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Venugopal N Dhoot

Assocham to facilitate Rs 1,00,000-cr investment in West Bengal
Seeks land acquisition policy before clearing SEZ proposals

Kolkata, February 18
Identifying West Bengal as the main business growth centre, the Assocham is preparing a blueprint for attracting Rs 1,00,000 crore investment from domestic and multinational companies in the state by 2010.

SAARC members aim at $20 b trade by 2010
Mumbai, February 18
The Second SAARC Business Leaders Conclave ended here today with member countries adopting a 13-point policy reform agenda to achieve intra-regional trade worth $20 billion by 2010.

Wal-Mart stores may miss brand name
New Delhi, February 18
The world's largest retailer, Wal-Mart, may be upbeat over its grand foray into India despite political hurdles, but its high-profile brand name may take a miss at the front-end retail stores in the country.

Employers not collecting TDS to pay penalty
New Delhi, February 18
Employers, who are not collecting and depositing tax deducted at source (TDS) from the salary of their employees, will have to pay heavy penalty from April 1 as the Income Tax Department has decided to tighten the noose around them.


A model displays a creation from the Clips Fall-Winter 2007-08 women collection during the Milan Fashion Week on Sunday.
A model displays a creation from the Clips Fall-Winter 2007-08 women collection during the Milan Fashion Week on Sunday. — Reuters

 

Tax Advice
Sum deposited by father in employed son’s PPF a/c eligible for rebate
by S.C. Vasudeva

Q. My son, who is a major and an employee of a private company, has PPF account. Can I claim rebate on the sum deposited by me in his account?

 

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Assocham to facilitate Rs 1,00,000-cr investment in West Bengal
Seeks land acquisition policy before clearing SEZ proposals

Kolkata, February 18
Identifying West Bengal as the main business growth centre, the Assocham is preparing a blueprint for attracting Rs 1,00,000 crore investment from domestic and multinational companies in the state by 2010.

The blueprint, which is in the final stage, will be shortly submitted to West Bengal Chief Minister Buddhadeb Bhattacharjee identifying chemicals, petrochmicals, engineering, automobiles, food processing, agri-business, bio-technology, IT and ITEs as the potential areas, Assocham President Venugopal N Dhoot said today.

"West Bengal is set to attract an additional investment of Rs 100,000 crore by 2010 in view of its investment-friendly policies and the fastest growth in domestic product. Assocham has created a committee under chairmanship of B.G. Bangur, which is finalising the blueprint," Mr Dhoot said.

In order to fructify the estimated investment, the Assocham will organise West Bengal Invest Mart in September this year, showcasing the state as the best investment destination to about 500 business leaders from across the country and abroad, he said.

"We are trying to make Italy and France as the partners countries for the Invest Mart. I have already talked to Italian Prime Minister Romano Prodi with the request and he has responded," the Assocham chief said.

The other foreign countries to be contacted to participate in the conclave, included the USA, the UK, Canada, Austraila, Germany and Japan, he said.

In reply to a question, Mr Dhoot said some of the findings of Assocham had revealed that the food-processing sector, biotchnology, IT and ITEs would alone attract investment of Rs 40,000 crore by 2010 while an investment of Rs 50,000 crore had been projected in the blueprint for the chemicals and petrochmicals, engineering and automobile sectors.

"We are going to approach the first 50 big industrial houses, including the Tatas, Birlas, Ambanis and Mahindras to come up with investment. We will also start visiting some foreign countries in October as part of our effort to rope in the MNCs with whom we have good relationship," Mr Dhoot added.

The Assocham wants the Centre to put on hold all SEZ proposals till it works out a land acquisition policy with adequate compensation package.

"Pending proposals on SEZs should be put on hold until the government puts in place its land acquisition policy and an adequate compensation package," Mr Dhoot said.

The chamber had written to Prime Minister Manmohan Singh requesting that land should not be taken without farmers' consent, he said.

While SEZs were required if the country were to develop as an industrialised nation, the Centre, however, should come out with a policy to resolve any problems faced by the farmers while setting up SEZs, he said.

In reply to a question, he said any political issue regarding the SEZs will have to be addressed by the Centre and the respective state governments.

He said they would submit a report to the Group of Ministers on ways to resolve the problems of farmers should their land be taken for SEZs.

Asked whether the land losers should be offered equity of the SEZs, he said it could be a solution in case the land loser was not happy with the compensation he would receive for his lost land. — Agencies

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SAARC members aim at $20 b trade by 2010 

Mumbai, February 18
The Second SAARC Business Leaders Conclave ended here today with member countries adopting a 13-point policy reform agenda to achieve intra-regional trade worth $20 billion by 2010.

The Mumbai Declaration made a resolve to implement the free trade agreement, SAFTA, in letter and spirit, reduce the number of items on the sensitive list and remove non-trade barriers while regularising and liberalising trade in services.

To achieve the objectives, the members of the seven-nation grouping will make efforts to reduce the cost of doing business in South Asia and adopt a regional investment protocol to promote intra-regional investments and joint ventures.

The declaration resolves to build world-class infrastructure at land border ports of SAARC nations. It will also work towards adopting an "open sky policy" to improve air connectivity by ensuring direct flights between capitals and major cities and giving access to private airlines to operate in the region.

The SAARC nations will promote energy cooperation to enhance production and transmission among member countries, thereby reducing cost and expanding the scope of cross-border water cooperation.

The declaration charts a plan to harmonise standards and customs procedures and to ensure mutual recognition of certificates.

To address the issue of smooth movement of people within the region, the declaration suggested providing easy and long-term multiple visas to businesspersons and tourists.

It stressed on promoting and facilitating shipping vehicles owned by SAARC countries to have priority berthing at each other's ports and creating special facilities for land-locked countries.

The members will also allow the broadcasting of TV channels, government and private, of all SAARC countries in the entire region while allowing content-sharing and co-production in the entertainment sector.— PTI

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Wal-Mart stores may miss brand name

New Delhi, February 18
The world's largest retailer, Wal-Mart, may be upbeat over its grand foray into India despite political hurdles, but its high-profile brand name may take a miss at the front-end retail stores in the country.

According to sources close to the US firm, the hundreds of retail outlets that Wal-Mart plans to open in India in partnership with Bharti over the next five years might not carry the Wal-Mart name at all.

A Wal-Mart spokesperson in India said the front-end stores would be 100 per cent owned and operated by Bharti while the US firm would focus on back-end operations like logistics and other supply chain management.

As for the branding of the front-end stores, the spokesperson said it was for Bharti to decide.

A Bharti official said the company was conducting consumer research and evaluating options at present and a decision regarding the brand name would be taken in due course of time.

However, sources indicated that the US major was open to the idea of giving the Wal-Mart brand a miss at the front-end store level, as it might further fuel the political opposition centred on concerns about a foreign company impacting the home-grown small retail stores.

The Bharti group is likely to unveil the strategic roadmap for the business on Monday. — PTI 

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Employers not collecting TDS to pay penalty

New Delhi, February 18
Employers, who are not collecting and depositing tax deducted at source (TDS) from the salary of their employees, will have to pay heavy penalty from April 1 as the Income Tax Department has decided to tighten the noose around them.

Sources in the Income Tax Department said till now no penalty was specified under the Income Tax Act for failure to collect TDS.

However, the Central Board of Direct Taxes (CBDT) has been receiving information from various quarters that in a number of cases, employers as well as accounting departments in many corporates were not collecting and depositing TDS, especially after the expansion of TDS provisions.

In a recent circular, the department has inserted a new section 271CA to provide for imposition of a penalty on any person who is responsible for collecting tax and has failed to collect TDS in accordance with the Act.

This amendment will take effect on April 1 and will, accordingly, apply in relation to the assessment year 2007-08 and subsequent assessment years, sources said.

The Income Tax Department will ensure that no penalty is imposed if the person concerned proves that there was a justified cause for his failure to collect and deposit TDS. — PTI 

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Tax Advice
Sum deposited by father in employed son’s PPF a/c eligible for rebate
by S.C. Vasudeva

Q. My son, who is a major and an employee of a private company, has PPF account. Can I claim rebate on the sum deposited by me in his account?

I have purchased NSCs worth Rs 50,000 during 2005-06 i.e. March 2006. On maturity in March 2012, Rs 80,050 is payable to me. Can I include interest income of Rs 30,050 in the statement for the year 2011-12 or should I include it on accrual basis each year?

— D.P. Singla, Patiala

A. According to the provisions of Section 80C of the Income-tax Act 1961 (the Act), in computing the total income of an individual, a deduction is allowed for the amount paid or deposited in the previous year as a contribution to any Provident Fund set up by the Central Government and notified by it in this behalf in the financial gazette where such contribution is to an account standing in the name of any person specified in sub Section (4) of Section 80C of the Act. The persons specified in sub Section (4) are the individual himself or herself, the wife or husband and any child of such individual. In view of the above provisions it would be possible for you to claim a rebate on the sum deposited by you in the account of your son. I may add that the deduction under Section 80C of the Act is allowed to the extent of Rs 1 lakh for various items specified therein.

In accordance with the provisions of Section 145 of the Act, you have a right to choose the cash method for declaring your income, which falls under the head “income from other sources”. Interest earned on National Savings Certificates would fall under the above head of income. In case you have followed the cash method for declaring your income from other sources on cash basis, there should not be any difficulty in including the interest income of Rs 30,050 in the year 2011-12. You must, however, indicate in your return that you have chosen to follow the cash method for the declaration of your income from other sources.

Rebate on tuition fee

Q. I am H.P. State Govt. employee and paying income tax every year. I had paid a sum of Rs 8,000 to a coaching centre for IAS and other competitive examinations of Panjab University, Chandigarh, on account of coaching fee for coaching classes for IAS (preliminary) in respect of my daughter during July 2005.

Kindly advise whether I can get rebate of the above amount under Section 80 of the Income-tax Act during Financial year 2005-06 (Assessment Year 2006-07).

— J. Singh, Nahan

A. Section 80C of the Act provides for the deduction of tuition fee (excluding any payment towards any development fee or donation or payment of similar nature, whether at the time of admission or thereafter) to any university, college, school or other educational institution situated within India for the purpose of full time education of any two children of an individual. Such deduction is permissible within the overall limit of Rs 1 lakh in respect of various items, including tuition fee as specified in the said section. On the basis of facts given in the query, the payment of Rs 8,000 to coaching centres would not be covered within the term “full time education” and therefore it would not be possible for you to get the deduction in respect of said amount under Section 80C of the Act.

Deduction u/s 80DD

Q. Please advise:

How much deduction is allowed from salary u/s 80DD for the assessment year 2006-07 & 2007-08 in respect of mentally retarded dependent?

Whether any proof is required of having spent that much amount in case the fact that child is handicapped had been certified by a recognised medical authority in the year 2000?

Whether any fresh certificate is required or that given in the year 2000 will be sufficient?

Whether the above deduction from salary can be made at source while computing income tax or refund shall have to be taken from the Income - Tax Department while filing return?

— R.S. Kanwar, Panchkula

A. The answers to your queries are as under:

The deduction under Section 80DD in respect of maintenance, including medical treatment of a dependant, who is a person with disability is allowed to an individual or HUF who is a resident in India if such assessee has incurred an expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant being a person with disability. The deduction is allowable to the extent of Rs 50,000. However, if the dependant is a person with severe disability, the deduction allowable is Rs 75,000. The above amount is applicable for both assessment years 2006-07 and 2007-08.

Since the deduction is in respect of expenditure incurred for the medical treatment of a person with disability, it would be essential to tender proof for the incurrence of the expenditure so as to avail the deduction.

Under Rule 11A of the Income-tax Rules 1962, it is obligatory to file a certificate issued by the medical authority in accordance with the provisions of said Rule. Sub-Rule (3) of the said Rule however, provides that where the condition of the disability is temporary and requires re-assessment after specified period, the certificate shall be valid for the period starting from the assessment year relevant to the previous year during which the certificate was issued ending with the assessment year relevant to the previous year during which the validity of the certificate expires. Further Notification No. 16-18/97/NI. 1 dated 01.06.2001 states that the certificate issued by the concerned authority would be valid for a period of 5 years for those whose disability is temporary and for those who acquired permanent disability, the validity can be shown as permanent. Your certificate having been issued in the year 2000, it may not conform to the form notified vide Notification No. 16-18/97-NI.1, dated 01.06.2001 published in the Gazette of India, Part I, Section 1, dated the 13.06.2001 and notification No. 16-18/97-NI.1, dated the 18.02.2002 published in the Gazette of India, Part I, Section 1, dated 27.02.2002 and notified under the guidelines for evaluation of various disabilities and procedure for certification, keeping in view the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 ( 1of 1996), in any other case.

The deduction can be claimed by you at the time of deduction of tax at source provided the requirements of the section are met. The Circular issued by the CBDT for deduction of tax at sources from salaries provides for the grant of such a deduction. 

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BRIEFLY

Reliance Retail eyes CWC storage
Lucknow, February 18
Reliance Retail Limited is holding talks with the Central Warehousing Corporation (CWC) to use their storage facilities for its Reliance Fresh stores across the country. CWC has about 500 warehouses in Maharashtra, Gujarat, Andhra Pradesh, West Bengal, Tamil Nadu, Karnataka, Kerala, UP, Delhi, Chandigarh, Bihar and Madhya Pradesh. — PTI

Bridgestone plan
New Delhi, February 18
Tyre major Bridgestone India is looking at investing $50-$100 million (about Rs 225-450 crore) in setting up a greenfield plant in India. “We are planning to set up another facility in India to cater to the increased OEM as well as replacement tyre market here,” Bridgestone India Managing Director Hisao Ikawa said. The new unit could have a capacity 15,000 tyres per day. — PTI 

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