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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

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B U S I N E S S

Big investments rain on MP
MoUs worth Rs 1.14-lakh cr signed
Bhopal, October 27
Madhya Pradesh has received investment proposals to the tune of Rs 1.14 lakh crore during the Global Investors Meet here in sectors such as energy, health and education.

India, US form aviation steering panel
New Delhi, October 27
India and the US have formed a joint aviation steering committee for smoothening the increasing aviation cooperation between the two countries. The committee also held its first meeting yesterday.

India ranks 5th in forex reserves
Mumbai, October 27
India has joined the elite group of world's five biggest holders of foreign exchange reserves as it added about $4.5 billion last week to take the kitty to $261 billion. The country surpassed South Korea, which had $257 billion in forex reserves as of September-end, to stand at the fifth spot.

PNB revises interest rates on FDs
New Delhi, October 27
Punjab National Bank today announced a 50 basis point increase in interest rates on fixed deposits for term of 1-2 years while slashing rates by 25 basis points on various other maturities. Interest rate has gone up by 50 basis points to 8.5 per cent for 1-2 years fixed deposits, PNB said.

Investor Guidance
NRIs can avail rebate under Section 80C
Q: 1. I have invested NRE Rs 1 lakh in Indian equity mutual fund scheme. I have provided my full name for the fund investment. However, on my PAN card only my first name appears. Does this matter or should I get the PAN data corrected?

Aviation Notes
Accident at IGIA raises safety concerns
Murder, foul-play, suicide or an accident. Call it whatever one may, the fact is that there is no discipline and transparency at the Indira Gandhi International Airport (IGIA), where any untoward happening can take place.


Former Miss India and actress Neha Dhupia poses with a gold necklace at the inauguration of the Festival of Gold exhibition in New Delhi on Saturday.
Former Miss India and actress Neha Dhupia poses with a gold necklace at the inauguration of the Festival of Gold exhibition in New Delhi on Saturday. The annual gold show, organised by government-owned trading company MMTC, country's largest importer of gold, displayed over 70,000 pieces of gold and diamond jewellery. — AFP

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Big investments rain on MP
MoUs worth Rs 1.14-lakh cr signed

Bhopal, October 27
Madhya Pradesh has received investment proposals to the tune of Rs 1.14 lakh crore during the Global Investors Meet here in sectors such as energy, health and education.

As many as 96 MoUs for projects worth over Rs 1.14 lakh crore have been signed during the two-day summit, with industrialists seeking to invest in sectors, including food processing, energy, health, IT and education, Chief Minister Shivraj Singh Chouhan told reporters.

While 10 MoUs have been signed for starting private universities in the state with an investment of Rs 2,731 crore and four agreements have been inked for projects in health sector worth Rs 1,685 crore.

In industrial sector, six MoUs have been signed paving the way for investment of Rs 46,363 crore. Investors have entered into agreements to invest Rs 54,840 crore in energy sector, Chouhan said, adding projects worth Rs 6,407 crore were also proposed in the IT sector.

To a particular query, he said though Assembly elections, expected by next year-end, could have proved a major setback with investors becoming apprehensive, their enthusiasm to invest demonstrated faith in the state government.

He, however, clarified "no poll motive" should be attached with the initiatives taken by the state government.

Claiming that Madhya Pradesh is now being considered as an ideal destination for investment, he said state industries and commerce minister Jayant Malaiyya and heads of other departments have been asked to review the progress of projects every month and clear hurdles faced by industrialists.

The investors have also been asked to produce time-bound project implementation plan so as to usher the pace of development, Chouhan said. — PTI

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India, US form aviation steering panel
Tribune News Service

New Delhi, October 27
India and the US have formed a joint aviation steering committee for smoothening the increasing aviation cooperation between the two countries. The committee also held its first meeting yesterday.

The US Federal Aviation Administration’s assistant administrator for international aviation James Filippatos, who was here on a visit, made the announcement of the setting up of the committee.

The joint aviation steering committee has been formed with the ministry of civil aviation.

The joint committee will bring the US and Indian aviation officials together every six months to develop and prioritise an overall bilateral aviation work plan.

The committee will oversee the work of various working groups, which will focus initially on air traffic control, flight standards, airports, airworthiness and environmental issues.

Each working group will be chaired jointly by a senior executive from the Federal Aviation Administration and the ministry of civil aviation and will develop and implement a work plan and report its progress regularly to the steering committee.

According to the US embassy officials here, in addition to participating in the first meeting of the US-India joint aviation steering committee, Filippatos participated in a meeting of the US-India Aviation Cooperation Program, a public-private partnership between the US trade and development agency, the Federal Aviation Administration, US aviation companies and the Government of India. The first program of an air traffic training exchange was also launched.

The air traffic training exchange will concentrate on “high-density” air traffic operations at India’s two busiest airports, New Delhi and Mumbai. The project will be completed in four phases, permitting Indian and American air traffic control officials to work together.

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India ranks 5th in forex reserves

Mumbai, October 27
India has joined the elite group of world's five biggest holders of foreign exchange reserves as it added about $4.5 billion last week to take the kitty to $261 billion.

The country surpassed South Korea, which had $257 billion in forex reserves as of September-end, to stand at the fifth spot. While India reports its reserve position every week, South Korea does so on a monthly basis.

China leads the pack with $1,434 billion, followed by Japan ($946 billion), Russia ($440 billion) and Taiwan ($263 billion).

According to Reserve Bank's weekly bulletin, India's foreign exchange reserves increased by about $4.5 billion during the week ended October 19. — PTI

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PNB revises interest rates on FDs

New Delhi, October 27
Punjab National Bank today announced a 50 basis point increase in interest rates on fixed deposits for term of 1-2 years while slashing rates by 25 basis points on various other maturities.

Interest rate has gone up by 50 basis points to 8.5 per cent for 1-2 years fixed deposits, PNB said.

On the other hand, interest rates have been reduced by 25 basis points on all other maturities. For instance, deposits for 180 days to less than one year would now attract interest rate of 7.25 per cent against 7.5 per cent earlier.

The interest rate on 2-5 years deposits has been slashed to 8.5 per cent as compared to 8.75 per cent earlier, it said. The new rates would come into effect from October 29. — PTI

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Investor Guidance
NRIs can avail rebate under Section 80C
by A.N. Shanbhag

Q: 1. I have invested NRE Rs 1 lakh in Indian equity mutual fund scheme. I have provided my full name for the fund investment. However, on my PAN card only my first name appears. Does this matter or should I get the PAN data corrected?

2. I have converted NRE amounts into NRO FD to get interest at the rate of 9.75 to 10 per cent. I want to claim tax deduction. What are the deductions for an NRI having taxable income in India to reduce the tax incidence on the NRO interest or house property income since PPF and other small savings are ruled out?

— G S Waghchaware

A: 1. Yes, It would be necessary to get your name changed either in PAN or all your investments. It would be better if you do in your PAN data since it is best to have your PAN card with your full correct name.

2. Though PPF etc. is not available to you as an NRI, you can still avail deductions under Section 80C by investing in equity linked savings schemes of mutual funds. NRIs can invest in such schemes. Another avenue is life insurance.

Seed capital

Q: I am 50 years old and have a son and a daughter aged 17 and 19 respectively. So far I have earmarked a certain sum from my investments for them in terms of needs such as higher education, setting up of house after marriage etc. However, lately, my daughter has taken interest in the stock market and is keen on trying her hand at investing. In this regard, I intend to gift her a small sum as seed capital. And not to leave the other sibling out, I intend to do the same for my son too. Are there any tax implications of this?

— Vilas Shah

A: In essence, what you are proposing to do is to gift your children money so that they can invest it on their own. It is indeed admirable that you intend to let them try on their own and learn from their experiences, good or bad. There will be no tax on the gifts that you make to them as there is no tax applicable on gifts given by relatives. As per the IT Act, you will qualify to be a relative of theirs. However, in the case of your son, who is a minor, clubbing provisions will apply. In other words, any income that your son earns will be clubbed in your hands. However, since your daughter has attained majority, clubbing will not be attracted. Therefore, it would be advisable for you to wait for one year till your son turns into major to gift him the amount.

FD interest

Q: I have received a lump sum amount due to my retirement. If I ask my wife to deposit say Rs 10 lakh as FD, she will get Rs 95,000 as interest, which will be below the tax bracket as she is not earning. Does she have to fill an IT return or does the bank directly deduct the tax?

— Ritesh

A: It seems from your question that you intend to invest a lump sum received on your retirement in the name of your wife by way of a fixed deposit. In this regard, note that clubbing provisions will apply on the interest that your wife earns and the same will be taxed in your hands.

NRI status

Q: I am working in a software company. My company wants to send me to the USA for project-related work. I have H1B Visa. My stay in the USA will be for one year initially. The duration can be extended, if needed. Here are my questions:

1. Shall I be called an NRI during my stay in the USA?

2. I have a demat account here and I am possessing shares of different companies. Do I have sell them before moving to the USA?

3. Can I sell them when I will be in the USA? Can I buy shares when I will be there?

4. Do I have to pay any tax for the trading?

— Pappu

A: A resident is one who, during a financial year (FY)- which is from April to March, satisfies any one of the following two basic conditions: He is in India for at least a)182 days in the FY OR b) 365 days out of the preceding four FYs AND 60 days in the FY. The stay in India need not be continuous. Most persons going abroad for an employment for the first time will have the status of a resident since they will be covered by the ‘b’ clause above. Therefore, if an Indian citizen leaves India in any year for the purpose of employment, or as a member of the crew of an Indian ship, the 60 days in the clause ‘b’ above is to be replaced by 182 days. In other words, they will be treated as residents only if they are in India for 182 days or more in the current FY. A person, who is not a resident, is an NRI. You do not have to sell the shares of your existing companies. However, your demat account will be redesignated as NON PINS and you cannot buy any shares in such demat account. You will have to open separate demat account in your new status as NRI under the PINS scheme. Your bank will help out with the procedure for the same. You can continue to buy shares when you are in the USA. The tax depend upon the nature of your trade, however, note that long-term gains are tax-free for all categories of investors, NRIs or otherwise.

Wealth tax

Q: In case of gold ETFs (exchange traded funds) is wealth tax applicable? Also, is it possible to sell the units back to the fund and convert the investment to gold? Would wealth tax be applicable at that time? And lastly, say I have total net wealth in the form of gold of Rs 20 lakh, will the tax be 1 per cent of amount above Rs 15 lakh or 1 per cent of the actual wealth of Rs 20 lakh since it is above Rs 15 lakh?

— Laxmi Nayar

A: The wealth tax is not applicable on gold ETF units. However, if such units are converted back into physical gold, wealth tax will be applicable. The rate of wealth tax is 1 per cent of net wealth above Rs 15 lakh. In the above case, wealth tax would be applicable at the rate of 1 per cent on the amount above Rs 15 lakh and not on the aggregate amount.

The authors may be contacted at wonderlandconsultants@yahoo.com

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Aviation Notes
Accident at IGIA raises safety concerns
by K.R. Wadhwaney

Murder, foul-play, suicide or an accident. Call it whatever one may, the fact is that there is no discipline and transparency at the Indira Gandhi International Airport (IGIA), where any untoward happening can take place.

The IGIA, the second busiest international airport after Mumbai, has become a cesspool of corruption and inefficiency as there is little rapport between the Delhi International Airport authorities, a private undertaking, and the Airports Authority of India (AAI).

It is a pity — thousand pities - that a young, innocent engineer of high calibre, Sansruti Sinha, should have been crushed at the busy time between 9 pm and 10 pm at tarmac without any one seeing it. Had another commander of another private airline not noticed it, Sansruti’s

mysterious death might have remained unknown for some more time. The commander’s phone to ATC (air traffic controller) led to activity at the tarmac.

Even after 72 hours, none, not even her office (Air Deccan), knows how and when Sansruti died. Does not this establish gross carelessness on the part of the authorities?

Shockingly, the time of her death is being worked out on the basis of stoppage of her wrist watch, which, according to investigators, stopped functioning following impact.

The IGIA has been the scene for several misdeeds. The incidents of smuggling of firearms, thefts, human trafficking and even molestations have been on the increase.

There have been two other ‘freak’ deaths at the IGIA. Some years ago, a young girl died when she was trapped in the escalator. Earlier, the Indian Airlines’ engineer was sucked into aircraft as engines were left on full throttle.

Sansruti was one of the competent and devoted workers. Her untimely death has sent shock waves at the IGIA and at other airports. Several questions now need to be asked.

They are:

1. What time Sansruti left her office?

2. Did she leave alone?

3. Was she walking towards hangar to examine an Air Deccan aircraft?

4. Was there none at hangar when she was hit?

5. Why none of her colleague made inquiries when she did not report back?

6. How was it that none noticed her body lying near hangar for about 15 minutes?

7. How was it that none from Air Deccan, DIAL and AAI reacted when her body was found on the tarmac?

8. Why are security and other concerned agencies tight-lipped?

According to airport sources, it was peak time and lights were blazing when the accident occurred. No wonder, the family members suspect some foul play. They feel that only impartial probe can solve the mystery of death of Sansruti.

Ground handling is a very lucrative but intricate and demanding trade. All airlines — domestic and international — have to abide by the rules while staying autonomous. They are free to appoint their own staff from ticketing to reservation in town offices and handle their own affairs at airports. They should be left alone to do ground handling or engage another agency. This uncertain situation at the IGIA is yet another reason for lawlessness obtaining at tarmac and other areas of operations. Discipline is the need of the hour.

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