 |
|
DoT moots 3 models for ADC sharing
Board meeting on EPF rate today
SPV on cards to revive NTC mills
Hutchison Essar borrows $140 m to boost network
EXIM Bank to assist pharma companies
Market
Update
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||
| Tax
Advice No tax on reimbursement of medical expenses Q. I am working in Container Corporation of India Ltd. a PSU, at Phillaur. I have a query. Kindly advise.
|
|
DoT moots 3 models for ADC sharing
New Delhi, November 20 As per DoT's draft ADC note, three models which should be looked at are a plain model with a higher percentage of revenue share on all calls — local, STD and ILD; fixing a certain amount of revenue share on calls; and giving ILD operators the option of negotiating settlement rates with their global partner carriers for call termination. The proposal for a higher revenue share on ILD calls and normal revenue share on other calls has been included so as to reduce impact on the local calls. The ADC component on incoming ISD calls accounts for nearly Rs 2,000 crore of the total Rs 5,000 crore. Considering that ADC has a bearing on long distance call tariffs, TRAI would be empowered to decide on the amount (of tariffs) and the amount of revenue-share, but the directive has to be from DoT, it said. This move might further reduce call tariffs and serve as a major incentive to telecom operators. DoT will announce the new regime under which the levy (ADC), paid by private operators to state-owned BSNL to meet social obligations like rural telephony, would be calculated on the basis of revenue of a service provider shortly. Meanwhile, telecom regulator TRAI is believed to be against a high revenue share proposed by the Department of Telecom as part of its plans to move towards a revenue share-based Access Deficit Charge regime from the present per-call system. In its response to the draft ADC note of the DoT, the regulator is understood to have replied that if the revenue share is higher, with local calls comprising a major chunk of the calls, operators would tend to pass the burden to consumers and as a result call tariff might go up. Besides this, a higher ADC on ILD calls would also encourage grey market. TRAI has also not favoured DoT's other proposal of keeping a higher revenue share on ILD calls specifically, while keeping a lower revenue share on other calls saying that this would lead to grey calls. On the third proposal of DoT on negotiated settlement rates with global carriers by ILDOs for termination, TRAI said all of these global carriers are monopoly players in their respective countries and therefore reaching a negotiated agreement like that would not be possible on mutually agreeable
terms. — PTI
|
|
Board meeting on EPF rate today
New Delhi, November 20 The EPFO Finance and Investment subcommittee has recommended an 8 per cent interest rate for this fiscal as against strident demands from Left and Right- wing trade unions pitching for at least a 9.5 per cent interest rate. The EPFO’s predicament is that the Central Government, has put up a brave front in dealing with this politically sensitive issue in the past several years and maintained the EPF interest rate at 9.5 per cent per annum for four crore EPF subscribers which has resulted in a deficit of Rs 716 crore. This deficit was made up last year by drawing from the reserve fund. The reserve fund has also depleted alarmingly and currently it is Rs 250 crore only. Left-affiliated trade unions like CITU have been clamouring for a 9.5 per cent interest rate claiming that Prime Minister Manmohan Singh himself had given this assurance. Moreover, the unions maintain that these take the Prime Minister’s assurance for the entire term of the UPA Government. As the matter is a perfect example of good politics versus bad economics, tomorrow’s meeting is likely to be stormy.
|
|
SPV on cards to revive NTC mills
Mumbai, November 20 NTC has invited expression of interest from parties to form a special purpose vehicle (SPV) in which it would be leasing the five mills for a span of 15 years, sources said. The state-owned corporation has put an eligibility criteria of 10 years of experience in textiles business and last three years of profit-making performance for the parties interested in bidding. There are a total of 29 sick mills across the country with NTC having around 50,000 employees. NTC is planning to modernise these ailing mills through the proposed move, the sources said. NTC has proposed a joint venture with the private parties for floating the SPV. However, the ratio of its cross-holding is not decided yet. Under this scheme, NTC would also be offering Voluntary Retirement Scheme (VRS) to its employees, but it has ensured that the employees would not be forced to opt for
it. — PTI
|
|
Hutchison Essar borrows $140 m to boost network
Singapore, November 20 The deal is the first syndicated loan for Hutchison Essar, a joint venture between Hutchison Whampoa Ltd.'s Hong Kong-based Hutchison Telecommunications International Ltd. and the Essar Group in Mumbai. The five-year loan pays interest at 84 basis points, over the London interbank offered rate, an average of rates set daily by 16 banks. The deal was arranged by Banc of America Securities LLC, Bayerische Hypo-und Vereinsbank AG, Chinatrust Commercial Bank, Rabobank NA and Raiffeisen Zentralbank Oesterreich AG. The five lead lenders brought in Allied Irish Banks Plc, Bank of Nova Scotia, BNP Paribas and China Construction Bank to join the
deal. — Bloomberg
|
|
EXIM Bank to assist pharma companies
Kolkata, November 20
|
|
Market Update by Lalit Batra
Indian
bourses have staged a rebound from the lower level in the past three weeks as investors sought bargains after a recent sharp fall in share prices. The recovery was part of a rebound across global emerging markets which were driven by a small 25 basis points US interest rate rise, which allayed fears of bigger hikes in future. Sensex has gained 13 per cent within three weeks. Last week alone, Sensex gained 2.5 per cent (8686) and Nifty closed higher by 2.8 per cent (2620).
The market sentiment was upbeat due to strong economic growth and on hopes that this growth will transform into decent earnings’ upgrades for corporate India. The Indian Government expects the economy to grow between 7 and 7.5 per cent. Though FIIs have continued to mop up Indian equities, their inflow slowed down last week. A slowdown in FII inflow may trigger correction on the bourses.
ABG Shipyard ABG Shipyard, part of the ABG Group, is the largest private sector shipyard in India. It builds marine ships, including bulk carriers, deck barges, interceptor boats, anchor handling supply ships, driving support ships, tugs and offshore vessels. The company came out with its IPO on November 18 (which will close on November 24) of 85 lakh shares in the price band of Rs 155-Rs 185, ABG Shipyard’s IPO at a Price band of Rs 155-Rs 185 gives a price-to-earnings ratio of 15.7 to 18.7 on post-issue equity of Rs 50.92 crore. This seems decent when compared to the 25 times discounting enjoyed by Bharti Shipyard. Investor may subscribe to the issue but should not expect spectacular gains as was the case with Bharti.
Indian Hotels Indian Hotels Company Limited (IHCL), a Tata group company set up in the early 20th century, is a leading player in the Indian hospitality industry. Its hotels are spread across the country with more than 8,000 rooms under its management across 51 hotels in India and 12 hotels in eight other countries.. India is fast emerging as one of the most favoured tourist destinations in the world. The gaining popularity of India as a business and tourist destination will sustain the foreign tourist inflow. Government policies to promote tourism in the country are also working in favour of the hotel industry. The World Travel and Tourism Council expects the tourist inflow into India to grow at 8.8 per cent in the next decade. IHCL with its pan-India presence will be a prime beneficiary of the buoyancy in the domestic travel industry. Investors can expect a 20 per cent compounded return in the next two years from Indian Hotels for any unforeseen event such as a terrorist attack, a war with a neighboring country or an epidemic.
|
|
Tax Advice by S.C. Vasudeva
Q. I am working in Container Corporation of India Ltd. a PSU, at Phillaur. I have a query. Kindly advise.
I had met with an accident (hurt on duty) with multiple fractures in Concor, Domestic Container Terminal, Phillaur (Pb.), yard on 21.11.04. As per the policy, the company has paid all dues amounting to Rs 2,24,040, towards medical treatment, including the surgery, and hospitalisation charges and medicines etc. Now the Concor accounts department has asked to submit a tax exemptio certificate issued to the hospital by the income tax authorities otherwise the amount of Rs 2,24,040 will be included in the taxable income. On enquiring from the hospital they has intimated that the hospital Satluj Hospital is a corporate hospital and no such exemption certificate has been issued by the income tax authorities. Moreover, they have intimated that the desired tax exemption certificate is being issued to the charitable hospital only. My query is since the amount has been incurred on medical treatment why the amount be should be covered under taxable income? If yes, please suggest the proper section under which I may be exempted from paying the income tax on the amount incurred on medical treatment. Other query is when the hospital has the PAN no. and the due tax is being paid regularly by the hospital. The income tax on the expenditure incurred by me on my medical treatment will be paid twice to the income tax department on the same amount first by the hospital and secondly by me. Is this correct? Kindly advise the corrective action to be taken by me for getting the exemption and oblige. — Ashok Maurya, Phillaur
A. The value of reimbursement of medical expenses to an employee is exempt from tax under the first proviso to Section 17(2) of the Income-Tax Act, 1961 (Act). Under the said proviso read with rule 3A of Income-tax rules, 1962, exemption from tax is available for reimbursement of expenses to the extent of expenditure actually incurred by the employee in respect of fracture in any part of skeletal system or dislocation of vertebrae requiring surgical operation or orthopaedic treatment. However, to avail the benefit the treatment in respect of the aforesaid ailment has to be in a hospital approved by Chief Commissioner of Income Tax. There is no exemption certificate which is to be issued by any hospital. It is an approval certificate by the Chief Commissioner of Income Tax. You may, therefore, make an enquiry from Satluj Hospital on the aforesaid lines. It may be added that the accident having occurred while on duty, the company had the responsibility to incur expenditure for your treatment. There should thus be no question of treating the amount as reimbursement to you so as to attract the proviso. The amount cannot be taxed in your hands as the accident occurred during the course of your duty and the employer was under an obligation to incur your hospitalisation expenses. Your other queries are not relevant in view of the facts explained above.
Bonus shares Q. What is the effect of income tax on the following transactions: 1. After bonus shares allotted and kept unsold, shall original shares sold on reduced market value, attract,
short-term capital loss on the purchase value? 2. What is the effect of shares being split form the FV of Rs10 to FV Rs 1 or Rs 2. 3. Is service tax, education cess, STT, brokerage, interest paid for buying the shares and DP charges deductible from the sale/purchase price, according to the transaction? — G. L. Gargi
A. The answer to your queries is as under: - 1. In case it is possible to identify the bonus shares, the loss as sale of original shares shall have to be computed after giving the benefit of indexation. 2. There is no effect as for the tax treatment is concerned if the shares are split in smaller denominations. 3. If a person is carrying on the business of purchase and sale of securities, the expenditure listed in your query would be allowable a deduction against the income from profits and gains for business.
Tax on MIS bonus Q. Whether bonus on MIS is taxable and amount to be added on NSC for Rs 27,000 which will be matured in February, 2006. — Daljit Singh Rosha
A. The answer to your queries is as under: - 1. The bonus received is taxable entirely. 2. The accrued interest on NSC should have been declared as income for the year ended 31.03.2001 and onwards. In case it has not been done, the entire amount of interest would be taxable in the year of receipt.
LTA/LTC & tax Q. Kindly advise whether LTC/LTA received by an employee is liable to be taxed as Fringe Benefit or it is taxable by including it in the salary income for the year claiming exemption under rules if it is spent? 2. If LTC/LTA is taxable as Fringe Benefit, what is rate of income tax chargeable? — Jagdish Kumar
A. The leave travel allowance or leave travel assistance remains to be exempt under Section 10(5) of the Act read with rule 2B of income-tax rules 1962. There is no change in the rules after the introduction of the provisions for the taxability of fringe benefits under a new chapter of the Act. LTA/LTC thus remain taxable in the hands of the employees if they are not in conformity with the aforesaid rule. Capital gain Q. As we know that longterm capital gain arising out of the sale of longterm capital asset is exempted from income-tax u/s 54F, if not consideration is either: - (a) Actually reinvested in purchase/construction of residential house before filing of income-tax return or (b) Deposit net consideration under ‘capital gain deposit account scheme’ My queries are: - 1. Name the Institutions (in Ludhiana) where we can open this account i.e. Capital Gain Deposit Account? 2. What will be the rate of interest accrued during the period of deposit? 3. How can be deposit and withdrawn money from such account? — Jaswant Singh Goraya
A. The answer to your queries is as under: - 1. The amount can be deposited in any nationalised bank in ‘capital gain scheme’ account. The deposit can be in the form of a savings bank account or Fixed Deposit account. 2. The rate of interest would be the prevailing rate notified by each bank for such deposits. 3. The amount from such account can be withdrawn only for the purpose of the acquisition/construction of the residential house.
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:
taxadvice@ tribunemail.com
|
bb
Inflation dips
Carbon credit Funds transfer |
| HOME PAGE | |
Punjab | Haryana | Jammu & Kashmir |
Himachal Pradesh | Regional Briefs |
Nation | Opinions | | Business | Sports | World | Mailbag | Chandigarh | Ludhiana | Delhi | | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail | |
Video
