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Punjab & Sind Bank row
FinMin rules out replacing CMD, directors

New Delhi, July 1
The finance ministry has ruled out replacing the chairman or the non-official directors of Punjab & Sind Bank (PSB) to resolve the dispute between them and wants the two sides to make peace with each other.

RBI to lend $5 billion for infrastructure 
New Delhi, July 1
The RBI will lend $5 billion to the government from a staggering foreign exchange reserves of $212 billion for improvment of infrastructure.

UCO Bank revises term deposit rates
Kolkata, July 1
UCO Bank today announced revision on domestic term deposits effective from July 1. While the rate of interest for the period of one year to less than three years remained unchanged at 9.6 per cent, the rate for the period between three and five years and above was lowered to 9.25 per cent from 9.75 per cent, a bank release said.

3-month old gets PAN card
Rourkela, July 1
A three-month old baby boy has become the youngest PAN card holder in the country.

Grand Vitara XL-7 Grand Vitara coming soon
New Delhi, July 1

Looking at filing up that one gap in which the country’s largest car manufacturer Maruti Udyog Limited (MUL) has no offering, its parent company the Suzuki Motor Corp (SMC) has now decided to launch the new Grand Vitara in the Indian market.



EARLIER STORIES

 

Honda plans small car for India
Tapukara (Rajasthan), July 1
Japanese auto major Honda today said it plans to take on the likes of Maruti’s Swift and Hyundai’s Getz Prime with its global small car developed with the Indian market in mind.

International tax summit begins today
New Delhi, July 1
The first international tax conference, co-hosted by the ministry of finance, Asian Development Bank (ADB) and Organisation of Economic Cooperation and Development (OECD), will begin here tomorrow.

Market Update
All-time highs within striking distance
The market edged higher, last week, amid volatility as Sensex closed the week with a gain of 183 points. Sensex is now just 73 points away from its alltime high of 14,723. Nifty also gained 66 points last week and needs another percentage gain to hit a new alltime high. 

Tax Advice
1/6 scheme not applicable any more
Q. My D.O.B. is January 2, 1942, and my income from pension is Rs 1,06,000 for the year 2006-07. My farm income is Rs 70,000 for 2006-07. I own a car and a 195 sq yards plot in Amritsar. I have no business or profession after retirement other than farming.

 

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Punjab & Sind Bank row
FinMin rules out replacing CMD, directors

New Delhi, July 1
The finance ministry has ruled out replacing the chairman or the non-official directors of Punjab & Sind Bank (PSB) to resolve the dispute between them and wants the two sides to make peace with each other.

"We have no plans to transfer the CMD of the bank as any such decision would send wrong signal to bank employees. Nor there is plan to change or shift the present non-official directors to any other bank due to political reasons," a finance ministry official said.

PSB chairman and managing director R.P. Singh had on June 25 alleged that five non-official directors led by Congress leader Harcharan Singh Josh were running a campaign to shield certain defaulters whose properties had been put on auction.

Singh had asked the government to restructure the board of directors and replace the five non-official directors.

Discounting reports that the fight between the management and non-official directors had delayed the bank's initial public offer, the ministry official said: "The bank has not so far sent any proposal to bring out an IPO."

Sources said the finance ministry would soon approve a proposal to restructure the bank's equity amounting to Rs 743 crore by converting a part of it into preferential shares.

The bank management has also alleged that defaulters and the directors colluded to negotiate NPA (non-performing assets) accounts for paltry sums.

These allegations were preceded by complaints by the directors to PMO and Central Vigilance Commission that Singh had sanctioned a Rs 150-crore loan to Akali leader and Punjab Chief Minister Parkash Singh Badal's son Sukhbir Singh Badal for his Orbit Resorts project in Gurgaon at a low interest rate and without collateral. — PTI

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RBI to lend $5 billion for infrastructure 

New Delhi, July 1
The RBI will lend $5 billion to the government from a staggering foreign exchange reserves of $212 billion for improvment of infrastructure.

“We have succeeded in convincing the RBI to lend $5 billion from the forex reserves to the India Infrastructure Finance Company Ltd (IIFCL), a 100 per cent state-owned company, which would finance the infrastructure projects of Indian companies, especially for capital imports,” a finance ministry official said.

The $5 billion-loan constitutes less than 2.5 per cent of the existing foreign reserves of the country.

The RBI’s decision follows finance minister P Chidambaram’s assurance that the borrowed forex reserves would not be spent in the domestic market that could lead to increase in money supply and later inflation.

The sources said the government has assured a guaranteed return of more than 3.5 per cent on $5 billion borrowing.

The committee on infrastructure financing, headed by HDFC chairman Deepak Parekh, had earlier recommended that a part of the forex reserves could be utilised for infrastructure funding. The proposal was accepted by the government this year.

The Parekh committee has also revised the target for infrastructure investment to $475 billion at current prices.

The idea of using forex reserves for improving country’s infrastructure was mooted by deputy chairman of the Planning Commission Montek Singh Ahluwalia two years ago. — PTI

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UCO Bank revises term deposit rates

Kolkata, July 1
UCO Bank today announced revision on domestic term deposits effective from July 1. While the rate of interest for the period of one year to less than three years remained unchanged at 9.6 per cent, the rate for the period between three and five years and above was lowered to 9.25 per cent from 9.75 per cent, a bank release said.

Senior citizens would continue to enjoy a rate of interest of ten per cent for the period of one year to less than three years while the rate applicable for the period between three and five years and above would now be 9.75 per cent, it said.

The rate of interest under UCO Tax Saver Scheme for general customers would now be 9.25 per cent and for senior citizens it would be 9.75 per cent, the release said. — UNI

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3-month old gets PAN card

Rourkela, July 1
A three-month old baby boy has become the youngest PAN card holder in the country.

The boy, Ayush Ranjan Rout, born on March 26 this year has been allotted a PAN card no ALAPR3284J.

Ayush's father Saroj Kumar Rout said they had entered into an agreement with 'Indian News and Feature Trust' under which the baby would work as a model.

Since the boy would earn money from modelling, they had applied for the PAN card on May 25, his father said. The Income Tax Department in a letter to Ayush, a resident of LIC colony here, said the department was pleased to allott him a PAN card for filing income tax returns. Ayush was asked to contact ITO/1 Rourkela for further details. — PTI 

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Grand Vitara coming soon
Girja Shankar Kaura/Tribune News Service

New Delhi, July 1
Looking at filing up that one gap in which the country’s largest car manufacturer Maruti Udyog Limited (MUL) has no offering, its parent company the Suzuki Motor Corp (SMC) has now decided to launch the new Grand Vitara in the Indian market.

Set to launch the Grand Vitara later in the week, MUL is looking at taking on the competition from some of the other car manufacturers in the country, who have already stolen a march in this segment over the otherwise most successful and the fast growing car manufacturer of the country.

The new Grand Vitara, made on a completely new platform, is the third generation Vitara offered by SMC and will compete with the likes of Honda’s CRV, Ford’s Endeavour, Hyundai’s Terracan and the other offerings from Nissan.

Although the new Grand Vitara shares its brand name with its predecessor, the two new models of the Grand Vitara XL-7 are completely distinct. This is the fifth new product offered by MUL in the last one year. All the previous four models - WagonR Duo,

Zen Estilo, Swift Diesel and SX4 - have been a huge success.

Incidentally, the Grand Vitara would not be manufactured at any of the MUL’s plants in India and would be imported from Japan as a completely built unit. It is expected to be in the price range of Rs 13 to 15 lakh.

Globally Grand Vitara has received rave reviews. It is doing extremely well in the advanced markets like Japan, the UK, the USA and Germany and has received many awards.

The new Grand Vitara is a five-seater SUV with a stylish, muscular looks.

It will be powered with a 2-litre variable intake system (VIS) engine. It will be available in nine colours and two variants, that being the automatic drive and the manual drive. 

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Honda plans small car for India

Tapukara (Rajasthan), July 1
Japanese auto major Honda today said it plans to take on the likes of Maruti’s Swift and Hyundai’s Getz Prime with its global small car developed with the Indian market in mind.

Honda Motor Co chairman Fatoshi Aoki said: “We cannot just make a small car without Honda-like characteristics.” He was speaking at the foundation stone laying ceremony of the second plant of its Indian subsidiary, Honda Siel car India (HSCI).

HSCI president Masahiro Takedagawa said the car, which would be launched in 2009, would qualify for the excise duty benefits given to small cars with a length of four metres and an engine capacity of 1,200 cc for petrol and 1,500 cc for diesel. — PTI 

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International tax summit begins today
Tribune News Service

New Delhi, July 1
The first international tax conference, co-hosted by the ministry of finance, Asian Development Bank (ADB) and Organisation of Economic Cooperation and Development (OECD), will begin here tomorrow.

The two-day conference will bring together, on a common platform, experts from the various countries and India as well as tax officials of the Government of India to discuss tax reforms in different countries.

The conference would provide to the international participants, a unique opportunity of understanding Indian tax reforms as well as to contribute to the process. 

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Market Update
by Lalit Batra
All-time highs within striking distance

The market edged higher, last week, amid volatility as Sensex closed the week with a gain of 183 points. Sensex is now just 73 points away from its alltime high of 14,723. Nifty also gained 66 points last week and needs another percentage gain to hit a new alltime high. A major part of the gains, last week, came on Friday after the inflation figures hit the market. India’s wholesale price index rose 4.03 per cent as per the latest data released on last Friday. The annual inflation rate was the lowest since the end of April 2006.

The market in the short run may extend last week’s gains following the smooth rollover of positions from the June to the July series in the derivatives segment, and on build-up of fresh positions. The market will be boosted further by the steady progress of moonsoon so far.

The announcement of the June quarter results is also likely to determine which way the markets move in the medium term. Investors may continue to invest in certain quality IPOs that have/are likely to hit the market in the medium term.

HDIL public offer

Housing Development & Infrastructure Ltd (HDIL), part of the Wadhawan group, is in the business of construction and development of residential, commercial & retail projects, slum rehabilitation and land development, prominently in Mumbai Metropolitan Region (MMR). Since its inception, the company has constructed 11.29 million sq. ft of saleable area, with another 112.11 million sq. ft of saleable area to be developed by 2012.

HDIL has a dominant presence in the most lucrative real estate market — Mumbai. Mumbai is one of the fastest growing real estate markets in India. The city generates about 5 per cent of the national GDP and contributes almost 40 per cent of the India’s tax revenue. Demand for quality apartment has always surpassed the supply and prices are always at a premium to the other parts of the country.

The company has an extensive land bank of 2574.2 acres, on which it estimates to develop 112.11 million sq. ft in a phased manner by 2012. Another key factor in the favour of the company is that it nearly owns 69.9 per cent of the land reserves, thus subsiding the chances of default normally associated in the process of land acquisition.

The real estate industry in India is being driven by factors like strong performance of the Indian economy and continued emphasis by the Union government on infrastructure, urban reforms and housing. HDIL is attractively positioned in this sector with a sizeable presence in MMR, where the demand for quality housing continues to soar.

Valuation

Knight Frank had valued HDIL’s land reserves at Rs 21,000 crore last December, using the discounted cash flow (DCF) method. The per share value works out to Rs 984. Cushman & Wakefield has worked out the net present value (NPV) of the company’s projects at Rs 22,000 crore in January this year. The per share value works out to Rs 1,028. These valuations are six months old and the real estate market condition has changed after that but it gives us the insight on the kind of reserves that HDIL has.

Keeping in view HDIL’s established business in MMR, low-cost housing model through involvement in slum rehabilitation projects and compelling valuations, investors may invest at cutoff to the issue. The HDIL’s IPO will close this Tuesday. 

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Tax Advice
by S.C. Vasudeva
1/6 scheme not applicable any more

Q. My D.O.B. is January 2, 1942, and my income from pension is Rs 1,06,000 for the year 2006-07.

My farm income is Rs 70,000 for 2006-07. I own a car and a 195 sq yards plot in Amritsar. I have no business or profession after retirement other than farming.

In the light of above mentioned facts, please advise me whether 1/6 category is applicable to me (a senior citizen). If so, am I required to file IT return for the assessment year 2007-08, or otherwise.

— Gurcharan Singh, Amritsar

A. Your total income being less than Rs 1,85,000, (limit applicable to senior citizen for assessment year 2007-08), you are not required to file an IT return under the provisions of Section 139 of the IT Act, 1961. The 1/6 scheme is not applicable from assessment year 2006-07 onwards.

Arrear refund

Q. I am 79 years of age and a govt pensioner. I have received arrears of Rs 1,75,396 w.e.f. January 1, 1996 to June 30, 2006 i.e. from January 1, 1996 to June 30, 2006 Rs.1,69,873 and from April 1, 2006 to June 30, 2006 Rs 5,523. My banker has deducted Rs 9,000 while making payment of Rs 1,75,396. Please advise how to get a refund of arrear of rebate under Section 89 of the IT Act. My overall pension, including Rs 5,523 received on June 30, 2006 out of Rs 1,75,396 against the period April 1, 2006 to March 31, 2007, is Rs 1,68,367. Due to sanction of different IT sections such as standard deduction, 80 88/L and 80-B, I have not to pay income tax since March 31, 2007 till today.

— Perminder Singh, Punjab

A. In this connection I invite your kind attention to my reply to the query published on June 25, 2007. I had explained the position with regard to the relief allowable under Section 89 of the IT Act.

I may add that your salary for the year being less than Rs 1,85,000, ordinarily you would not have been liable to file the return for assessment year 2007-08 (previous year ending March 31, 2007). However, on account of the receipt of arrears of Rs 1,75,396, you will have to file the return and seek the relief under Section 89 of the Act for which you may kindly refer to the above said reply.

Rebate u/s 80C

Q. My queries are:

(i) How much income tax is payable by a senior citizen pensioner whose income from all sources i.e. pension, arrear of pension, rental income and interest income is expected to be about Rs 1,99,600 during the financial year 2006-07 (assessment year 2007-08)?

(ii) Is there any rebate permissible over and above exemption of Rs 1,85,000?

(iii) How much and in which scheme to be invested?

— D. R. Oberoi, H.P.

A. Section 80C of the Act provides for a deduction of an amount not exceeding Rs 1 lakh, provided the amounts have been paid or deposited in various schemes specified in the said section. Such, investments should be made before the closing of the financial year. The tax payable on Rs 1,99,600, including education cess, will be Rs 2,978.

II

Q. I am a retired govt employee of HPSEB and below 65 years of age. My total income from all sources is Rs 2 lakh. My son is doing B-Tech and his annual tuition fee is Rs 45,000. Kindly advise as to how much amount is to be invested by me to get the benefit under Section 80C, including the tuition fee of my son. Please also calculate my tax liabilities.

— S.N. Sharma Punjab

A. The maximum amount of deduction allowable under Section 80C is Rs 1 lakh. You will have to therefore deposit/invest another sum of Rs 55,000 so as to avail the maximum deduction. In case you avail the deduction of the entire amount allowable under Section 80C, your income would be reduced to Rs 1 lakh and no tax would be payable by you for the assessment year 2008-09.

Tax liability on nominees

Q. I have FDs in different banks and I have nominated my sons to receive payment in case of my death. I am a senior citizen, have a PAN and submit IT return every year though my income from all sources is less than Rs 1,85,000.

Kindly advise:

(1) If on my death, amount to be received by my sons would be clubbed with their income and would they have to pay income tax as they all are IT payees, or

(2) Is there any way out like by way of gifts etc. that they would not have to pay income tax on the amount to be received by them as my nominees.

— M.S. Bir, H.P.

A. The amount received by your sons after your death from any source would become a capital receipt in their hands and income arising therefrom shall be taxed in their hands. Even if you gift the amount to them during your life time, the income therefrom will have to be included in their income, provided they have attained majority. However, in case they are minor, the income received by them shall be clubbed in the hands of either of the parents whose income is higher. 

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BRIEFLY

RBI branch
Shimla, July 1
Himachal Chief Minister Virbhadra Singh inaugurated the rural and credit department branch of the RBI here today. He said Himachal Pradesh had been the first state in the country to achieve the target of total financial inclusion by bringing every household in the state under the fold of banking. Regional director of the RBI D.P.S. Rathore said it had been the endeavour of the bank to improve the loan distribution process, deliver banking facilities to every section of the society and strengthen the rural economy. — TNS

Subhiksha stores
New Delhi, July 1
Subhiksha plans to add 200 stores that would create 12,000 jobs within the next few months. “We presently employ 18,000 people directly and indirectly and plan to add nearly 12,000 people by the end of this fiscal to take the total number to 30,000,” Subhiksha Retail’s president (manpower) Shashi Kanth said. — PTI

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