SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI








THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

B U S I N E S S

DoT dumps mobile number portability
New Delhi, December 3
The government is understood to have rejected telecom regulator TRAI's recommendations on mobile number portability saying this should not be mandated by the licensor or the regulator, as it would deny subscribers the freedom to change operator without changing the number.

Sell crop via commodity exchanges
Chandigarh, December 3
Two leading futures trading exchanges — Multi Commodities Exchange of India and National Commodities and Derivatives Exchange — have decided to rope in small farmers in Punjab and Haryana, so that they can benefit from future trading of their produce.

TCS wins $100 m deal in China
Beijing, December 3
Tata Consultancy Services has won a landmark deal worth a whopping $100 million from the state-run Bank of China, industry sources said today. It is being dubbed as one of the major IT-related deals signed by a Chinese bank ahead of the opening up of the country's banking sector to foreign competition by December 11 under Beijing's commitment to the WTO, industry sources said.

Pak complains against India
Islamabad, December 3
Irked by the dwindling export of textile products which constitute a major chunk of its total exports, Pakistan has allegedly complained to the World Bank to stop India from using "unfair trade practices".

Let market decide oil prices: CII
New Delhi, December 3
Even while keeping the welfare considerations and the economic costs in mind, it is imperative for India to gradually move to a market -determined oil price mechanism, CII President R. Seshasayee said today.

Bollywood actress Preity Zinta along with UB Group Chairman Vijay Mallya and photographer Atul Kasbekar at the launch of Kingfisher Swimsuit Calendar, 2007, in Mumbai Bollywood actress Preity Zinta along with UB Group Chairman Vijay Mallya and photographer Atul Kasbekar at the launch of Kingfisher Swimsuit Calendar, 2007, in Mumbai on Sunday. — PTI



Bollywood star Shah Rukh Khan at the launch of a range of Tag Heur watches in New Delhi
Bollywood star Shah Rukh Khan at the launch of a range of Tag Heur watches in New Delhi on Sunday. — PTI

EARLIER STORIES

 

Market Update

Pick up IDBI with 2-year perspective
The market eyes the 14,000-mark during this week on the back of robust economic growth and expectations of strong results for the December quarter from Indian companies. Sensex closed the week at the record high of 13,844 on the news of strong GDP growth of 9.2 per cent during the September quarter.

Tax Advice

Interest income from PPF account tax-free
Q. I am a government pensioner and a senior citizen. Kindly clarify the following points:-
1. Whether or not interest income on PP Fund is taxable. Previously it was not.
2. Standard deductions for salaried persons/pensioners have been withdrawn but I am given to understand that in the case of family pension, it is not withdrawn. Kindly confirm it.

 

 







Top








 

DoT dumps mobile number portability
Foreign executives in telecom Cos may stay

New Delhi, December 3
The government is understood to have rejected telecom regulator TRAI's recommendations on mobile number portability (MNP) saying this should not be mandated by the licensor or the regulator, as it would deny subscribers the freedom to change operator without changing the number.

Keeping in view some of the facts and recognising that the MNP is not a mandatory service and in the competitive environment sharing of cost upgradation for such facilities should not be mandated by the licensor (DoT) or the regulator and should be left to the commercial judgement of the service providers, sources said.

TRAI had given its recommendations in March this year asking DoT to implement the facility by April, 2007, saying the government may mandate all cellular mobile service providers to offer MNP, initially to be introduced within the service area only.

Since the regulator had submitted recommendations suo motu, DoT is of the view that these are not covered under the particular clause of the TRAI Act 1997 and therefore, in case of not accepting the recommendations, it is not necessary to refer them back to TRAI before taking a final decision.

TRAI had estimated that the cost of Rs 940 crore for the upgradation of networks and the implementation mechanism is to be shared by all operators. The DoT said Rs 940 crore was not a small cost at present so as to implement these features from April 1, 2007.

It is pertinent to mention that some of the countries like Japan have already implemented MNP and according to analysts, the subscribers have immensely benefitted from the service. In fact, both operators as well subscribers have got advantage of it.

Further, DoT noted that the MNP cannot be implemented across all mobile subscribers due to technical reasons.

"In India, mobile networks are GSM and CDMA based and at present dual technology handsets are not available and the assumption of TRAI that in view of the benefits offered by MNP is not a major issue for the customer and that the market forces will take of this aspect, is completely out of place," the DoT said.

Meanwhile, telecom firms that have non-Indian CEOs or CFOs may get to keep them, as the DoT is understood to have convinced security agencies that foreign officials were no threat to the country.

DoT, which held extensive discussions with security agencies in this regard, has also possibly found a practical solution to allowing companies remote access to haul telecom traffic outside India, informed sources said.

It has suggested that remote access may be allowed on the condition that telcos would, over a specified period of time, have to set up network operation centre in India.

Till such time, remote access could be allowed with proper checking (by intelligence agencies).

The DoT is in the process of approaching the Cabinet in the second week of this month with a note that, among others, proposes allowing appointment of foreigners to key positions and remote access. — PTI

Top

 

Sell crop via commodity exchanges
Ruchika M. Khanna
Tribune News Service

Chandigarh, December 3
Two leading futures trading exchanges — Multi Commodities Exchange of India (MCX) and National Commodities and Derivatives Exchange (NCDEX) — have decided to rope in small farmers in Punjab and Haryana, so that they can benefit from future trading of their produce.

MCX has now decided to launch its National Spot Exchange at all major mandis in Punjab and Haryana. They are trying to enroll commission agents from these mandis, who will get terminals for trading. Through these terminals, farmers will be able to sell their produce anywhere in the country, where his produce gets the maximum value. “We are in the last stage of finalising the details with the Punjab Government,” said a senior official of the company.

NCDEX, on the other hand, has already installed its tickers in all 54 mandis of Haryana, where the prices all agricultural products are flashed. “As a result, farmers know the future prices and quote the same to the trader, before they sell their crop. In a way, we are now a referral centre for these farmers. After creating awareness, we will also install terminals for trade at the mandis,” says Mr Krishan Veer Singh, Manager, Business Development, NCDEX.

Both companies are also setting up new delivery points in the two states, besides enhancing their terminal services with the brokers. They are also in the process of expanding warehousing facilities for the farmers in this region. “From December 11, NCDEX has also decided to include barley as a commodity for future trading. This will benefit the farmers in Rajasthan, Haryana and parts of Punjab. The price centre for barley will be set up at Jaipur, whereas the delivery centres will be set up at Rewari and Bulandshahr,” said Mr Singh.

Officials of the two exchanges, who are participating in Agro Tech 2006, informed TNS that though farmers and traders in Rajasthan were big way into future trading of agricultural commodities, it had not really picked up in Punjab and Haryana. Both MCX, which has a daily turnover of Rs 16,000 crore, and NCDEX, with a daily turnover of around Rs 10,000 crore, claim that Rajasthan alone has a 10-12 per cent of the market share in futures trading.

Top

 

TCS wins $100 m deal in China

Beijing, December 3
Tata Consultancy Services (TCS) has won a landmark deal worth a whopping $100 million from the state-run Bank of China (BOC), industry sources said today.

It is being dubbed as one of the major IT-related deals signed by a Chinese bank ahead of the opening up of the country's banking sector to foreign competition by December 11 under Beijing's commitment to the WTO, industry sources said.

Under the just-inked deal, the Indian IT giant will provide a range of banking solutions to BoC. However the details are not yet known.

Meanwhile, TCS and its Chinese partners are expected to get their business licence soon for their Beijing-based joint venture.

The joint venture will be located in Beijing's Zhongguancun Software Park (z-Park) and will provide IT services and solutions to China's domestic market as well as major markets, particularly Japan, as well as the rest of the Asia-Pacific region, US, Europe. — PTI

Top

 

Pak complains against India

Islamabad, December 3
Irked by the dwindling export of textile products which constitute a major chunk of its total exports, Pakistan has allegedly complained to the World Bank to stop India from using "unfair trade practices".

"Yes, we have asked the World Bank to stop India from using unfair trade methods for boosting its textile exports," local daily 'The Nation' today quoted a Pakistani official as claiming.

The unnamed official blamed India for using "unfair trade methods" for boosting its exports but did not elaborate what those practices are.

Pointing a finger at Bangladesh, he said the South Asian nation is categorised as a Least Developed Country and enjoyed benefits which included zero per cent duty in the US markets where as Pakistani products have to pay 13 per cent duty.

He said the combination of falling export receipts and an unexplained jump in remittances has fuelled suspicion that exporters have been concertedly diverting export receipts into non-bank channels in order to pressure the government into granting further "relief" in the form of subsidies and exemptions. — PTI

Top

 

Let market decide oil prices: CII
Tribune News Service

New Delhi, December 3
Even while keeping the welfare considerations and the economic costs in mind, it is imperative for India to gradually move to a market -determined oil price mechanism, CII President R. Seshasayee said today.

As long as the international prices of oil were within a specific band the market forces should determine the price of petroleum products in the domestic market he went on to say. The Rangarajan Committee report dealt with this aspect of pricing in detail and the government must ensure that India moved in that direction.

India should look for ways to reduce its dependency on oil imports, reiterated Mr Seshasayee.

As much as 70 per cent of India’s oil consumption is imported.

Top

    
Market Update

by Lalit Batra

Pick up IDBI with 2-year perspective

The market eyes the 14,000-mark during this week on the back of robust economic growth and expectations of strong results for the December quarter from Indian companies. Sensex closed the week at the record high of 13,844 on the news of strong GDP growth of 9.2 per cent during the September quarter. Nifty, the most widely followed benchmark after Sensex, was witness to yet another landmark as it touched the elusive 4,000 mark in intra-day trading on Friday, but closed a shade below the landmark.

Investors may continue to build fresh positions following a smooth rollover from November contracts to December series. Markets may also gain on the expectations of allocations from foreign financial investors (FIIs) for the next calendar year 2007. However, caution is advised at higher levels as Sensex is already up 47.3 per cent in 2006.

IDBI

The government’s approval for IDBI taking over the defunct United Western Bank (UWB) in September, 2006, came as a windfall gain to the former. UWB offered a strong presence in the rural and semi-urban areas of Maharashtra. The benefit of the deal to the IDBI is further underlined by the fact that while the net compensation payable by the IDBI to UWB shareholders was far less than the cost the IDBI would have incurred setting up those branches and ATMs.

The IDBI currently has the lowest net interest margin (NIMs) across banks in both PSU and private segments. I am of the view that going forward the banks’ NIMs would improve as the bank’s extended presence will help it grow its retail asset base and garner deposits. The same will help it derive better spreads and therefore, improve its NIMs. Also some of the banks high-cost debt will get offloaded during the current financial year which should lower the cost of funds. A small improvement in NIMs will give a strong boost to the IDBI’s bottom-line.

IDBI will also gain as the funds in stressed asset stabilisation fund (SASF) will get unlocked as the bank recovers money from its delinquent cases.

The IDBI has sufficient capital and its capital adequacy ratio (CAR) stood at 14.8 per cent during the last financial year. Besides investing in its retail foray, the bank is also embarking on several plans for its subsidiaries. The bank has invested capital in the life insurance venture with Fortis and Federal Bank that is expected to enhance its non-fund income base going forward.

As a pure value play (other players’ valuation in banking space are stretched), I recommend a buy on the IDBI at the current price of Rs 74 with a two-year perspective.

Top

    
Tax Advice

by S.C. Vasudeva

Interest income from PPF account tax-free

Q. I am a government pensioner and a senior citizen. Kindly clarify the following points:-

1. Whether or not interest income on PP Fund is taxable. Previously it was not.

2. Standard deductions for salaried persons/pensioners have been withdrawn but I am given to understand that in the case of family pension, it is not withdrawn. Kindly confirm it.

3. Donation to the All-India Pingalwara Charitable Society, Amritsar, can be deducted from the taxable income. Please confirm.

— M.L. Sharma, Chandigarh

A. 1. The interest on Public Provident Fund Account is presently not taxable.

2. Your information that standard deduction in respect of family pension has not been withdrawn is correct.

3. The donation to a charitable trust/society are deductible under Section 80G of the Act to the extent 50 per cent (in case of certain specified bodies to the extent of 100 per cent) of the amount paid, provided such an entity is able to provide you a certificate giving the details of exemption allowed by the department and the receipt for such donation is enclosed with the return of income. I may add that the amount on which the deduction under the aforesaid section is allowable is restricted to 10 per cent of the gross total income as reduced by any portion of income on which tax is not payable under any provision of the Act and by any amount in respect of which the assessee is entitled to a deduction under any other provisions of Chapter VI-A of the Act.

Tax liability

Q. I am a Punjab Government employee. My salary details for the year 2005-06 are as under:

Pay & allowances received

Basic Pay: 1,90,000

DP: 95,000

DA: 57,484

HRA: 23,796

Rural area allowance: 11,856

Fixed medical allowance: 3,000

Total: 3,81,136

Deductions

GPF subscription: 64,894

Car loan interest: 30,000

G.I.S.: 1,440

Tuition fee (two children)
(11,000+7,260): 18,260

Pension scheme
(HDFC): 10,099
LIC: 5,645

Please calculate my tax liability and also explain the following in detail:

(1) Deductions under Section 80C the limit for which is Rs 1 lakh.

(2) Tax liability for the income earned as interest on saving bank account.

(3) Please specify the No. of children for which rebate on tuition fee can be obtained.

(4) Calculation of HRA.

(5) Formulae for calculation of rural area allowance.

(6) Any other deductions available to govt. employee under other sections.

— Ashwani Kumar, Chandigarh

A. (1) The interest earned on saving bank account is taxable and has to be included in your total income.

(2) The deduction for tuition fee is allowable for two children.

(3) The amount to the extent of which HRA is exempt can be calculated with reference to the rent actually paid for which details have not been given by you in the query. It is, therefore, not possible to compute the amount exempt from tax. Accordingly, the entire HRA in your case has been presumed to be taxable.

(4) It is not clear from your query as to whether rural area allowance is in the nature of compensatory modified field area allowance which is exempt under Section 10(14) of the Income-tax Act 1961 (the Act) read with Rule 2BB of Income-tax Rules 1962, to the extent of Rs 1,000 per month in respect of the following areas in Punjab and Rajasthan:

“Areas west of line joining Jessai, Barmer, Jaisalmer, Pokharan, Udasor, Mahajan Ranges, Suratgarh, Lalgarh, Jattan, Abohar, Govindgarh, Fazilika, Jadiala Gurur, Moga, Dholewal, Beas, Bir Sarangwal, Hussainiwala, Dera Baba Nanak, Laisain Bulge up to the international border, all inclusive”.

Since the query does not indicate this fact, the calculation of tax liability has been made on the presumption that the rural allowance is not exempt from tax as well as on the presumption that the same is exempt from tax. In the first alternative, the total taxable income works out at Rs 2,81,136 and tax including education cess is Rs 35,029. In case the allowance is taken as exempt from tax, the total taxable income would work out at Rs 2,69,280 on which tax, including education cess, Rs 31,400 would be payable.

There is no other deduction available to government servants exempt under Section 80C of the Act

I may add that the deduction for car loan interest is not allowed to a person earning salary income and, therefore, the same has been ignored for computing the deduction under Section 80C of the Act.

II

Q. Please advise my tax liability for the year 2006-07.

My business Income

(Proprietory concern) is Rs. 1,60,000

LIC premium 51,044

Mediclaim 1,872

Tuition fee 9,900

So what is my tax liability.

2. Second my wife income chart:

Salary (gross) 99,716

LIC commission received 8,778

                                              1,08,494

Tuition income 25,000

                                              133,494

LIC premium 27,806

PF deducted 6,560

What will be the tax liability of my wife as she is a female and can tax rebate under 88C of female deduction please publish in your esteem tax column.

— Gurpal Singh Sikka, Ludhiana

A. On the basis of figures given by you, your taxable income works out at Rs 97,184 which is below the maximum amount on which tax is not payable by an individual. In your case, therefore, no tax liability would arise. Similarly, in case of your wife there will be no tax liability as her taxable income would be Rs 99,128 which is below Rs 1,35,000, the maximum amount on which tax is not chargeable in case of an assessee who is a woman and is less than 65 years of age.

NSS withdrawals

Q. I want to draw Rs 70,000 from my NSS Account - 1987. If I deposit the same amount immediately in my PPF account, please inform whether I shall get rebate on income-tax or not.

I have read somewhere that if fixed deposit amount is up to Rs 1 lac in any nationalised bank for five years, the income-tax will be free on interests received. Will this Rs 1 lakh deposit replace deposits in PPF, etc. for income-tax rebate.

— M.L. Sharma, Kurukshetra

A. You would be entitled to a deduction under Section 80C of the Act of an amount deposited in your PPF account as the words “out of chargeable income” have been omitted from the said section and, therefore, there is no difficulty in getting the deduction after you have withdrawn the money from National Saving Scheme Account. The provisions of Section 80C have been amended so as to include the making of Fixed Deposit with a scheduled bank. However, such deduction is covered within the overall amount of Rs 1 lakh specified by Section 80C of the Act. The fixed Deposit has to be made for a period of 5 years. However, the interest received thereon would not be tax free but would be subject to tax.

Top

 
BRIEFLY

Ratan Tata bags award
Mumbai, December 3
Tata group Chairman Ratan Tata has won an award for 'Responsible Capitalism' for demonstrating social responsibility as an integral part of his commercial success. He became the eighth head of an international corporation to receive the award. Princess Royal of Britain presented the award to Mr Tata in London yesterday at a ceremony attended by over 250 dignatories. — PTI

Top

 





HOME PAGE | Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Opinions |
| Business | Sports | World | Mailbag | Chandigarh | Ludhiana | Delhi |
| Calendar | Weather | Archive | Subscribe | Suggestion | E-mail |