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NTPC sets terms for Dabhol acquisition
Govt may fall back upon ex-CEOs Revival of sick PSUs
MNCs bullish on India
Indo Mobil mulls motor cycle plant
Buy IDFC for long term
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Invest capital gain in bonds to save tax
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NTPC sets terms for Dabhol acquisition
New Delhi, July 17 NTPC has sought government nod in writing, yet to be given to the power major, and has brought these "conditions" to the notice of the Centre for urgent implementation of these proposals. As such, for proposed acquisition NTPC-GAIL do not have even Rs 200 crore authority, which is available for investment in joint ventures, whereas the current investment envisages acquisition of assets valued at Rs 10,036 crore. In a letter written to Power Secretary R V Shahi, NTPC has said "the dispensation, if proposed, may therefore authorise the Board of Directors of NTPC/GAIL for investment in joint venture company (Ratnagiri Gas and Power Pvt Limited) to do acquisition." The assets worth Rs 10,036 crore would be funded by an equity of Rs 1,500 crore with Rs 500 crore equity each by NTPC, GAIL and Indian financial institutions and the remaining through loan by the FIs. On the proposed stamp duty to be paid while transferring assets first to the FIs and then from FIs to NTPC/GAIL that could range between Rs 2,500-3,000 crore, NTPC has sought exemption saying the payment could make the project commercially unviable. Fearing slapping of Rs 150 crore income tax on depreciation, NTPC has asked government to give exemption from paying income tax for 15 years as given to green field projects, and not from five years back when the first phase of DPC was commissioned. Another major condition put by NTPC is exemption from paying import duty on imported liquefied natural gas (LNG) in order to keep the fuel cost and generation cost within permissible limits. According to sources, NTPC's consent to acquire Dabhol would be subject to the implementation of the conditions put forward by the power PSU. As per the responsibilities allocation, NTPC would have the management control over the plant besides operational part, while GAIL would be involved in the
regassification. — PTI
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Dabhol to add 2000 MW
Maharashtra Chief Minister Vilasrao Deshmukh yesterday said power generation in the state would grow by 2,000 MW within a year with the Dabhol plant becoming operational again. "The Dabhol plant will start generating about 2,000 MW within a year as the whole thing has been amicably settled among all stakeholders."
Mr Deshmukh's assertion came a day after Union Law Minister H R Bhardwaj said that "all cases" relating to the Dabhol project have been settled by the government.
— TNS
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Govt may fall back upon ex-CEOs Revival of sick PSUs
New Delhi, July 17 To overcome this problem the government has decided to rope in retired Chairmen and Managing Directors and other senior professionals who have an experience of running PSUs. It has even decided to take the services of retired bureaucrats to do the job of turning around the companies. The proposal was debated at length by the Board for Reconstruction of Public Enterprises (BRPSE) and was given a go-ahead, Board Chairman P.K. Basu said. It will now be taken to the Cabinet for approval. He said the Ministry of Heavy Industry and Public Enterprises has been asked to take the proposal to the Cabinet at the earliest. The board will invite the proposals from retired PSU officials who want to take over the sick government-owned companies and turn these around. The officials can approach the board either individually or in groups and make a presentation about their strategy to make the loss-making companies profitable. Only the posts of Chairman and Managing Director and Working Director would be open for them. The only condition set before them is that the applicants should be less than 70 years of age. According to the latest public enterprises survey, of the total 242 Central PSEs, 230 were in operation and 12 under construction. Out of 230 operating enterprises, 140 were profit-making, 88 were loss-making and two PSEs incurred neither any profit nor any loss during 2003-04. According to rough estimates, 30 per cent of the posts at the CEO and Director level are vacant in the 88 loss-making PSUs.
— PTI
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MNCs bullish on India
New Delhi, July 17 Almost 70 per cent MNCs which participated in the CII-AT Kearney MNC Survey, 2005, evinced “high likelihood” of pumping in more money into India in medium to long term and most of them indicated to be doing so irrespective of their current performance. India’s market potential, labour competitiveness and macro economic stability were unanimously highlighted as the key drivers of FDI attractiveness. Three out of every four MNCs stated their performance in India had met or exceeded internal targets and expectations, says the survey. More than three-quarters of the survey respondents ranked India higher than Malaysia, Thailand and the Philippines in terms of MNCs’ performance. Though close to 50 per cent of the survey respondents believed that India is on a par with or better than China in terms of MNC performance, 75 per cent of them viewed India unfavourable compared to the communist nation on FDI attractiveness, says the survey. Investors favour China over India for its market size, access to export markets, government incentives, favourable cost structure, infrastructure and macroeconomic climate. MNCs from a cross-section of sectors constituted respondents in the survey. — PTI
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Indo Mobil mulls motor cycle plant
Kolkata, July 17
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by S.C. Vasudeva
Invest capital gain in bonds to save tax
Q. Please clarify a property issue which concerns thousands of urbanised rural people like me.
We are six brothers. Only I have settled in a city. Our father, as head of a joint family built five pucca houses for my five brothers in the village. He bought a 450 yard plot and built a house for me in Ferozepore in 1980. The plot cost Rs 38,000 but my father kept no account of the construction expenses. The family split in 1981. The price of my urban house was evaluated. I paid the difference of Rs 27,500 each to my father and five brothers. As the house still stood in my father's name, I filed a suit and inherited the house through a court decree in 1984. After living in it for 20 years, I sold the house for Rs 6 lakh in August, 2004. I have not yet bought a new house or plot. My queries are: (a) Does an inherited house like mine invite capital gains tax? (b) If yes, how is it to be calculated? (c) If taxable, how can I escape it? — T.S. Kamboj A. Answers to queries raised by you are as under: (a) The provisions of the Act relating to the chargeability of capital gains tax on the capital gain arising on the sale of an inherited house, would be applicable. The capital gains tax would be leviable on the person who has inherited the house. (b) In the given case, the capital gain would be computed by taking the fair market value of the house on April 1, 1981 as the house had been constructed before the said date. Such value would be raised by cost inflation index applicable to the year of sale as notified by the Government of India. The relevant formula is as under: Cost of acquisition X Cost Inflation Index of the year in which the asset is transferred ¸ Cost Inflation Index of the year of acquisition or the year beginning on April 1, 1981, whichever is later. (c) To save capital gains tax you can either invest capital gain in the capital gains tax saving bonds or invest the same in purchase of another residential house within a period of two years of the date of sale of the residential house or invest the same in construction of a residential house within a period of three years of the date of sale of the residential house.
Tax liability
Q. My salary income for the financial year 2005-06 will be Rs 2.5 lakh. My contribution towards GPF will be Rs 84,000 and I will invest Rs 20,000/- in bonds. Please let me know what will be my tax liability. — Sat pal A. In accordance with the new scheme introduced by the Finance Act 2005, the amount deposited towards saving schemes are allowed as a deduction against the total income. Section 80C of the Income-Tax Act 1961 (The Act) now provides for a deduction of an aggregate sum of Rs1,00,000 from the total income in respect of various items listed in the aforesaid Section. On the basis of the figures given by you in your query, the total income in your case would be Rs1,50,000 (2,50,000 - 1,00,000). The tax, including the education cess of 2 per cent would work out at Rs 5,100 for assessment year 2006-07. The answer is based on the presumption that the investment of Rs 20,000 will be made by you in infrastructure bonds.
Section 88
Q. My total salary for the financial year 2004-05 will be Rs 2,05,640 and following procedure for calculating income tax and allowing rebate u/s 24(b) towards interest accrued on HBA and one day salary donated for Tsunami National Fund(U/S 80-G) has been adopted:- A. Section 88 of the Act (as applicable to assessment year 2005-06) provides for deduction of 20 per cent of the aggregate of the sums specified in the said Section in case of an individual or Hindu Undivided Family whose gross total income before giving effect to deductions under chapter VI-A does not exceed Rs 1,50,000. In your case, since the total income before giving effect to deduction under Section 80G of the Act (which is covered under chapter VI-A of the Act) does not exceed the said amount of Rs 1,50,000 the rebate would be allowed to you on savings @ 20%. The deduction allowable would be Rs 14,000. I may add that the answer to your query is based on the presumption that the amount of Rs 70,000 has been deposited in saving schemes covered by Section 88 of the Act.
Rebate on house loan
Q. I want to clarify the following fact related to the Income Tax Act. I have taken a house loan from HDFC bank jointly with my wife, who is a homely lady. The plot is in the name of my wife and myself (jointly), The plot is purchased from my funds & HDFC loan is for construction work only. Please advise whether benefit of income tax deduction on interest repayment and rebate on principal repayment
every year is 100 per cent applicable to me only. Can I take 100 per cent rebate on interest and principal amount because repayment is made from my salary account through payee cheques to the bank. Tell me Section no and sub Section. — Amrit Pal Pilot A. For the assessment year 2006-07, you will be entitled to a deduction of the interest paid on the loan raised from HDFC against your rental income, if any or in case the house is self-occupied against your other income, including salary income. Section 80C of the Act as applicable for assessment year 2006-07 provides for the deduction of an aggregate sum of Rs 1,00,000 for amounts contributed towards various saving schemes as well as for any sum paid towards loan raised for the construction or acquisition of a residential house. You can, therefore, claim the deduction from your total income accordingly. It may be added that the reply to your query is based on the presumption that you are real owner of the property and your wife is only a name lender as also that the income from house property in its entirety would be declared in your return of income.
Readers are welcome to send questions for tax advice. These should be brief, to the point and not exceed 100-150 words. The letters should be sent to Tax Advice C/o The Tribune, Sector 29, Chandigarh-160020 or emailed to:
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Chinese firm eyes India L & T UTI in Bahrain Salora pact Bosch acquisition |
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