High-level Indian presence at air show today
Forex reserves up
Time for international airport at Goa
China suspends export of
Gift money can be invested in PPF
Moscow, November 10
"Currently, India's exports to Russia are around $ 1 billion, which is less than 1 per cent of India's overall exports and Indian imports from Russia are about 1.2 per cent of Russia's total exports," he said in an interview to Russia's government agency RIA Novosti ahead of his two-day Moscow visit beginning tomorrow.
According to him, relatively high-transportation costs and inadequate exchanges between Indian and Russian businessmen were some of the reasons for low trade volumes.
"Diversification of trade to high value items such as gems and jewellery could offset the transportation cost disadvantage. Rationalisation of tariff lines, setting up of joint ventures and greater information exchange would also contribute to enhancing trade," he said.
"Additionally, there is potential for investment in sectors such as machinery, automobiles, pharmaceuticals, agricultural and food products."
The Prime Minister called for a greater involvement of the private sector, which is essential to expanding bilateral trade. Quality standards and certification requirements also need to be mutually agreed upon.
"I look forward to discussing these issues with President Putin," Singh said ahead of Monday's summit in the Kremlin.
He said the two governments had set up a joint study group last year to examine measures to boost bilateral trade to $ 10 billion by 2010 and to study the feasibility of signing a Comprehensive Economic Cooperation Agreement.
The report of the joint study group has been submitted, and is in the process of examination by the two governments.
About the lack of mutual investments, he said, "One of the reasons for the currently limited investments seems to be the lack of information and awareness among the business communities on both sides. We set up the India-Russia Forum on Trade and Investment last year for business-to-business interaction. The first meeting of this forum was held in February 2007 in India with the participation of over 500 businessmen from both countries."
The next meeting of the Forum is scheduled for February 2008 in India. — PTI
Mahurat trading ends in red
Mumbai, November 10
It was the first time in the last seven years that the market witnessed a negative ending on this auspicious day of trading as the market was observing correction and consolidation for the past few sessions, dealers said.
Many heavily overvalued scrips took a beating with the Reliance pack that had run up sharply in recent times bearing the brunt of the hammering.
The Sensex opened high to touch 19,329 points at the start of the one-hour mahurat trading yesterday and fell sharply at the end of the session to close at 18,737 points as a large number of investors booked profits.
Similarly, the broad-based National Stock Exchange index Nifty ended 35.50 points low at 5663.25 from the previous close of 5698.75, in the one-hour mahurat trade. Nifty started with a marginal gain at 5703.45, touched a low of 5614.20 by shedding 180 points from a high of 5794.20 during the hour-long trade.
Usually, investors buy huge quantities of stocks on mahurat trading in the hope that the shares will appreciate substantially through the year. "There are usually more buyers than sellers during mahurat trading," said a veteran stockbroker Vasantlal Choksi.
The buzz in the market was that a number of bull operators had been shorting shares of the Reliance group like Reliance Petroleum Ltd and Reliance Natural Resources Ltd in the derivatives trade and were caught on the back foot when the scrips surged recently.
"I do not think economic conditions in USA are very good. Asian markets there are deteriorating at a fast speed. We don't know how this uncertainty in USA will pan out, what value will the dollar lose, and what disorder it can cause to financial markets. I am extremely bearish on US financial markets and think the sub-prime problem is going to be far larger than what people are imagining," a big bull Rakesh Jhunjhunwala had told a TV channel recently.
After his warnings of a prolonged correction telecast early in the day, investors flooded online forums and via SMS messages among investor groups causing panic. "I sold off my entire portfolio during mahurat trading," says Vasant Sawant, a software engineer. "I will buy when the market falls sharply," states Sawant.
Among the key indices, NTPC, Reliance Ind, Reliance Communication, HPCL, BPCL, Suzlon Energy and Cipla were among the top gainers. Whereas, major IT, telecom and banking stocks ended in red. Wipro, ICICI Bank, Satyam, ACC, Bharti Airtel, Tata Steel, SAIL and Tata Power were among the top losers during the mahurat trade.
Dubai, November 10
With India planning to organise a regular air show, the high-level delegation will meet the various facilitiers and see the arrangements at the Dubai event.
India will have a high-level presence at the five-day air show, where both a high-level civil aviation and defence delegation are taking part, Indian consul-general Venu Rajamony said.
Thirteen Indian companies, including HAL, will put up stalls at the show. The defence delegation will consist of Vice Chief of air staff.
"The scale of growth over the last two years - which amounts to 40 per cent in booked floor space - reflects the massive growth the Middle East's aviation industry is experiencing across all segments," Sheikh Ahmed Bin Saeed Al Maktoum, president of the Dubai Civil Aviation Authority and chairman of Dubai Airports, said in a statement.
"This year, we have 130 newcomers from 24 countries - which accounts for over 10 per cent of the overall exhibitor profile, with 11 national pavilions, 91 chalets and 15 outdoor pavilions - up from five in 2005 - it truly is a full-house scenario," said Alison Weller, aerospace director of Fairs & Exhibitions (F&E), the event organiser.
F&E chairman Virginia Kerr said, "Orders worth $ 21.3 billion were placed last year. We expect this year's figures to exceed that." With 850 exhibitors from 50 countries and over 140 aircraft on display, the airshow, which is on from November 11-15, is the world's third largest global aerospace event after Le Bourget in Paris and Farnborough in the UK. — PTI
Mumbai, November 10
The Reserve Bank of India (RBI) said in its Weekly Statistical Supplement that the foreign currency assets went up by $ 3.64 billion to $ 258.264 billion for the week.
Foreign reserves were riding high for last two months on good foreign funds inflow in the country. A part was also contributed by the reported intervention of the RBI to mop up excess liquidity in the market, dealers said.
Foreign currency assets, as expressed in dollars, include the effect of appreciation or depreciation in non-US currencies (euro, sterling and yen) held in reserves.
As per the figures released by the RBI, after a month without any change, the country's gold assets marked an increase of $ 444 million to touch $ 7.811 billion. However, SDRs were unchanged at $ 13 million and the reserves in IMF went down by $ 11 million to $ 430 million. — UNI
Time for international airport at Goa
Goa is an attractive hub for tourists of all classes - young and old, rich and poor. Tourism industry is one of the major money earners for its economy. Foreigners consider their trip to India incomplete without visiting Goa.
The government should upgrade airports at Dabholim and Mopa so that foreign tourists are able to reach Goa directly instead of going via Mumbai. This will reduce pressure on the Mumbai airport where several other airlines are planning operations. Many aviation analysts say Goa deserves a new international airport. The ideal location for the new airport is in north of Mopa.
The defence constraints and continued change in government in Goa should not prevent authorities from constructing or upgrading the airport at Mopa.
Like Goa, Agra is another centre, which urgently needs an independent international airport. As Taj is a must for tourists, an international airport will considerably reduce congestion at the Indira Gandhi International Airport (IGIA), where operations are causing considerable worries to commanders, airlines and passengers.
The Delhi International Airport outfit (DIAL), a private body, has been claiming of several planned several measures to help facilitate passengers during foggy season. But this is mere loud talking. The analysts think that the situation will be worse than before because heaps of rubbish and rubble have already started affecting visibility.
“A thick layer of dust often hangs on and around runway and this reduces visibility to less than 1200 yards,” said officials, adding “When it happens in November much before fog envelopes the airport in December and January, it is a sufficient cause to get concerned about the situation”. Despite DIAL’s claims, its efforts do not appear to be good enough for the operations to continue unhindered.
The mystery about the death of a girl, an engineer of the private airline on the tarmac at domestic wing of IGI airport remains unsolved. The culprit, who crushed her under the wheel, remains at large. The aviation ministry has reviewed the safety measures and directed the airlines to reduce plying of vehicles. Walking and operations of two-wheelers have also been restricted.
Beijing, November 10
Ordering suspension of exports, China's quality control watchdog said it has sealed the bead toys, highly rated for its popularity with kids, at the level of the producer, whom it did not name and asked the quality control agencies to launch inspections.
The action came in response to recall of 4.2 million "Acqua Dots" in the US and in Australia where the arts and crafts toy is sold under the brand name "Bindeez".
Nine children reportedly fell ill so far in the US and three in Australia after swallowing the beads. "Children who swallow the beads can become comatose, develop respiratory depression or have seizures," a CPSC statement in the US warned. — PTI
Tehran, November 10
"The content of the Peace Pipeline contract has been finalised and all the points prepared by the two sides' legal experts have been re-read and agreed by the two sides," Iran's deputy minister, in charge of the project, Hojatollah Ganimifard, was quoted as saying by the Iranian oil ministry's news service Shana today.
"The remaining points which are technical issues... must be studied within a month to make the contract ready for the simultaneous signing by the heads of the two countries," Ghanimifard said.
Tehran and Islamabad have neared a conclusion to the contract in the absence of India, a potential party to the deal.
Talks on the $ 7.4-billion project to supply gas to India through a 2,600-km (1,615-mile) pipeline began in 1994 but were stalled by tensions between India and Pakistan.
Talks resumed early in 2004 along with peace moves between India and Pakistan but dragged because of New Delhi's opposition to periodic price reviews.
An agreement between Iran and Pakistan marked a breakthrough in the talks when they agreed to a periodic revision of gas prices every three years instead of a long-term fixed price. — AFP
Gift money can be invested in PPF
Q: Recently on our anniversary, my wife and I received around Rs. 40,000 by way of gifts which we promptly banked. I wish to invest this money into my PPF account. However, one of my friends advised me that this is not allowed under law as the PPF investment should be out of income earned during the year and not from receipts such as gifts etc. Please advice.
A: There was a time when PPF investments had to be made out of income chargeable to tax. Which meant that you had to make investments from taxable income earned during the year. However, this requirement has since been dropped and there is no bar on you investing money received as gifts in PPF.
Wealth tax on cars
Q: Recently I read that wealth tax is applicable on cars. I already own a car the market value of which would be around Rs 8.50 lakh. I am about to buy a second car of say Rs 12 lakh. Would I be liable to wealth tax?
A: Assuming that the cars are meant for your personal use and you are not in the business of car hire, then yes, the purchase of the second car would make you liable to wealth tax. There are other assets like property, jewellery etc, which are also liable to wealth tax. In the absence of details on these, we cannot comment on your total wealth tax liability. However, as wealth tax is payable on net wealth over Rs 15 lakh, assuming the cars would be the only asset in your possession liable to wealth tax, tax planning wise it would make sense to buy the second car in the name of any of your family member such that each one can take optimum benefit of the initial Rs 15 lakh basic exemption.
Tax on home tuitions
Q: My wife conducts tuitions at home and earns around Rs 12,000 to Rs 15,000 a year. Most of this money is received in cash. Is she liable to pay taxes? If so, since she has not put the money into the bank, would she be penalised? We use the money for our day-to-day household expenses and hence never put the money in the bank.
A: There is no requirement as such to necessarily bank the money. However, if her net income is above Rs 1,45,000 in the entire year, she is liable to pay taxes and file a tax return. Now assuming that the fees are Rs 15,000 per month, the entire income for the year works out to Rs 1,80,000. However, she may incur some expenses in order to earn the income. Such expenses are deductible against the income and tax is payable only on the net figure. Therefore, any amount spent during the year on books, reference materials, stationery etc. can be adjusted against the income. It would be advisable to maintain informal books of accounts for a precise and correct count of income and expenses such that she doesn’t end up paying less or more than what is due from her.
Q: While I know the limit under Section 80C is Rs 1 lakh, can I invest more than this amount? What I mean is that though the tax exemption is limited to Rs 1 lakh, for my savings purposes if I wish to invest over and above Rs 1 lakh, is it possible under law?
A: Yes, it is subject to limits as per rules applicable to individual instruments. For example, PPF rules prohibit an investment of over Rs. 70,000 a year by any investor. Therefore, what you propose may not be possible in the case of PPF. However, take tax saving mutual funds. Here, there is no limit on how much you can invest — you can invest any amount you desire, however, tax concessions will be limited to Rs. 1 lakh. So it depends upon instrument to instrument.
TDS and NREs
Q : I am an NRI living in USA having NRE accounts in India. I have several FDs with an Indian bank currently and I notice that there is a TDS that gets deducted whenever a FD matures. I would like to send a request to the bank stating that it does not need to deduct the tax, but I will pay. What form do I need to send for that?
A: The interest on NRO is fully taxable at the rates applicable to residents. But there is no income threshold under which TDS is not chargeable. However, TDS is applicable @30.9% on the entire NRO interest (without any threshold) and nothing can be done in practice, to avoid it. The TDS is applicable on accrual basis on cumulative deposits. The only practical recourse open is to claim refund by filing tax returns.
In case the interest payable is over Rs. 10 lakh from the same branch of the bank, there is a surcharge of 10% taking the total tax to 33.99%.
The TDS is not the same as your tax liability. This liability will be computed on the basis of the income tax rates which again depend upon your income and the exemptions, deductions and rebates you can claim.
If your tax liability is less than the TDS, the only practical way to get the refund is to file the tax returns. Form 15-G (for non-seniors) or 15-H (for senior citizens), requesting for non-application of TDS is not available for NRIs.
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