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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

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B U S I N E S S

Clear pending SEZs by Aug 23, states told
New Delhi, August 19
The Centre has given an ultimatum to the states to clear the backlog of pending SEZ proposals by August 23, failing which it may scrap over 170 applications.

Gas Pricing
Govt playing with energy security: Naik
New Delhi, August 19
The row over pricing of gas has gained a new dimension with past and present lawmakers from the Right and Left airing their views on the issue, which is currently being examined by an empowered Group of Ministers.

Rising onion prices may reduce govt to ‘tears’
New Delhi, August 19
Unknown to the UPA government, which is crying itself hoarse about the benefits of a nuclear deal with the US, rising onion prices may arm the opposition with a potent weapon capable of reducing the ruling coalition to tears.

Patent Row
Milkfed’s overseas plans hit roadblock
Chandigarh, August 19
Failure to patent its popular milk products brand 'Verka' has cut short Punjab State Cooperative Milk Producer's Federation (Milkfed) plans to explore the Canadian and US markets.


EARLIER STORIES

 
Censor Board of Film Certification chairperson Sharmila Tagore at the inauguration of Art Karat showroom in DLF, Gurgaon, on Saturday.
Censor Board of Film Certification chairperson Sharmila Tagore at the inauguration of Art Karat showroom in DLF, Gurgaon, on Saturday. — PTI

Faulty Battery
Airtel, Hutch back Nokia
New Delhi, August 19
Country’s leading mobile operators Bharti Airtel and Hutch today threw their weight behind Nokia, facing a major crisis brought about by faulty component, saying the Finnish handset maker's offer to replace inferior batteries was a first in the country.

Bharti signs MoU for Haryana Tech Park
New Delhi, August 19
Bharti Airtel, a leading telecom service provider today announced an alliance with Selecto Systems for providing telecom network infrastructure and services for its IT SEZ-Haryana Technology Park (HTP).

Tax Advice
Investment return of cash gift to child taxable
Q. I have a daughter aged 2 years. She receives cash gifts (shagun) on various occasions like on her b’day, religious ceremonies, visits to our relatives. Though individually small in amount, the collective sum becomes considerable per annum.

 
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Clear pending SEZs by Aug 23, states told

New Delhi, August 19
The Centre has given an ultimatum to the states to clear the backlog of pending SEZ proposals by August 23, failing which it may scrap over 170 applications.

“We have asked the state governments to decide on the SEZ proposals that have been pending with them for more than six months,” a government official said.

States have been asked to revert to the Centre by August 23 on the status of pending SEZs. “If we do not get their reply by that date, we may scrap these proposals,” he said.

There are 268 proposals pending with commerce ministry, which can go to the Board of Approval only after they are approved by state governments. Of these, there are about 170 cases on which state governments’ response is awaited.

Although the SEZ Rules require the promoters to get the state clearance before the proposals are taken up by the BoA, many of the applications are sent directly to the Centre.

This way the promoters try and speed up the process of clearance both at the central and state level. Applications for formal approvals can be taken up only if the promoters have land in possession. The government has so far given formal approval to 364 proposals and in-principle nod to 180 other. This takes the total number of clearances to about 550. — PTI

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Gas Pricing
Govt playing with energy security: Naik

New Delhi, August 19
The row over pricing of gas has gained a new dimension with past and present lawmakers from the Right and Left airing their views on the issue, which is currently being examined by an empowered Group of Ministers.

While former petroleum minister and BJP leader Ram Naik accused the Centre of trying to default on commitments to investors, union leader Tapan Sen, MP, sought the Prime Minister's intervention to ensure Reliance Industries (RIL) supplied gas to customers at a price agreed in 2004.

Their statements come even as a covert and overt battle is on between Mukesh Ambani-led RIL, which has raised the price of gas from KG-D6 Basin, and Anil Ambani Group firm RNRL that has challenged the move in the Bombay High Court.

"NELP made the world look at India and new investments saw the largest gas discovery being made (in Krishna Godavari basin by RIL in 2002). India is short of both oil and gas and needs such investments. Attempts to renege on promises will definitely not go down well" with investors, he said.

"This has reference to reports that PM's Economic Advisory Council has been asked to look into the pricing for gas from KG-D6 Basin... urge upon you to restrict the focus on pricing of gas to the rate quoted by RIL in 2004 for NTPC project," Sen said in a letter to the Prime Minister.

Naik, however, argued that the New Exploration Licensing Policy (NELP) gives producers the freedom to sell oil and gas at market prices. Using the rights granted to it under Production Sharing Contract of the NELP, RIL proposed to price the gas at $4.33 per million British thermal unit, which is said to be lower than the market price of $4.75 to $5.70 per mBtu.

However, in a 2004 bid called by NTPC, RIL-NIKKO had quoted $2.97 per mBtu as the delivered price.

"This (old) price is nowhere near the price being aired by RIL in the presently ongoing debate on gas pricing, which is highly inflated...," Sen noted in the letter dated August 1.

The new price has also been opposed by power and fertiliser sectors, who want government to regulate prices. To resolve the issue, the government has set up an Empowered Group of Ministers.

"The nation's energy security is at stake," Naik said, adding that it would not be appropriate for the government to decide gas pricing.

A host of foreign firms, including top rank BP Plc and BG Group, have warned government of investor backlash if commitments in NELP were reneged. — PTI

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Rising onion prices may reduce govt to ‘tears’

New Delhi, August 19
Unknown to the UPA government, which is crying itself hoarse about the benefits of a nuclear deal with the US, rising onion prices may arm the opposition with a potent weapon capable of reducing the ruling coalition to tears.

Onion prices, which were blamed for BJP’s rout in Assembly elections to Delhi and Rajasthan in 1998 and threatened to rock the Sheila Dikshit government in Delhi early this year, has risen 11 per cent in the past one week in wholesale markets with production dipping across the country.

“The cost of onion has reached Rs 20 a kg now which is, too, high to buy daily,” said Mamta, a homemaker and resident of the national capital.

The all-India average price of onion in the wholesale market went up to Rs 1,070 a quintal yesterday against Rs 962 per quintal on August 13, according to Nashik-based National Horticultural Research and Development Foundation.

“The main reason for the increase is less arrival of onion in the market,” wholesale trader Sher Singh at the Azadpur Mandi said, adding that there was no stock in the major mandis of Maharashtra.

The onion arrivals in Delhi, one of the largest consuming centre of the country, dipped to about 600 tons yesterday from 1,050 tons at the beginning of the last week mainly due to surge in onion rates in the southern parts of the country, where the supplies are also going from the producing areas, traders said.

Delhi Chief Minister Sheila Dikshit had in February this year sought a ban on export of the edible bulbs through Nafed as part of efforts to ease prices.

Traders also said onion prices may further go up if rains hit the Kolhapur and Bellary regions, from where Delhi gets its supply.

At the Lasalgaon mandi in Maharashtra, a major growing area, onion arrival dipped to 800 tons on August 17 from 1,546 tons of August 13 while at another centre Pimpalgaon it came down to 657 tons from 843 tons.

Experts said the decline in arrival is because of liquidity in stocks at the farmers’ level. India’s onion production was hit in Maharashtra last year as many farmers shifted to sugarcane.

Government agencies had raised the minimum export price of onion this month by $ 20 per tonne to $ 345 per tonne mainly to discourage export and increase the domestic availability of the essential commodity. — PTI

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Patent Row
Milkfed’s overseas plans hit roadblock

Chandigarh, August 19
Failure to patent its popular milk products brand 'Verka' has cut short Punjab State Cooperative Milk Producer's Federation (Milkfed) plans to explore the Canadian and US markets.

A namesake brand has been patented in the US by NRI Kulwinder Dhillon-owned Quality Products Inc, which sells paneer, ghee and dahi in the States. These products bear the 'Real California' seal and status of approval from the US Health Department, the company website states.

"Nobody paid any attention to the export prospects for the 'Verka' range of products," Milkfed’s managing director V.K. Singh said while admitting that now it would be impossible to export and market products under the brand in view of patent restrictions in the US and Canada.

However, Singh said the cooperative was considering an alternative strategy under which it would sign revenue-sharing agreements with firms or individuals in the US and Canada. "We have approached with offers," he added.

Punjab Cooperation Minister Capt Kanwaljit Singh assured that the Milkfed was in the process of protecting its right. — PTI

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Faulty Battery
Airtel, Hutch back Nokia

New Delhi, August 19
Country’s leading mobile operators Bharti Airtel and Hutch today threw their weight behind Nokia, facing a major crisis brought about by faulty component, saying the Finnish handset maker's offer to replace inferior batteries was a first in the country.

"Both on infrastructure and terminal side, Nokia plays a significant role. I genuinely believe any company taking such a pro-active intervention, as by Nokia, is a good sign of consumerism in India and this reaffirms our confidence in them," Sanjay Kapoor, president, Bharti Airtel mobile services, said.

In the handset market, Nokia is the only major player and taking such passionate decisions was never seen in India in the past, Kapoor said, adding: "They are not worried about money but only about their customers".

Echoing Kapoor's views, Harit Nagpal, marketing director of Hutch, said: "There are always chances of failure in operations or businesses such (as the one) run by Nokia, it is how effectively you communicate it with your customers and recover from crisis (is what matters).

According to latest information available, Nokia has got more than 31 lakh messages or phone calls in the last one week and have found 5-6 per cent batteries in the BL-5C batch manufacturing during the period of November 2005 to December 2006. — PTI

Nokia undeterred

Nokia is undeterred over the controversies surrounding its ''BL-5C'' batteries and hopes that consumers will appreciate the measures taken by the company to resolve the problem as soon as possible, a top company official said.

''Our foremost priority is consumer's interest and for that we are taking all possible measures to sort out their problems,'' Nokia India director marketing Devinder Kishore said.

''Nokia has a quality system in which customer is in focus,'' Kishore said, adding, that the matter will be resolved in a customer-friendly way. — UNI

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Bharti signs MoU for Haryana Tech Park
Tribune News Service

New Delhi, August 19
Bharti Airtel, a leading telecom service provider today announced an alliance with Selecto Systems for providing telecom network infrastructure and services for its IT SEZ-Haryana Technology Park (HTP).

The HTP, a notified SEZ, is promoted by Selecto Systems Pvt. Ltd. and technically assisted by Paharpur Business Centre & Software Technology Incubator Park.

Under the MoU, Airtel has been assigned the “Preferred Telecom Service Provider” status and will be given preferential rights to establish and provide telecom infrastructure and services at the HTP, a release said.

The memorandum of understanding (MoU) was signed by Milan Rao, Chief Operating Officer-North, Airtel Enterprise Services and Kamal Meattle, Chief Executive Officer, Selecto Systems.

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Tax Advice
Investment return of cash gift to child taxable
by S.C. Vasudeva

Q. I have a daughter aged 2 years. She receives cash gifts (shagun) on various occasions like on her b’day, religious ceremonies, visits to our relatives. Though individually small in amount, the collective sum becomes considerable per annum.

1. What are its tax implications, whether the amount has to be reflected in parent’s income or not? If not, where it has to be shown in tax return?

2. Can a PPF account be opened in her name and this amount be deposited in that.

3. If we invest the amount in bank FD/KVP what will be the tax implications.

— Rajesh Kapil, Ludhiana

A. 1. The cash gifts received by your daughter are not includible in your income. However, if these are invested anywhere, the income arising on such investment would be includible in your income. In case the amount has been deposited in her bank account the interest earned on such deposit will be includible in your income.

2. The Public Provident Fund Scheme provides for opening of an account by an individual on his behalf or on behalf of a minor of whom he is a guardian. You can deposit this amount in her P.P.F. Account if such an account has been opened by you on her behalf.

3. As indicated herein above, the income arising on the fixed deposit or from Kisan Vikas Patras would be includible in your income in view of the provisions of section 64(1A) of the Income-tax Act 1961 (the Act).

Refund claim

Q. I have an STD a/c jointly with first name of my wife with SBOP Saban Bazar, Ludhiana, from where I retired in February 2005. I had obtained PAN No. in the name of my wife who is a housewife and has no other income except interest on above and P.O. MIS. I had also submitted Form 15G so that bank does not deduct TDS. I did not file the I.T. return for F.Y. 2005-06 as the income is far below the income chargeable to tax i.e. Rs1,35,000/- (maximum limit for women). But the bank had already deducted TDS in March 2006 but had not delivered the relative certificate till March 2007. As such I was not able to claim refund in the previous year’s return. Will it be sufficient to mention the fact about late delivery of TDS certificate or get it confirmed by the branch manager (for the lapse).

— Sudarshan Kumar Jain, Ludhiana

A. It appears from the query that the tax was deducted at source by the bank in respect of interest income reflected by your wife in her return for the year ended 31.03.2006. The refund in respect of tax deducted at source on such interest can be claimed by filing a revised return for the assessment year 2006-07 (financial year 31.03.2006). You can file the revised return on or before 31.03.2008. You should obtain a certificate from the bank confirming that the delay in giving the certificate was on their part and claim the refund for tax deducted at source in the revised return.

Pension among legal heirs

Q. I am working as a lecturer in Panjab University having an income of approximately Rs.2.50 lakh (2005-06). I also get family pension of Rs.1,50,000 on account of the death of my husband who expired in February 2007. I have two minor daughters and have a PAN issued by the Income Tax Department.

I want to divide the total amount of my husband’s pension into three equal parts among three family members. A part of my pension i.e. 1/3 is to be added to my income under other sources. My problem is that before I approach the Head of Department of my late husband, I must know the provisions of the Act or of the law under which, the division of family pension is allowed.

In case the entire family pension of my husband is to be added to my own income as a lecturer, I will have to pay atleast 40 per cent of it towards Income Tax. Please specify the provisions of law of Income Tax, which allow the division of family pension among the legal heirs of the deceased.

— Dr Sanju Dhawan

A. In accordance with the provisions of the Hindu Succession Act 1956, the property of a Hindu, who has died without making a Will is inherited by his legal heirs in accordance with the provisions of Section 8 read with relevant schedule to the said Act. The schedule lists the class-1 heirs which include son, wife and daughters apart from certain other relations. Such heirs inherit the property simultaneously i.e. in equal shares.

In my opinion the family pension is property, which will be inherited by all legal heirs simultaneously. Therefore you should be able to divide such pension in three parts for the taxability. You should, however, take care that this bifurcation actually takes place and 1/3 of family pension is received by your daughters. I may, however, add that in spite of such division of family pension the income of minor daughters will be clubbed with your income in view of the provisions of section 64(1A) of the Act. The above section provides that in computing the total income of an individual there shall be included all such income as arises to his minor child, not being a minor child suffering from any disability specified in section 80U of the Act.

Tax on LIC payments

Q. Monthly pension being received from ‘Jeevan Suraksha Scheme’ of LIC is taxable or exempted from I.T. under section 10(23AAB). Also clarify section 10(23AAB) please.

— Tarsem, Patiala

A. Monthly payments received from Life Insurance Corporation Limited under ‘Jeevan Suraksha Scheme’ will be taxable. These are not exempted from tax under section 10(23AAB) of the Act. The said section deals with the income of a fund which has been set up by the Life Insurance Corporation or any other insurer under a pension scheme to which contribution is made by any person for the purposes of receiving pension from such fund and which is approved by the Insurance Regulatory and Development Authority.

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