SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Chevron to quit RPL
Mumbai, February 28
Reliance Industries Ltd (RIL) announced here today that it would buy out the 5 per cent stake of Chevron Corp in Reliance Petroleum Ltd (RPL). The buyout will clear all hurdles for the nation’s largest private firm to merge its refining subsidiary with itself.

ATF prices cut by 7%
New Delhi, February 28
State-run fuel retailers today slashed jet fuel or aviation turbine fuel (ATF) rates by a further 7 per cent, making it the 11th reduction since September last year. ATF prices in Delhi were slashed by Rs 2,052 per kilolitre to Rs 27,106 per kl effective midnight tonight, an official of IndianOil Corp, the nation’s largest fuel retailer, said.

Revision of STD tariff
Chandigarh, February 28
With the revision of STD tariff i.e. Re 1 per two minutes w.e.f. 1st March, 2009, BSNL has decided to scrap the ‘95’ facility. Now every subscribers will be provided with the facility of dialling ‘0’ on his landline/WLL so as to facilitate STD dialling at reduced rate subject to technical feasibility.



EARLIER STORIES




A pedestrian walks by the Virgin Megastore on Friday in San Francisco. As the recession deepens, the San Francisco Virgin Megastore will shut its doors after 14-years in business
A pedestrian walks by the Virgin Megastore on Friday in San Francisco. As the recession deepens, the San Francisco Virgin Megastore will shut its doors after 14-years in business. — AFP

Subbarao, Montek discuss global issues 
New Delhi, February 28
Amid intense anticipation of rate cuts by the Reserve Bank, its Governor D Subbarao today met Planning Commission Deputy Chairman Montek Singh Ahluwalia but the agenda was G-20 ministerial meeting in London next month.

UBI cuts home, car loan rates
Mumbai, February 28
Public sector Union Bank of India (UBI) today slashed interest rates on home loans by up to one per cent and new car loans by up to 1.5 per cent with effect from tomorrow.

Aviation Notes
Near-miss: Three choppers landed without clearance
The probe panel has blamed the Air Force (Navy) helicopter pilots for the near-miss incident with an Indian Airlines A-321 aircraft at Mumbai airport on February 9. The findings are that the three helicopters landed without obtaining clearance from the tower or even contacting it. If this is correct, then the leader of the helicopters is largely to be blamed for not adhering to procedure. The report, submitted about a fortnight ago, says providence more than human endeavour prevented tragedy from taking place.

Investor Guidance
NRIs cannot open fresh accounts in NSO schemes
Q: I am a US citizen currently visiting India. My query is regarding PPF account that I had opened when I was the resident of India. Can I continue to operate and invest in PPF since the investment is for 15 years out of which only nine have elapsed? If not, what happens to my PPF investment balance? Can the same be repatriated?

 





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Chevron to quit RPL
Tribune News Service & PTI

Mumbai, February 28
Reliance Industries Ltd (RIL) announced here today that it would buy out the 5 per cent stake of Chevron Corp in Reliance Petroleum Ltd (RPL). The buyout will clear all hurdles for the nation’s largest private firm to merge its refining subsidiary with itself.

RIL’s stake in RPL will rise to 75.38 per cent after buying Chevron’s stake. Both company’s will have their respective board meetings on Monday to discuss the merger.

“Chevron confirms that it has agreed to sell its 5 per cent equity interest in RPL to RIL for an undisclosed amount,” company spokesperson Lloyd Avram said in an e-mail response.

Neither Chevron nor Reliance would indicate the price at which 22.50 crore-equity shares will change hands. Insiders, however, said the deal would be at Rs 60 a share - the same price at which the US firm had bought the stake in April 2006.

The Chevron spokesperson cited “continuing low global demand for refined products as principal reason” for selling its interest in the refinery.

As per the April 2006 agreement, Chevron was to supply one-third of RPL’s crude needs (over 9.6 million tons a year) and lift half of the gasoline and diesel produced from the refinery.

Chevron couldn’t make much headway on any of these.

A RIL statement acknowledged that RPL and Chevron were to enter into crude supply and product off-take agreements.

“Chevron, RIL and RPL have jointly decided not to proceed with the conclusion of these agreements,” it said.

The Equity Investment Agreement of 2006 provided that in case these agreements were not executed, Chevron shall sell and RIL shall buy the 5 per cent shares of RPL.

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ATF prices cut by 7%

New Delhi, February 28
State-run fuel retailers today slashed jet fuel or aviation turbine fuel (ATF) rates by a further 7 per cent, making it the 11th reduction since September last year. ATF prices in Delhi were slashed by Rs 2,052 per kilolitre to Rs 27,106 per kl effective midnight tonight, an official of IndianOil Corp, the nation’s largest fuel retailer, said.

But for the one-off 3.3 per cent increase in rates on January 16, jet fuel prices are declining in tandem with the fall in international oil rates. In Mumbai, ATF rates were down to Rs 27,861 per kl from Rs 29,985.19 per kl.

The reduction in jet fuel prices announced today varied from airport to airport depending on local taxes and levies and an on average worked out to Rs 2,125 per kl.

ATF prices had peaked to Rs 71,028.26 per kl (in Delhi) in August on international crude prices touching historic high of $147 a barrel. But they have since been slashed every month till October and twice in November. After the 11th reduction, jet fuel is hovering at early 2005 levels.

State-run IndianOil Corp, Hindustan Petroleum and Bharat Petroleum revise ATF rates on the 1st and 16th of every month based on the average international jet fuel rates in the preceding fortnight. — PTI

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Revision of STD tariff

Chandigarh, February 28
With the revision of STD tariff i.e. Re 1 per two minutes w.e.f. 1st March, 2009, BSNL has decided to scrap the ‘95’ facility. Now every subscribers will be provided with the facility of dialling ‘0’ on his landline/WLL so as to facilitate STD dialling at reduced rate subject to technical feasibility.

However, if subscriber refuses to take this facility he can contact the nearest BSNL customer service centre for registering unwillingness. The customer may contact at call centre no 1500 for further details.— TNS

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Subbarao, Montek discuss global issues 

New Delhi, February 28
Amid intense anticipation of rate cuts by the Reserve Bank, its Governor D Subbarao today met Planning Commission Deputy Chairman Montek Singh Ahluwalia but the agenda was G-20 ministerial meeting in London next month.

“The agenda (of the meeting) is for G-20 meeting of finance ministers and central bank governors,” Subbarao told reporters here after the meeting It was a preparatory meeting for the G-20 he said and added that “this (the meeting) has nothing to do with immediate monetary policy issues”.

When asked whether the rates cut came up for discussion, the RBI Governor said: “I am not prepared to answer this question.” The meeting is believed to have taken stock of the global macroeconomic situation and preparations for India’s viewpoint on how to deal with international financial meltdown.

Disappointing GDP numbers for the third quarter have sparked off speculations that the central bank may soon cut rates since inflation is way below 4 per cent. — PTI

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UBI cuts home, car loan rates

Mumbai, February 28
Public sector Union Bank of India (UBI) today slashed interest rates on home loans by up to one per cent and new car loans by up to 1.5 per cent with effect from tomorrow.

While, the second largest state-owned lender, Punjab National Bank, also reduced its interest rates on new car loans by 0.5 per cent from March 1.

With the reduction, PNB will now offer new car loans for an interest rate of 10.5-11 per cent while Union Bank will give new car loans at 11-11.25 per cent, the two banks said in different statements today.

An up to one per cent reduction in Union Bank's new home loan rates will make the product available for a rate in the range of 9.75-10.75 per cent to its customers, the bank said.

Earlier this month, the SBI had announced a freeze on its interest rates for one year at 10 per cent on new car loans availed on or before May 31.

SBI has also frozen interest rates on new car loans at 10 per cent and farm loans at 8 per cent for a period of one year, after which the rates would be restored to the card rates on respective schemes. — PTI

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Aviation Notes
Near-miss: Three choppers landed without clearance
by K.R. Wadhwaney

The probe panel has blamed the Air Force (Navy) helicopter pilots for the near-miss incident with an Indian Airlines A-321 aircraft at Mumbai airport on February 9. The findings are that the three helicopters landed without obtaining clearance from the tower or even contacting it. If this is correct, then the leader of the helicopters is largely to be blamed for not adhering to procedure. The report, submitted about a fortnight ago, says providence more than human endeavour prevented tragedy from taking place.

It is not understood why the findings are not being made public. It should have been done immediately after the report was finalised. The findings are vital so that similar incidents do not recur.

Surprisingly, the aviation authorities in the country refuse to provide facts and figures to the media to clear misunderstandings and misgivings existing in the industry. Flying is highly technical while media is totally non-technical. The journalists need to be briefed so that errors and omissions in reporting are minimal.

Repeated attempts to contact director-general of civil aviation (DGCA) Naseem Zaidi have proved futile. Minister of State for Civil Aviation Praful Patel has also kept quiet. The findings have yet to be tabled.

The report has not touched upon another vex subject i.e. whether it continues to be mandatory to close civil operations when the VVIP movement is in progress. There are three divergent opinions: (1) recommendations, listed in the prestigious Blue Book, have been done away with. (2) Only Prime Minister and President are provided security cover and, when their movement is in progress, the airport is closed minutes before and minutes after the VVIP operations and (3) The President of India is excluded from this security list and only the Prime Minister now is provided the security cover in air.

It is not known why the Prime Minister’s Office, Civil Aviation Ministry or the DGCA is not placing facts on the table as to what rules are in operation during the VVIP movement?

According to airport sources, the two derostered air traffic controllers are likely to return to their duties on the quiet because as per the report, they were not guilty of any indiscretion. The question is why were they penalised before the probe was completed?

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Investor Guidance
NRIs cannot open fresh accounts in NSO schemes
by A.N. Shanbhag

Q: I am a US citizen currently visiting India. My query is regarding PPF account that I had opened when I was the resident of India. Can I continue to operate and invest in PPF since the investment is for 15 years out of which only nine have elapsed? If not, what happens to my PPF investment balance? Can the same be repatriated?

— Mhatre

A: With effect from July 25, 2003, NRIs are not eligible to open fresh accounts in any of the NSO schemes, namely the post office SB, RD, TD, monthly income scheme, senior citizens savings scheme accounts or purchase National Savings Certificates or Kisan Vikas Patras. They cannot even open a PPF account. Similarly, the 8 per cent RBI savings bonds are out of the reach of NRIs. The existing accounts (opened when the NRI was resident or opened before July 25, 2003by NRI) can be continued up to their maturity but cannot be renewed or extended. As and when the irregularity comes to the notice of the authorities, the money will be returned to the depositor without any interest.

Tax rebate on HRA

Q: I am serving in a multinational corporation earning around Rs 5.6 lakh per annum. My contribution towards PPF/LIC etc is above Rs 1 lakh annually. I want to know whether I can claim income tax rebate on HRA as I am residing at my parents’ house at Chandigarh and paying token house rent to my parents at the rate of Rs 8,000 per month.

— Varun Sehgal

A: An employee living in his own house or where he does not pay any rent is not eligible for this exemption.

Since you are not living in your own house and since you do pay rent, you are eligible for the tax exemption available on HRA.

The least of the following is exempt from tax under Section 10(13A):

a) 40 per cent of salary (50 per cent for Mumbai, Kolkata, Delhi and Chennai).

b) HRA for the period the house is occupied by the employee.

c) The excess of rent paid over 10 per cent of salary.

Gift deed documents

Q: I understand that gifts given to your children and parents are tax-free and that, subsequently, interest accrued on such ‘gifts’ is tax-free.

How do you document that these amounts have indeed been gifted? Is it mandatory that we prepare relevant gift deed documents on stamp papers and get them duly notarised?

How much can one give to a single child without incurring any tax liability at his/her hands? This will, of course, depend on the prevailing interest rates. Assume an interest rate to be 10 per cent per annum and the gift is for a girl aged 21. Is this “no questions asked” avenue for savings tax? Does it attract any query from the department?

— Kiran Dabholkar

A: There is no mandatory requirement by law that the gift deed needs to be executed on a stamp paper and duly notarised. While doing this will not harm, even a simple letter from you the donor to the recipient that the gift is being given out of your natural love and affection and a return letter from the recipient accepting your gift would suffice. As per the example specified by you, if your 21-year-old daughter does not have any taxable income, then you can potentially give a gift of Rs 18 lakh to her. This is because for ladies the basic tax exemption is Rs 1.80 lakh that is what she will earn at the rate of 10 per cent without having to pay tax. The question of asking questions does not arise since this is nothing illegal about this, you are following the law to the last letter.

Income tax

Q: I am 85-years-old retired Haryana government officer. I am regularly filing IT return every year. In FY 2007-08, I had paid Rs 29,620 as income tax. Can this amount be shown as expenditure in returns for FY 2008-09? Are the IT authorities not required to inform the assessee that the assessment has been completed?

—MS Dewan

A: Income tax paid is not a deductible expense. Never in the past, was it deductible. Section 80VV that allowed deduction of the lawyers’ fees for filing the returns has been omitted by the Finance Act, 1985, w.e.f. April 1, 1986. Wealth tax was a deductible item, but provision of its deductibility was dropped in 1995-96.

2. Circular 779 dated September 14, 1999, amended Section 143 and done away with examining every return minutely. Acknowledgement of filing the returns shall be deemed to be intimation. Filing of the returns itself would complete the process of assessment limiting its scope to raise demand where taxes are not paid and issue refunds, if due, on the basis of the return. Where such adjustments are necessary, the ITO shall send the intimation along with refund or demand notice within one year from the end of the relevant FY.

Consequently, if you do not receive any intimation from the department within one year from the end of the relevant FY, you may assume that your assessment is completed and there is no addition tax payable by you or any refund due to you.

The authors may be contacted at wonderlandconsultants@yahoo.com

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