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B U S I N E S S

Delhi-Mumbai Industrial Corridor
Japan assures monetary, tech aid
New Delhi, April 14
Japan today assured to extend technical as well as monetary support to the ambitious Delhi-Mumbai Industrial Corridor (DMIC), which will require an investment of an estimated $50 billion.

Google grabs DoubleClick for $3.1 b
San Francisco, April 14
Seeking to expand its already well-honed ability to sell targeted Internet advertisements, online search leader Google Inc. said it has agreed to pay $3.1 billion in cash to acquire ad-management technology company DoubleClick Inc.

PTC offers power to Nepal
Kathmandu, April 14
T.N. Thakur, chairman and managing director of the Power Trading Corporation (PTC) India Ltd, has informed that India can give 35 megawatts (MW) of additional power to Nepal with the existing transmission links, besides 80 MWs that Nepal has been importing during dry season.At an interaction program with media persons here, Thakur informed that he had expressed commitment to provide every kind of assistance in the hydropower projects to the Nepal Electricity Board.


 

EARLIER STORIES

 
Brussels to be Jet’s hub
Mumbai, April 14
Jet Airways is all set to unveil a new design and brand strategy on Monday.Fresh from its acquisition of Air Sahara, Jet Airways Chairman Naresh Goyal is said to be pushing for a rebranding of the airline in the premium category in order to take on Kingfisher Airlines. 

Aviation Notes
Mishaps a routine at IGIA
There had been many a slip between the cup and the lip la-affaire ‘the make-over and the take-over’ deal between Naresh Goyal and Subrata Roy, owners of Jet Airways and Sahara Airline, respectively.

FDI touches $15 billion
Buoyed by three-fold increase in the Foreign Direct Investment (FDI) inflows in the country to $15 billion in 2006-07, commerce minister Kamal Nath today said the government has set a target of attracting $25 billion in the investment sector in 2007-08.

Japanese Minister for Economy, Trade and Industry Akira Amari is all ears at an interactive session in New Delhi on Saturday. Japan will help India build the Delhi-Mumbai Industrial Corridor that may require $50b. — Tribune photo by Mukesh Aggarwal 

Investor Guidance
Earnings from margin trading is speculative income
Q: Is the income from daily trading (margin trading) considered a short-term gain or business income? How the gain or loss from futures & options (F&O) and daily trading is set off against short-term gain/loss? Can we carry forward F&O and daily trading loss for eight years?

 

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Delhi-Mumbai Industrial Corridor
Japan assures monetary, tech aid

Tribune News Service

New Delhi, April 14
Japan today assured to extend technical as well as monetary support to the ambitious Delhi-Mumbai Industrial Corridor (DMIC), which will require an investment of an estimated $50 billion.

“The project will be launched in January 2008 after finalisation of detailed project report by end of December this year. It will be completed in next seven years and entail an overall investment between $45 and $50 billion,” Commerce and Industry Minister Kamal Nath said.

The project will come up on a 300 km area, along the proposed Delhi-Mumbai dedicated freight corridor, Nath said at an interactive session with Japanese Minister of Economy, Trade and Industry Akira Amari. The session was organised by the CII.

The mega project, planned on the lines of Tokyo-Osaka Industrial Corridor, will have a 4,000 MW power plant, three ports and six airports, apart from connectivity with existing sea ports, Secretary in the Department of Industrial Policy and Promotion Ajay Dua told newspersons on the sidelines of the session.

Japan was roped in as a partner for the project during Prime Minister Manmohan Singh’s visit to Tokyo in December last year.

Mr Nath said an initial investment of $2 billion would be earmarked for the project. The entire cost of the project will be funded through private-public partnership and foreign investment. Apart from giving a grant, Japan would also invest in the project, he said.

The 1,483 kilometre Delhi-Mumbai Freight Corridor will stretch across six states — NCR of Delhi (22 Km), Haryana (148 Km), Uttar Pradesh (22 Km), Rajasthan (578 Km), Gujarat (565 Km) and Maharashtra (148 Km) — who would be made stakeholders, Dua said.

The project will be implemented by Delhi-Mumbai Industrial Corridor Development Corporation, which will float special purpose vehicles to implement the projects.

The Japanese Minister said the DMIC project should be beneficial to both the countries in terms of development of ports, business parks and infrastructure and Japan is committed to huge investment for the project

“India could now be considered as big economic power but faces challenges of infrastructural development, roadways and unemployment,” Amari said, adding, Japan has been working on various forms of strengthening economic relation with India and work towards the development of both countries.

The Japanese Minister also informed that a high-level business delegation would visit India in July 2007 and will hold the first policy dialogue with India and present a comprehensive concept paper by end of 2007.

The delegation will focus on strengthening the economic partnership between the two countries, as Common Economic Partnership Agreement (CEPA) with India will be an important development for Asean+6 countries, of which India is a member, Amari said.

First Energy dialogue with India has been planned on April 23, 2007, in Japan during the visit of Montek Singh Ahluwalia, Deputy Chairman, Planning Commission of India, Amari added.

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Google grabs DoubleClick for $3.1 b

San Francisco, April 14
Seeking to expand its already well-honed ability to sell targeted Internet advertisements, online search leader Google Inc. said it has agreed to pay $3.1 billion in cash to acquire ad-management technology company DoubleClick Inc

The two companies announced the deal after the markets closed yesterday. The boards of both companies have approved the takeover, which is expected to close by the end of the year.

New York-based DoubleClick helps its customers place and track online advertising, including search ads, which Google more than its nearest search competitors Yahoo Inc. and Microsoft Corp. has turned into an extremely lucrative business.

DoubleClick had been the target of a fierce bidding war between Microsoft and Google, and Google’s winning bid is nearly three times the amount DoubleClick fetched when it went private in 2005 for $1.1 billion.

The acquisition is the largest in Google’s history, beating out the $1.76 billion deal for online video-sharing site YouTube Inc late last year.

Though Google is highly profitable in large part because of the small, text-based ads linked to search terms, analysts said the DoubleClick addition helps further the company’s push into delivering the splashy multimedia display ads increasingly favoured by big-ticket advertisers.

DoubleClick is one of the industry’s leading providers of the tools to serve up those advertisements and measure their success. — AP

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PTC offers power to Nepal
Bishnu Bhudhathoki
Tribune News Service

Kathmandu, April 14
T.N. Thakur, chairman and managing director of the Power Trading Corporation (PTC) India Ltd, has informed that India can give 35 megawatts (MW) of additional power to Nepal with the existing transmission links, besides 80 MWs that Nepal has been importing during dry season.

At an interaction program with media persons here, Thakur informed that he had expressed commitment to provide every kind of assistance in the hydropower projects to the Nepal Electricity Board.

On the directions of Prime Minister Manmohan Singh, the Bihar Electricity Board has agreed to provide power at a concessional rate of Rs 4 per unit though the spot price of electricity in the Indian market is Rs 7 per unit, he said.

During dry season this year, the Government of Nepal had asked India for around 100 MWs of additional power to deal with acute power shortage in the country.

Power availability in the country has improved in recent weeks with astonishing rise in water discharge in the rivers owing to melting of snow early this year.

However, constraint posed by transmission links is set to make Nepal suffer with still greater shortages during dry seasons for at least two more years, even if construction of the proposed high voltage transmission links starts immediately.

While Nepal can benefit from the high voltage links by importing power from India, long run utility of the links is export of power to India. According to Thakur, India currently has a total installed capacity of 135,000 MWs, of which 26 per cent comes from hydropower. The projected demand for India by 2012 is 200,000 MWs. This is estimated to jump to 350,000 MWs by 2020 and 500,000 MWs by 2025, he said.

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Brussels to be Jet’s hub
Tribune News Service

Mumbai, April 14
Jet Airways is all set to unveil a new design and brand strategy on Monday.

Fresh from its acquisition of Air Sahara, Jet Airways Chairman Naresh Goyal is said to be pushing for a rebranding of the airline in the premium category in order to take on Kingfisher Airlines. Goyal has, meanwhile, refuted rumours that Air Sahara would be operated as a low-cost operator.

Sources say, Jet Airways has roped in actor Shah Rukh Khan as its brand ambassador. He is at present on the airline's board.

Jet is all set to to open its European hub at Brussels' airport on May 2.

Naresh Goyal, chairman of Jet Airways, will be present at the contract signing ceremony with Brussels Airlines and Brussels Airport, while Belgian Prime Minister Guy Verhofstadt will be the chief guest.

Jet will also unveil its new Boeing 777 and Airbus 330 aircraft on the occasion.

The airline is expected to begin its daily flight to Newark, US, with a stopover in Brussels in early August. Daily flights to Toronto, Canada, with a stopover in Brussels are expected by the year.

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Aviation Notes
Mishaps a routine at IGIA
by K.R. Wadhwaney

There had been many a slip between the cup and the lip la-affaire ‘the make-over and the take-over’ deal between Naresh Goyal and Subrata Roy, owners of Jet Airways and Sahara Airline, respectively.

Goyal and Roy are calculative and tough shoppers. Their vision is shrewd, if not far-sighted. Their bargaining skin is sturdier than that of crocodile.

Both Goyal and Roy have other similarities in business transactions. Both have risen from a scratch to high mountain. Both believe in giving nothing to rival. Both have uncanny knack and political influence to emerge out of difficult terrain to firm road. Both use money to their advantage, because they believe and practice that every person, after all, has price. Both are highly ambitious believing in jumping from first floor to land on second.

There is, however, a major dissimilarity between them. Goyal has steadfastly stayed in aviation from travel agency to airlines, Roy has a finger in every pie from chit fund to para-financing to sports to housing. Most of Roy’s fountains seem barren but he gives the impression to his subscribers and others that there is ‘hidden gangajal’.

The purchase-sale deal, initiated about a year ago, fell through. Litigation followed. The battle royal in court and arbitration have resumed. In court and arbitration, they have the benefit of legal luminaries of high voltage. But both Goyal and Roy have their own ‘legal mind’. The deal has been inked, but can always fall through because both Goyal and Roy may unearth fresh avenues of further bargaining. Make any intricate rule or law but an Indian has a sharp mind to have a solution. Here Goyal and Roy are mast masters.

In the end, the Jet-Sahara merger has taken-off as compared to Air India and Indian merger. If the private merger rises as a single entity in skies, it will give a run for life to the merged national entity. This is for sure. If Goyal believes in investing and making money, he also believes in providing superior cabin service on flights. It cannot be said about the national carrier, which has the unwritten agenda of pulling down each other.

Incidents, accidents, mishaps, near-misses and heavy landings continues to happen with monotonous regularity at Indira Gandhi International Airport (IGIA). Mechanical snags and failures in system are because of negligence in maintaining aircraft. The machinery is sturdy and aged aircraft can be rendered serviceable with timely and adequate servicing. Unfortunately, engineers are as guilty as commanders. This scenario will continue as long as authorities directorate general of civil aviation and civil aviation ministry continue to be lax in their authority.

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FDI touches $15 billion

Buoyed by three-fold increase in the Foreign Direct Investment (FDI) inflows in the country to $15 billion in 2006-07, commerce minister Kamal Nath today said the government has set a target of attracting $25 billion in the investment sector in 2007-08.

In the last fiscal FDI had touched $15 billion as against $5.5 billion in 2005-06, Nath said at a CII interaction with the Japanese trade minister Akira Amari.

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Investor Guidance
Earnings from margin trading is speculative income
by A.N. Shanbhag

Q: Is the income from daily trading (margin trading) considered a short-term gain or business income? How the gain or loss from futures & options (F&O) and daily trading is set off against short-term gain/loss? Can we carry forward F&O and daily trading loss for eight years?

— Rhrutvik

A: 1. Income from F&O is business income.

2. Income from margin trading is neither STCG nor business but speculative income

3. Loss from F&O may be set off against other business or rental or interest income but not salaries. But loss from margin trading can be set off against income from margin trading only.

4. F&O loss can be carried for eight years but for margin trading it can be done for four years only.

Loss on NCDEX

Q: I have a question on adjusting losses in income tax. How losses that are made on commodity futures traded (gold futures for example) on NCDEX, treated. I was told these will be treated as speculative losses and can be set off against speculative income alone. If there is no speculative income, can these losses be carried forward for four years?

— Shreya

A: Your information is correct. Under Section 43(5) of the ITA, loss from commodity futures will be treated as speculative loss and can only be adjusted against speculative income only. Unabsorbed loss can be carried forward for four years.

Tuition fee

Q: I am paying fee of my two children studying in class IV and nursery. Fee paid under which head(s) qualifies for deduction under Section 80C? My office allows rebate only on payment/s made under the head tuition fee? Details for the fees is as follows:

Tuition fee: 2,000 per month

Term fee: 1,000 every six months

Examination fee: 1,000 every six months

Computer fee: 200 per month

Caution money: 1000 per year

Science lab fee: 200 per month

Conveyance: 500 per month

— Upadhey

A: As per the law, tuition fees paid — at the time of admission or thereafter to any university, college, school or other educational institution situated within the country — for full-time education of two children is eligible for benefit under Section 80C. However, eligible amount shall not include any payment towards any development fees or donation or payment of similar nature. The concession is available to each of the parents, if eligible, even in respect of the same child.

It seems the deduction is being offered only on tuition fees because the words used in the law are tuition fees. However, the other fees listed out, except conveyance, are part and parcel of full time education and deduction should be allowed on the same.

This would depend upon the interpretation of the employer and nothing can be done about it. You may if you so desire, claim the deduction not granted by the employer in your tax return and claim refund of any extra tax deducted over and above the resulting tax liability. Also, in the case the child is in nursery, it is again open to interpretation whether the same would qualify as ‘full-time education’ or not.

Lastly, the above-said is just an opinion and it should not be taken as a specification on the law per se. Please consult your tax advisor before taking any action in this regard.

Equity funds

Q: I go through your informative question and answers every week. However, I am still confused whether I will be taxed on the dividends on my ELSS schemes?

Will I be taxed on my other equity funds too?

Should I invest when they declare a dividend? Is it beneficial as the NAV drops soon after?

— Akshata

A: Dividends from ELSS schemes and also other equity- oriented mutual funds are tax-free. There is no distribution tax applicable also. The investment decision should not be based on dividend declaration but on the performance of the scheme in general and whether the scheme objective meets your risk profile. As you yourself have pointed out, after dividend the NAV falls to the extent of the dividend declared and hence it makes no difference whether you invest before the dividend or after.

Online tax filing

Q: I have the following questions as an NRI:

1. If my earnings through the stock trades are more than Rs 1 lakh, do I have to file tax return in India?

2. I am also with the understanding that tax will be deducted at source for the interest earned in the NRO accounts. Does it mean that I need to file tax returns in India?

3. Is there a way I can file tax returns online? Similarly if I need to par tax, can I do that online? In general what is the best way for NRI to file taxes?

4. Due to my NRI status (with no Indian income) I will not be filing tax returns. If say after a year I earn rent income or profit from stock trades and if I have to file tax returns, does it impact because there is a gap in tax filing?

— Kumar

A: 1. Yes, if your earning is more than Rs 1.10 lakh, you have to file tax return.

2. If your Indian income is more than Rs1.10 lakh you have to file a tax return, regardless of the amount of tax deducted at source. You get credit for the tax deducted from your final tax liability. If your Indian income is less than Rs 1.10 lakh, you need not file a tax return unless you wish to claim refund of any extra TDS.

3. At this particular juncture, online filing is not possible but it should see day light within a couple of years.

4. If the income chargeable to tax is less than the tax threshold, there is no need to file the returns. The gap will not matter as legally a person with income below the tax threshold of Rs. 1.10 lakh isn’t liable to file a tax return.

The authors may be contacted at wonderlandconsultants@yahoo.com

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