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AI struggles to survive
Mumbai, June 20
A day after Air India asked its top executives to forgo their salary for July, the chairman and managing director of the state-run carrier, Arvind Jadhav, today appealed to all staff to “rise up to the challenge” and help the airline in its “fight for survival”.In a letter to each employee, Jadhav has said in view of the global crisis, all airlines had been experiencing low fares, poor load factors, drop in premium travel, decline in cargo load and low yields.

Nortel sells wireless business to Nokia
Toronto, June 20
Toronto-headquartered Nortel, which is under bankruptcy protection in both the US and Canada, has announced that it would liquidate itself.In a statement issued Friday, the 127-year-old Canadian telecom equipment giant said it had entered into a deal with Nokia Siemens to sell its wireless business for $650 million.“This (sale) will ensure Nortel's strong assets - technologies, customer relationships and employees - continue to play an important role in driving the future of communications.


EARLIER STORIES




Rajiv M Sanghvi, managing director of Áudi, at the launch of Audi Q5, in Hyderabad on Saturday. The Audi Q5 range starts at Rs 39 lakh. — AFP photo

Aviation Notes
Different rules for different people
Senior staff of Air India and Indian Airlines is angry. They have every reason to do so because they have been barred from upgradation while a minister's maid and a son have been upgraded to business class and first class, respectively, on the Mumbai-London sector recently.This is not all. The maid, unable to read and write, was provided VIP treatment escorted up to the door of the aircraft and was allowed to carry a huge consignment of excess baggage without any payment. According to reports, the consignment consisted of “imported whisky” to be delivered in London. Details as to how she was escorted out of the Heathrow Airport are not available yet.

Investor Guidance
Pension to freedom fighter’s spouse tax-free
Q: My question is regarding tax treatment for pension given to spouse of late freedom fighters. Whether it is taxable or not? In case of bank deposits in joint names, interest is to be apportioned to all the depositors or only to first named depositor.

 





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AI struggles to survive

Mumbai, June 20
A day after Air India asked its top executives to forgo their salary for July, the chairman and managing director of the state-run carrier, Arvind Jadhav, today appealed to all staff to “rise up to the challenge” and help the airline in its “fight for survival”.

In a letter to each employee, Jadhav has said in view of the global crisis, all airlines had been experiencing low fares, poor load factors, drop in premium travel, decline in cargo load and low yields.

Despite the hardships in the industry, Air India has not taken any harsh steps like pay cuts and job cuts so far, Jadhav pointed out.

“Employees have been receiving their wages, salaries every month even when people in the industry have lost jobs or seen emoluments take a dip. We should consider ourselves fortunate that we have been insulated from the adverse impact of the economic meltdown so far," Jadhav said.

His letter comes at a time when the employees of the carrier have called for an indefinite strike from July 1 if the management delays their salaries.

The company, struggling to cope with a cash crunch, had earlier announced that it will defer its employees' salaries of June by two weeks. It has also asked the top executives above general manager level to forego their compensation for July.

“As loans from financial institutions at high interest rates cannot be availed of endlessly to meet working capital expenditure, the time has come for us to face the moment of truth. This is an hour of crisis for us all and it is a fight for survival,” Jadhav said.

The company has already requested the government to infuse funds by way of equity and soft loans and is hopeful that it would come soon, he added.

Jadhav also warned of the impact of suggestions for disinvestment or privatisation of Air India.

He urged each and every employee to “rise up to the challenge” and demonstrate their ability to overcome the crisis and emerge with flying colours.

Jadhav said the management was in dialogue with employees' unions to apprise them of the difficult financial situation confronting the aviation industry and the airline in particular. — IANS

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Nortel sells wireless business to Nokia

Toronto, June 20
Toronto-headquartered Nortel, which is under bankruptcy protection in both the US and Canada, has announced that it would liquidate itself.

In a statement issued Friday, the 127-year-old Canadian telecom equipment giant said it had entered into a deal with Nokia Siemens to sell its wireless business for $650 million.

“This (sale) will ensure Nortel's strong assets - technologies, customer relationships and employees - continue to play an important role in driving the future of communications. The value of Nortel's wireless business is recognised throughout the industry,” said Nortel president and chief executive Mike Zafirovski.

Once the biggest maker of telecom equipment and Canada's most valuable company, Nortel said it was in talks with other parties to sell its other businesses.

“Maximising the value of our businesses in the face of a consolidating global market has been our most critical priority. We have determined the best way to do this is to find buyers for our businesses who can carry Nortel innovation forward, while preserving employment to the greatest extent possible," said Zafirovski. Nortel, which once accounted for the bulk of the Toronto Stock Exchange (TSX), said it was delisting from the stock market.

Nortel, which has been in business making telephones and later telecom technology since 1882, had to file for bankruptcy after suffering losses to the tune of $5 billion last year.

Even as its top bosses restructured the company and cut jobs, Nortel posted a further loss of $507 million in the first quarter ending March 31.

The telecom giant's accumulated problems - from the bubble burst to internal accounting scandal to the current meltdown - forced it to seek bankruptcy protection in the US and Canada in January. — IANS

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Aviation Notes
Different rules for different people
by K.R. Wadhwaney

Senior staff of Air India and Indian Airlines is angry. They have every reason to do so because they have been barred from upgradation while a minister's maid and a son have been upgraded to business class and first class, respectively, on the Mumbai-London sector recently.

This is not all. The maid, unable to read and write, was provided VIP treatment escorted up to the door of the aircraft and was allowed to carry a huge consignment of excess baggage without any payment. According to reports, the consignment consisted of “imported whisky” to be delivered in London. Details as to how she was escorted out of the Heathrow Airport are not available yet.

As many as six petitions have been filed under the Right of Information Act. Considering the act of upgradation as illegality and causing humiliation to senior officials, the staff wants the Prime Minister to take action against the erring minister.

AI has already announced deferment of salaries to its 32,000 employees for June. The deferment, according to aviation analysts, is a “clever ploy” to secure immediate patronage and benevolence of the government.

No matter what measures Air India undertakes or no matter how much passenger-load the airline achieves, its losses will continue to mount because over-head expenses have been rising enormously. The analysts feel that the authorities have been “penny-wise and pound-foolish”.

Judging from the goings-on, it appears there is a subtle move by the politicians to convert Air India into a private company. According to analysts, the operator-industrialist, a favourite of a group of politicians, is already in queue to grab the national carrier. The situation is very murky and turn-around of the airlines is virtually ruled out. 

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Investor Guidance
Pension to freedom fighter’s spouse tax-free
by A.N. Shanbhag

Q: My question is regarding tax treatment for pension given to spouse of late freedom fighters. Whether it is taxable or not?In case of bank deposits in joint names, interest is to be apportioned to all the depositors or only to first named depositor.

— TN Ramakrishna

A: U/s 10(17A), pension given to freedom fighters under Swatantrata Sainik Samman Pension Scheme, 1980, is tax-free. The pension passed on to the spouse (widow or widower) is also tax-free.The fixed deposit belongs to the first named depositor (if adult) and the interest is taxable in the hands of the first named depositor.If the depositors are an association of persons (AOP), the interest is taxable in the hands of the AOP.

PPF account

Q: I had opened a PPF account on March 26, 1990, and it was to mature on March 26, 2005. I failed to furnish Form-H. However, the bank accepted subsequent deposit in the 16th year. Later on, the bank on realising that I could not have deposited the money without furnishing Form-H refunded the balance due and payable on date of maturity. They also refused to pay interest for almost more than one year. Am I entitled to receive interest for the period between the date of maturity and actual payment made by the bank? In your article you have stated that such a account shall be treated as without subscription extension and it shall also earn interest until the entire money in account is withdrawn.

— Goyal

A: Form-H is to be used to declare the intention of continuing the account with subscription for each extended period. It should be filed before the first contribution is made for the first extended year in each block. In its absence, the account will be treated as without-subscription extension. Fresh contributions made to such accounts will enjoy neither the deduction u/s 80C nor the interest. [MoF (DEA) 7/21/88-NS-II dated 10.8.90]If an account holder has failed to file the form, he can approach Ministry of Finance and pray for getting the account regularised. The authorities state that the account offices should not accept any after-maturity subscriptions without Form-H. For this, a list of matured accounts should be kept with the counter assistant.You are not entitled to any interest on the amount contributed in the extended period since Form H was not submitted by you. However, the amount held till maturity (prior to extension) will earn interest till the month prior to the date of withdrawal.

The authors may be contacted at wonderlandconsultants@yahoo.com 

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