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Sunday, January 10, 1999
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Ministers’ group to woo foreign investors
NEW DELHI, Jan 9 — The Prime Minister has constituted a Special Group of Ministers to attract foreign investors in the high potential oil and natural gas sector.

New strategy for oil exploration
NEW DELHI, Jan 9 — A new strategy for establishing joint ventures for explorations in oil in India and abroad will soon be unveiled by government.

‘Limit office term for politicians’
JAIPUR, Jan 9 — Former Finance Minister, Mr P. Chidambaram, today suggested that there should be a limit on the term of office of politicians, including the PM, the CMs and parliamentarians.

Hosiery faces new threats
LUDHIANA, Jan 9 — New threats and fresh challenges, which may threaten the very existence of the hosiery industry here in the next millennium has spurred some of Ludhiana’s leading apparel exporters to put their heads together to chart out a comprehensive strategy for facing them.

Changes in buyback ordinance
NEW DELHI, Jan 9 — Bowing to the demands of the corporate sector, the Government has made important changes in the ordinance on buyback of shares by companies freeing them from the obligation to seek financial institution’s permission to make inter corporate investments.

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Titanic tops ’98 US music sales
LOS ANGELES, Jan 9 — The soundtrack to the movie, Titanic, was the best-selling album of 1998 in the USA, selling over 9.3 million albums, entertainment data collection company, Soundscan, has added.

labour law

Tax and you


Ministers’ group to woo foreign investors
Tribune News Service

NEW DELHI, Jan 9 — The Prime Minister has constituted a Special Group of Ministers to attract foreign investors in the high potential oil and natural gas sector.

The Group will work out a time-bound plan to accelerate the process of reforms in the oil sector, Prime Minister Mr Atal Behari Vajpayee said here today.

The Special Group will work out the specific framework for creating a ‘India Hydrocarbon Vision 2020’ and submit its report to the Prime Minister within six weeks, Mr Vajpayee said while inaugurating four-day international conference on petroleum and allied sectors —Petrotech 99 — organised by the Indian Oil Corporation (IOC) here .

Urging foreign investors to capitalise on the “excellent opportunities for investment in exploration and production in India”, Mr Vajpayee said that “we want our country to become a major hydrocarbon power of the world in the near future”.

“I would therefore urge the oil companies and investors around the world to work out their plans for making Indian their priority destination for investment and growth”, Mr Vajpayee said.

Expressing concern about the falling self sufficiency of the country, he said that the government is looking at oil and gas demand increasing at a sustained rate of about 8 per cent compared to the world average growth in petroleum demand at 1.5 per cent. “Therefore it is essential to mobilise technology and finance to accelerate exploration and production of oil and gas in India”, he said.

“With the announcement of the India Hydrocarbon Vision 2020, I am sure the process of reforms in the petroleum sector will be accelerated in a time-bound frame”, Mr Vajpayee said adding that before submitting its report the Group will interact closely with the private sector and professionals.

The government is also examining decanalisation of imports with a suitable tariff regime to integrate the domestic and the international market, the Prime Minister said.

The government is also planning to construct national oil and gas pipeline grids to facilitate effective distribution with minimum cost as inadequate infrastructure is causing constraints in trade and industry including the oil sector, he said.

Regarding restructuring of Public Sector Undertakings (PSUs), Mr Vajpayee said that a credible plan for restructuring all PSUs will be announced, including steps to sell the government’s equity while at the same time safeguarding the strategic aspect of national oil security.

“We are restructuring all the PSUs to provide them the required operational flexibility and autonomy. This process will be accelerated”, he said.

“The government plans to disinvest in oil PSUs that are highly profitable. This is consistent with my government’s desire to withdraw from the commercial sector and focus on the social sector”, Mr Vajpayee said.

The government is also taking steps through diplomatic and commercial channels to develop hydro-carbon cooperation in India’s neighbourhood to the mutual benefit of all the countries, the Prime Minister added.

Regarding the new exploration and licensing policy, the Prime Minister said that it has a favourable fiscal regime. “To facilitate the working of serious investors, we will further improve the structure of incentives”, he added.

Definite steps have also been taken to de-control and de-regulate the oil industry in the country which has so far been entirely with the public sector.

The Prime Minister said that a specific time-table has been announced to completely decontrol the marketing by March 31, 2002 with simultaneous initiation of tariff reforms.Top


New strategy for oil exploration
Tribune News Service

NEW DELHI, Jan 9 — A new strategy for establishing joint ventures for explorations in oil in India and abroad will soon be unveiled by government.

Announcing this at a special session of Petrotech 99 here today, the Union Minister for Petroleum and Natural Gas K. Ramamurthy said that this programme will set into motion a new initiative where exploration risks, managerial efficiency, application of modern technologies and attendant benefits would be shared between the national oil companies and joint venture partners.

The entire energy sector, which had moved from the private sector to the public sector, would be deregularised by March 2002, the minister said.

In addition, to supplement the efforts of oil companies in upstream sector, downstream oil companies in India have been allowed to invest in exploration and production both in India and abroad. To this end, these oil companies will be allowed join hands with foreign companies, he said.

In order to increase the pace of exploration and production in the country, 48 more blocks are proposed to be offered under the New Exploration Licensing Policy (NLEP).

These include 10 onshore blocks, 26 offshore blocks upto 400 metres of water depth and 12 deep water blocks.

Regarding additions to refining capacity, Mr Ramamurthy said that in the next five years refining capacity is expected to double from the current level of about 68 MMTPA.

Moreover, it is expected that the product pipeline capacity will be increased three-fold in the next three years following formation of a holding company Petronet India Ltd.Top


Changes in buyback ordinance

NEW DELHI, Jan 9 (PTI) — Bowing to the demands of the corporate sector, the Government has made important changes in the ordinance on buyback of shares by companies freeing them from the obligation to seek financial institution’s permission to make inter corporate investments.

The ordinance reissued on Thursday by the President K.R. Narayanan, however, restricts the corporates to buyback only 25 per cent shares of their paid up capital.

Funds used for the purpose are not to exceed 25 per cent of the paid up capital and free reserves. Also, free reserves have been defined now for the purpose of buyback, an official release here said today.

The new provisions of the repromulgated companies (amendment) ordinance, 1999, withdraw the powers of the Board of Directors to decline or suspend registration of shares of nominees.

The buyback ordinance was reissued as the earlier one was due to expire tomorrow. Under the constitution an ordinance promulgated by the government lapses unless it is approved by Parliament within six weeks of commencement of the session.

The release said changes had been made to make some of the legal provisions more simple, practical and to remove ambiguity in respect of some of the provisions.

The fresh ordinance has also extended to seven years from five years the transfer of unclaimed dividends from a company to the investor education and protection fund.Top


Hosiery faces new threats
From A.S. Prashar
Tribune News Service

LUDHIANA, Jan 9 — New threats and fresh challenges which may threaten the very existence of the hosiery industry here in the next millennium has spurred some of Ludhiana’s leading apparel exporters to put their heads together to chart out a comprehensive strategy for facing them.

“We have so far been thriving in a protected market”, says a concerned Mr Sanjeev Gupta, one of the better known apparel exporters of Ludhiana. “We have seldom worried about quality nor taken into account the changing fashions, designs, consumer preferences and tastes in a regulated manner. All that is now set to change. The existing WTO system under which each country was allocated an export quota for garments is due to end in 2005. After that, each country will be free to compete in the open world market and maximise its apparel exports.”

The rise of China and Taiwan as world’s leading quality apparel exporters should serve as a warning to Indian exporters. But the fact of the matter is that no coherent thinking has started in Ludhiana so far. Therefore, Ludhiana industry may well be wiped out of the world markets after 2005, warns Mr Gupta. In Angora segment, China has already captured our share in CIS.

Christened as the Apparel Exporters’ Association of Ludhiana (APPEAL), the group consists of 14 members at present. “Our number may be small but we account for nearly 50 per cent of the total apparel exports from Ludhiana to European Union and the USA,” says Mr Gupta who has been elected president. Other office-bearers include Mr Ajay Marjana (Secretary), Dr Prem Kumar (adviser) and Mr Chaman Dhanda, (consultant, United Nations Industrial Development Organisation). They together with Mr Ashwani Dhawan, Mr Sanjiv Jain, Mr Surinder Jain, Mr Anil Jain and Mr Rajan Mehra form the core group of the outfit.

Russia was the most favoured export destination for Ludhiana hosiery industry with almost 80 per cent share in total exports of approximately Rs 600 crore. It also exported to some extent to the European Union and the US markets during the last one decade. With Rs 100 crore (US $ 25 million) exports to these markets, most of these manufacturers are sub-contractors to the internationally reputed branded knitwear producers.

The industry here, however, suffers from serious weaknesses like small fragmented size, price based competition, limited product range, low quality image, unreliable delivery schedules, inadequate marketing and export infrastructure.

The group is therefore, of the view that in order to realise the full potential of the industry, it is imperative to formulate effective growth strategies, create facilitating institutions and strong infrastructure facilities. The group intends to overcome some of the common problems of the knitwear export industry. The United Nations Industrial Development Organisation is helping APPEAL in removing some of the major constraints of the knitwear exporters.

The APPEAL will host a seminar on “Knitwear Vision 2005” on Monday where some of these problems will be discussed. Mr Braham Dutta, Joint Secretary, Small Scale Industry, Government of India will be the chief guest. Others who will participate along with nearly 100 delegates include Mr Ranjit Singh Talwandi, Chairman, PSIEC, and Mr D.S, Guru, Director, Industries, Punjab.Top


‘Limit office term for politicians’
From T.V. Lakshminarayan
Tribune News Service

JAIPUR, Jan 9 — Former Finance Minister, Mr P. Chidambaram, today suggested that there should be a limit on the term of office of politicians, including the Prime Minister, the chief ministers and parliamentarians.

He was also of the opinion that only literate and qualified persons should be allowed to hold important office.

Addressing the concluding session of the fifth partnership summit, organised by the Confederation of Indian Industry, Mr Chidambaram said as the country prepares to enter the next millennium and the next century good governance would hold the key to the success of the country.

Mr Chidambaram who in the absence of the Defence Minister, Mr George Fernandes, and the Planning Commission member, Mr Montek Singh Singh Ahluwalia, emerged as the key speaker of the day demonstrated that even today he was a hot favourite with the captains of Indian industry and international delegation.

Mr Chidambaram felt it was too ambitious to set an agenda for the next millennium as it was too long a period. He said even looking back hundred years shows how much things have changed. Telephones, rockets, space stations and other developments were unthinkable hundred years ago, he added.

Talking on good governance, he said politics should not be a life long profession for any person and the term of office for them should be limited.

Regarding the qualifications for politicians, Mr Chidambaram, said the world was becoming more knowledge-based and technical. He said a Minister dealing with subjects like ports, surface transport, and telecom needed to grapple with some highly technical and complicated details and an illiterate man could not handle it.

He blamed the voters for the rot in the political system and said they must eliminate corrupt and dishonest politicians. There should be a premium on educated people, he felt.

Account ability had become the biggest casualty of the 20th Century in India and this trend needed to be reversed. The Lok Sabha member said accountability would be the single most important criteria for good governance in the next century.

Mr Chidambaram was of the hope that the next generation, which was more intelligent and educated, would steer the country towards a new destination in the next century.

India should keep itself open to new ideas and technology and encourage competition. There was need to aim at efficiency in every field and India must move in tune with the world and not take a different course, Mr Chidambaram warned.

Later addressing a press conference, Mr Chidambaram said the government’s decision to increase import duty on gold was not justified and it was a reversal of the earlier policy to liberalise import of gold. He felt the new measure would not bring in any significant revenue gains for the government.

On the floundering Indian economy, Mr Chidambaram said since March 30, 1997, when the Gowda Government was pulled down there was political instability in the country. He said the BJP slogan of “able Prime Minister, stable government” had not proved right and even today the perception was that there was political instability in India. He said economics cannot be divorced from politics.

On the present state of Indian economy, Mr Chidambaram said during the current year, agriculture would do well and add to GDP services sector too was satisfactory. It was the manufacturing sector in industrial growth and exports that were causing worry. He said export growth had become negative for the first time in 1998-99 and this was dangerous.

On the government’s disinvestment programme, Mr Chidambaram said the entire policy was suspect and questionable. The government’s disinvestment plans were more of a sleight of hand rather than genuine disinvestment.

On reigning in the fiscal deficit, Mr Chidambaram said the government should concentrate on reducing non-plan expenditure.Top


Hyundai allowed to buy back

NEW DELHI, Jan 9 (UNI) — The Foreign Investment Promotion Board (FIPB) today allowed Hyundai Motor Corporation of South Korea to buy-back 14.2 per cent stake in Hyundai Motor India Limited from financial institutions by paying $ 138 million.

The Hyundai proposal was among the 41 applications, amounting to a foreign direct investment inflow of Rs 720 crore, which was cleared by the board today, sources said here.

The other major proposal given the go ahead include applications by the Toyota Group to set up component manufacturing units, by Novartis holdings for producing seeds and by Henkel-Spic to issue non-convertible redeemable preference shares.

The Korean giant had earlier offloaded 14.2 per cent stake in its wholly-owned subsidiary in favour of institutions. The company is now bringing in $ 138 million to acquire this stake. With this the total equity of the company would go up to $ 350 million.

Novartis holdings of Switzerland has been allowed to invest Rs 3.10 crore foreign equity for setting up a 100 per cent subsidiary in Pune for production of seeds. The approval is subject to the condition that the company would not produce terminator seeds and the requirements of bio-technology would be applicable on them.

Nine proposals in the automobile sector were given the nod, including two applications of Toyota Tsusho Corporation (TTC), the trading arm of Japan-based Toyota Motor Corporation. Both the ventures would be part of the component network which Toyota is setting up for its India venture under which the first multi-utility vehicle would roll out by the year-end. The units would be located at the Toyota ancillary park in Bangalore.

TTC has been allowed to set up a joint venture with Kirloskar Systems for fabrication and processing of steel products and components for automobiles. The company would bring in Rs 12 crore foreign equity to pick up 95.40 per cent stake in the joint venture.

Besides, TTC, along with Asian Seike — a component manufacturing arm of the Toyota Group — is setting up a unit to manufacture several automotive components. Together, the foreign partners would hold 70 per cent stake in the venture. Aisin Seiki is engaged in the manufacture of door locks, window regulators, brakes, clutches and fuel injection systems.

Mannesmann Sachs of Germany has been given the nod to bring in Rs 2.03 crore to pick up an additional 29 per cent stake in its ailing joint venture company in Solan, Himachal Pradesh, by the same name. This is as per the revival package prepared by the BIFR, besides hiking its holding in the joint venture from 51 per cent to 80 per cent, Mannesmann would also provide technology support to introduce newer and more competitive products in the Indian market. The joint venture is presently engaged in the manufacture of shock absorbers and other automobile components, the sources added.

The other automobile proposals approved today include Penta Daewha Auto Parts Limited and Sirmour Sudburg Auto Limited, Jamna NHK Alewd Suspension Components Limited and Walker Exhaust India Private Limited.

The Netherlands-based Prebon Holdings has been allowed to set up a venture for indulging in stock broking and merchant banking activities. The company would invest Rs 2.5 crore to pick up 51 per cent stake in the venture.Top


Titanic tops ’98 US music sales

LOS ANGELES, Jan 9 (Reuters) — The soundtrack to the movie, Titanic, was the best-selling album of 1998 in the USA, selling over 9.3 million albums, entertainment data collection company, Soundscan, has added.

Coming in a distant second was Canadian Pop diva Celine Dion’s ‘Let’s Talk About Love’ which sold 5.8 million albums. Both albums, released by Sony Music, contained the chart-topping ballad, ‘My Heart Will Go On’.

Five of the top 10 bestsellers of the year were released by Sony. Since its November, 1997 release, the Titanic soundtrack has sold more than 25 million copies worldwide, making it the best-selling soundtrack of all time.

The album, which topped the Billboard charts for 16 weeks, contained the James Horner score to the hit movie as well as Dion’s haunting ballad, which smashed radio play records in the USA even before it was released as a single. Indeed, the album was such a success that it even spawned a second sound track album, ‘Back to Titanic’ and started a cottage industry as smaller record companies released Titanic-related albums to capitalise on the craze.

All told 711 million albums were bought in 1998, up from 651.8 million the previous year, Soundscan said. Teenage heart-throbs, Backstreet Boys, claimed third place, selling 5.7 million copies of their debut offering, Backstreet Boys. Canadian country bombshell Shania Twain held fourth position with 4.8 million copies of her Mercury Records release, Come on Over.

In fifth place was boy group N-Sync, whose self-titled RCA debut album sold 4.4 million copies. Another soundtrack, for the film ‘City of Angels’, racked up sales of 4.1 million, making it the sixth best-seller of the year. It was helped by hit singles from Alanis Morissette and the rock band, Goo Goo Dolls.Top


PSB honours Saini
Tribune News Service

CHANDIGARH, Jan 9 — Mr S.S Kohli, Chairman and Managing Director of the Punjab and Sind Bank honoured Mr Baljit Singh Saini, Olympian for his outstanding performance while playing for Indian Hockey team at Bangkok, which won gold medal for the country. He was allowed two increments along with Rs 31,000 as cash award by the bank. The function was held at bank’s head office in New Delhi.Top


Gold rises

NEW DELHI, Jan 9 (PTI) — Silver made another jump on the bullion market following persistent buying support from stockists and closed with further gains. Gold also moved up slightly on scattered buying by local parties. The quotations: Silver .999 (ready) 7760, delivery 7760, coins buyer 10,700 and seller 10,800. Standard gold 4450, ornaments 4300 and sovereign 3800.Top


Chinese experts for licensed sex shops

Alarmed at the mushrooming of sex shops nationwide, Chinese medical experts have urged the government to bring order to such businesses by opening government licensed shops.

The government must issue business licences to sex shops to standardise their activities, Li Zeyou, a member of China’s sexuality society (CSS) was quoted as saying by the official Xinhua news agency.

“The fledgling sex health business, which can be a boon to China in terms of population control, is doomed if such a trend is left unchecked,” Li said at a medical seminar. — PTI

No smiles

Flight attendants of Hong Kong’s Cathay Pacific have threatened to stop smiling to protest the airline’s plans to scrap their automatic pay rises, a newspaper report said.

Cathay, which employs 5,500 flight attendants, is demanding employees fly an extra eight hours a month to earn a 3.5 per cent rise.

Other options are to work the same number of hours for the same money or take a voluntary severance package, Hong Kong’s ‘South China Morning Post’ reported.

“Our contracts do not say we have to smile,” said Becky Kwan Siu-Wa, who chairs the flight attendants’ union representing three-quarters of cabin crew, adding, other types of action were also being considered. — PTI

Scotland pride

Among the more desirable wool textiles of the world, Harris Tweed recently arrived in India courtesy Scottish Tweeds. Mr R.S. Sekhon, Chandigarh-based Scottish Tweeds distributor and agent for India, Nepal and Bhutan said that the company wanted to popularise the concept of tweeds in India especially among younger generation.

Mr Sekhon said that Harris Tweed is now available in all Indian metros at prices beginning at Rs 7,500 that scale Rs 9,000 per length. The tweed is available in three weights standard, light and feather. — TNS

In majority

Despite all those partying singles and unwed parents on US television, the typical American adult is still married and living with his or her spouse.

Some 110.6 million Americans aged 18 and over are married and living with one another last year, the census bureau has reported. That’s 56 per cent of the adult population. Though it is a share that has been declining for years, married are still the majority.

“The percentage of married adults has been fading because of the increase in the never married and divorced population,” said census population expert, Terry A. Lugaila. In 1970, 68.4 per cent of adults lived as married couples, she noted.

But the decline has slowed, with most of the decrease having occurred in the 1970s and 1980s when the divorce rate was rising and many young adults were postponing marriage to pursue education and careers. — AP

No act

A British pantomime star brought the house down when he dropped on one knee and proposed to his stunned 24-year-old co-star on stage. Paul Oldham stopped the climactic wedding scene on the final night of ‘Aladdin’, in Rochdale near Manchester, to pop the question. When Helen Burton, whom he had met just four weeks earlier, burst into tears and said “Yes”, the capacity audience erupted in cheers for the couple.

“I’d never met her before, but when the cast gathered for the first time I just thought this girl is gorgeous,” the British Press Association news agency quoted Oldham as saying.

On Christmas day, the couple went to a pub and he asked her to marry him. “She accepted without hesitation, but there were no friends or family and I thought what was the best way to led them all know in style?,” said Oldham.

Virginity test

Turkey’s Justice Minister has ordered officials to stop the practice of forced gynaecological exams to determine if women and girls are virgins.

Hasan Denizkurdu issued a decree banning the practice, saying the exams hurt the dignity, modesty and feelings” of women. According to the decree, exams can only be required by a judge if such tests are required as evidence in criminal cases.

Girls in State orphanages, prisoners and sometimes even foreign tourists staying in hotel rooms with male companions have been subjected to gynaecological tests against their will.

While human rights groups have long denounced the practice, many conservative Turkish families defend the tests as a way of deterring girls from straying and damaging marriage prospects.

Sex before marriage is frowned upon. Women wear red ribbons on their wedding gowns to signal their virginity. The exams have been carried out despite not always being accurate proof of virginity.

Women’s rights advocates have welcomed the decree. “Restricting the framework of the tests and putting the tests under strict control was the required thing to do,” said Feride Acar, a professor of women’s studies at Ankara’s Middle East Technical University.Top


Tax and you
by R.N. Lakhotia

Q: My individual income during the financial year 1991-92 was as under:

a) Income from military pension Rs 7,488
b) Rent from a house Rs 32,900
c) Intt. on SB a/c & FDR Rs 6,559

Total: Rs 46,947

I do not know the exemption limit during that year i.e. 1991-92. Similarly I do not know the standard deduction as well as the exemption for repair of the house.

Kindly inform me as to my liability for the individual income tax for that year.

Please give your address as well as telephone No. so that certain income-tax advices may be obtained personally by prior appointment.

— G. Lal, Chandigarh

Ans: For the assessment year 1992-93 the Income-tax exemption was Rs 22,000. Even after the granting of standard deduction from the pension income and the standard deduction re: repairs from the rental income as also deduction u/s 80L in respect of the bank FDR interest, you were liable to file your Income-tax return in respect of Assessment year 1992-93. Now the time for filing the tax return for the said year has already lapsed. If by chance you receive a notice from the Income-Tax Officer for the purposes of re-assessment you may then file your return and pay tax accordingly. My mailing address is S-228, Greater Kailash-II, New Delhi-110048. My phone No. is 6415434 and 6447768.

Q: I am serving government employee and I am supposed to investment in ULIP of UTI qualifies for income-tax rebate u/s 88 whether the dividend income from ULIP which stands reinvested in the units of ULIP is tax free or not. If the amount of dividend is tax free then how the calculations are to be made vice versa?

— M. Ram, Pathankot

Ans: The income received by you from UTI re: ULIP is strictly speaking not dividend income. The same is not completely exempt u/s 10(10D) of the Income-Tax Act, 1961, unless it is received from the LIC. However, the same will qualify for exemption u/s 80L of the Income-Tax Act, 1961.

Q: I received Rs 50,000 as net Long-term Capital Gain from the sale of shares in the assessment year 98-99. Have I to pay I. Tax @ 20 per cent on this L.T. capital gain, when my income is only Rs 14,000 and I am also allowed Rs 10,000 as senior citizen tax rebate?

If yes, will be it be refunded against long term capital loss from sale of shares in the subsequent years.

2. Please differentiate between 54EA and 54EB in detail and explain 48 & 112 of I.T. Act, 1961.

3. Within which period the long term capital gain from the sale of shares/house etc. can be invested in the purchase of house, permitted securities or shares etc. To claim exemption from this long term capital gain tax.

— Dalbir Kaur, Amritsar

Ans: On the facts stated by you there will be no liability to tax on you in respect of the capital gains received by you amounting to Rs 14,000 only. This is because of the fact that the total taxable income including the long-term capital gains is less than Rs 40,000 being the exemption limit for Assessment year 1998-99. Hence, you will not be required to make payment of any Income-tax on account of long-term capital gains. The difference between section 54 EA and section 54EB is that as per section 54EA for availing tax exemption for the purposes of capital gains the entire net sale consideration has to be invested in certain specified securities while as per section 54EB the investment of only long-term capital gains has to be made in certain specified securities for claiming tax exemption.

Section 48 of the Income-tax Act, 1961 speaks about the mode of computation of the capital gains. It also contains the concept of Cost Inflation Index. Section 112 of the Income-Tax Act contains the details of the tax to be paid in respect of long-term capital gains. For claiming exemption of long-term capital gains from the sale of shares, etc. the investment in residential house property can be made either within the period of one year before or within 2 years after the date of transfer, or construction of residential house within 3 years of transfer. However, please do ensure that the person taking advantage of this tax exemption does not own any other residential house property.

Q: Please refer to column 1-4 of The Tribune, Sunday, May, 1998, on the above subject.

2. In answer to last question, it has been mentioned that husband can make payment of house rent to his wife and the house rent paid to her shall be excluded from the total income of the husband.

It will be most appropriate, if in answers to such questions relevant rules are quoted/reproduced. Please let me know the rules under which above mentioned exemption is available.

— J.S. Guliani, Chandigarh

Ans: In respect of house rent payment by an employee to his wife the benefit of tax exemption of the house rent allowance would be permissible as per rule 2A of the Income-Tax Rules, 1962.Top


labour law
by Praful R. Desai

Proper discretion

Q.: While claiming back arrears could parity be claimed with employees who stand on different footing?

Ans: This point came up for consideration before the S.C. in the case of Ravooj MA v Senior Divisional Signal & Telecommunication Engineer (1998-II-LLJ-1278).

The appellant was prematurely retired from service but was ordered to be reinstated on his representation. He was claiming full back wages for the intervening period.

The S.C. opined that the appellant’s case is not a case of political or personal victimisation. As per the guidelines of the railways, in his case it would not be appropriate to treat the period during which he did not work as on duty or to allow him full salary for the period. As per the guidelines this period has to be treated as leave due and admissible, which has been done in the present case. The authority ordering reinstatement has applied its mind to the facts of the appellant’s case and has given appropriate directions as to how the intervening period is to be treated. Thus, the S.C. did not find any reason to interfere with the discretion so exercised.

The only ground urged by the appellant is that some other persons have been given the benefit of pay for the entire intervening period.

This, by itself, is no help to the appellant, in the opinion of the S.C. If the person who is reinstated with full pay during the intervening period was a victim of personal or political vendetta, he would be entitled to full pay as per the guidelines.

In one case, it seems that the authority under the payment of Wages Act directed that pay should be given to the reinstated employee for the intervening period.

That order, in the opinion of the S.C., also cannot be considered as a precedent which should be applied in all the cases, much less when the guidelines issued by the Railway Board are clear and the discretion has been properly exercised in the present case.

With the result, the S.C. dismissed the appeal.Top

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