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B U S I N E S S

TRAI to prosecute erring operators
Board meeting today
New Delhi, March 19
The TRAI is poised to prosecute erring telecom providers, including Reliance Infocomm and Bharti Tele-ventures Ltd, who have not responded to show-cause notices served on them for network congestion on March 6 and would decide the final course of action tomorrow at its Board meeting here.

Cadbury fined Rs 2,500
New Delhi, March 19
The State Consumer Disputes Redressal Commission has upheld a city consumer court order which slapped a fine of Rs 2,500 on Cadbury India Ltd. for repacking old chocolate bars with fresh manufacturing dates on the wrapper.

Damodaran’s no for super regulator
Bhubaneswar, March 19
SEBI Chairman M. Damodaran today disapproved the idea to have a ‘super regulator’ as mooted by the RBI.

Indo-Pak trade touches $1 b
New Delhi, March 19
Bilateral trade between India and Pakistan is estimated to have crossed $1 billion so far this fiscal while illegal trade reduced by 50 per cent with the implementation of SAFTA and opening up of rail and road linkages, industry body Assocham said today.

Haryana to set up four more industrial townships
Chandigarh, March 19
Industrial scene is looking up in Haryana, prompting the state government to plan four more industrial townships on the pattern of Manesar in Gurgaon district.

IEG pegs output growth below 8 pc
New Delhi, March 19
The 9 per cent industrial growth for the current fiscal 2005-06, as indicated by the advance estimates, may not fructify and the output growth may well remain below 8 per cent, the Institute of Economic Growth (IEG) has said.

Alliance Air looks for pilots
New Delhi, March 19
With large number of pilots quitting it, public sector carrier Alliance Air is faced with the threat of its fleet being grounded forcing it to launch a recruitment drive for expatriate commanders.


A model displays an outfit at a fashion show in Lahore on Saturday. The event was organised by the Dubai-based Kamber Entertainment Group in association with Style Duniya Network.
A model displays an outfit at a fashion show in Lahore on Saturday. The event was organised by the Dubai-based Kamber Entertainment Group in association with Style Duniya Network. — Reuters

EARLIER STORIES

 
Tax Advice

Permanent Account Number must for claiming IT refund
Q. Please enlighten me about the procedure for getting refund of wrongly deducted income tax in the case of a widow who is drawing family pension of about Rs 36,000 per annum in respect of her deceased husband through bank.

Market Scan

Stay invested in metal, infrastructure scrips
Sensex closed at 10,860 points last week after touching a new all-time high of 10951. The index gained 0.9 per cent during the week.


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TRAI to prosecute erring operators
Board meeting today

New Delhi, March 19
The TRAI is poised to prosecute erring telecom providers, including Reliance Infocomm and Bharti Tele-ventures Ltd, who have not responded to show-cause notices served on them for network congestion on March 6 and would decide the final course of action tomorrow at its Board meeting here.

Besides issuing notices, the TRAI can recommend to the DoT to take penal action against erring operators and even recommend revocation of their licences.

The Board meeting also assumes significance as its Chairman Pradip Baijal is retiring on March 21.

''We have decided not to give an extension to the operators to file their replies. The TRAI Board will meet on Monday to decide on the future course of action,'' Mr Baijal had said.

The notices were also sent to Reliance Telecom, Tata Teleservices, BPL Mobile and Spice Communication.

Meanwhile, Cellular Operators Association of India (COAI) in a reply to the TRAI had said the regulator was shifting the blame on service providers for poor call quality and it was only covering up its own failures.

The regulator had on March 6 issued show-cause notices to Bharti Tele-Ventures, Tata Teleservices Ltd, Reliance Infocomm Ltd as well as Reliance Telecom, BPL Mobile, and Spice Communication for the quarter ending December 2005.

On analysing the performance report of the operators for the quarter ending December 2005, it was seen that though there has been some improvement in the performance of the CMSPs in meeting the quality of service benchmark, but as regards PoI congestion, most of the operators showed deterioration in their performance. — UNI

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Cadbury fined Rs 2,500

New Delhi, March 19
The State Consumer Disputes Redressal Commission has upheld a city consumer court order which slapped a fine of Rs 2,500 on Cadbury India Ltd. for repacking old chocolate bars with fresh manufacturing dates on the wrapper.

The forum has asked the company to pay the amount to the father of a child who got ill after consuming the chocolate.

“Nobody can be allowed to play with the health of children. We warn them, if in future any such incident comes to our notice, we will impose exemplary punitive damages,” Delhi State Consumer Disputes Redressal Commission Bench of Justice J.D. Kapoor and Ruminita Mittal said. — PTI

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Damodaran’s no for super regulator

Bhubaneswar, March 19
SEBI Chairman M. Damodaran today disapproved the idea to have a ‘super regulator’ as mooted by the RBI.

“To ensure coordinated regulation, we have the concept of a lead regulator. The lead regulator calls meetings where issues pertaining to inter-regulation and coordination come up for discussion. This high- level committee is presided over by the RBI Chairman. The Finance Secretary and myself are members in the committee,” Mr Damodaran told reporters.

He said: “the model is working very well in India. I don’t think, you are going to see a new model in a hurry, just because somewhere else it is being implemented.” Recently, the RBI had called for an umbrella regulatory body to deal with the existing gaps and overlaps in financial sector regulation.

Admitting that the overlapping was taking place periodically, the SEBI Chairman said the concept of lead regulator could be effective to resolve the issues.

“We are constantly monitoring functioning of regulatory bodies of other countries. We will make changes which would be suitable for India,” Mr Damodaran, who was here to attend the convocation ceremony of the Xavier Institute of Management, Bhubaneswar, said. — PTI

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Indo-Pak trade touches $1 b

New Delhi, March 19
Bilateral trade between India and Pakistan is estimated to have crossed $1 billion so far this fiscal while illegal trade reduced by 50 per cent with the implementation of SAFTA and opening up of rail and road linkages, industry body Assocham said today.

The illegal trade, estimated to be $2 billion in 2004-05, is projected to have come down to $1 billion by February 2006, the chamber said in a statement.

On the other hand, official trade has increased by $400 million till February-end 2006 to cross $1 billion, it said. — PTI

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Haryana to set up four more industrial townships
Shubhadeep Choudhury
Tribune News Service

Chandigarh, March 19
Industrial scene is looking up in Haryana, prompting the state government to plan four more industrial townships on the pattern of Manesar in Gurgaon district.

The new townships will come up in Ambala, Rohtak and Faridabad districts, Chief Minister Bhupinder Singh Hooda told The Tribune. Three new SEZs for the state were also under active consideration of the Commerce Ministry, Mr Hooda added.

The plan was to tackle unemployment through rapid industrialisation, the Chief Minister said.

On the scenario in the power sector, the Chief Minister said it was bad last summer due to problems with the northern grid. “Hopefully, this summer it will be better”, Mr Hooda said, adding that upgradation of the distribution network had been speeded up by procuring new equipment. It was proposed to set up power plants, including a nuclear one, to make Haryana self-dependent on power.

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IEG pegs output growth below 8 pc

New Delhi, March 19
The 9 per cent industrial growth for the current fiscal 2005-06, as indicated by the advance estimates, may not fructify and the output growth may well remain below 8 per cent, the Institute of Economic Growth (IEG) has said.

The IEG also expects the overall GDP growth to fall below 8.1 per cent as shown by the advance estimates done by the Central Statistical Organisation earlier. Though inflation continues to remain subdued, the inflationary expectations still persist, the IEG said.

It said the average industrial growth rate in the next three months would be about 6 per cent, to be impacted largely by the volatile growth in exports. Overall, the growth of the IIP (Index of Industrial Production) for 2005-06 would be below 8 pc. — UNI

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Alliance Air looks for pilots

New Delhi, March 19
With large number of pilots quitting it, public sector carrier Alliance Air is faced with the threat of its fleet being grounded forcing it to launch a recruitment drive for expatriate commanders.

According to figures based on its current fleet of seven Boeing 737s and four ATR turboprop aircraft as on March 7, the airline has 24 vacancies for commanders and 11 for co-pilots.

The number of pilots and technical personnel who have quit the services of Alliance Air in the past two years stands at 91 and 97, respectively.

As on February 28 this year, the carrier has only 25 commanders, including seven expatriate pilots, and 38 co-pilots.

Official sources said many of these pilots have put in their papers and were awaiting the six-month notice period to get over by this month end to join other domestic carriers.

While some applications for co-pilots were received, there was not a single application for commanders, the sources said adding the carrier was making efforts to recruit Indian as well as expatriate pilots. — PTI

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Tax Advice

by S.C. Vasudeva

Permanent Account Number must for claiming IT refund

Q. Please enlighten me about the procedure for getting refund of wrongly deducted income tax in the case of a widow who is drawing family pension of about Rs 36,000 per annum in respect of her deceased husband through bank. The Accountant General, Punjab, authorised the arrears of family pension amounting to Rs 1,60,000 relating to the past 4 years in the month of 8/2003 as a result of filing civil suit which was instituted because of non-payment of family pension after the death of her husband. The said widow has no other income except the family pension and as such she has not got allotted PAN No. from the Income Tax Authority as she is not assessable to income tax. The bank had deducted the amount of Rs 10,980 from the arrears of family pension which was credited to her saving account in the year 2003-2004 without intimating her. The said arrears were to be spread over to previous years in accordance with Section 89 of the Income Tax Act, but the bank failed to take such action. The bank supplied Form 16 to her, but no details of the arrears were given to her for claiming refund. She filed a complaint in District Consumer Forum and on their directions she has been supplied the year-wise details of the arrears on the basis of which the income tax was deducted by the bank.

After receiving the details of the arrears of family pension, she wants to approach the Income Tax Authorities for the refund of the wrongly deducted income tax of Rs 10,980 by the bank. Please give guidance as to how the case is to be submitted for refund to the income tax authorities under the circumstances when no PAN No. is allowed. Some income tax practitioner has suggested that she must get allotted the PAN No. for submitting claim for the refund even if she is not income tax assessee. Is there no other way out to get such refund in such cases wherein the bank deducts income tax wrongly from a saving account holder?

— Puran Chand Arora

A. There is no alternative but to apply to the Income Tax Department for the grant of the refund of tax deducted at source. The lady will, therefore, have to obtain a Permanent Account Number and file the tax returns for the years for which the tax has been deducted along with a claim for the refund of income tax in Form No. 30. I may add that she would be able to file the returns for the years ended 31st March 2005 and 31st March 2004 before 31st March 2006 as the other years prior to 31st March 2004 have become time- barred. Further, apart from the relief under section 89 of the Act, she would also be entitled to a standard deduction of one third of the pension or Rs15,000 whichever is less under Section 57 (iia) of the Act.

Tax liability

Q. My total gross salary is Rs 3,25,000/-. My saving is Rs 1,20,000/- Kindly calculate my tax for the year 2005-06.

— Dr Ajai Srivastava

A. It is not possible to ascertain from your query whether the amount of Rs 1,20,000/- is covered under the provisions of Section 80C of the Income-tax Act 1961 (The Act). However, presuming that the same is covered, you will be entitled to a deduction of Rs 1,00,000 from your total income of Rs 3,25,000. Tax of Rs 20,400 including education cess would be payable on a sum of Rs 2,25,000 for assessment year 2006-07. I may add that this calculation is based on the presumption that you are not a senior citizen.

Section 80C

Q. Please tell me that U/S 80C if I save below Rs 1 lakh, can I take rebates or not, and which rebates come U/S 80C. do LIC premium, GPF, PPF, NSC come under rebate or not?

— Asif Iqbal

A. Section 80C of the Act provides for a deduction of maximum amount of Rs 1 lakh. You would be entitled to deduction of the amount which you have contributed/deposited towards the specified saving schemes even if the amount falls below the amount of Rs l lakh.

Interest on NSCs

Q. Please clarify if the capital received after fixed tenure during the deferment period of a Life Insurance Plan is mandatory to be shown under the head “Income from other sources”, while filing the income-tax return for that particular financial year by an assessee. If not, under which section of the Income-tax Act it is exempted or deductions are allowed.

In the preceding financial years, rebate U/S 88 was not permissible for interest accrued on NSCs 8th issue in the sixth year. Does the same hold good for deductions U/S 80C in the current financial year also or otherwise.

— Umesh Chopra

A. The answers to your queries are as under:

(a) The amount received under a Life Insurance Plan is exempt under Section 10D of the Act and, therefore, should be shown in the column wherein “incomes which are claimed to be exempt from tax” are required to be shown. It may be added that the exemption is limited to any sum received under an insurance policy issued on or after the 1st day of April 2003 in respect of which the premium payable for any of the years during the term of policy does not exceed 20 pc of the actual sum assured.

(b) The interest accrued on National Saving Certificate VIII issue is duly covered under the provision of Section 80C of the Act.

Leave encashment

Q. I want to know whether the amount received through leave encashment is taxable or not. Someone has told me that the Hon’ble Supreme Court has passed one order in 1998 clarifying that the amount received through leave encashment is not taxable

— Ramesh Kumar

Q. I am an employee of Public sector unit (M/s Powergrid Corporation of India Ltd. I want to encash earned leave from department. Kindly clarify the tax liability on leave encashment. My annual income is in range of Rs 4,50,000 to Rs 5,00,000.

— Kuleshwar Sahu

Note: The aforesaid questions are being answered by a common answer

A. The amount received by an employee as the cash equivalent of the leave salary at his credit is exempt from tax under Section 10AA of the Act provided the same has been received at the time of the retirement of the employee whether on superannuation or otherwise. In case of Central or state government employees, the receipt of entire amount is exempt from tax. However, in case of an employee other than an employee of the Central or state government, exemption is allowed in respect of so much of the period of earned leave at his credit at the time of his retirement whether on superannuation or otherwise as does not exceed 10 months calculated on the basis of the average salary drawn by the employee during the period of 10 months immediately preceding his retirement whether on superannuation or otherwise subject to a limit to be notified by the government in this behalf. The notified limit presently is Rs 3 lakh. It may be added that the entitlement to earned leave of an employee shall not exceed 30 days for every year of actual services rendered by him as an employee of the employer from whose service he has retired. 
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Market Scan

by J.C. Anand

Stay invested in metal, infrastructure scrips

Sensex closed at 10,860 points last week after touching a new all-time high of 10951. The index gained 0.9 per cent during the week. The total number of scrips declining was 1,765 as against 782 scrips advancing. Almost every analyst expects market correction. It is time for selective profit booking but investors should stay invested in infrastructure and basic metal scrips like ABB, L & T, Alstom Projects, Areva T & D, Sesa Goa, Hindustan Zinc, Hindalco etc.

It is possible that even these scrips may decline a bit when the major market correction overtakes the stock market but they have an inbuilt capacity to rebound and advance further when the market settles. Some of these scrips like ABB and L & T are also bonus candidates. According to the available data advance tax deposited by L & T during 2005-06 is double the advance tax deposited last year.

Areva T & D, formerly a part of Alstom, which has been taken over by Arevet of France, made a profit of Rs 5,939 lakh as against Rs 2,005 lakh for the nine-month period ended December 31, 2005.

The Reliance Industries demerger has benefited the shareholders in the demerged category of shares managed by Anil Ambani, which are Reliance Communication, Reliance Natural Resources, Reliance Capital Ventures and Reliance Energy Ventures. The last two companies are being subjected to further consolidation etc. and when the process is completed each shareholder of Reliance Industries will get 5 shares of Reliance Capital and 7.5 shares of Reliance Energy for every 100 shares held by him. The total gain to every shareholder is expected to be between Rs 350 to Rs 400 per share. Investment in the post-demerged Reliance Industries shares is also a good investment and is likely to reward shareholders still further.

SKF India, which is a leading ball-bearing company quoting around Rs 320, is a good script for a further rise. SKF India is set to play a major role in the global business plans, including manufacturing products. It will also offer training to the company’s employees in the latest technology. DIC and Neyveli Lignite are also safe and growth-oriented scrips. Investors should keep these three scrips in view and invest in them when the market correction takes place.
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