 |
|
|
Govt may put pension funds in stocks
Tatas, CSN in a fix on Corus bid
Recast GoM on SEZ, pleads Assocham
Investor protection fund Bill soon
Brown accused of favouring Mittal
UCAM inks pact with Italian firm
|
|
||||||||||||||||||||||||||||||||||||||||||||||||
Inflation may play spoilsport
Interest on deposits under PO savings bank account taxable
|
|
Govt may put pension funds in stocks
New Delhi, January 21 The meeting, which will be inaugurated by Prime Minister Manmohan Singh, aims to bring states including Left-ruled West Bengal and Kerala, on board for newer options for investing funds collected through the New Pension Fund, which are currently being credited into the Public Accounts of India, earning a return of around 8 per cent equal to the GPF rate. Earlier, last month the issue was discussed by the Cabinet and it was decided to call a meeting of state chief ministers on the issue. Faced with stiff opposition of the Left parties on the Pension Fund Regulatory and Development Authority (PFRDA) Bill, the Finance Ministry is pinning hopes on this crucial meeting. Finance Ministry sources said the support of the states, especially West Bengal and Kerala, could pave the way for building pressure on Left parties to support the PFRDA Bill in the Parliament. Finance Ministry is emphasising that on the pattern of non-government provident funds, the pension funds should be allowed to invest at least up to 5 per cent in shares and a specific percentage in equity-linked mutual funds to provide better returns to employees. The decision at the meeting will help the states bring down future burden of providing pensions, besides creating long-term funds for crucial sectors like roads, ports, railway and other infrastructure sectors, Finance Ministry sources said. The 16 states, including Tamil Nadu, Uttaranchal, Rajasthan, Andhra Pradesh, Orissa, Gujarat, Maharashtra, Madhya Pradesh, Chhattisgarh, Himachal Pradesh, Assam, Bihar, Manipur and Goa, are already in favour of new investment pattern for funds under NPS. In fact, the Finance Ministry officials said the meeting has been convened on the request of the states. The NPS is based on the concept of defined contribution system unlike the defined benefit system of old pension system. The Centre introduced the scheme for its employees recruited since January 1, 2004. Under the scheme, about Rs 1,500 crore of pension funds have been collected but in the absence of legal sanction, these funds cannot be invested in the booming stock markets. Around one lakh employees have been so far covered under the scheme.
— PTI |
|
Tatas, CSN in a fix on Corus bid
London/Mumbai, January 21 While various reports over the past week suggested Tata Steel was close to up the ante with a new offer, a Brazilian daily said that CSN had convinced its bankers to increase the loan commitments to fund the deal by up to 20 per cent. However, investment bankers close to the deal say Tata and CSN are in a catch-22 situation over their Corus bid -- both are eager to clinch the deal, but seriously believe their current offers fairly value the Anglo-Dutch steel-maker. Even if the two decide to go for higher bids, none is in a hurry and would like to wait till the last minute to cut the reaction time for the rival bidder. At the same time, both might not like to delay any hike in the bid to a point when the regulators step in with their auction process.
— PTI |
|
Recast GoM on SEZ, pleads Assocham
New Delhi, January 21 The Prime Minister should reconstitute the GoM with representatives from states to formulate within three months the land acquisition and rehabilitation policies for SEZ proposals. The farmers should be offered a stake by way of shareholding in the proposed projects so that the farmer, if he so desires, can have a long- term interest in the projects and reap long-term benefits, said the note submitted to the government by Assocham President Venugopal N. Dhoot. He said "till the reconstitution of the GoM takes place, the pending proposals for SEZs should not be cleared in the absence of a suitable and adequate relief and rehabilitation package so that the issue is unnecessarily not politicised for ulterior gains for vested interests." The note said SEZs should be specially earmarked on barren or wastelands, land with salinity or acidity and non- fertile land. Hassle free operating environment with a single-window clearance mechanism should be adhered to. SEZ infrastructure and services need to adhere to the defined global standards and time-framed targets. About 250 SEZ proposals in 21 states are awaiting approval on account of disputes on compensation packages and acquisition of agriculture land in the absence of a suitable relief and rehabilitation package. |
|
Investor protection fund Bill soon
New Delhi, January 21 In his Budget speech last year, Finance Minister P. Chidambaram had promised to set up such a fund by amending the SEBI Act. According to a senior Finance Ministry official, SEBI Chairman M. Damodaran met Mr Chidambaram on Saturday, where all proposals pertaining to comprehensive amendments in the SEBI Act were given the final shape. "The Finance Ministry will now start the process of preparation of a Cabinet note and after getting Cabinet clearance, the Bill may be tabled in the upcoming Budget session," a Finance Ministry official said. The proposed amendments include provisions for more powers to the market regulator to administer the stock market and to safeguard the interests of investors. Besides IPF, the Bill will contain the provision of disgorgement compounding and plea bargaining. The proposed amendment would arm SEBI to utilise money collected in tha IPF by way of fines and penalties from the listed companies and brokers, who indulge in violation of market regulator's guidelines. The sources said the fund collected through disgorgement would also go to the IPF. However, money to be collected through the recent disgorgement order of SEBI would not go to the fund as it was not supposed to be operational from a retrospective effect. Passing a disgorgement order for the first time in India in November, 2006, in the IPO scam, SEBI had asked depositories NSDL and CDSL and eight depository participants to cough up Rs 115.81 crore. The investors who might incur financial losses due to any scam in the stock market, will be compensated from IPF, the official said. However, SEBI has so far not decided how to compensate retail investors from the money to be collected from NSDL, CDSL and eight DPs.
— PTI |
|
|
Brown accused of favouring Mittal
London, January 21 Quoting Norman Baker, Liberal Democrat MP, The Sunday Telegraph today said the Treasury had sidelined a pledge that it would close a loophole which allows wealthy businessmen to operate elaborate, but legal, tax avoidance schemes while living in Britain. The daily noted that the Chancellor attended a meeting of leading banks in Mumbai on Friday organised by ICICI Bank, of which Mittal is a director and substantial shareholder.
— PTI
|
|
UCAM inks pact with Italian firm
Bangalore, January 21 UCAM Managing Director Indradev Babu said while initially the machines would be manufactured at UCAM's existing facility, the joint venture partners propose to set up a dedicated greenfield facility near Bangalore for Rosa Ucam Grindtech Pvt Ltd, a joint venture entity. |
|
Interest up
Mumbai, January 21 |
by J.C. Anand
Inflation may play spoilsport
The third-quarter results have been quite impressive. The software technology companies, with the exception of Satyam, have done very well with growth in volume operating profit margins, productivity and net profitability. Most billing rates have also been raised in TCS, Infosys and HCL Technology. Cement companies have also performed excellently. Ultra Tech, a subsidiary of Grasim, recorded a Rs 466.84-crore increase in its nine-month net profit, raising it to Rs 550.74 crore from Rs 83.96 crore. dalmic Cement’s net profit for the nine-month ended December 31, 2006 is up at Rs 22.23 crore as against 12.62 crore as on December 31, 2005. Ranbaxy’s net profit is up by 166 per cent at Rs 185 crore. The December quarterly results of Nicholas Piramal are up by 82 per cent, of Biocon’s by 45 per cent and of Reliance Energy by 22 per cent. Despite these excellent results, Sensex was up only by 53 points during the past week.
Reliance Industries has done extremely well and it is expected to maintain its high profitability in the financial year 2007-08. The same may be said about Larsen and Toubro, Grasim, ABB and software-technology companies. Some foreign analysts hold that though these stock market would continue to do well in the next financial year, it is unlikely to repeat the performance of the financial year 2006-07. One major disturbing factor is a rise in the inflation rate, which now has moved up to 6.12 per cent (as on January 6, 2007. This has been attributed to a rise in the food and energy prices. This two-year high inflation rise is likely to hit the economy as well as the profitability of the corporate sector. The RBI may allow banks to raise their interest rates on bank deposits and the corporate sector may have also to suffer both directly and indirectly due to the impact of high inflation rates and in their borrowings from banks. The Finance Minister has stated that the inflation rate of 6.12 per cent is the matter of concern and worry and may ask the RBI to check it. The scrips of sugar companies have also lost their sweetness and it is expected that at least for the next two years the sugar companies may be under shadow. Multi-national pharma companies are likely to stay depressed in the Indian stock market. Many multinational pharma companies have decided to introduce new patent products through their wholly owned subsidiaries rather than through their listed companies in the stock market. E. Merck and Novartis have already made announcements on it. It is not yet known what policy Pfizer would adopt. Glaxo Pharma is the only company which has been introducing its new products through its listed company. Many IPOs expected during the next six months. Investors should reserve their funds for these IPOs. Investment may also be made in companies like ONGC, BPCL, GAIL, Reliance Industries and other oil refinery companies in view of relatively lower international crude prices and some outstanding oil and gas discoveries in India by ONGC and Reliance Industries. |
|||||
by S.C. Vasudeva
Interest on deposits under PO savings bank account taxable
Q. I will be thankful for the clarification on the following points:
1. Can one gift to one's relatives in the shape of NSCs/KVP or making deposit in their PPF A/cs, without any tax liability, after taking their consent. 2. Is interest income from PO Savings Bank Account taxable now, in case yes then from which year. — Akash, Patiala A. The answers to your queries are as under: 1. It is possible to gift National Savings Certificates or Kisan Vikas Patra to the relatives without any tax liability. 2. The interest on deposit under Post Office savings bank account is taxable w.e.f. assessment year 2006-07. Tax liability on gift
Q. Can I gift any amount of money to my nephew who is the son of my real elder brother in view of my natural love and affection for him without any tax liability on the donee? Is it mandatory to give the gift money through "Account Payee" cheque or bank draft only? Can one give gift money in cash as well as if this be so then is there any upper limit for the same? — Bachan Singh,
Anandpur Sahib A. Section 56(2)(vi) of the Income Tax Act 1961 (the Act), as amended by the Taxation Laws Amendment Act, 2006, provides where any sum of money, the aggregate value of which exceeds Rs 50,000, is received without consideration, by an individual or a Hindu Undivided Family, in any previous year from any person or persons on or after the 1st day of April 2006, the whole of the aggregate value of such sum shall be chargeable to Income Tax under the head "Income from other sources". It may be added that the aforesaid clause does not apply to any sum of money received: (a) from any relative; or (b) on the occasion of the marriage of the individual; or (c) under a will or by way of inheritance; or (d) in contemplation of death of the payer; or (e) from any local authority as defined in the Explanation to Clause (20) of Section 10; or (f) from any fund or foundation or university or other education institution or hospital or other medical institution or any Trust or institution referred to in clause (23C) of Section 10; or (g) from any trust or institution registered under Section 12AA. For the purposes of (a) above the term "relative" means - (i) spouse of the individual; (ii) brother or sister of the individual; (iii) brother or sister of the spouse of the individual. (iv) brother or sister of either of the parents of the individual; (v) any lineal ascendant or descendant of the individual; (vi) any lineal ascendant or descendant of the spouse of the individual; (vii) spouse of the person referred to in clauses (ii) to (vi) Accordingly, in case you intend making a gift to your brother's son, the amount received by him shall not be covered within the provisions of the above section. It would be better to give the money by cheque so that the transaction is recorded in the bank account of both the parties. There is no prohibition to give the gift in cash but there must be an evidence to prove that the gifted amount was available with you in cash. VRS benefits & taxability
Q. I have taken retirement under Voluntary Retirement Scheme 2002 (VRS) from the Punjab State Federation of Cooperative Sugar Mills Ltd. (Sugarfed, Punjab), an apex institution w.e.f. 08.12.2005. I have been paid a total sum of Rs 8,34,904 as per details given below:- 1. Ex-gratia for service done: 3,50,658 2. Ex-gratia for 3. Gratuity: 1,73,402 4. Encashment of Earned leave: 1,33,584 Total: 8,66,369 Less Income Tax: 29,465 Net Amount: 8,36,904 Detail of Income tax deducted as per Form 16 issued by Sugarfed, Punjab 1. VRS amount (taxable): 2,08,725 2. Gratuity (taxable): 4,374 3. Leave Encashment (taxable): 3,370 4. Salary for 3 months (August, September & October, 2005): 57,414 Total: 2,73,883 Deductions u/s 80C: 6,019 Taxable Income: 2,67,864 Income Tax deducted: 30,965 Detail of tax deducted and deposited into Central Govt. Account Rs 1,000: 05.10.05 SBI, Sec 17, Chandigarh Rs 500: 03.11.05 — do— Rs 29,465: 02.01.06 — do— Rs 30,965 (i) Whether the amount of VRS, gratuity and leave encashment is taxable? (ii) I have claimed refund in my income tax return for the year 2005-06. Whether I am eligible for refund or not. — B.S. Baidwan, Kharar A. The answers to your queries are as under: (i) Section 10(10C) of the Act provides for the exemption to the extent of Rs 5,00,000 in respect of an amount received by an employee of a co-operative society on his voluntary retirement or termination of his services in accordance with any scheme or schemes of voluntary retirement provided that the scheme of schemes governing the payment of such amount is framed in accordance with the prescribed guidelines. Further, the gratuity received by an employee is exempt under Section 10(10) of the Act to the extent of half a month's salary for each year of completed service, calculated on the basis of average salary for the 10 months immediately preceding the month in which the retirement or termination takes place subject to a maximum amount of Rs 3,50,000. Leave encashment is exempt under Section 10(10AA) of the Act to the extent of so much of the period of earned leave at his credit at time of the retirement of the employee as does not exceed 10 months’ leave calculated on the basis of average salary drawn by the employee during the period of 10 months immediately preceding the retirement whether on superannuation or otherwise, subject to the maximum of Rs 3,00,000. (ii) The refund by the department shall be granted only if the VRS, gratuity and leave encashment amounts have not been computed in accordance with the above provisions and that you were entitled to a higher exemption than that allowed by your employer. Form 15H
Q. I am a senior citizen and my total income from all sources is Rs 207,000. Out of which interest from post office is Rs 1,35,000 (Sr. citizens Savings Scheme Accounts). In order to get benefit U/s 80-C, I purchased NSC worth Rs 35,000. In this way my taxable income is Nil. My simple query is as to whether I can file Form 15H to the post office for not deducting income tax from the amount of interest accrue from Sr. Citizen Savings Scheme accounts, keeping in view the fact that my taxable income would be nil after getting benefit U/s 80C. — I.S. Anand, Mohali A. Form 15H can be filed by a senior citizen under Section 197A(1C) of the Act provided a senior citizen is able to give a declaration in writing in duplicate to the effect that the tax on his estimated total income of the previous year in which such income is to be included in computing his total income will be Nil. In view of this position it may not be possible for you to give a declaration as your estimated total income on which tax is to be computed will not be Nil. This is because your total income is Rs 2,07,000 which in ordinary course would be taxable but for the deduction allowable under section 80C of the Act. A perusal of Form 15H which is prescribed by Rule 29 C(1A) of the Income-tax Rules 1962 also confirms the above position. |
|||||
|
| 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 | |
