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NTC lost Rs 96 cr in sale of land: CAG
Pak to import “mild steel” from India
TUs harden stand on EPF rate
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Intel keen on India
Oil-IOC ink pact with NOC
Adidas to launch eyewear soon
Bulls continue to party
No rebate admissible for angioplasty
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NTC lost Rs 96 cr in sale of land: CAG
New Delhi, November 4 By not doing the proper valuation of three mills and allowing for unjustified exemptions the NTC lost potential revenue of Rs 96.41 crore, the CAG said in its latest report. The CAG pointed out that for the three mills the asset sale committee of the NTC arrived at the reserve price on the basis of average of valuations as per the guidelines set in the draft
rehabilitation scheme (DRS) of the NTC, CBDT guidelines and by a registered valuer. As the three valuations varied by a big margin setting the reserve price on the basis of average does not make sense, the report said. Even while using CBDT formula indexation was done on the basis of market value on April 1, 2002 and not March 31, 2002 while the land was advertised for sale in 2003. In the case of DRS and CBDT valuations, there was an undervaluation of Rs 134.30 crore and Rs 52.77 crore. The CAG has also found lacune in the way sale was carried out. In the case of Mysore Mills in Bangalore, there was only one bidder who initially did not match the reserve price. “Considering the fact that the purchaser had matched the reserve price of Rs 84.35 crore, the lower fixation led to the loss of Rs 67.65 crore,” the audit body said. In the case of Minerva Mills in Bangalore, the company got Rs 71.52 crore as against Rs 94.78 crore as worked out in audit. By allowing for deductions the sale of land of Netha mills the company incurred a loss of Rs 5.50 crore. The CAG said the Karnataka Housing Board had agreed to buy the land of Minerva Mills and Mysore Mills at a price, which was higher by Rs 55.61 crore than what it got through the tendering process but the company refused saying that the government guidance rates were less than the valuation rate of registered valuers.
— PTI
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Pak to import “mild steel” from India
Islamabad, December 4 The Ministry of Commerce has issued a notification allowing the import of mild steel structures from India. The magnitude of devastation is too high that the local industry alone will not be able to meet the requirements of steel structures, an official was quoted as saying by local daily The News said. “The rationale behind the decision is that transportation cost in importing mild steel from India is comparatively very low and economical,” he added. With the permission to allow the import of steel from India, the list of importable items from India has now swelled to 723. In order to save costs, Pakistan plans to import construction materials like CGI sheets through the five points along the LoC which were opened to exchange relief materials.
— PTI
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TUs harden stand on EPF rate
New Delhi, December 4 The unions have already firmly told the Centre that they would not make any compromise on the issue. The issue is expected to spill over to the meeting of the Indian Labour Conference (ILC) here on December 9 and 10 if the UPA Government is not able to resolve the matter at the special meeting of the Board of Trustees of the EPF Organisation here on December 7, trade union leaders said. The trade unions are also meeting on December 8 to finalise their strategy for the meeting. An indication about the government’s inability to pay a 9.5 per cent interest rate was given by the Prime Minister yesterday to AITUC leader Gurudas Dasgupta when Mr Dasgupta, along with another representative, met Dr Manmohan Singh. Ironically, it was the Prime Minister, who intervened last time to help the trade unions get the over 40 million EPF subscribers a 9.5 per cent rate of interest for 2002-03, 2003-04 and 2004-05. Leaders of the BMS, AITUC, CITU and HMS, along with three other recognised central trade unions, have already submitted their joint submission to the EPFO Board of Trustees
here on November 21, demanding a 9.5 per cent rate of interest. — UNI
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Intel keen on India
Chennai, December 4 Mr Maran, who briefed the waiting newspersons after about an hour-long meeting with Mr Barret at his Gopalapuram residence, said Intel was serious about investing in India. “He will make some interesting announcements in Delhi tomorrow,” Mr Maran said. The possible areas of investments were in education and development of low-cost computers, he said, adding that Intel had already deputed a team for developing low-cost computers.
— UNI
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Oil-IOC ink pact with NOC
New Delhi, December 4 OIL & IOC had formed a consortium last year to scout for opportunities in the E & P sector together leveraging respective strengths of the two companies. The agreement was signed yesterday by Mr R.K. Dutta, CMD on behalf of OIL and Mr Badri, Chairman, NOC, Libya. The OIL and IOC consortium had won the block in the EPSA round-2 against fierce global competition, an official press note said here today. OIL and IOC with OIL as operator are the first companies to sign the agreement with the NOC in this round of winners. The work programme for this block include 1000-line kilometers of 2D survey and 500 Sq. Km of 3D survey and drilling of one well in five years.
— UNI
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by Lalit Batra Bulls continue to party
Bulls continued to party on the Dalal Street with another week of gains. Sensex gained another 1 per cent this week, bringing the total tally to five consecutive weeks of gains and a rise of about 16 per cent. It is the return of FIIs that has made this possible. FIIs made net purchases to the tune of Rs 1,100 crore in the first four trading sessions of the week while mutual funds sold equities worth Rs 160
crore. FII investments in 2005 till date are about $ 8.8 billion, the largest ever in a single year.
We believe that FII inflows would continue to drive the markets, but at the current levels (PE of 17.5 for Sensex) the market is turning expensive and investors may aggressively book profits and re-enter the markets on correction.
ICICI Bank public offer ICICI Bank has come out with a second public offer within 19 months after its previous issue. The bank’s previous issue raised Rs 3500 crore, including a green-shoe option of Rs 450 crore in April, 2004. It now expects to raise up to Rs 5,750 crore, including a green-shoe option of Rs 750 crore from the domestic market. Additionally, Rs 2,300 crore, including a green-shoe option of Rs 300 crore, will be raised via an ADS issue. ICICI Bank is raising the money to meet its capital requirements, given its asset growth. The bank’s business focus is on retail and rural credit, international banking and traditional corporate banking. The price band for the equity issue has been set at Rs 505-Rs 545. Retail bidders, including the existing retail shareholder, will be allotted shares at a 5 per cent discount. The pricing of the issue is aggressive and retail investors may avoid the issue as of now. Investors may buy the stock at a later date when the valuation is more attractive then the current discounting of 18 times. |
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by S.C. Vasudeva No rebate admissible for angioplasty
Q. 1 I underwent angioplasty in July, 2005, and incurred an expenditure of Rs 2.50 lakh. Kindly advice
(i) Extent of amount to be deducted from income. If possible. (ii) Whether deductible amount shall be included under Section 80C or under any other section. (separate section) (iii) Documents to be attached along with income-tax return for A.Y. 2006-07. (Er. Eqbal Singh,
LUDHIANA) A. 1 Section 80DDB of the Act deals with the deduction of amount actually paid for medical treatment of specified diseases or ailments prescribed in rule 11DD(1) of the Income-tax Rules 1962. A perusal of Rule 11DD of the said rules would show that the angioplasty is not covered among the prescribed disease or ailments. You would, therefore, not be entitled to any deduction in respect of the amount incurred by you for undergoing angioplasty treatment.
Rebate on house rent Q. 2 During service I was occupying Government accommodation and now I have retired. I have no house anywhere and after retirement I have shifted to a rented house, paying a rent of Rs 3,500/- p.m. You are requested to please clarify whether I am entitled to rebate on the house rent being paid by me if so, to what extent and under which Section of the I.T. Act. (S.K. Verma,
CHANDIGARH) A.2 Section 80GG of the Income-tax Act, 1961, provides for the deduction of rent paid by an assessee out of his total income subject, however, to the following conditions:- (i) The rent paid is in excess of 10 % of his total income before allowing deduction under this section. (ii) The rent paid is in respect of accommodation occupied for the purpose of his own residence and a declaration in form 10BA is filed along with the return. (iii) The assessee or his spouse or minor child or Hindu undivided family of which he is a member does not own any residential accommodation at the place where the assessee resides or performs the duties of his office or employment or carries on his business or profession. (iv) The amount of deduction is limited to 25% of the total income or Rs.2,000/- per month whichever is less. It may be added that a person who is an employee and is entitled to HRA from the employer is not entitled to the aforesaid deduction.
Section 80-L Q. 3 Due to the removal of section 80L for the A.Y. 2006-07, the accrued interest income of post office NSC & R/D A/C is now taxable. Whether this is applicable to deposits made after May 13, 2005, or even for the deposits made before that date too (i.e. for example deposits made in the year 2003 or 2004 etc.) (Venkatal Akshmi NARASIMHAN) A. 3 The deduction allowable under Section 80L has been discontinued w.e.f. 1.4.06. Accordingly, the accrued interest for the period 01.04.2005 to 31.04.2006 for all deposits/financial instruments, the interest in respect of which was allowed to be deducted from the total income under Section 80L of the Act would now be taxable. In other words, there is no such exemption applicable for interest deposits made prior to May 13, 2005, or interest earned on deposits made after 13th May; 2005.
Mother can gift property Q. 4 I need to have clarification from you on the following points. 1. My Mother owned a flat since 1980 at Chandigarh. We sold it for Rs 8 lakh in September, 2005. 2. We had another plot for Rs 3.25 lakh. We bought it in December 2004. This plot was on joint registry, me & my mother’s name. We sold this plot for Rs 3.25 lakh in Sept, 2005. 3. In September 2005, we purchased a plot in my name costing Rs 8.25 lakh. This purchase is in my name as we need to construct a house with a Loan and also I can take the benefit of home loan. Now my questions are: 1. What are all tax liabilities applicable on us (I and my mother). My mother is a housewife and she has no income of her own. 2. Does my mother have to pay some tax? If yes, how much, what types of tax and how can we have a waiver? 3. Can I show the purchase of plot in my name as a gift from my mother? If yes, then how should I proceed. If no, how can I justify the purchase of the plot? (Nitin Harjai) A. 4 You have not indicated the source of funds from which the flats have been purchased. It is, therefore, presumed that the funds used were that of your mother. The answer to your queries accordingly is as under: - 1. The value of the flat as on 1.4.1981 will have to be ascertained and indexed cost for the financial year 2005-06 will be worked out by applying the prescribed cost inflation index. The prescribed rate for financial year 2005-06 is 497. The said amount would be substituted for the cost and would be deducted from the sale price of Rs 8 lakh. The net amount would be taxable as long-term capital gain at the specified rate of 20% plus applicable and education cess. The capital gains tax would not be payable in case the amount of capital gain is invested by your mother in her own name in the acquisition or construction of a residential house within the specified period. 2. Your mother can gift any amount to you for making an investment, including purchase of a house. The gift and acceptance, thereof, can be made for a movable property through an exchange of letters.
Company account Q. 5 I am working as a workshop head in Delhi. My H.O. was in Delhi, now shifted to Gurgaon. To meet out day-to-day workshop expenses the company has opened a savings account in my name and they make the e-transfer and the I take out money by ATM or by cheque as convenient for workshop expenses. Can it attract any problems in my personal taxation as the SB account is in my name with Citibank. (N.P.S. Kapoor) A. 5 The subject account should not create any problem in your personal taxation provided it is so disclosed in your personal tax return and the fact that the said account is being used for day-to-day expenses of the workshop is proved to the satisfaction of the tax authorities.
Taxable in India Q. 6 I am an Indian citizen holding a US green card. I do hold NROR status currently as per description in one of your earlier answers. I was transferred through my US company to their Indian operations but now working as an employee of the Indian operations. The stock options that were granted while in the USA have been continued for me as per the old vesting I had. When I sell these stock options, would this be treated as Indian income or US income? Is it required for me to pay tax in the USA and also in India? Can I choose either? (Vineet Sharma) A. 6 According to Section 5 of the Act, a resident is taxable in respect of all income, derived from whatever sources which is taxable in respect of all income. (a) Is received or is deemed to be received in India in such year by or on behalf of such person; or (b) Accrues or arises or is deemed to accrue or arise to him in India during such year; or (c) Accrues or arises to him outside India during such year: Provided that, in the case of a person not ordinarily a resident in India within the meaning of sub-section (6) of Section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India. In your case as the income in respect of sale of stock option will be received in India, it would become taxable in India in your hands. It would not be possible to answer your query with regard to the taxability of such gain in the USA unless the scheme under which the stock options were issued is examined.
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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