SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI



THE TRIBUNE
 SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

ICICI Bank Q4 net drops 35% 
Mumbai, April 25
Country’s biggest private sector lender ICICI Bank’s net profit declined 35.3 per cent, the sharpest fall in over six years, at Rs 744 crore for the fourth quarter of the past fiscal as the bank scaled down on unsecured lending in times of global financial crisis.

Lakshmi Mittal loses £23.5 b in a year
London, April 25
NRI steel tycoon Lakshmi Mittal, one of the wealthiest in the world, lost as much as £23.5 billion in the last one year owing to the current global recession. The Daily Telegraph quoting the 'Sunday Times Rich List', which is to be published tomorrow, has reported that Mittal, the richest man in the UK, has seen his wealth plunging to £9.5 billion from £33 billion last year.

A customer places an order inside ‘Obama Fried Chicken’ in Brooklyn.
A customer places an order inside ‘Obama Fried Chicken’ in Brooklyn. To the owners of a New York fast-food joint renaming their business in honor of Barack Obama seemed a great way to celebrate his election. But within days they were accused of racism and embroiled in a row that encapsulates the nation's pride in a black president and the fact, 100 days into Obama's administration, that racial tensions remain raw. — AFP


Glam Slam
A model displays a creation during a fashion show in New Delhi on Saturday.
A model displays a creation during a fashion show in New Delhi on Saturday. — AFP

EARLIER STORIES



UTI AMC to divest 26 pc stake
Kolkata, April 25
UTI Asset Management Company today said it would divest 26 per cent stake to a strategic partner in the next three months but is open to acquisition of domestic fund house.

Aviation Notes
IA-AI merger flight runs into rough weather
The recently formed National Aviation Company (NAC), amalgamation of Air India and Indian Airlines, has turned asthmatic. The air to inhale has become poisonous. The government has to act promptly to provide it a “politically-free” flight path to continue operations.

Investor Guidance
Tax relief on LTCG invested in bonds
Q: I sold my house last year in April. However, the transaction is not complete and I will receive all the money by April this year. I have earned long-term capital gains on this sale (Rs 20 lakh). Can I invest the money in bonds now to claim tax benefit? Since when are the six months counted? Is it from the initial agreement date or completion of agreement? — Ravi Ajmera





Top








 

ICICI Bank Q4 net drops 35% 

Mumbai, April 25
Country’s biggest private sector lender ICICI Bank’s net profit declined 35.3 per cent, the sharpest fall in over six years, at Rs 744 crore for the fourth quarter of the past fiscal as the bank scaled down on unsecured lending in times of global financial crisis.

The bank's profit was at Rs 1,150 crore in the same period in 2007-08. For the period under review, the total income also slipped 11.43 per cent to Rs 9,203 crore from Rs 10,391 crore in the same quarter a year-ago, an ICICI Bank release said.

“Given the current scenario, the priority is to conserve capital and maintain the quality of book,” ICICI Bank CEO- designate Chanda Kochhar told reporters here.

The deposit-base during the quarter shrank to Rs 2,18,348 crore from Rs 2,44,431 crore. “The reduction in term deposits was primarily due to the bank’s conscious strategy of paying off wholesale deposits,” Kochhar said.

In view of rising bad loans, ICICI Bank has scaled down its unsecured lending and would focus on enhancing the net interest income, current and savings accounts and fee-income, Kochhar said.

The bank expects a 5-10 per cent loan growth in retail and corporate portfolios in the current fiscal, Kochhar said.

ICICI Bank's net non-performing assets (NPA) for the quarter rose to 1.95 per cent from 1.5 per cent in the corresponding period last fiscal while gross NPAs inched up to 4.1 per cent from 3.2 per cent.

The private sector lender also named its executive director V Vaidyanathan as the managing director and CEO of ICICI Prudential Life Insurance. Earlier this week, Shikha Sharma had resigned as MD and CEO of ICICI Prudential.

The bank also appointed Sandeep Bakshi as its executive director while Bhargav Dasgupta has been named as the managing director and CEO of ICICI Lombard.

The appointments will be effective from May 1, the bank said. — PTI 

Top

 

Lakshmi Mittal loses £23.5 b in a year

London, April 25
NRI steel tycoon Lakshmi Mittal, one of the wealthiest in the world, lost as much as £23.5 billion in the last one year owing to the current global recession. The Daily Telegraph quoting the 'Sunday Times Rich List', which is to be published tomorrow, has reported that Mittal, the richest man in the UK, has seen his wealth plunging to £9.5 billion from £33 billion last year.

Also quoting the daily, the Daily Telegraph stated that the current estimates suggest that the 1,000 wealthiest people in the country have seen over half of their cumulative wealth wiped out by the recession, from £412 billion in 2008 to around £200 billion today.

Besides Mittal, the other major loses were Romans Abramovich, owner of Chelsea football club, down from £15 billion to £9.6 billion, Charles Dunstone - the Carphone Warehouse founder - whose £904 million stake in the firm is now worth around a third of that and Sir Richard Branson, the Virgin Airlines boss, whose £2.7 billion fortune has been cut in half.

Singer Sir Elton John is also among those hit by recession, with his fortune down from £238 million to £175 million. — PTI

Top

 

UTI AMC to divest 26 pc stake

Kolkata, April 25
UTI Asset Management Company today said it would divest 26 per cent stake to a strategic partner in the next three months but is open to acquisition of domestic fund house.

“There are three shortlisted parties interested in taking stake and we hope to finalise this in the next three months," UTI AMC chairman and managing director UK Sinha said here.

Sinha declined to name the shortlisted bidders, but said the AMC would induct those that offered UTI a greater global footprint. SBI, Punjab National Bank, Bank of Baroda and LIC are the shareholders of UTI AMC holding 25 per cent each.

Post divestment, all four investors would dilute stake proportionately to allot 26 per cent to the strategic partner. — PTI 

Top

 

Aviation Notes
IA-AI merger flight runs into rough weather
by K.R. Wadhwaney

The recently formed National Aviation Company (NAC), amalgamation of Air India and Indian Airlines, has turned asthmatic. The air to inhale has become poisonous. The government has to act promptly to provide it a “politically-free” flight path to continue operations.

This unprecedented, abysmal situation has violently arisen as two sectors-Air India and Indian Airlines-have not blended. The AI staff blames IA while IA personnel accuse AI for usurping all advantages as also swiping away the name of the domestic airline from the framework of Indian aviation.

According to AI officials, they have been denied arrears, adequate distribution of share of postings and transfers reducing them to look more 'orphans' than bona fide officials of the amalgamated outfit, which was formed with a lot of fanfare.

The study reveals that over-head expenses have increased instead of reducing. The output has reduced because officials are more in transit than in their offices. The murky situation is getting murkier.

The IA officials complain that traffic on several domestic sectors has nose-dived owing to indifferent attitude of the powers that-be. This complaint appears to be out-of-tune as on April 20, Air India launched “low apex fares” for 35 cities to woo passengers during the coming summer vacations. “We are endeavouring to secure as much market load as possible”, said one senior official, adding:

“We are now competing against other airlines and also trains, which are starting luxury services to woo passengers”.

Whatever may be the domestic scenario, Air India is on the upswing on international routes. Several new routes have been initiated and more will be introduced as new planes keep arriving.

IA officials refuse to subscribe to the domestic 'expansion' talk.

They have a suitcase-load of complaints, protests and observations against the NAC (AI) which, according to them, has not taken-off from the thorny runway.

Amidst this ticklish scenario, CMD, Raghu Menon, was reported to have felt ‘suffocated' and wished to be relieved. Essentially a polished bureaucrat of proven skill and ability (1974 IAS-batch), he is reported to have felt that the airline is not functioning as 'commercially and professionally' as many other foreign outfits.

(Menon is being replaced by another officer from the service, EK Bharat Bhushan, who currently serves as joint secretary and financial adviser in the Civil Aviation Ministry.)

According to aviation analysts, the product (Ai-IA) is highly competitive but it is caught in the 'clutches' of the powers that are running the airline as their 'personal 'jagir'.

The search for the new CMD is on. The aviation analysts, connected with the functioning the vex airline industry, are of the firm belief that the replacement should be one, who is well versed with 'airline-operations'. They say: “The merger should be reorganised treating AI and IA as two equal arms of the company”. Any discrimination will be counter-productive, according to them.

Top

 

Investor Guidance
Tax relief on LTCG invested in bonds
by A.N. Shanbhag

Q: I sold my house last year in April. However, the transaction is not complete and I will receive all the money by April this year. I have earned long-term capital gains on this sale (Rs 20 lakh). Can I invest the money in bonds now to claim tax benefit? Since when are the six months counted? Is it from the initial agreement date or completion of agreement? — Ravi Ajmera

A: Any tax on long-term capital gains can be saved by investing the capital gain amount in bonds under Section 54EC. There is a limit of Rs 50 lakh per financial year on investment in such bonds. The clock starts ticking from the date the property gets transferred to the buyer and not from the date you receive the entire money.

Arrears of pension

Q: I have a query regarding arrears of pension received by a widow family pensioner of Punjab State Electricity Board. I have received pension from the board in April 2008 along with arrears of pension amounting to Rs 2.52 wef November 12, 2006 (date of death of my husband). The DDO is intent upon deducting the income tax for all the payments received by me in the current year though I have submitted my income tax statement for the current year availing relief under Section 89(1) through Form 10(E). The officials say their chartered accountant is of the opinion that relief is not admissible to the widow pensioner under Section 89(1). Please advise on the issue and the action that could be taken against the DDO if he is wrongly. — Parminder Kaur

A: The CA of the bank has erred. Section 89 is reproduced verbatim hereunder:

“Where an assessee is in receipt of a sum in the nature of salary, being paid in arrears or in advance or is in receipt, in any one financial year, of salary for more than 12 months or a payment which under the provisions of clause (3) of Section 17 is a profit in lieu of salary, or is in receipt of a sum in the nature of family pension as defined in the Explanation to clause (iia) of Section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the assessing officer shall grant such relief as may be prescribed.”

It is obvious that family pension received in arrears is eligible for the benefit of Section 89.

PPF account

Q: I have three grand children aged 16, 8 and 3 years. Can I open PPF a/c in their name? If yes, then how much contribution can I make in each a/c. I do not mind investing Rs 70,000 in each a/c and do not wish to claim any tax deduction for that investment since I am also contributing Rs. 70,000 in my own PPF a/c. The amount of Rs 2,10,000 contributed by me to my grand children’s PPF a/c has no impact on income except my capital will go down by that amount.

Will this transfer of Rs 70,000 be considered as gift from me to them and will they come under gift tax?

Can I make direct payment to their respective PPF a/c or I have to open first bank a/c in their name, deposit amount and then write cheque from their bank a/c? — Sanat Kapadia

A: Yes, you can open an account in their names but there is an insurmountable difficulty. As per notification GSR 908(E) dated December 6, 2000, the ceiling on the aggregate contributions to accounts of self and all the minor children of whom the individual is a guardian is Rs. 70,000.

What if an individual, who is not a guardian says the grandfather, contributes to the account of the child? The contributions can flow from any source, but the clubbing with the parent is applicable. Under such circumstances, neither the grandfather nor the parent can claim the benefit of Section 80C.

This contribution in excess of Rs 70,000 will be returned to the parent without interest whenever (and if) it comes to the notice of the accounting office. Otherwise the parents can continue to contribute to the PPF of children without claiming the deduction under Section 80C.

Such contributions will be treated as gifts but since the gifts are received from a relative, no income tax is attracted. The interest will get clubbed in the hands of the natural guardian, but since it is tax-free, the clubbing provision loses its teeth.

New pension scheme

Q:Employee provident funds — contribution by employer that is less than 12 pc — is not to be included in the employee’s earnings for calculation of income tax. My query is with respect to the NPS (new pension scheme). In the case of NPS, whether the 10 per cent contribution of employer share would be taxable as the employee’s income? — Madan Lal Singla

A: Under Section 80CCD, contributions by the employee as well as the employer up to 10 per cent of the salary (basic + DA) is deductible from his gross total income (which includes the employer’s contribution) within the overall limit of Rs. 1 lakh in respect of contributions to schemes covered by Section 80C, 80CCC and 80CCD. 

The authors may be contacted at: wonderlandconsultants@yahoo.com

Top

 





HOME PAGE | Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Opinions |
| Business | Sports | World | Letters | Chandigarh | Ludhiana | Delhi |
| Calendar | Weather | Archive | Subscribe | Suggestion | E-mail |