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PM foresees Chandigarh as front-runner in IT
TV channel holds camp for investors
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India to open financial sector further gradually
Washington, September 24 India today said it would open up its financial sector further, but this would happen gradually after putting in place appropriate laws and appointing regulators. “It is our intention to move forward, but at every step the watchword will be caution and placing suitable instruments to prevent financial shocks,” Finance Minister P Chidambaram said in his lecture at Yale University. Goodyear to shut units in US
Passengers may be harassed as AAI workers plan stir
182 days a year stay must to qualify for resident Indian status
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PM foresees Chandigarh as front-runner in IT
Chandigarh, September 24 Soon after unveiling the foundation stone of the technology park, named after the former Indian Prime Minister, Dr Manmohan Singh said vision of Mr Rajiv Gandhi has led to technological empowerment of India and added: “Today, I see a wave of development arising out of industrialisation and service sector in northern India that will integrate Indian economy with the global economy.” The RGCTP is expected to employ about 5,000 professionals, immediately, while this number would touch around 20,000 once various IT, BPO and service sector companies establish themselves here. So far, Infosys and DLF have made an investment of around Rs 500 crore and more companies like IBM are keen to come here, he said. Dr. Manmohan Singh said: “Unfortunately, the momentum of growth of the ’60s and ’70 could not be maintained over the last decade and the region’s economy lagged behind. Now I see a second wave of development that will come from industrialisation and knowledge-based sector.” He said the technology park would serve as a model for other SEZs in the country as the Chandigarh Administration had planned it holistically, with the provision for housing and other infrastructure of its own rather than burdening the city. The second phase of CTP, comprising an additional 250 acres, is being developed as a Technology Habitat centre in order to provide integrated facilities to professionals working at the CTP. Out of this, 115 acres will be for the technology park and 135 acres for the integrated support facilities. The Administration is providing residential, commercial, community and sports infrastructure for the IT companies to flourish in a manner that is conducive to their growth with a futuristic outlook. The Prime Minister said that Chandigarh was emerging as front-runner as a preferred IT destinations after Bangalore, Hyderabad, Chennai and Gurgaon. Labelling science and technology as the “determinants of economic growth,” Dr Manmohan Singh said India will have to make strides on these two fronts if it is to gain a position among the world’s developed nations. He said that he looked upon RGCTP as yet another temple as India was moving ahead on science and technology fronts in its quest to battle “poverty, ignorance and disease which afflict millions of our people.” The Prime Minister also said that the Centre would lend all support to the Punjab Government’s initiative of starting a biotechnology corridor in the state.
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TV channel holds camp for investors
Chandigarh , September 24 Experts and market analysts discussed the investment prospects while retail investors were given an opportunity to interact with them. Mr Shankar Sharma, Director, First Global, spoke on hedge fund clients and drew a comparison between the Indian and the US market. He laid emphasis on bringing in ‘computer-like’ discipline among investors and said that an investor should diversify across the entire basket of stocks in a sector so as to avoid stock-specific risk. Mr Atul Suri, Technical Analyst and CEO, Marathontrends.com, said that sectoral moves were very important for every investor. He said the FMCG sector was doing well, by and large. Mr Prithvi Haldea, Managing Director, Prime Database, spoke about initial and follow-on public offerings. He divulged that 2004 had been a public issue year when Rs 30,511 crore was raised, an amount almost equal to the combined mobilisation of the preceding nine years. Others who spoke on the occasion were Mr Sudarshan Sukani from Technical Trends and Anand Tandon from Gryffon Investments. Nearly 400 investors participated in this first-ever investor camp held by the business channel in City Beautiful.
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India to open financial sector further gradually
Washington, September 24 “It is our intention to move forward, but at every step the watchword will be caution and placing suitable instruments to prevent financial shocks,” Finance Minister P Chidambaram said in his lecture at Yale University. “We have taken measured steps in banking, insurance, capital markets, securities markets and the debt markets,” he said, adding US banks, insurance companies and other financial intermediaries seem to have realised the opportunities that lie ahead and accepted the wisdom of India’s policy to “hasten slowly”.
— PTI
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Goodyear to shut units in US
New York, September 24 Goodyear, the largest tyre maker in the US, said it would make an unspecified number of factory closures to reduce capacity by 8 to 12 per cent, and would acquire more of its products from Asia. Earlier this week, Goodyear said it was putting up for sale its engineered products unit, which makes hoses, conveyor belts and other products. And in early August, Goodyear sold 95 per cent stake in an Indonesian rubber plantation to competitor Bridgestone Corp. The sale of its North American farm tyre business is pending.
— AFP
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by A.N. Shanbhag
182 days a year stay must to qualify
Q: My son was working with a multinational firm at Gurgaon. The firm sent him on deputation to USA. He left India in April 2003. He is coming back to India in October 2005. During the pervious year 2003-04 and 2004-05 he visited India hardly for a fortnight in each year. Apparently his residential status for the A Y 2004-05 and 2005-06 will be “non-resident”. Kindly let us know what will be his residential status for 2006-07.
— S. R. Shabi, Shimla. A:
A resident is one who during a Financial Year (FY) which is from April to March, satisfies any one of the following two basic conditions: He is in India for at least a) 182 days in the FY OR b) 365 days out of the preceding 4 FYs AND 60 days in the FY. A deputy does not leave India in any year for the purpose of employment since he is already employed in India. Therefore, he gets the status of an NRI if his stay in India during the FY is less than 60 days. Since he left India in April, his status for FY 03-04 and 04-05 does appear to be that of an NRI. For FY 05-06, if his stay in India happens to be 182 days or more, he will be a resident. As your son will be coming in October 2005 his residential status for F.Y. 2005-06 will be resident in India, if his, stay in India happens to be 60 days or more (see condition ‘b’ above).
Tax on donation
Q: I am employed as an officer in public sector bank. My gross salary this year will be: 2,28,000 I shall be receiving arrears w.e.f. 1/11/02: 35,000 Total: 2,63,000 Being lady, income of Rs 1,35,000 is exempt from income tax and one can invest Rs 1,00,000 further. 1. I am paying installments of Rs 48,000 p.a. for my house loan accounted in my name in 2001 2. I donated Rs 51,000 to ‘Divya Yog Mandir Trust’ Hardwar of Swami Ravidevji. The receipt mentions “All donations to the ashram are exempted from income tax under Clause 80G of Income Tax Act, 1961. My questions are: 1. In F.Y. 2005-06, what kind of investments are available in ceiling of Rs 1 lakh. If details are not available at present, then give details, whenever they are available. 2. How to treat the donation? Is it 100 per cent deducted from salary? Is there any limitations on the amount of donation what one can make? 3. Applicability of Slab rates? If one’s salary is: 3,00,000 Exempt income is: 1,00,000 Net income: 2,00,000 Investment made: 1,00,000 Net Taxable income: 1,00,000 Is the tax rate on Rs 1 lakh applicable is 10 per cent, 20 per cent or 30 per cent? Kindly explain? — Ramakant A:
A) Contributions to specified schemes: Sec. 80C. Contributions by an individual or HUF to some specified schemes qualify for a deduction from gross total income. There are no ceilings on deductions u/s 80C for individual schemes, unless the rules of the schemes provide for their own limits. These schemes are - 1. Life insurance premiums. 2. Recognised provident fund. 3. Family pension scheme. 4. Public Provident Fund. 5. (ULIP) Plan of UTI, Dhanaraksha of LIC. 7. National Savings Certificate - VIII 8. HLA of National Housing Bank 10. Jeevan Dhara/Jeevan Akshay of LIC 11. Equity-linked tax-saving schemes 12. Retirement benefit plan of UTI 13. Instruments of infrastructure companies 14. Units of MFs dedicated to infrastructure 15. FI Bonds dedicated to infrastructure. 16. Tuition fees paid, whether at the time of admission or thereafter, to any university, college, school or other educational institution situated within India for the purpose of full-time education of any two children of the individual. However, the eligible amount shall not include any payment towards any development fees or donation or payment of similar nature. The concession is available to each of the parents, if eligible, even in respect of the same child, on their respective payments. 17. Payment by an individual or HUF towards cost of purchase or construction of a residential house, (not necessarily self-occupied) in respect of:
i) admission fee, cost of share or initial deposit ii) cost of any addition, alteration, renovation or repairs carried out after the issue of the completion certificate or the house is occupied by the assessee or it has been let out and iii) expenditure where a deduction is separately allowable u/s 24.
Such a house is required to be held for a minimum period of five years from the end of the FY in which its possession was taken. Similarly, a single premium LIC policy is required to be held at least for two years. Other policies should have their premiums paid for at least two years. ULIP of UTI and Dhanaraksha of LICMF require the holding period to be at least five years. If the asset is liquidated before these specified holding periods, no aggregate deductions (or rebate) claimed shall be deemed to be the income(or tax payable) of the assessee for the year. Contributions to i) any life insurance company for life cover ii) LIC deferred annuity iii) PPF iv) ULIP and Dhanaraksha in the name of spouse and all children, major or minor, married or otherwise, (including married daughters) are also eligible for the deduction. Similarly, contributions by HUF to all items mentioned above, except LIC deferred annuity in the name of any member of the family are also eligible. B) An assessee is entitled to a deduction of 50 per cent and in some cases 100 per cent of donations made for approved charitable purposes. Some of these donations attract a ceiling of 10 per cent of the total income of the assessee, as reduced by the amount deductible u/ss 80CCC to 80U (but not Sec. 80G). In your case, it appears that the deduction is 50 per cent and the ceiling of 10 per cent is applicable. C) Regards your point ‘3’ If one’s salary is: 3,00,000 Investment made: 1,00,000 Net income: 2,00,000 Tax up to Rs 1,00,000: 0 Next 50,000 @ 10%: 5,000 Next 50,000 @ 20%: 10,000 The total tax liability is Rs 15,000. Coming back to your own case,” Total income: Rs 2,63,000 Deduction u/s 80C: 1,00,000 Taxable income: 1,63,000 Deduction for housing loan interest amount out of instalment of Rs 48,000 (income from house property is nil less interest) will be deductible from taxable income and the principal repayment can be part of Rs 1 lakh deduction allowed u/s 80C Amount of donation acceptable u/s 80G will be 10 per cent of your taxable income and 50 per cent of that will be deductible from taxable income. Since we do not know the split of Rs. 48,000 into interest and principal amounts we are not in a position to calculate the taxable income and the tax payable. If the taxable income is Rs. 1,35,000 (tax threshold for non-senior women) or less there would be no tax payable. If in excess of Rs. 1,35,000, Rs. 15,000 will be taxable @ 10 per cent and anything over will be taxable @ 20 per cent There will be 2 per cent education cess payable on the tax worked out.
NSS account
Q: I opened NSS Account on March 23, 1989, and made deposits in it up to May 7, 1991. I want to withdraw 50 per cent of the total upto date credit deposits. Whether the total 50 per cent withdrawal shall have to be shown as taxable income in my Income Tax Return? — Rajesh Kumar, Chandigarh. A:
Any withdrawal from NSS87 (in which you have invested) during the lifetime of the investor is taxable during the year of withdrawal and has to be declared in the income-tax return. It is tax-free in the hands of the nominee or legatee. TDS is applied on withdrawal, if the withdrawn amount is over Rs 2,400.
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