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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Satyam board meets today
May touch L&T stake issue; finalise on CEO, funds

New Delhi, January 25
The board of Satyam will meet for two days from Monday to finalise the twin issues of appointing CEO and CFO and working capital arrangement, and may discuss Larsen & Toubro (L&T) increasing stake in the company to 12 per cent.

LIC bonuses may diminish
Chennai, January 25
Life Insurance Corp of India (LIC) policyholders have to brace up for a cut in bonuses as the insurer's surplus could take a hit of around Rs 8,000 crore if the government hikes its share in the surplus to 10 per cent.

Tatas to slash 5,000 jobs at Corus, JLR
London, January 25
Tatas are expected to cut as many as 5,000 jobs at their steel and auto subsidiaries in the UK - Corus and Jaguar Land Rover (JLR) - in the coming weeks. About 3,500 jobs are anticipated to go at Corus this week, while JLR is expected to see another 1,500 layoffs in the coming weeks, The Sunday Times has reported.



EARLIER STORIES




Tata Sons director RK Krishna Kumar (L), L&T’s chairman AM Naik (C) and industrialist Ashok S Ganguly will be conferred with Padma awards for 2009. Ganguly is being honuored with Padma Vibhushan, while Anil Manibhai Naik has been selected for Padma Bhushan. Krishna Kumar will be given Padma Shri.
Tata Sons director RK Krishna Kumar (L), L&T’s chairman AM Naik (C) and industrialist Ashok S Ganguly will be conferred with Padma awards for 2009. Ganguly is being honuored with Padma Vibhushan, while Anil Manibhai Naik has been selected for Padma Bhushan. Krishna Kumar will be given Padma Shri.

Three US banks fail in 25 days
New York, January 25
As the financial woes continue to mount in the world's largest economy, three US banks have already have collapsed so far in 2009. The 1st Centennial Bank, Redlands, is the latest entity that was closed down on January 23 taking the tally of failed banks to 18 since September last year when the credit turmoil turned acute.

$500-m Chinese aid to Pak
China has released $500 million to Pakistan to improve the country's foreign currency reserves, officials here said. The Reserve Bank of China transferred the amount to the State Bank of Pakistan. A Finance Ministry official said Pakistan’s foreign exchange reserves currently stood at $10.2 billion after China released the amount.

Tax Advice
No rebate on car loan repayment
Q I am a senior citizen. I purchased a car, which I got financed from Citi Corp Maruti Finance Ltd. I am paying Rs 6,400 per month as EMI.
Please clarify if any rebate can be taken for its principal and interest amount under the Income-tax Act? Also mention the section of the act, if applicable.
— Hari Singh, Kharar

Appointed
Amiya PaulUdhampur, January 25
Amiya Paul is the new general manager of NHPC’s Salal Power Station, in Reasi district of Jammu and Kashmir. Prior to joining Salal Power Station, he was general manager, Sippi Small Project & Kambang Small Project. He was also instrumental in execution and commissioning of Kambang & Sippi, which are situated in Arunachal Pradesh.—TNS

Corporate Results

 





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Satyam board meets today
May touch L&T stake issue; finalise on CEO, funds

New Delhi, January 25
The board of Satyam will meet for two days from Monday to finalise the twin issues of appointing CEO and CFO and working capital arrangement, and may discuss Larsen & Toubro (L&T) increasing stake in the company to 12 per cent.

A Satyam director said it was quite obvious that L&T picking up more stake in the company would be discussed, as that is the single largest stakeholder at the moment.

LIC, which holds four per cent stake, has found a board berth in Satyam, while L&T does not have a board seat.

Engineering giant Larsen & Toubro tripled its stake in Satyam to 12 per cent on Friday from its earlier 4 per cent.

Earlier, Satyam board member Tarun Das had said the board had been approached by potential Indian and MNC bidders.

Software company iGATE has already expressed interest in the fifth largest exporter.

The six-member government board had met last week and announced that funding arrangements for Satyam to meet operational needs, including the salary bills and vendor payments, up to March 2009 would be be announced before January 28 while the new CEO and CFO will be appointed soon.

It also said a new investment banker would be appointed in the next few days and declared that the immovable properties of the company, including all campuses owned by it, were free from any encumbrance - making them eligible for mortgaging or sale.

In a statement issued after the meeting, the board confirmed that prima facie there appeared to be no basis to doubt the number of employees and the attrition was well under control.

The collections had been robust so far and the board took into confidence the leadership team to work out the ways and means to expedite the collections and also to execute prudent measures for cost optimisation. — PTI

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LIC bonuses may diminish

Chennai, January 25
Life Insurance Corp of India (LIC) policyholders have to brace up for a cut in bonuses as the insurer's surplus could take a hit of around Rs 8,000 crore if the government hikes its share in the surplus to 10 per cent.

Currently, LIC divides its surplus between policyholders and the government in the ratio of 95:5.

The government has sought to increase its share of surplus by amending Section 28 of the LIC Act through The Life Insurance Corp (Amendment) Bill, 2008, now being studied by the Parliamentary Standing Committee on Finance. “Shorn of actuarial calculations, the new surplus-sharing formula will increase LIC's liability (amount kept aside in respect of a “participating” or “with profit” policy on a given date) by around 1.5 per cent or around Rs 8,000 crore. This will result in a corresponding decrease in the surplus,” said R Ramakrishnan, a consultant actuary and a member of the Malhotra Committee on insurance reforms.

A with-profits policy (prevalent in Commonwealth countries) or participating policy (as in the US) is an insurance contract that figures in the profits of a life insurance company. Currently, LIC's bonus rate varies from policy to policy and ranges between Rs 40 and Rs 60 for every Rs 1,000 of sum assured.

As per the amendment bill, LIC can distribute 90 per cent or more of the surplus to its policyholders and apportion a specified percentage of the balance to a separate account, the purpose of which will be spelt out by the government later. The remaining surplus will be paid to the government as dividend. LIC officials were not available to give comments. — IANS

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Tatas to slash 5,000 jobs at Corus, JLR

London, January 25
Tatas are expected to cut as many as 5,000 jobs at their steel and auto subsidiaries in the UK - Corus and Jaguar Land Rover (JLR) - in the coming weeks. About 3,500 jobs are anticipated to go at Corus this week, while JLR is expected to see another 1,500 layoffs in the coming weeks, The Sunday Times has reported.

“It is understood the planned job cuts (at Corus) will come across the company's 23,000-strong British workforce, and are not expected to lead to the closure of any large sites," the report said. — PTI

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Three US banks fail in 25 days

New York, January 25
As the financial woes continue to mount in the world's largest economy, three US banks have already have collapsed so far in 2009. The 1st Centennial Bank, Redlands, is the latest entity that was closed down on January 23 taking the tally of failed banks to 18 since September last year when the credit turmoil turned acute.

On January 16, Bank of Clark County, Vancouver, and National Bank of Commerce, Berkeley, had gone belly up.

The Federal Deposit Insurance Corporation, an independent agency, often appointed as receiver of failed banks on Friday, said it had closed 1st Centennial Bank.

Reflecting the severity of the economic crisis last year alone, US witnessed 25 bank failures - an average of two entities going under each month. Ironically, official data shows that in the last eight years (2000-08), 52 banks have collapsed. — PTI

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$500-m Chinese aid to Pak
Afzal Khan writes from Islamabad

China has released $500 million to Pakistan to improve the country's foreign currency reserves, officials here said.

The Reserve Bank of China transferred the amount to the State Bank of Pakistan. A Finance Ministry official said Pakistan’s foreign exchange reserves currently stood at $10.2 billion after China released the amount.

In a related development the US has also released $101 million as part of the pending nearly $1 billion payment under the Coalition Support Fund. This relates to the expenditures it incurred in the US-led war on terror.

According to official APP news agency, Pakistan was paid the amount on Friday. The payment was withheld for most part of the year 2008. The latest release covers the period until April 2008. 

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Tax Advice
No rebate on car loan repayment
by S.C. Vasudeva

Q I am a senior citizen. I purchased a car, which I got financed from Citi Corp Maruti Finance Ltd. I am paying Rs 6,400 per month as EMI.

Please clarify if any rebate can be taken for its principal and interest amount under the Income-tax Act? Also mention the section of the act, if applicable.

— Hari Singh, Kharar

A I assume that as a senior citizen your income is comprised of either pension and/or only interest. In such a case, no deduction is allowable from total income in respect of instalment paid towards the repayment of loan borrowed for purchasing a car and payment of interest thereon.

IT slab for senior citizens

Q a) What is the income-tax slab applicable to senior citizens (those above 65 years) having income exceeding Rs.5 lakh during the current financial year relevant to assessment year 2009-10?

b) Is any deduction/rebate allowed to senior citizens in the total income-tax payable by them?

— BK Chaudhary, Chandigarh

A. Your queries are replied as under:

a) For assessment year 2009-10, the income of a senior citizen is not chargeable to tax up to Rs 2,25,000. Amount of Rs 75,000 would be taxable at the rate of 10 % and balance amount of Rs 2,00,000 would be taxable at the rate of 20 %. The total tax on an income of Rs 5 lakh would be Rs 47,500 plus surcharge in respect of education cess at the rate of 3 % thereof.

b) There is no special deduction allowable to senior citizens. I may add that deduction under Section 80C of the Income-tax Act, 1961 (the Act), is duly allowable to senior citizens.

IT rebate

Q I am 85 years-old. For 2007-08, I had paid Rs 33,895 as income on June 8, 2008. Kindly clarify if I can get rebate in income-tax return for the financial year 2008-09:

a) On the amount of Rs 33,895 spent by me - paid to Income-tax Department during 2008-09.

b) On gifts given to my sons during 2008-09 Rs.1.5 lakh to my elder son (by cheques) to clear his car loan

c) Gift of Rs 1 lakh in cash given to my younger son for the marriage of his daughter?

— MS Dewan, Ambala Cantt

A Reply to your queries is as under:

a) The income tax paid by an assessee is not subject to any rebate or deduction from the total income of the assessee.

b) No rebate under the provisions of the Act is allowable in respect of the amount gifted by an assessee to his son.

Due arrears

Q I bring to your notice the following advice with which I do not agree. First, you said the arrears on account of the Sixth Pay Commission recommendations are to be considered during the financial year 2008-09 whereas only 40 % of the amount has been paid during 2008-09 and 60 % is to be paid during 2009-10. You have taken the total arrears due in 2008-09. But it is not so. The 60 % arrear is not due in 2009-10. Kindly guide.

Secondly, in reply to a question of Raminder Singh of Patiala dated January 5, 2009, you have advised that interest on NSS is not eligible for deduction under Section 80D. The question is regarding interest accrued on NSC and not NSS.

— Jarnail Singh

A Please refer to my reply given to a query raised by Gurdev Singh of Jalandhar published on December 1, 2008. I have clearly mentioned that in case arrears are due, they will be taxable in the year in which they become due. I have not stated that the arrears that are being paid have become due.

The deduction under Section 80D of the Act is in respect of health insurance premium paid by an assessee subject to the limits specified in the said section.

The deduction in respect of interest earned on NSCs covered under Section 80C of the Act. Such an interest is, in the first instance, added to the total income and thereafter a deduction is allowed under Section 80C of the Act within the overall limit of Rs 1 lakh.

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Corporate Results
HUL net dips to Rs 616 cr

Mumbai, January 25
A marginal 2.49 per cent dip in net profit for the quarter ended December 31, 2008, notwithstanding, FMCG major Hindustan Unilever has hinted that with the fall in raw material prices, its bottomline is likely to look up in the coming quarters. HUL's net profit fell to Rs 615.74 crore for the quarter ended December 31, 2008, on net sales of Rs 4,307.71 crore compared with a net profit of Rs 631.44 crore and sales of Rs 3,687.4 crore in the corresponding quarter previous fiscal.

Financial Technologies

Financial Technologies (India)has said it had recorded a 53 per cent rise in standalone PAT, excluding project divestment income, at Rs 43.2 crore for the third quarter of the current fiscal. The company had reported a standalone PAT of Rs 28.3 crore, excluding project divestment income (PDI), in the same period last fiscal. However, the company said in a regulatory filing that its PAT fell by nearly 92 per cent due to the project divestment income in the last financial year. Financial Technologies' standalone operating revenue went up by 58 per cent to Rs 62.4 crore in Q3 FY'09. The company board declared an interim dividend of 100 per cent per share of Rs 2 each.

PTC India PAT jumps

PTC India Ltd has reported a near four-fold increase in profit after tax at Rs 23.69 crore for the third quarter ended December 31. The company had a profit after tax of Rs 6.21 crore in the corresponding quarter in the previous fiscal, it said in a statement. The total income for the latest quarter jumped almost three times to Rs 2,117.70 crore, compared to Rs 734.56 crore in the corresponding quarter. — PTI

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