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21st century will be India’s: Mukesh
Mumbai, March 8
Mukesh Ambani As India’s growth story continues, the 21st century will be India’s and demographically as the world grows older, the country is becoming younger and that will be its strength, RIL chairman and managing director Mukesh Ambani said.

Global Meltdown
Bluechip stocks, economic metrics headed for Ground Zero
New Delhi, March 8
It’s a free-fall for many towards ‘ground zero’ in the world of economy - be it shares of iconic names like Citi, AIG, GM and Ford, or macroeconomic metrics like interest rates, inflation and GDP growth.


EARLIER STORIES



Indo-Pak trade may dip by 60 pc: Ficci
New Delhi, March 8
India-Pakistan trade is likely to suffer a major setback in the coming months with total trade, presently at a little over $2 billion, likely to see a 60 per cent decline in 2009-10, with the overall figure nosediving to $900 million. This was revealed in a survey conducted by Ficci amongst exporters and importers doing business with Pakistan.

Tax Advice
Karta to be taxed for property given to Hindu undivided family
Q. I intend to put my individual movable asset like FDs etc. to the common stock of existing HUF of which I am also the Karta.


A group of jobseekers rush to put in their applications as thousands of unemployed youth flock a job fair in China's Hubei province on Saturday. As unemployment stemming from the world financial crisis is growing, at least 20 million migrant workers have already lost their jobs. — AFP

MTNL, BSNL 3G service hits security hurdle
New Delhi, March 8
After the controversy over the services being provided by the telecom compenies over the Research in Motion (RIM) manufactured BlackBerry phones, it now the turn of the two state-run telecom companies — the MTNL and the BSNL — to face the security hurdle. According to the reports, the Department of Telecom (DoT) has asked MTNL and BSNL to stop their third generation (3G) services till the security agencies put in place suitable monitoring system to track traffic on their network.

Iran inflation shoots to 25.9 pc
Tehran, March 8
Inflation, one of the biggest challenges facing oil-rich Iran, hit 25.9 per cent in February, local news agencies reported today, quoting official figures.

Reverse ‘brain drain’ in US
Washington: Burgeoning new economies abroad and flagging prospects in the US are pushing “talented” immigrants, including those from India, to move back to their homes, according to a new study. For more than 40 years, India and China had suffered a major “brain drain” as tens of thousands of talented people made their way to the US, a news report here said quoting Vivek Wadhwa, author of the study. As many as 80 per cent held master's degrees or doctorates in management, technology or science.

ArcelorMittal idling Cleveland plant
Cleveland: Steel maker ArcelorMittal plans to suspend operations at its Cleveland site in early May amid a declining market for steel and lay off about 700 more workers for an undetermined length of time, a local union official said.

 





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21st century will be India’s: Mukesh

Mumbai, March 8
As India’s growth story continues, the 21st century will be India’s and demographically as the world grows older, the country is becoming younger and that will be its strength, RIL chairman and managing director Mukesh Ambani said.

“In this decade and coming decades, India is becoming younger as the world becomes older,” Ambani said at the International Bar Association Business Law Conference on India as an emerging economic giant here.

“Fundamentally, the world is becoming older and India is becoming younger and that is our strength,” Ambani said.

Reeling out statistics, the Reliance Industries’ chairman said out of India’s one billion people, 44 per cent are less than 19 years of age.

“In the next 20 years, we will have more than 400 million under the age of 35 and in a decade from now, only 10 per cent of Indians will be above 60 years of age,” he said.

Ambani said there were four trends that would drive the world and India has a competitive advantage in them.

“The first driver is demographics,” he said. India today represents in demographic terms exactly what the US was in the 1910-1920s, he said.

The second trend is democracy and its pluralism and the ability of Indians to believe in that democracy.

“This is our baby-boomer generation that is growing up, that is aspiring, that produces and consumes at the same time and creates internal markets,” he said.

“The third trend that I see is again in India’s favour and I am a big believer in this.” As an engineer, he feels “that technology is going to drive more and more value-creation in the world and in spite of the recent economic meltdown, technology is not going to stop,” he said.

He termed the last advantage as globalisation and growth.

“I think we have got an underlined growth momentum, and whatever happens to the rest of the world, we still think that we will grow at six to seven per cent,” Ambani said.

If one looked at the next three-four-five decades, India would maintain a double-digit growth and the economy had the growth momentum going for it for the next three decades, Ambani said, adding the country would also reinvent its growth model.

“So, while there will be ups and downs in globalisation, we have the ability to reinvent our growth model and that again is strength,” Ambani added.

He said, "We will have two-three years of recovery in the world and then things will go back (to normal) but even while that is happening, India continues on this path led by its younger people, led really in terms of trying to create and reinvent growth and becoming a powerful engine for the whole world”. — PTI

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Global Meltdown
Bluechip stocks, economic metrics headed for Ground Zero

New Delhi, March 8
It’s a free-fall for many towards ‘ground zero’ in the world of economy - be it shares of iconic names like Citi, AIG, GM and Ford, or macroeconomic metrics like interest rates, inflation and GDP growth.

Having an ownership pie in AIG, once the world's biggest insurer, does not cost even half a dollar now, while Citigroup, again once the world’s biggest bank, is hanging just over one-buck mark.

Not far away are General Motors and Ford, the world’s two largest carmakers, with share prices of just over $1 level. A year or so ago, these names were among the prized brands of the stock market also, besides the areas of their businesses, with share prices in multiples of current levels.

Giving company to these and many other once blue-chip stocks in their free-fall towards near-zero levels are macroeconomic indicators like interest rate, inflation and GDP growth rates, not only in the world's biggest economy, the US, but also at many other places.

Besides, the world seems to be fast moving towards zero interest regime, as benchmark rates in many nations are being cut to stimulate the economy.

The US central bank Federal Reserve has cut down its key rates to 0-0.25 per cent, while Bank of Japan has slashed its rate to 0.1 per cent. Besides, the rates in the UK, Canada, Switzerland and Hong Kong have come down to 0.5 per cent.

Except for some West Asian, African and South American economies, interest rates in India and China are among the highest at 3.5 per cent and 5.31 per cent respectively.

In terms of gross domestic product growth rates, a downturn is being witnessed across the world, although some like India and China are still maintaining some commendable rate of over five per cent and eight per cent respectively.

However, the countries like the US, UK, Singapore, Japan, Germany, Italy, the Netherlands, Sweden, Spain, Finland and many more have already slipped below the ground-zero with negative GDP growth rates. — PTI

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Indo-Pak trade may dip by 60 pc: Ficci
Bhagyashree Pande
Tribune News Service

New Delhi, March 8
India-Pakistan trade is likely to suffer a major setback in the coming months with total trade, presently at a little over $2 billion, likely to see a 60 per cent decline in 2009-10, with the overall figure nosediving to $900 million. This was revealed in a survey conducted by Ficci amongst exporters and importers doing business with Pakistan.

However, the view of businessmen from Pakistan is slightly different. Shamim ur Rehman Alvi, past president, Karachi Chambers of Commerce, while speaking to The Tribune, said “Pakistani businessmen are keen on doing business with India because they trust a good quality Indian product rather than buying from West, where there are many formalities. Moreover, Indian products are cost competitive because of geographical proximity.”

He further said, “the future of trade lies in peace and friendship between the two countries. We have to push our politicians to make trade smooth across the border. Pakistani businessmen are keen that there should be cross-border investments, and together the market can supply to the whole of Middle-East region, which has tremendous demand but no supplier in geographic proximity.”

The companies that participated in the survey reported that there was great unwillingness on the part of Indian exporters to travel to Pakistan to conclude even the firmed-up deals. The tumultuous situation in Pakistan has created a fear psychosis amongst Indian exporters and importers, who say that cross-border travel has been a major casualty following the recent developments in the neighbouring country.

While in the current situation bilateral trade is going down, some of the Indian exporters and importers may take advantage of third country channels. Notable amongst these channels are Dubai and Singapore.

In fact, some of the companies have already increased their stock of inventories at Dubai and Singapore to service the Pakistani market.

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Tax Advice
Karta to be taxed for property given to Hindu undivided family
by S.C. Vasudeva

Q. I intend to put my individual movable asset like FDs etc. to the common stock of existing HUF of which I am also the Karta.

(a) What procedure should be adopted where both individual and HUF are taxpayers or any one of them is an assessee.

(b) Where both individual and HUF are not assessed to tax income being below taxable limit.

(c) Is there any tax liability on such transaction?

— BP Singh, Mohali

A. Your queries are replied hereunder:

(i) You will have to make a declaration for throwing your individual property into the common stock of the family. Such declaration will be required for both situations cited by you in your query. Such declaration can be in the form of an affidavit, which will have to be sworn in by the person who intends throwing his property into the common stock of the family.

(ii) Section 64(2) of the Act provide that in case an individual who is a member of Hindu Undivided Family (HUF) and impresses his separate property with the character of property belonging to the family or throws into the common stock of the family, it shall deemed to be a transfer to the members of the family for being held by them jointly and the income arising from the converted property or any part thereof shall be deemed to arise to the individual who has thrown his individual property into a common stock and shall be assessed accordingly. Similar provisions exist in the Wealth-tax Act, 1957, whereby such property will continue to be treated as property of the individual for the purposes of levy of the wealth tax.

IT return

Q. My son was working in Mumbai till May 2008 and in Noida from June 2008 to December 31, 2008. He is to file IT return for AY 2009-10. He filed the return for 2008-09 in Delhi, it being his city of residence. Now he has gone to the US for studying on F1 visa. Please advise how and where he should file the return now.

— Bhajan Singh, Tilak Nagar

A. On the basis of the facts given in the query, it is noticed that the permanent address of your son is in Delhi. He can, therefore, file the return of income for assessment year 2009-10 in Delhi.

IT calculation

Q. I am 61-year-old. My total pension for financial year 2008-09 is Rs 1,85,350 and my earnings from the interest from FDs is Rs 24,600. I have been paid Rs 47,183 as arrears (40 per cent of Rs 1,17,957). I have paid Rs 39,000 as tuition fee for my daughter and invested Rs 1,10,000 in various ELSS mutual funds. In addition, I have donated Rs 2,400 to a recognised charity fund. Please calculate my income tax for FY 2008-09 (AY 2009-10).

— Sarabjit Singh, Kurukshetra

A. On the basis of the figures given in the query, your total income works out at Rs 2,57,133. After allowing the benefit of deduction under Section 80C and Section 80G of the Act (Rs 1,00,000 + 1200), the taxable income works out at Rs 1,55,933. Income tax thereon would be leviable at the rate of 10 per cent on the amount exceeding Rs 1,50,000 plus surcharge for education cess at the rate of 3 per cent thereon. The total tax would, thus, work out at Rs 611.

Tax liability

Q. I am 62-year-old housewife. I have a joint saving account in a bank with my husband, who is a pensioner and an income tax payee. I want to put some money from our joint account in one FD exclusively in my name and submit Form G/H to the bank. Total interest accrued on my invested amount will be around Rs 1,90,000. Please let me know my tax liability and will the deposit be in order?

— Varinderjit Kaur, Patiala

A. It is presumed that you do not have any income from any source. The reply to the query is, thus, based on this presumption. You may put the money in fixed deposit in your name. However, the interest earned on such a deposit will be clubbed with the income of your husband in view of the provisions of the Act. Further, it may not be possible to submit Form 15-G in view of the interest income being higher than Rs 1,80,000, the maximum amount not chargeable to tax as applicable to women of less than 65 years of age. Form 15-H is applicable for senior citizens only.

Section 89

Q. I am a government pensioner and my yearly pension is Rs 2,76,000 that has been revised as on January 1, 1996, and I would be getting Rs 21,000 more thus total Rs 2,97,000. I am getting tax relief of Rs 1,00,000, thus yearly would be Rs 1,97,000, for which no tax is levied being senior citizen aged 85 years. If this increase of Rs 21,000 for 12 years is added to my income of 2007-08, it would be Rs 2,76,000 + 2,52,000 = Rs 5,28,000. This means more income tax to be levied for no fault of mine if the arrears are paid yearly. How to minimise liability of income tax? Kindly advice on the following:

1. Can the bank manger help me by adding arrears amount with salary and then deducted tax?

2. Details of procedure of Section 89 for tax relief

3. Income-tax free bonds/schemes.

— Isher Singh, Mohali

A. Your queries are replied hereunder:

(a) You can seek a relief under Section 89 of the Act by filing Form 10E with the person responsible for making the payment of pension and deducting tax at source from such pension.

(b) Various steps for allowing the relief under Section 89 of the Act are as under:

(i) Find out the tax on total income of the previous year in which pension is received in arrears.

(ii) Find out the tax on total income as reduced by additional pension of the previous year.

(iii) From the amount arrived at in (i), deduct the amount arrived at in (ii).

(iv) The resultant figure of (iii) is the tax on additional pension.

(v) Ascertain the previous years to which the additional pension relates and add the respective amount of additional pension in respective preceding previous years.

(vi) Find out the tax on total income as increased by the relevant additional pension in respect of each of such previous years.

(vii) Find out the tax on the total income without the addition of additional pension of each of the said previous years.

(viii) From the amount so arrived at in (vi), deduct the amount arrived at in (vii).

(ix) The resultant figure arrived at in (viii) is the aggregate tax on additional pension.

(x) The relief under Section 89 is the difference of (iv) & (ix).

Form ITR 4

Q. Suppose we want to show business income of a person to be less than Rs 1,20,000 to avoid maintaining account books, in such case on what basis should we show gross receipts, gross profit, expenses, debtors, creditors, cash balance and stock in Form ITR 4? Is it necessary to show all these items or only those items that we are sure of?

— Sam, Kurukshetra

A. According to the provisions of Section 44AA of the IT Act, 1961, the requirement to maintain the books of account applies if either of the following two conditions are fulfilled:

(a) The income from business or profession exceeds Rs 1,20,000

(b) The turnover or total sales or gross receipts from business or profession do not exceed Rs 10,00,000.

I assume that either of the conditions are not fulfilled in the case cited by you. It may be added that profit or turnover should not be manipulated so as to bring the same below the figures stated hereinabove. The profit or turnover as the case may be should be actually less than the above amount so as to maintain the real spirit of requirements of the Act. The figure of gross turnover can be shown on the basis of VAT return. In my opinion, records maintained by an assessee for arriving at the profit at a figure of less than Rs 1,20,000. should have the facility of ascertaining the figures required to be disclosed in the return.

Land deal document

Q. Is it legally right to laminate a faded and brittle, but still legible document concerning a land deal? Would it be admissible in court?

— Amarjit Singh, Gurgaon

A The evidence admissible in the court would be the original document relating to a land deal.

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MTNL, BSNL 3G service hits security hurdle
Tribune News Service

New Delhi, March 8
After the controversy over the services being provided by the telecom compenies over the Research in Motion (RIM) manufactured BlackBerry phones, it now the turn of the two state-run telecom companies — the MTNL and the BSNL — to face the security hurdle. According to the reports, the Department of Telecom (DoT) has asked MTNL and BSNL to stop their third generation (3G) services till the security agencies put in place suitable monitoring system to track traffic on their network.

The BlackBerry manufacturers had faced a similar problem as the security agencies were unable to intercept the messages and the data sent through the phones as they did not have the facilities for the same and sought to have the main server installed in India.

The order comes as the Intelligence Bureau had informed the department that BSNL had not provided for monitoring video calls.

A note issued by the DoT to the two state-run companies said: “The IB was of the view that till such facility is not made available by the service providers, the various services should not be offered to the subscribers. Therefore, MTNL and BSNL may not provide such services to subscribers till monitoring is not available with IB”.

The order from the DoT comes despite the two telecom companies pointing it out to the government that interception of 3G traffic is possible.

MTNL officials said they would reply to the DoT’s letter and as of now there was no move to stop 3G services. BSNL is all set to launch its 3G services in over 700 cities across the country over the next few months. The two PSU’s have also been given an advantage over the private players by being allotted the 3G spectrum ahead of the others who would have to participate in an auction for the same.

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Iran inflation shoots to 25.9 pc

Tehran, March 8
Inflation, one of the biggest challenges facing oil-rich Iran, hit 25.9 per cent in February, local news agencies reported today, quoting official figures.

Inflation rose to 25.9 per cent in the Iranian calendar month of Bahman ending February 18 from the previous month’s figure of 24 per cent, the ISNA news agency quoted the central bank as saying.

The latest figure, although marginally higher than for January, is still lower than the September 2008 peak of 29 per cent.

Central Bank chief Mahmoud Bahmani has vowed to cut inflation to around 22 per cent by March 20, the end of the current Iranian year, in a strategy of “increasing production and supplying goods proportionate to demand.” Central bank officials have cited growth in money supply as the prime factor for the surge in inflation, along with rising global prices.

Analysts predict that the government injecting oil money into the economy will keep inflation considerably high for years to come, despite the central bank's efforts to reduce excessive liquidity. — AFP

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Reverse ‘brain drain’ in US

Washington: Burgeoning new economies abroad and flagging prospects in the US are pushing “talented” immigrants, including those from India, to move back to their homes, according to a new study. For more than 40 years, India and China had suffered a major “brain drain” as tens of thousands of talented people made their way to the US, a news report here said quoting Vivek Wadhwa, author of the study. As many as 80 per cent held master's degrees or doctorates in management, technology or science.

Pointing out that “America’s loss will be the world’s gain”, Wadhwa, in study published in Washington Post today, said, “Immigrants who leave the US will launch companies, file patents and fill the intellectual coffers of other countries. Their talents will benefit nations such as India, China and Canada, not the US,” the study said.

Wadhwa made the conclusions after surveying 1,200 Indians and Chinese, most in their 30s who worked or studied in the US and then returned home. — PTI

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ArcelorMittal idling Cleveland plant

Cleveland: Steel maker ArcelorMittal plans to suspend operations at its Cleveland site in early May amid a declining market for steel and lay off about 700 more workers for an undetermined length of time, a local union official said.

About 450 of the roughly 1,400 members of the United Steelworkers of America Local 979 already have been laid off in the past three months, Local 979 vice-president Dan Boone yesterday said.

Union officials and company management informed workers about the new round of layoffs in several meetings on Friday, he said, adding that economic conditions had foreshadowed the potential for more cuts. He said many of the workers had been cut during shutdowns by other northeast Ohio steel companies in the past.

Luxembourg-based ArcelorMittal, the world's largest steel maker, said it is responding to poor market conditions and collapsing demand. — AP

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