time education of your child.

5. The amount of Rs 20,000 deposited in the senior citizen saving scheme in a post office will not be covered under the above amount of Rs 1,00,000.

Capital gains

Q. Recently, I, an American citizen and operating an NRO account (ICICI Bank), have received as my share Rs 14 lakh from the sale of ancestral property in India on which I am currently paying a tax:-

1. What are my tax liabilities if I repatriate this amount to America,

2. How can I save tax?

— Col. Kahlon

A. The amount of Rs.14 Lacs received from the sale of ancestral property in India can be repatriated to America. In accordance with Regulation (3) of the Foreign Exchange Management (Remittance of Assets) Regulations, 2000, a non-resident is allowed to repatriate an amount not exceeding $ 1,00,000 per calendar year out of the balance held in an NRO account.

1. The amount of capital gains earned on the sale of ancestral property can be invested in the acquisition or construction of a house within the specified time limit. It can also be invested in purchase of tax saving bonds within the specified time limit. In both these cases, capital gains tax would not be chargeable.

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