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India gets energy saving norms
Ludhiana SMEs to get CII support, says Mittal
Submit Form 16 for refund
OVL to take Shell’s stake off Egypt
Listed bourses add over $125 b to investors’ kitty
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EPF Board defers interest rate decision
Tax
Advice
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India gets energy saving norms
New Delhi, May 27 The implementation of the codes will reduce energy consumption from 25 per cent to 40 per cent and yield annual saving of about 1.7 billion units. The codes sets a minimum efficiency standards for external wall, roof, glass structure, lighting, heating, ventilation and air-conditioning of the commercial buildings in all five climatic zones in the country. The state government will have the flexibility to amend these codes to suit local or regional needs and notify them accordingly. Launching the codes here today, Minister for Power Sushil Kumar Shinde said that the codes aimed at bringing down the energy consumption of the commercial buildings through the efficient design and use of resources. Highlighting the government’s efforts to increase power production in the country, Shinde said the plans had been made for capacity addition of about 70,000 MW during the 11th Plan and by 2012 the country would be self sufficient to the great extent in the power sector. He said that efficient use of energy and check the leakages in energy consumption is must as by conserving only 20 per cent of energy the country would save about Rs 20,000 crore. The minister said that the government would very soon put in place appropriate institutional structure to oversee implementation of the codes throughout the country with the involvement of states and other stakeholders. Effective awareness and outreach programme would be launched to overcome strong first cost bias that usually needs owners to under-invest in energy efficiency during building design and construction. The state governments would be requested to integrate the energy codes in city bylaws through municipalities, he added.
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Ludhiana SMEs to get CII support, says Mittal
New Delhi, May 27 In an exclusive interview with The Tribune, Mittal, who began his entrepreneurial venture from this town in Punjab as a young lad of 18-years said the industry in Ludhiana would “witness action and support from the CII.” Mittal said: “CII will take significant initiative in the area of small and medium enterprises. We are forming 75 SME clusters this year and monitor their development and help them in turning goals into a reality." With the growth of SMEs in the region, Mittal said the L M Thapar Institute in Chandigarh, would emerge as the flagship centre for SME development in the region, especially Punjab. The government is considering higher financial assistance to existing clusters of micro, small and medium enterprises (MSME) up to 80 per cent of financial requirements under the 11th Five Year Plan. To enable MSMEs become competitive, the government is proposing a pool of consultants under its National Manufacturing Competitiveness Programme. The consultants would be deployed with a cluster of 8-10 companies for a period of one to one-and-a-half years. The cost of the consultants will be borne by the government. At the beginning of Xth Plan (2002-03), the segment provided gainful employment to 24.9 million persons in the rural and urban areas of the country through 10.5 million units, engaged in manufacturing and providing a wide range of goods and services. Over the next four years (end 2005-06), they have grown to 12.3 million units providing employment to 29.5 million persons.
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Submit Form 16 for refund
New Delhi, May 27 However, if the assessee does not claim refund, he does not need to furnish Form 16 with returns as the new IT return form for individual tax payer is annexure-less for 2007-08. The I-T Department has issued 17 lakh tax deduction and collection account numbers (TANs) to employers, which are required to quote them and file quarterly statement of tax deducted at source of each employees. Since many employers are not filing quarterly statement of tax deducted at source, Form 16 is supposed to be submitted to help the authorities pay refunds quickly after cross- checking the amount, the officials said. The new tax forms in ITR series, introduced from May 14, are annexure-less except for ITR-7, the form for charitable and religious trusts, political parties and other non-profit organisations. The eight new forms are prescribed for the current assessment year, four of which are for individuals and Hindu Undivided Families. The purpose of annexure-less forms is to enable tax payers file them through electronic mode, the officials said.
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OVL to take Shell’s stake off Egypt
New Delhi, May 27 Code-named Project Wonder, the north-east Mediterranean Deepwater Concession in the Egypt Mediterranean Sea, has Shell as operator with 100 per cent stake and is estimated to hold close to 10 trillion cubic feet of gas reserves. “We are not paying Shell for buying the stake but have agreed to pay for its share of exploration cost in 2007 of $140 million and a maximum of $40 million for future cost beyond 2007,” an OVL executive said here. OVL will also not contribute towards the past costs ($300 million) incurred by Shell till October 1, 2006. Besides carrying Shell in the development cost, OVL will also pay development bonus to Shell up to a maximum of $19.425 million at the time of award of development lease by the local government and $35.343 million production bonus at the time of start of commercial production. Gas production from the discoveries is planned in 2012. — PTI
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Listed bourses add over $125 b to investors’ kitty
Mumbai, May 27 The 18 leading publicly traded bourses worldwide have collectively created a wealth of over $125 billion for investors since their listings, according to an analysis of market cap figures of various exchanges by PTI Research. This accounts for more than half of their combined market value currently, the analysis showed. While Bombay Stock Exchange and National Stock Exchange are yet to take a call on their listings, the recent strategic stake sales by the two bourses put their market value at about $1 billion and $2.5 billion, respectively. At these values, the two Indian bourses would come at the bottom end of the list of listed exchanges worldwide in terms of market capitalisation. "When we consider the sharp appreciation witnessed in the market value of these exchanges after their listings, the investors could look forward to a similar surge in the market capitalisation of Indian bourses too after their listings," said a market observer. The market cap of all listed exchanges worldwide has surged by more than 60 per cent on average since their respective listings. In fact, the market value of 15 bourses have at least doubled since the time of their listing, while the jump has been over six-fold for six of them. Nearly, half of all listed exchanges have entered the capital market after 2003. Leading bourses like Nasdaq, NYSE Euronext (the merged entity after New York Stock Exchange's Euronext takeover) and London Stock Exchange have added between $1 billion and $3 billion to investors' wealth since their listings. Johannesburg Stock Exchange also recorded significant growth in its market value and is worth an estimated $92 billion, recording a massive gain of about $60 billion since listing in June 2006. NYSE Euronext has a market cap of about $22 billion, while that of Nasdaq is $3.7 billion and LSE $2.7 billion. While LSE has gained 374 per cent in market value since its listing in August 2001, Nasdaq has risen more than 200 per cent since listing in November 2005. Hong Kong Exchange and Clearing Ltd, Deutsche Boerse and Chicago Mercantile Exchange have generated a total investor wealth to the tune of $10-15 billion. Besides stock exchanges, commodity bourses like Chicago Board of Trade and Intercontinental Exchange Inc also posted strong gains in their market capitalisation since listing, the analysis showed. — PTI
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EPF Board defers interest rate decision
New Delhi, May 27 No decision was taken at the Special Meeting of the EPF Central Board of Trustees (CBT) in view of Election Commission’s model code of conduct for Goa assembly polls, trade union sources said. The meeting, held in the backdrop of strong protests against any cut in the rate of EPF, was chaired by Labour Minister Oscar Fernandes, who is also the chairman of CBT. The finance and investment committee of the EPF Board in its 83rd meeting held in March 2006 had observed that only 8 per cent rate of interest was sustainable out of the income of the fund during 2006-07. This was rejected by trade unions, which opposed any cut in the present rate of 8.5 per cent. In his opening remarks, Fernandes said the most "telling effect" of non-declaration of rate of interest will be felt in updating annual accounts and furnishing information of balances to members. He said the delay would also lead to accumulation of Interest Suspense Account which draws "adverse attention". Fernandes also said it would have implications in further roll out of the Re-inventing EPF India Project in other offices. The Minister appealed to the CBT members to recommend the interest rate not only for the previous years but also for the current financial year. With Left parties going hammer and tongs against further slashing of the interest from 8.5 per cent, the Board will have to weigh all options carefully before finalising the rate. The Leftist trade unions have been suggesting that since some banks were at present giving upto 10.5 per cent interest, the EPF rates should be hiked accordingly. — PTI
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Tax calculations vary for allotted and bonus shares
by S.C. Vasudeva Q. I am a small investor. A chance allotment of 100 shares on April 11, 1993, costing Rs 15,000 became 1000 on August 30, 2005 (Bonus 1:1 on January 21, 1995, 1:1 on August 28, 2004, and 2:3 on August 30, 2005). I sold 500 shares on November 15, 2006, for Rs 2 lakh through recognised stock exchange. Regularly following your column convinces me that this amount qualifies for LTCG. It is IT return filing time. I have been filing IT return on Form 2D Saral. How to show this sale of shares in the return is my problem and I request you to kindly advise me: (a) What is the amount of LTCG? (b) Whether I will have to use some other IT form for filing this year’s return due to LTCG or will Form 2D do? (c ) Item No 18 of 2D Saral relates to capital gains. Please advise me the item serial number where I should show the LTCG exemption amount to nullify the effect of Item No 18 (increase in total income). (d) I am also having Form 3 Saral IT53, which contains Schedule C Capital Gains. (i) Does this schedule cover LTCG due to sale of shares? (ii) If so, then, under which Section (54 to 54G)? Will the exemption (Serial No 10) qualify and can it be shown. 3. My taxable income this financial year is Rs 50,000 and I have already saved Rs 50,000 to cover this liability. — K.Singh, Himachal Pradesh A. The information provided is not complete. The amount of capital gain can be computed only if it is known which share i.e. the share originally acquired or only the bonus share have been sold. In case original shares have also been sold, the cost of original shares will have to be indexed by taking the financial year 1993-94 as base year. The index for financial year 2006-07 being 519, the indexed cost would work out at Rs.31,905 (15,000 x 519/244). The bonus shares will be taken at nil cost. On this basis the long-term capital gain would work out at Rs 1,68,095. In case the bonus shares have been sold in entirety, the total amount of Rs 2 lakh would be a long-term capital gain. However, in accordance with the provisions of Section 10(38) of the Act, any income arising from the transfer of a long term capital asset being an equity share in a company where the transaction of sale of such equity share is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and such transaction is chargeable to the Securities Transaction Tax under that chapter, would be exempt from tax. On the basis of facts given by you in the query you seem to comply with the above requirements as the sale has been effected on November 15, 2006, through a recognised stock exchange. If this presumption is correct, the gain of Rs 2 lakh, therefore, would not be taxable in your case. You can indicate the above fact in Form 2D against Item 25 under the head “income claimed to be exempt from income tax”. Tax on FDs
Q. Will the amount of interest paid to me on my FDs be accountable in income-tax return or will the amount of interest accrued but not paid be accounted for? I am senior citizen aged 83. The bank, despite repeated requests, is not in a position to explain. As already explained most of my FDs are for a period of 46 days and I get these renewed on due dates regularly. Then how does the question of accrued interest arise on every renewal? FDs are renewed for principle amount only and the interest as per my instructions is credited regularly to my savings account. Thus it is very easy to find out how much interest has been paid to one simple calculation from the pass book of savings account. According to my detailed explanation/clarification, interest paid to me, credited to my savings account comes to Rs 1,16,984. While certifying the said income, the bank has issued certificate. Interest paid and credited to savings account comes to Rs 1,16,948. Accrued interest comes to Rs 1,68,134. When I have got all my FDs renewed, where does the question of accrued arise. I am very cautious that correct amount is shown in return. — M.S. Dewan A.
The taxability of interest earned on fixed deposits will depend on the method of accounting followed by you. You have the option to declare the interest on accrual basis as also on receipt basis. In case you have been showing the interest on accrual basis and have been following the same method consistently, you will have to disclose and include the interest in your income on accrual basis. However, in case you have not declared any interest earlier and this is the first occasion to disclose such interest, you can exercise the option and include the same in your return on receipt basis. The amount of interest credited to your savings account can be shown as interest income in such a case. You must, however, make a proper disclosure in this regard in your return of income. The difference between the amount credited to the savings account and the accrued interest can be on account of certain FDs in respect of which the period of 46 days has not expired as on March 31, i.e. at the close of the financial year. The bank might have, therefore, included the interest for the broken period, which has accrued at March 31. As explained hereinabove, you have an option to include interest on accrual or receipt basis but such option, once exercised, should be consistently followed for the purposes of filing the income-tax return. Two accounts
Q. According to your advice dated October 30, 2006, PPF account can be opened by an individual in his own or in joint name. However, the local SBI and PO authorities when consulted insist that according to the information available, PPF account can be opened only in one name. It appears that what you have stated in your column is based on some latest order issued by the government about which the local authorities are not aware. I request that you may kindly elaborate in your tax advice column, the particulars of government order, which allows opening of PPF account by an individual in his own name or in joint name. — D.S. Chawla, New Delhi A.
I invite your kind attention to the question of Harbhajan Singh of Gurdaspur as published on October 30, 2006. The query-maker has pointed out that he had opened joint account with his wife’s name. My reply, therefore, was based on this query. You may, therefore, show this query to the authorities concerned. PPF ceiling
Q. I am pensioner and my pension is taxable. I claim rebate of Rs 70,000 under Section 80C by depositing Rs 70,000 in my PPF account. In addition to above, I want to deposit Rs 30,000 in PPF account of my son. Kindly advice can I claim rebate of Rs 1 lakh deposit or only Rs 70,000. — Om Prasad A.
The Public Provident Fund scheme permits the subscription to Public Provident Fund of any amount not more than Rs 70,000 in a year. You would, thus, be entitled to a deduction of Rs 70,000 only in respect of the deposit made in the Public Provident Fund account. However you have all liberty to deposit the additional amount of Rs 30,000 in other saving schemes specified in Section 80C of the IT Act, 1961 (the Act), example payment of premium towards the life insurance policy in the name of your son. |
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