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Finance Minister hints at amendment of SEBI Act
Hindujas tie up with
QTel, Altimo
Investor Guidance
Aviation Notes
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Realty advice for Rlys
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Finance Minister hints at amendment of SEBI Act Mumbai, February 10 “We need to advance the level of investor protection and impart financial literary skills at an early stage. We will come up with a financial literacy package, free of cost for schools and colleges,” Mr Chidambaram said. He was addressing the annual convention of National Stock Exchange members here today. A comprehensive amendment to the SEBI Act was under examination, he said, adding that an IPF will be set up soon as announced by Prime Minister Manmohan Singh earlier. Investor protection was the surest way to attract small investors to the capital market, he said. “Only 4 per cent of household savings get into the capital market. With IPF, a sizeable portion of household income will enter stock markets,” he noted. Stressing on the need to consolidate brokers, Mr Chidamabaram said a large number of them raised the cost of regulation and it was in the mutual interest, SEBI, NSE and Association of NSE Members of India (ANMI) should work towards this end. “I urge ANMI, NSE and SEBI to consider whether it is possible to incentivise consolidation of market participants,” he said. Reasons for inflation The rise in India’s inflation rate is due to strong growth and robust consumer demand but the government would use all possible measures to control the price rise, he said. The benchmark wholesale price inflation rate rose to a two year-high of 6.58 per cent in late January, adding to expectations that last week’s interest rate rise would be followed by further measures to calm prices. The spike in inflation could not have come at a worst time for the ruling Congress Party as it faces polls in three states later this month and the government is keen get the rate back to its own comfort level of around 5 per cent. “GDP is rising at more than 9 per cent. Year-on-year credit growth is little over 30 per cent and money supply is close to 21 per cent,” the Finance Minister told reporters “This is an unusual combination of factors. The government is determined to take all steps to moderate inflation. We have done it before and are confident of doing it again.”
— PTI, Reuters |
Hindujas tie up with QTel, Altimo
London/Mumbai, February 10 Hindujas have already submitted a binding bid for acquisition of controlling stake in India’s fourth largest mobile player and contrary to speculations have not sought any extension for making its offer, sources close to the development said. They discarded suggestion that Hindujas-led consortium had put up a non-binding bid while seeking some more time for a firm offer. The bid from Hindujas, as also from Reliance Communications, Essar and Vodafone, are expected to be considered tomorrow by the board of Hong Kong-based Hutchison Telecom International (HTIL), which has put its 67 per cent stake on the block. Spokesperson from Hindujas, Qatar Telecom or Altimo could not be contacted for comments. Various reports had suggested that Hindujas sought a day’s extension from HTIL for submitting its bid as it was still in the process of completing due diligence for a possible deal. Besides Hindujas, Reliance Communications, UK-based Vodafone and Indian conglomerate Essar Group, the 33 per cent partner in Hutch-Essar, have also submitted their initial bids for acquisition of controlling stake in the target company. While an HTIL spokesperson was not available for comments, the sources close to the development said it could still be a long-drawn battle. The bids have been made in the range between $16 and 20 billion.
— PTI |
Investor Guidance
Q: 1. Whether one has to pay income tax if he sells/ redeems the shares given to him under stock option plan of his parent company (USA) during his employment 4/5 years back, in its Indian company, free of cost? 2. If he has bought shares and there is good 100 per cent appreciation? — Raffi A: Shares sold abroad (not on an Indian stock exchange) are also taxable as capital gain. However, to qualify as long-term capital asset, the conditions are different. To qualify as a long-term capital asset, the holding period would be 3 years instead of 1 year. Also, the exemption from long-term gains is not available as the shares are not sold on an Indian stock exchange. The tax would be payable @20 per cent after taking into account indexed cost. PPF accounts
Q: I have one query regarding the PPF account. My PPF account is maturing in April 2007. Can I keep this account as a ‘dead’ one and withdraw the interest every year later on and open another PPF account with another bank to take the necessary advantage of Sec 80C in the following years by putting in subscription in the new account? If yes, it gives excellent return of 8 per cent tax-free on the accrued amount in the old account. — Deepak Patil A: Even after the PPF account matures, if you do not contribute any amount, the corpus continues to earn interest and hence is not considered dead. The only way to open another account is to withdraw the entire amount since the PPF rules do not allow an individual to have more than one account. There is no advantage in opening another account since you have also the option to continue the account with contributions. You may open accounts in the name of each and every major member of your family. Mutual Funds
Q: I have bought Reliance Banking Fund units (Dividend Re-investment option) in 2005. Thereafter, the fund has declared dividend twice and the same has been converted to new units in the last 12 months. ((let original units purchased were 1000 units @ Rs 15 per unit. Within 1 month of purchase the Fund declared dividend (tax-free to investors) which was converted to 100 units. The Fund again declared dividend after 3 months and the same was converted to 150 units. Currently total units are thus 1,250 and the NAV Rs 18 per unit). If I want to sell the entire units what will be the tax treatment? — S. Vasu A: Yes, the dividend from equity-based MF schemes like the Reliance Banking Fund is tax-free in the hands of the investor but short-term capital gains are charged to tax @10.2 per cent. If you sell all the units now, only the original units will be eligible for the exemption on the long-term capital gains but the units from dividends reinvested will be taxed as short-term capital gains. You would have done well by choosing a growth option in which case you would have obtained the same amount on withdrawal as the dividend-reinvest option and the entire amount would have been tax exempt. Second home loan
Q: I am working in a public utility. I have already availed housing loan from my employer and built a house. I am 50 years of age. I have availed income tax relief for housing loan repayments and repaid the loan in full. Now can I go for a second home loan (not extension or improvement) and also can I avail income tax relief? — Himesh A: If you avail of a second home loan for another house, you can claim benefits for repayment of loan and interest payable for the
same. The authors may be contacted at wonderlandconsultants@yahoo.com |
Realty advice for Rlys New Delhi, February 10 In a pre-budget representation, submitted to Railways Minister Lalu Prasad, Assocham President Venugopal N. Dhoot said with these measure Railways could enhance its revenues and profitability. He contended that the Railways Minister should incorporate provisions with sufficient fiscal concessions to lure real estate promoters to come forward to develop wasteland that Railways have in its possessions to put up motels, smaller huts and apartments, logging houses and pizza huts to enhance its revenues. The chamber is of the view that Indian Railway Finance Corporation Ltd should be empowered with fattening its corpus size from higher allocation from the Finance Ministry and issue Letter of Intent (LoIs), seeking public private partnership. |
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