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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Britain asks India to open up retail sector
New Delhi, January 15
Ahead of the visit of British Secretary of State for Business, Innovation and Skills Vince Cable to New Delhi next week, Britain has said it would like India to open up the retail sector and further liberalise defence and financial services.

Aviation Notes
IndiGo set to fly on international routes
Gurgaon based IndiGo is all set to wear international colours. It fulfils all the rules, regulations and parameters for flying on international routes. Its claim is so strong that the civil aviation ministry cannot reject it. It completes the minimum period of five years in August this year.

Investor Guidance
Provident fund dues tax-free
Q: My father retired from Punjab National Bank as Scale 1 officer on April 30, 2010, in Haryana and received following dues:
1. Gratuity - Rs 6,21,000
2. Leave encashment of 240 days: Rs 3,76,000
3. PF: Rs 10,00,000
4. Some amount was transferred into his PF account in the month of April as PF against the revised new scale (arrears for revised salary) & he retired in the end of April. Is this new PF amount taxable? Please advise from the above dues which amounts are taxable & to what extent.


EARLIER STORIES



A picture illustration of Euro banknotes is seen at an ATM in Berlin on Saturday. Starting Saturday, teller machines in Germany must display the transaction fees to customers who are not clients of the bank, according to a new law
A picture illustration of Euro banknotes is seen at an ATM in Berlin on Saturday. Starting Saturday, teller machines in Germany must display the transaction fees to customers who are not clients of the bank, according to a new law. — Reuters

No ban by SEBI, says ADAG
New Delhi, January 15
Anil Ambani group today said Reliance Infra and RNRL settled the SEBI probe through voluntary terms proposed by them and the regulator did not impose any ban on the companies or their directors. "There is no bar or ban imposed by SEBI on the company and its directors. The matter has been settled through voluntary consent proceedings, as stated in SEBI order," a Reliance Infrastructure spokesperson said. The statement came a day after SEBI passed a consent order to settle a probe into alleged violation of regulations for foreign investment and unfair trade practices by Reliance Infra and RNRL.

Panel to look into Internet protocol implementation
New Delhi, January 15
The Department of Telecom (DoT) is to set up a panel to review the progress of implementation of a next version of Internet protocol, IPv6, in the government sector and to prepare a national IPv6 address policy.

 





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Britain asks India to open up retail sector
Ashok Tuteja
Tribune News Service

New Delhi, January 15
Ahead of the visit of British Secretary of State for Business, Innovation and Skills Vince Cable to New Delhi next week, Britain has said it would like India to open up the retail sector and further liberalise defence and financial services.

In the field of defence, London particularly sought to extend cooperation with India in the field of naval ship building.

Addressing a press conference here last evening, British High Commissioner to India Richard Stagg said: "We want to talk to the government (India) about opening up areas of retail, defence.’’ In this connection he also drew attention to Defence Minister AK Antony’s announcement about the private sector's involvement in the defence sector.

India presently allows 51 per cent FDI in single brand retail and 100 per cent in the cash-and-carry (wholesale) formats, while FDI in multi-brand retail is prohibited. In defence and insurance sectors, 26 per cent FDI is permitted.

The British envoy claimed that his country has strong expertise in areas like retail, infrastructure, energy, financial services and defence.

On naval tie-up between the two countries, Stagg said there was a considerable scope. Since there were lot of similarities between the two navies in terms of ship building.

India and Britain have had a long Navy-to-Navy relationship as both the aircraft carriers which the Indian Navy has operated were earlier in service with the British Navy.

Replying to a question, he said telecom operator Vodafone should not be made to pay the proposed Rs 11,000 crore tax from its deal with Hutchison Essar as it had not made any capital gains. "We believe that Vodafone have not made capital gain, which would attract the proposed tax. But these issues are lying in the Indian Supreme Court, we respect the court of land ... but we have an opinion."

Accompanied by a large business delegation that will include top corporate honchos representing leading British companies like Agusta Westland, BAE Systems, Intelligent Energy, and Rolls Royce, British Minister Cable will begin his visit to India from its financial capital Mumbai on Monday.

He will meet Maharashtra Chief Minister Prithviraj Chavan and SBI chairman OP Bhatt. He will also attend a meeting of top industrialists at an event co-hosted by the CII, where he will speak on globalisation and the role of emerging markets in world trade.

Cable will also attend an event that will launch the Indian subsidiary of Smiths Medical International, a leading global manufacturer and supplier of medical equipment, the British high commission said.

  • At present, India allows 51% FDI in single brand retail
  • 100% FDI in the cash-and-carry formats
  • FDI in multi-brand retail is prohibited
  • In defence and insurance sectors, 26% FDI is allowed

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Aviation Notes
IndiGo set to fly on international routes
by KR Wadhwaney

Gurgaon based IndiGo is all set to wear international colours. It fulfils all the rules, regulations and parameters for flying on international routes. Its claim is so strong that the civil aviation ministry cannot reject it. It completes the minimum period of five years in August this year.

The largest no-frills carrier, IndiGo, is third private airline to go past Air India. The first two are Jet and Kingfisher.

The airline’s main partner, Rahul Bhatia, in golf attire, looks taller than his height of 6 ft 3 inches. He thinks tall, acts tall and does tall. When in 2005, his carrier, IndiGo, had ordered 100 A-320s (Rs 27,960 crore), there were murmurs. Now, his airline has caused turmoil in the Indian civil aviation industry. It has struck the largest aircraft deal in global aviation history. It has ordered 180 A-320s aircraft worth Rs 71,760 crore ($ 15.6 billion) to be delivered between 2016 and 2025.

IndiGo has yet another first. It is perhaps the only international airline which has patronised one manufacturer, European Airbus Industrie. Its current fleet is 39, of which five are leased. All aircraft are A-320-200s.

"Our aircraft are ‘fuel-efficient’ and therefore we will continue to expand our operations on ‘low-fare system", said Rahul Bhatia, group managing director of Inter-Globe Enterprises that runs IndiGo, and Rakesh Gangwal, its co-founder.

With airlines, particularly private carrier, buying aircraft more frequently than before, the airport up-gradation has also to go hand-in-hand. As of now, there is an acute paucity of hangars at airports, particularly at international airports. Also, maintenance facilities have to be up-graded. The pilot production-line is also feeble. There are not many flying schools. The Indira Gandhi Flying Uran at Rae Bareli needs to be improved immensely. It was started with a lot of fanfare. It initially functioned superbly. Now, it has fallen on bad days.

New terminals have come up at about 4-5 centres. The buildings are impressive to look at, but they are managed and controlled badly. The complaints are rising. But the managements, particularly at IGIA's Terminal-III, run by the Delhi International Airport Limited (DIAL) remains unconcerned. Its officials keep on harping that it is a world-class terminal. They seem to be blissfully unaware that the rating of the airport is not based on how good is a building but how efficient is the service.

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Investor Guidance
Provident fund dues tax-free
by AN Shanbhag

Q: My father retired from Punjab National Bank as Scale 1 officer on April 30, 2010, in Haryana and received following dues:

1. Gratuity - Rs 6,21,000

2. Leave encashment of 240 days: Rs 3,76,000

3. PF: Rs 10,00,000

4. Some amount was transferred into his PF account in the month of April as PF against the revised new scale (arrears for revised salary) & he retired in the end of April. Is this new PF amount taxable? Please advise from the above dues which amounts are taxable & to what extent.

— Nitin Jain

A: 1.Gratuity: U/s 10(10iii) in the case of employees to whom the Payment of Gratuity Act is not applicable, gratuity received by an employee on his retirement or on his becoming incapacitated prior to such retirement or on termination of his employment, the exempt amount would be the least of the following :

— Actual amount of gratuity.

— Half month’s salary for number of years of service calculated on the basis of average salary for the last 10 months.

— Rs 10,00,000. This limit was Rs 3,50,000 prior to Notification 43/2010 dt 11.6.10. This raised limit is applicable to the employees who retire or become incapacitated prior to such retirement or die or whose employment is terminated on or after 24.5.10.

Salary includes DA if the terms of employment so provide but excludes all other allowances, bonuses, commissions and perks.

2. Leave Encashment: Under Sec. 10(10AA) exemption is subject to the least of -

a) 10 months average salary (calculated on the basis of the salary during 10 months preceding the employees’ retirement on superannuation or otherwise). b) Earned leave standing to the credit of the employee. Earned leave cannot exceed 30 days for every year of actual service rendered for the employer from whose service he has retired. c) The amount of leave encashment actually received. d) Rs 3 lakh.

3. Provident Fund: This amount, new or old, is tax-free without any limit.

Ancestral assets

Q: I am a regular reader of The Tribune. I want to know whether an ancestral property can be sold individually by any person without any will, takseem or the consent of any other legal heir or heirs.

— Sunil, Ludhiana

A: An individual can sell any property (residential or commercial) belonging to him. If the property is held jointly by two or more persons, these persons can sell the property jointly. In other words, you are in a position to sell the ancestral property if the property has been transferred and registered in your name. From the query, it seems as if you have not yet got the property in your name. For that purpose, you will have to obtain a probate from a court of law which will require you to take no objection from all the heirs.

Gift to friend

Q: I have a NRI account with an Indian bank and I want to deposit a cheque in my friend’s local (non NRI) account in India. Will this amount be taxable to my friend? Does he need to show this amount as year-end earnings for income tax purpose?

— Mankani

A: Whether it will be treated as taxable income of your friend or not, will strictly depend upon the purpose for which you would be making the payment. If the payment is against any goods bought from him or services rendered by him to you, obviously your payment (less his cost) will be his income. However, if it is a gift from you to him and the amount is less than Rs. 50,000, the amount will not be taxed in his hands, unless he receives similar gifts from other sources and the total amount of gifts so received crosses the threshold of Rs 50,000.

Tax on gift

Q: At the outset I would like to tell you how impressed I am with your knowledge of tax matters and the nice way you explain the complex issues into easy to understand concepts. I would appreciate your clarification about an issue that you discussed in one of the past Q&A columns. If I understood you correctly an Indian resident may gift equivalent of $200,000 per financial year. Can this gift be made by an uncle to his niece & nephew who are Canadian citizens working in the US?

— Rob Keshav

A: We are glad that you find the column useful. Thank you for your appreciation. Regarding your query, Indian residents can gift/donate/ invest up to $200,000 per financial year (Apr-Mar) abroad.

Consequently, an uncle who is a resident of India can certainly gift any amount of money up to this limit to his niece and/or nephew.

The authors may be contacted at [email protected] 

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No ban by SEBI, says ADAG

New Delhi, January 15
Anil Ambani group today said Reliance Infra and RNRL settled the SEBI probe through voluntary terms proposed by them and the regulator did not impose any ban on the companies or their directors. "There is no bar or ban imposed by SEBI on the company and its directors. The matter has been settled through voluntary consent proceedings, as stated in SEBI order," a Reliance Infrastructure spokesperson said. The statement came a day after SEBI passed a consent order to settle a probe into alleged violation of regulations for foreign investment and unfair trade practices by Reliance Infra and RNRL.

The terms include payment of Rs 50 crore as settlement charges, which have been paid by the directors without any financial burden on the companies involved. Also, the two companies, their chairman Anil Ambani and four other directors offered to abstain from any investment in listed stocks subject to certain conditions, according to the SEBI order. — PTI

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Panel to look into Internet protocol implementation
Tribune News Service

New Delhi, January 15
The Department of Telecom (DoT) is to set up a panel to review the progress of implementation of a next version of Internet protocol, IPv6, in the government sector and to prepare a national IPv6 address policy.

A statement issued by the Ministry of telecom said, “DoT has decided to form a panel of consultants for IPv6 implementation in the government sector and to prepare the national IPv6 address policy for the country”.

The decision to set up a panel was taken by the central and nodal officers in a meeting to review the progress of IPv6 implementation. Security and law enforcement issues in view of adopting IPv6 were also discussed.

IPv6 will increase the capacity for Internet domains. Domains listed under the current protocol IPv4 are nearing exhaustion and are expected to run out by March 2012.

Last year, the DoT had released a national IPv6 deployment roadmap under which all government departments have to use IPv6 services by March 2012.

Reports said the new protocol is a scalable technology with the potential to spread the Internet reach to each of India's 1.17 billion people. It is already being implemented in the US, EU and Japan, among others.

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