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No misuse of P-Notes, Govt tells apex court
New Delhi, May 2
The Centre today strongly defended the policy on investment through participatory notes (P-Notes), asserting that there was no evidence to show that "anonymous entities are misusing P-Notes in the Indian markets."

Plan your pension with NPS
Chandigarh, May 2
The Pension Fund Regulatory and Development Authority (PFRDA) has launched the New Pension Scheme (NPS) with effect from May 1. Now, every citizen of the country can avail of the pension facility and plan his retirement.


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THE TRIBUNE
 SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

 

Aviation Notes
IGIA, now a ‘gateway to India’
If it had been a painful 18-month experience of dismantling and razing to ground 38 structures of different sizes, it has been a wonderful exercise in raising a two-level ultra-modern domestic departure terminal 1D at the Indira Gandhi International Airport (IGIA). It is a terminal concourse which provides 'feel good syndrome' to all travellers and visitors.

Investor Guidance
NRIs can’t buy farmland
Q: I am an NRI and would like to buy agricultural land. I have no history of holding agriculture land in our family. Is any certificate required that I am a farmer to buy land or can I buy as an individual. — Ritesh Reshamiya






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No misuse of P-Notes, Govt tells apex court
R Sedhuraman
Legal Correspondent

New Delhi, May 2
The Centre today strongly defended the policy on investment through participatory notes (P-Notes), asserting that there was no evidence to show that "anonymous entities are misusing P-Notes in the Indian markets."

In an affidavit filed in the Supreme Court, the Finance Ministry said it was "watching the economy closely and diligently, punctually and meticulously, discussing issues which arise on the basis of movements in the market" and studying the trends for the benefit of the people.

"…I state and submit that the Expert Group constituted by the government on encouraging FII (foreign institutional investment) flows and checking the vulnerability of capital markets to speculative flows (Lahiri Committee) discussed the various concerns arising out of P-Notes issued by FIIs."

The Central Government "has decided" on the continuation of issuance of PNs in "larger economic interest of the country," the affidavit, filed in response to a PIL on black money, said.

Priya VK Singh, Director in the Department of Revenue of the Finance Ministry, has filed the document which pointed out that the market regulator SEBI had powers to obtain information about the final holder or beneficiary for the purpose of investigation or inquiry.

Further, FIIs in India were subject to the Money Laundering and Know Your Client (KYC) requirements, it said.

The ministry described as "incorrect" a charge in the PIL, filed by former Law Minister Ram Jethmalani, former Punjab police chief KPS Gill and others, that the government granted licence to UBS Bank AG to open a retail branch in Mumbai to enable acquisition of Standard Chartered Mutual Fund.

It also rejected a charge that there was "inaction" on the part of the government with respect to the operation of the UBS Bank in India. The terms of consent approved by the apex court imposed a financial liability on UBS Asia and dealt with the Securities Appellate Tribunal's judgment of September 9, 2005. UBS India was a merchant banker and also acted as a broker and was not a registered FII that could issue P-Notes.

UBS India being an investment banker was regulated by SEBI and was outside the purview of the RBI that regulated the affairs of non-banking financial corporations, the affidavit clarified.

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Plan your pension with NPS
Sanjay Khurana
Tribune News Service

Chandigarh, May 2
The Pension Fund Regulatory and Development Authority (PFRDA) has launched the New Pension Scheme (NPS) with effect from May 1. Now, every citizen of the country can avail of the pension facility and plan his retirement.

Any Indian citizen between the age of 18 and 55 years can join the NPS. At present, only Tier-I of the scheme, constituting non-withdrawable pension account, is operational while Tier-II (withdrawable account) of the NPS account will become functional in about six months.

There is no investment ceiling. But the minimum investment limit has been fixed at Rs 500 a month or Rs 6,000 per annum.

The NPS would be based on defined contributions. It will use the existing network of bank branches and post offices to collect contributions. There will be seamless transfer of accumulations in case of change of employment and/or location. It will also offer a basket of investment choices and fund managers. The NPS is a voluntary scheme.

The system will, however, be mandatory for new recruits to the Central Government service (except the armed forces). The monthly contribution will be 10 per cent of the salary and DA to be paid by the employee and matched by the Central Government.

However, there will be no contribution from the government in respect of individuals who are not government employees. The contributions and returns thereon will be deposited in a non-withdrawable pension account.

In addition to the above pension account, each individual can have a voluntary Tier-II withdrawable account at his option. The government will make no contribution to this account. These assets will be managed in the same manner as the pension. The accumulations in this account can be withdrawn anytime without assigning any reason.

Individuals can normally exit at or after 60 years of age from the pension system. At exit, the individual will be required to invest at least 40 per cent of pension wealth to purchase an annuity.

In case of government employees, the annuity should provide for pension for the lifetime of the employee and his dependent parents and his spouse at the time of retirement. The individual will receive a lump sum of the remaining pension wealth, which he/she will be free to utilise in any manner.

Individuals would have the flexibility to leave the pension system prior to age 60. However, in this case, the mandatory annuitisation would be 80 per cent of the pension wealth.

There will be one or more central record keeping agency (CRA), several pension fund managers (PFMs) to choose from which will offer different categories of schemes.

The participating entities will provide easy to understand information about the past performance and regular NAVs so that the individual can make informed choices about which scheme to choose.

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Aviation Notes
IGIA, now a ‘gateway to India’
by K.R. Wadhwaney

If it had been a painful 18-month experience of dismantling and razing to ground 38 structures of different sizes, it has been a wonderful exercise in raising a two-level ultra-modern domestic departure terminal 1D at the Indira Gandhi International Airport (IGIA). It is a terminal concourse which provides 'feel good syndrome' to all travellers and visitors.

Designed by famous architect Hafeez Contractor, the terminal features a variety of passenger-friendly innovations. It has all essential facilities for passengers to render transit through the airport free from hindrances. Developed by GMR's joint venture, Delhi International Airport Limited (DIAL), the developers have shown wisdom in providing, among other facilities, exclusive locations for 'nappy-changing and infant-feeding'.

The terminal will also have a facility known as 'contact zone'. It is essentially designed for minors, handicapped persons and senior citizens. But the facility can be used by other passengers also. There will also be a provision for wheel-chairs.

The huge departure concourse, a kind of 'mini-township', includes recreational channels for infants and senior citizens. It is a hugely 'disabled-friendly' terminal which has series of stores for passengers to spend time when their flights are delayed.

Several delegations of foreign aviation analysts have passed through the I-D terminal and spoken highly of its design, décor and functioning.

The international departure and arrival terminals are also being modernised keeping in mind 'future needs'. It will be comparable with any modern airport in the world.

The modernised IGIA is now truly a 'gateway to India'. Spread across an area of 37,500 square metres, the 1-D terminal can handle 3,000 passengers in an hour. Spacious lounges and all types of restaurants make it look like a 'mall', a craze with Delhiites.

The airport has three runways. When one is being re-carpeted, the other two are good enough to handle traffic without any hindrance. The recently developed runway is 11/29 (4,430 metres). It is good enough for any wide-bodied aircraft to land or take-off. The runway, 10/28, known as 'main runway’ is 3,810 metres and subsidiary runway, 09/27, is 2,813 metres. According to aviation experts, there are a very few airports which have three runways.

According to developers, the work is progressing at war-footing and all parameters will be fully operational before the 2010 Games descend on New Delhi.

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Investor Guidance
NRIs can’t buy farmland
by A.N. Shanbhag

Q: I am an NRI and would like to buy agricultural land. I have no history of holding agriculture land in our family. Is any certificate required that I am a farmer to buy land or can I buy as an individual. — Ritesh Reshamiya

A: NRIs are not allowed to buy agricultural or farm land. Residents, wishing to buy such land must be farmers.

PPF rules

Q: I had read somewhere that the beauty of PPF is that one can give a cheque on 5th of the month and the money will be credited to the PPF account on the same day, and not on the day the cheque is cleared. Hence one can earn interest for that month too. Is this true? — Chandrashekhar

A: Yes, it’s true. As per MoF (DEA) letter No. F.3(9)-PD/72 dtd. 4.9.1972, “When the deposit is made by means of a local cheque or draft by the subscriber, the date of tender of cheque or draft at the Account Office will be treated as the date of deposit provided that the related cheque is honoured on presentation for encashment.

Securities Transaction Tax

Q: I want to known about Securities Transaction Tax (STT). If I have paid Rs 5,000 as STT and my short-term capital gain excluding STT is Rs 2,50,000, what should be my tax liability assuming that I have other business income of Rs 1 lakh and no investment in tax saver funds. Please also tell me if there are changes in the short-term capital gain and treatment of STT from that of last year. — Dinkar

A: STT is payable on transactions in equities traded on a recognised stock exchange in India. There are following 3 tax concessions on such transactions:

1. Dividend is tax-free in the hands of the investor in all the cases, equities as well as all the schemes of MFs.

2. The long-term capital gain (LTCG) for shares sold on recognised stock exchanges and equity-based units of MF sold to the MF is exempt and therefore, it cannot be setoff against any other losses, including the carried forward losses of yesteryears. Consequently long-term capital loss (LTCL) is also exempt and is not available for any setoff

3. The STCG enjoys the concessional flat rate of tax @15.45%. Sec. 36 is amended to allow deduction of STT against income from such transactions only when the income from such transactions is included under the head ‘profits and gains of business or profession’.

Investment in NSC

Q: I have an enquiry for NSC in account of HUF. I had purchased NSC on 30.3.06 in my HUF a/c. The maturity date of the same is on 30.3.2012. Please let me know whether I can get the interest on the amount. If I am not entitled for the interest then should I ask the post office to refund the amount with immediate effect? — Vivek Garg

A: S.O. 289(E) dt 13.5.05 debars Trusts, HUFs ad AOPs from investing in NSC-VIII. Your investment is on 30.3.06. If and when the error comes to notice, the money will be returned without any interest. Unfortunately, the post offices notice the error only at the time of making payment at maturity. You will do well to withdraw the funds immediately.

The authors may be contacted at wonderlandconsultants@yahoo.com

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