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India keen to tap Caspian oil, gas
Samsonite to make fashion accessories
APC to target home-user segment
Spice plans radio facility on handsets
Sensex scales new
Aviation
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Investor
guidance Non-resident Indians cannot invest in NSC, KVP Q: I am an NRI and recently while in India, I completed the application forms for post office NSC investments and passed them along with the cheque to the agent for necessary issue of NSC certificate. For some strange reason he got me KVP issued. Please advise if it is OK to invest in KVP and if not what should I do?
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India keen to tap Caspian oil, gas
New Delhi, November 26 New Delhi also suggested laying a crude pipeline from Azerbaijan to the Arabian sea to bring Caspian oil to the world’s fastest growing consumption centre. Encouraged by the success of Indian oil companies to acquire oil assets abroad, Petroleum Minister Mani Shankar Aiyar today met representatives from China and Uzbekistan, Azerbaijan and Turkmenistan to boost the ongoing efforts towards developing an Asian oil and gas grid and strengthen energy security. A day after meeting of the ministerial round table on cooperation between North and Central Asian producers, Mr Aiyar today called on Rustam Sodykovich Azimov, Foreign Economic Relations, Investment and Trade Minister of Uzbekistan and Chinese Ambassador Sun Yux. The meet came in the backdrop of India rallying to build bridges with Central Asian oil producers to secure energy supplies. During the meeting with Mr Idriz Rzabeyov, Head of Energy Department in the ministry, Azerbaijan, Mr Aiyar proposed to hold discussions in India on the Baku-Tbilisi-Ceyhan (BTC) pipeline, which may be attended by the Energy Ministers of the three countries who are partners in BTC pipeline, that is Azerbaijan, Georgia and Turkey. “The BTC (Baku-Tbilisi-Ceyhan) is the most recent world class project involving more than one country. It has the entire documentation written in English, all of it is posted on the web so we don’t have to get to these people. But it would be nice to hear what they have to say on the subject and then its for us to draw any lessons if we think there are any lessons to be drawn,” said Mr Aiyar. Regarding the proposed TAP pipeline that may be extended to India, he said the reserves should be enough for supply through the transnational pipeline to South Asian region where unmet gas demand is expected to grow to about 500 million standard cubic meters per day (MMSCMD). To feed TAP, he suggested a junction of pipelines at Daulatabad connecting the sources of natural gas in Azerbaijan, Kazakhstan, Russia, and Uzbekistan, along with that of Turkmenistan, to the consuming countries in the South Asia. He also told Uzbekistan’s Minister for Foreign Economic Relations, Investment and Trade Rustam Sodykovich Azimov that Uzbekistan gas reserves should also flow through the TAP pipeline. In his meeting with his counterpart from Turkemistan, he enquired about the gas reserves in the country and that available for TAP pipeline. “The gas reserve figure told to me was very very high, much beyond what is being talked about. I cannot tell you because of confidentiality clause.” Turkeministan, he said, had assured that the country had enough gas reserves for TAP after meeting commitments to Russia. Speaking to reporters, Mr Aiyar said India would attend the next steering committee meeting of TAP pipeline in January as an observer before committing to join the project. He said India was preparing a draft for signing during the forthcoming visit, along with 4-5 MoUs between companies from both sides, specifying areas of activities for cooperation in oil and gas sector. The minister further said that domestic companies should try and join hands together in seeking oil equity on a case-by-case basis and must try to go together as far as possible which is in the interest of both. The competition amongst these principal buyers is going to benefit sellers as seen in recent Petrokazakh deal. He clarified that this understanding should not bind them to always go together as there could be healthy competition in some cases.
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Samsonite to make fashion accessories
Chandigarh, November 26 “This is our brand expansion strategy,” Mr Ramesh Tainwala, President, Samsonite South Asia Pvt Ltd said during an interview here yesterday. The group has plans to invest $10 million in the country over the next few months, including opening of eight new exclusive boutiques to market the new range of product. The new products are presently being test marketed in Italy, Korea and Japan. The exclusive ‘Black Label’ stores will stock the products catering to the premium and lifestyle segment, he said. While the first two will be opened in Delhi and Mumbai by December end, the other six in Chandigarh, Bangalore, Chennai, Secunderabad, Pune and Mumbai (second store) would be opened by March 2006. “We also plan to set up another manufacturing facility at Baddi in Himachal Pradesh to avail the tax concessions being offered by the hill state and may also set up a design centre at Chandigarh so that the two can work in tandem,” he said.
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APC to target home-user segment
Chandigarh, November 26 “We see an opportunity here because big-time IT firms are making a beeline for tricity. With presence here, the idea is to target clients in the entire North, including J&K, Haryana, Himachal Pradesh and Punjab,” Mr Pankaj Sharma, Country General Manager, said while talking to TNS during his visit to the city today. “Already, we have clichéd a major deal with Khanna Paper Mills, Amritsar,” he said and added that many more such deals from the region were in the pipeline. Buoyant after having recently acquired NetBotz, Inc for $31 million in cash, the India head of the $1.7-billion US giant said they now plan to target the home-user segment and SMEs. “The sale of UPS is directly proportional to the PC penetration. It is the home segment that is contributing to one-third of entire PC sales. After closely studying the Indian PC market, we have realised that there are two distinct user segments emerging for home UPS — home entertainment and basic home value segments. These are the strata that we are monitoring closely,” he said. At present, we command 33 per cent of market share estimated to be over Rs 425 million. This may witness manifolds jump in near future,” he added. “The line that used to divide MNCs, regional and national players has vanished with the high purchasing power that India has now acquired. That is why MNCs are reaching out to basic end-users directly. It is now an era of consolidation as local players are either vanishing or merging with national and international players,” he said while ruling out any further acquisition plan by APC, at least in near future.
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Spice plans radio facility on handsets
Mohali, November 26 Dr Modi, who was addressing mediapersons here today, said the company was offering information and communication to people and is now entering the entertainment sphere. Radio and TV facility would be provided to the subscribers on their mobiles phones and both services would be free of cost. “We are in the process of a tie-up. We have the required technology which will be implemented from January 1 and would be started from Punjab to begin with.” Dr Modi further said the cost of the handset on which the radio service would be provided would be about $ 30. Mass manufacturing of the handsets would start from January. He said the company had also come up with a multiplex at Noida which would be inaugurated on November 30.
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Sensex scales new all-time high
Mumbai, November 26 The 30-stock Sensex touched a lifetime high of 8,912 points in the intra-day trading during the special live trading conducted from 1030 hrs to 1330 hrs to test the functionality of the back-up or disaster recovery site (DRS). The BSE members did face some problem in order confirmation and trade confirmations were slow due to technical problems, said a BSE broker. The National Stock Exchange
(NSE) Nifty index surpassed the previous all-time high of 2,669 to settle at a new peak of 2,683.45.
— UNI
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Tourism, aviation should go hand in hand
by K.R. Wadhwaney
The
aviation and tourism sectors are seen as twins worldwide. Several countries like Thailand, Malaysia, Singapore, China, Japan and Sri Lanka, have prospered through them. They are ‘gateways’ of their respective countries as they are complimentary. Their message, loud and vibrant, is: ‘March ahead, hand-in-hand.’
Sadly, reverse is the scenario in this country which, even after numerous instances, continues to treat these all-important money-spinning segments with scant respect. Separation of twins into two ministries has not been a successful exercise, if not exactly counterproductive. In-depth study shows that there is almost no coordination between aviation and tourism in most states. Chandigarh, for example, is throbbing and thirsting for recognition in tourism but its progress in aviation is dismal. Chandigarh, according to analysts, will become ‘gateway’ (single destination) of Northern India only when its airport becomes a full-fledged hub. There is an urgent need to upgrade the airport with ultra-modern infrastructure in place. The operation of more flights, national and international, will increase inflow of travellers and increase of tourists will widen the umbrella of tourism in the region, including Himachal Pradesh and Jammu and Kashmir. Regardless of the fact that the airport is under the control of defence, it needs upgradation on war-footing and not cosmetic changes. This is all the more important because Chandigarh bears the responsibility of ‘triplets’. Apart from being Union Territory it is also the hot seat of two prosperous states — Punjab and Haryana. Chandigarh has already secured another first. It has a very active tourism club which is spreading ‘awakening’ among travellers of different ages and classes. Decengestion at Delhi will reduce considerably only when airports at Chandigarh, Amritsar and Agra are provided much needed importance they deserve. The work at Amritsar airport needs to be stepped up. But whatever Amritsar’s importance in the world of tourism, Chandigarh has all the pre-requisites to be a nerve-centre for the region. The Times Group picking up 2 per cent stake in Paramount Air is a healthy sign. But overall India’s aviation scene is unhealthy because infrastructure all over the country is awfully dismal. What is the use of bringing in new aircraft and airlines when the space is not adequate for them to be parked at international airports like Delhi and Mumbai. It is just like buying costly machinery without possessing adequate space to house it.
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Non-resident Indians cannot invest in NSC, KVP
by A.N. Shanbhag Q: I am an NRI and recently while in India, I completed the application forms for post office NSC investments and passed them along with the cheque to the agent for necessary issue of NSC certificate. For some strange reason he got me KVP issued. Please advise if it is OK to invest in KVP and if not what should I do? — Tarachand Satsangi A: Had you informed the agent that you are an NRI? NRIs are not allowed to invest either in NSC or KVP. If and when the irregularity comes to the notice of the account office, the capital will be returned to you without any interest. You may also have some problems with the income tax department. You will do well by bringing the irregularity to the post office yourself and request for the refund. There are many avenues where you can legally invest and be better off. Sections 80C, 80D Q: I am a senior citizen with total income of Rs 2,80,000 (of which short-term capital gain is Rs 60,000). If I invest Rs 1 lakh under Section 80C, my taxable income would be Rs 1,80,000 below the exempted threshold limit of Rs 1,85,000. I shall be obliged if you would kindly advise me whether I would be fully exempted from tax liability or whether I would still have to pay short-term capital gain tax of Rs 6,000. My understanding is that short-term capital gain of Rs 60,000, being part of Rs 1,80,000, should not attract any tax. However, I am not sure about this and request your valuable advice on the matter. — Ghanshyamdas Bhuneja A: Yes, where LTCG is taxed @ 20 per cent (or 10 per cent) or STCG is taxed @ 10 per cent, the assessee will not get any deduction u/s 80C, 80D etc, against these gains which will be treated as a separate block. For a resident individual or an HUF, where the total income as reduced by short-term or long-term capital gains on which tax is exigible falls below the tax threshold of Rs 1 lakh (Rs 1.85 lakh for senior citizens and Rs. 1.35 lakh for non-senior females), the gains would be reduced by the amount by which the total income so reduced falls short of the threshold and the balance of the gains would be taxed at the rates applicable. In short, where the tax liability arises only because of inclusion of such capital gains in the total income, tax is levied on the excess over the minimum taxable limit. In your case, your total income (excluding short-term gains) is Rs 2,20,000 and with the deduction allowed u/s 80C it descends down to Rs 1,20,000. Inclusion of the Rs 60,000 to this amount does not take you into the tax zone. Therefore, you are not liable to any tax. Please note that you need to invest only Rs 95,000 in avenues u/s 80C to bring your taxable income to Rs 1,85,000.
Gift of shares Q: If me or my father give a gift of equity shares (held for a long time, attracting LT capital gains which is exempt from tax) to my wife, and my wife immediately sells these and earns a LT capital gains which is exempt from tax. Hence there is no impact of clubbing of income. Now my wife invests the proceeds from sale of shares and earns income. Would that also be clubbed or would my wife be liable for income tax? Would clubbing provision attract only on first income earned from the transfer of assets or would it be attracted throughout the life for the income earned from that proceeds. — Jayant A: For computing long-term capital gains arising out of the subsequent sale by the donee or the legatee, the cost of the property is the cost incurred by the donor when he originally acquired it, or the FMV as on April 1, 1981, as assessed by an official chartered valuer, whichever is higher. Explanation ‘iii’ to Section 48, defines ‘indexed cost of acquisition to mean an amount which bears to the cost of acquisition the same proportion as cost inflation index for the year in which the asset is transferred bears to the cost inflation index for the first year in which the asset was held by the assessee or for the year beginning on April, 1, 1981, whichever is later’. This means that in the case of an inherited or gifted property, the cost of acquisition is the cost to the original holder (or FMV as on 1.4.81) but the date of acquisition should be taken as the date of the inheritance or the gift. However, the character of long or short-term depends upon the date of acquisition of the original holder. In case this original holder has also acquired the property by way of gift or inheritance then it will be the date of very first holder who purchased or constructed the property. Your contention is absolutely correct. The capital gains (with indexation) will be taxable in your or your father’s hands but it being long-term in nature will be tax free. The profit (without indexation) will be her own asset and any subsequent interest received thereon will be taxed in her own hands. On the other hand, the original amount (without indexation) invested by you or your father, irrespective of the FMV as on 1.4.81 will attract clubbing provision in respect of income generated there from. Yes, quite a good idea.
HDFC MF Q: I made a SIP in HDFC mutual tax saver fund. When I applied that time they had dividend reinvestment option but after few instalments they changed it to dividend payout without my consent and knowledge. Few days ago, I received their mail that was last Saturday in which they said they have changed these things since July 1, but I have been informed now. On this basis can I ask that fund house to redeem me all my units because I wanted to continue in dividend reinvestment only. They should have kept my folio in the same way what terms they had in the beginning. Don’t you think that they should have asked me first or should have given me the choice to continue as per their new terms? It has lock in period of three years but can I withdraw those units on this basis. I have not taken any tax benefit on them. — Dr Sandeep Sharma A: I think, HDFC MF has taken a. good investor-friendly decision. I am not sure, but someone from there might have read my article which brought out the difficulties underlying the dividend reinvestment plan for all schemes of MFs, particularly the ELSSs. The dividend paid or reinvested attracts dividend stripping regulations; not the growth scheme. Moreover, every dividend reinvested suffers lock-ins of three years from the dates of reinvestments. Then again, until April 1, 2003, the dividend used to suffer dividend distribution tax. All said and done, HDFC should have approached you with a suggestion to switch over. It is possible that it did so and you might have missed it. It is also possible that since there is hardly any cognizable difference, SEBI regulations do not require the fund to take any consent of the investors.
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