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Aviation growth plan to go before Cabinet
Mylan takes German Merck’s generic arm
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Coal India, NTPC ink pact
Kerala signs Smart City deal
Market Scan
Tax Advice
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Aviation growth plan to go before Cabinet
Mumbai, May 13 "We have already sent the Vision 2020 statement for the Indian aviation sector to the Cabinet for clearance and I hope it will pass through in a couple of months," Patel said at a function to showcase Jet Airways' first acquired Boeing 777-300 ER and Airbus 330-200 aircraft here. He said the statement, which encompasses the country's vision for the rapidly growing aviation sector, now at 50 per cent annually, will spell out the plan its growth. "It is not going to be a standard mechanical formula ... of course, there will be certain guidelines and we will be doing all these things in a few months." Patel also said he would talk to India's oil minister and state-run oil companies about high jet fuel prices. "We want some kind of a rationalisation (of prices). If there is no support, we will look into various ways including looking at allowing imports to carriers or allowing us to hedge," he said. Indian carriers are allowed to hedge fuel for international flights but not for domestic operations. The government would come out with some innovative solutions in the next couple of weeks to deal with the "artificially high" ATF prices. If the oil companies and PSUs do not see reason, steps could be taken to "unlock this monopoly", he said. "We have already allowed hedging and bulk imports of jet fuel. We are taking it up very seriously with the Petroleum Ministry as well as the oil PSUs," he said adding that private players like Reliance, Essar and Shell were also selling ATF. Pooh-poohing the criticism that Indian airports are far below in performance, Patel said Mumbai airport now handled almost the same traffic as that of Singapore with just half the infrastructure. Regarding the second airport for Mumbai, he said: "We and the state government are working on the Navi Mumbai airport and the proposal will go to Cabinet shortly for clearance." — PTI, Reuters Jet weighs cargo segment option Jet Airways today said it was mulling $400 million rights issue for expansion plans and start a full-fledged dedicated cargo service by year-end. Jet Airways chairman Naresh Goyal said, “We are looking at a $400 million rights issue, which is expected to be completed in four months and the money would be utilised for funding aircraft acquisition.” Addressing a press conference, Goyal said that Jet proposes to launch a dedicated cargo service, he said the company has already appointed an NRI from American Airlines to oversee the project.
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Mylan takes German Merck’s generic arm
New Delhi, May 13 The combination of Mylan and Merck generics will create a vertically and horizontally integrated generics and speciality pharmaceuticals leader with a diversified revenue base and a global footprint, the company said in a statement. "Mylan's acquisition of Merck Generics would substantially complete the execution on one of its long -term visions: to create a world class global quality generics leader," Mylan's Vice-Chairman and Chief Executive Officer Robert J Coury said. The US-firm, which had acquired 51.5 per cent in India's Matrix Laboratories for $736 million in cash last year said, the latest acquisition would further strengthen the company's hold in the global genercis market. India's Ranbaxy, Cipla were among other firms which had shown interest in Merck's global generic business but later dropped out citing overvaluation.
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Coal India, NTPC ink pact
New Delhi, May 13 According to official sources, the MoU includes joint business development group consisting of four members, each from CIL and NTPC, who will identify suitable projects and submit feasibility report to the steering committee consisting of two functional directors, one each from the coal companies. The committee will send the report, if considered viable, to an apex committee comprising of CEOs of CIL and NTPC. The apex committee will consider and approve the report.
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Thiruvananthapuram, May 13 The agreement was signed after an year-long negotiations in the presence of Chief Minister V.S. Achuthanandan by Ahmad bin Byat, Executive Chairman of Dubai Technology and Media Free Zone Authority (Tecom) and State Chief Secretary Lizzie Jacob. Smart City, a joint venture project, will be one of India's largest business parks covering one million square metres of land. The project will create an infrastructure and environment for the knowledge-based industry, primarily ICT to grow and flourish, based on the successful models of Dubai Internet City and Dubai Media City. — PTI
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Contrarians may gain in insipid market
by J.C. Anand
The
highlight of last week’s stock market trading was high degree of volatility. The Sensex, however, fluctuated between 1,379 points on the higher side and 1,365 points on lower side. Last Monday it opened at 13,879 points and closed at 13,796, on Friday, registering a loss of only 83 points. Inflation rate has moved down to 5.66 per cent from 5.77 per cent.
The stock market is, however, likely to stay flat or move down further. The inflation rate is still high and there are reports that the US economy is slowing down. While long-term prospects for the Indian economy and the stock market are high, but for the next six weeks the market is not likely to register any upward movement. A majority of major companies have already announced their quarterly results. However, IPO offerings from many blue-chip companies like DLF, ICICI Bank and Bharat Earth Movers, may activate the market. With interest rates soaring high, it may be wise to put investable funds in 10 per cent plus fixed deposits, which are being offered by the banks, than to put the money in equity shares, where the net return of dividend income is not higher than 2 to 3 per cent. Perhaps the way out to this dilemma is to turn oneself into a contrarian investor. A long-term contrarian investor is almost certain to make positive gains. It would be wise to invest only in those companies which have trusted management, good fundamentals and high growth prospects and in those scrips where investment is available at a relatively much lower level than its normal market rate. Wockhardt
Wockhardt Ltd., closed last week at Rs 400 per share (of Rs 5 face value). Its normal market rate is between Rs 425 to Rs 440 per share. During the last year it also moved up to Rs 476. Wockhardt is a leading pharma company with excellent management. Its equity capital is Rs 54.7 crore with EPS of Rs 27.57 (for Rs 5 face value share). Its book value per share is Rs 73.6 and promoters’ take stands at 74 per cent. Dividend declared by the company for year ended December 31, 2006, was 100 per cent. It commands a large market in Europe and the USA. In October 2006, it acquired Pinewood, the largest generic pharmaceutical company of Ireland. Last week, it also acquired the fourth largest pharma company in France called Nagmal Laboratories. This would make Wockhardt the largest Indian pharma company in Europe. Contrarian investors may also identify other such companies where investment can be fruitfully make. |
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No rebate on entrance exam coaching fee
by S.C. Vasudeva Q. I want to know the following (i) Whether subscription towards the GPF during April to December 31, 2006, is deductible under Section 80C of the Income Tax Act, if the subscriber has retired on December 31, 2006 on superannuation but he does not close his GPF account till March 31, 2007? (ii) In such a case, can he subscribe towards GPF in January, February and March 2007, that is even after his retirement on superannuation on December 31, 2006. (iii) Whether subscription towards GIS during April to December 31, 2006 is deductible under Section 80C of the IT Act, if the subscriber is retired by the state government on December 31, 2006, on superannuation and the retiree gets his dues under the said GIS in January, 2007? (iv) Whether the fee paid to a private institution on June 24, 2006, and September 30, 2006, in respect of daughter of a state government employee for coaching for medical entrance examination, 2007 is deductible under Section 80C of the Income-tax Act? (v) If drawing and disbursing officer does not deduct income tax at source during April 1 to December 31, 2006, and the employee is retired on superannuation by the state government on December 31, 2006, what is the procedure for payment of income tax by the retiree? — Gul, Chandigarh A. The answers to your queries are as under: (i) The General Provident Fund contribution made during the year of retirement should ordinarily be considered for the purposes of computing the tax liability in respect of the salary earned up to the date of retirement. (ii) The fee paid for the coaching of the medical entrance exam would not be admissible as deduction. This is in view of the provisions of Clause (xvii) of sub section 2 of Section 80C of the Income-tax Act, 1961 (the Act). According to the said clause any tuition fees paid (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter to any university, college, school or other educational institutions situated within India for the purpose of full time education of any two children of the assessee is admissible as a deduction. The coaching fee of entrance examination not being for the purpose of full time education of your daughter would not come within the purview of the aforesaid section. (iii) The accumulated amount of General Provident Fund will be payable to you as on the date of retirement and, therefore, any further contribution after such date of retirement may not be taken into consideration by the Disbursing Authority. (iv) In case the tax at source has not been deducted by the disbursing authority at the time of retirement, the same will have to be paid by the assessee either at the time of filing the return or as an advance tax at the financial year in which the assessee has retired in case the fact of non-deduction is known prior to the specified dates. Uses of PAN
Q. I received information through ‘Tax Advice’ column that persons under taxable limits need not to furnish annual returns. What to do with PAN issued to them? — L.D Mahant, Raikot A.
The Permanent Account Number (PAN) issued to you may have to be used for various other purposes. In fact, it becomes a permanent record of your identity and proof of residence. The same may also have to be referred, in case purchase of certain items above a specified amount is effected. Rule 114B of Income-tax Rules 1962 specifies the following items in this regard: (a) Sale or purchase of any immovable property valued at Rs 5 lakh or more; (b) Sale or purchase of a motor vehicle or vehicle, as defined in Clause (28) of Section 2 of the Motor Vehicles Act, 1988 (59 of 1988), which requires registration by a registering authority under Chapter IV of that Act. This would, however, not include a two-wheeler. c) A time deposit, exceeding Rs 50,000 with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in Section 51 of that Act); (d) A deposit, exceeding Rs 50,000, in any account with Post Office savings bank; (e) A contract of a value exceeding Rs 1 lakh for sale or purchase of securities as defined in Clause (h) of Section 2 of the Securities Contacts (Regulation) Act, 1956 (42 of 1956); (f) Opening an account (not being a time-deposit referred to in clause c) with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in Section 51 of that Act); (g) Making an application for installation of a telephone connection (including a cellular telephone connection); (h) Payment to hotels and restaurants against their bills for an amount exceeding Rs 25,000 at any one time; (i) Payment in cash for purchase of bank drafts or pay orders or banker’s cheques from a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) for an amount aggregating Rs 50,000 or more during any one day; (j) Deposit in cash aggregating Rs 50,000 or more, with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in Section 51 of that Act) during any one day; (k) Payment in cash in connection with travel to any foreign country of an amount exceeding Rs 25,000 at any one time. Explanation
For the purposes of this clause: (i) “Payment in cash in connection with travel” includes payment in cash towards fare, or to a travel agent or a tour operator, or for the purchase of foreign currency; (ii) The expression “travel to any foreign country” does not include travel to the neighbouring countries or to such places of pilgrimage as may be specified by the Board under the Explanation 3 of sub-section (1) of Section 139; (l) Making an application to any banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or to any other company or institution, for issue of a credit card; (m) Payment of an amount of Rs 50,000 or more to a mutual fund for purchase of its units; (n) Payment of an amount of Rs 50,000 or more to a company for acquiring shares issued by it; (o) Payment of any amount of Rs 50,000 or more to a company or an institution for acquiring debentures or bonds issued by it; (p) Payment of an amount of Rs 50,000 or more to the Reserve Bank of India, constituted under Section 3 of the Reserve Bank of India Act, 1934 (2 of 1934) for acquiring bonds issued by it. Remittance from UK
Q. I am a senior citizen (65 years of age) and an income tax payee. I always file my returns. My son, a software engineer in Delhi, is presently posted at England on company project. He sends nearly Rs 1 lakh per month for me through ICICI Bank of which I have got an account at Chandigarh. Please advise: (i) My son pays IT for his income in the UK. Is the money, he sends to me taxable? (ii) How much money can my son send to me? Is there any limit? (iii) Whether the money he sends to me mentioned in my returns? (iv) During the financial year April 2006 to March 2007, my son had been in the UK. He has been paying income tax there. Does he have to submit the return here in India also? — S.S. Sharma, Chandigarh A. The answers to your queries are as under: (i) The amount remitted by your son to India is not taxable, in case he is a non-resident in accordance with the provisions of the Act. (ii) There is no limit of sending any amount to India by your son. (iii) It will be better to make a disclosure in respect to the amount so received. Copies of the inward remittance must be available with you so as to prove the nature of receipt. (iv) The filing of IT return depends on the quantum of income as well as the residential status of a person. In case a person is a non-resident, he is taxable in India in respect of an income received or deemed to be received in India as well as income, which accrues or arises or is deemed to accrue or arise in India during a particular year. In case of a non-resident if such a person does not have an Indian income, the income earned by him outside India will not be taxable. However, in case a person is a resident in India his world income, i.e. his entire income, wherever earned, is taxable in India. He, would, however be entitled to a deduction of tax paid outside India in case India has a double taxation agreement with a country where he is settled. I may add that the obligation to file return in all cases will arise if the total income of the person concerned is above Rs 1 lakh for 2007-2008 and Rs 1,10,000 for assessment year 2008-2009. |
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