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Pressure on interest rates ‘transitory’ IBP to merge with IOC within 6 months
Q1 results show robust growth
Bajaj Auto Q1 net up at Rs 266 cr |
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Penalty under Section 271F for not filing income tax return
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Pressure on interest rates ‘transitory’ New Delhi, July 16 "Pressure (on interest rates) to the extent that there is pressure globally. But this is only a transitory phenomenon. It is short term," Banking Secretary Vinod Rai said here. Indicating that the rates are not likely to go northward in the long run, he said public sector banks are taking long-term view of interest rates and they do not find any pressure. He attributed the hike in home loan rates to the Reserve Bank's decision to increase reverse repo rate by 25 basis points, besides pick up in industrial and manufacturing activities. "When you have the hike of reverse repo or repo rates, then it has backward fallback on interest rates," the Banking Secretary said. The observation came ahead of quarterly review of the monetary policy by the RBI, which is widely expected by analysts to hike reverse repo and repo rates following hike in benchmark interest rates by the US Federal Reserve and Bank of Japan by 0.25 per cent each. Pointing out that banks also take a conscious decision, he said, "At one point of time, when they have sufficient liquidity, they say let us push it in the retail segment. When they now find that there is demand in manufacturing and industry, they are drawing from there (retail) and lending it there (industry)," Mr Rai said. To a question, he said it would not lead to scarcity of credit to the housing and other retail sectors. Housing loans are also dictated by demand and supply of credit, he said. When asked when there is no pressure on interest rates, why has the RBI been sucking out liquidity from the system through reverse repo operations, he said the liquidity adjustment facility was also aimed at stabilising the markets. "All banks may not lend at the same time. It may be slack time for one bank and not for others. To even out liquidity in such a scenario, the RBI undertakes reverse repo operations," he explained. The RBI had kept the reverse repo and repo rates intact in its annual monetary policy in April, but raised them by 0.25 per cent each last month after inflation rose. RBI Deputy Governor Rakesh Mohan justified the central bank's move, saying it was consistent with the Reserve Bank's statement that measures would be taken as the situation evolves. "We are confident of containing inflation ... We are worried about global oil prices ... RBI will manage risks as they evolve," RBI Governor Y.V. Reddy had said after announcing the policy in April.— PTI
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IBP to merge with IOC within 6 months
New Delhi, July 16 “The oil companies and different committees have proposed various alternatives. For instance, the highly subsidised kerosene and liquid petroleum gas (LPG) can be targeted only for the families living below poverty line (BPL), thus giving relief to the companies,” said Mr V.C. Agrawal, Managing Director of IBP Limited, in an interview with The Tribune. An electrical engineer from IIT, Roorkee, Mr Agrawal has taken over the reins of IBP at a time, when it is in the final stages of merger with parent company IndianOil. “The Board of Directors of both companies and the shareholders have cleared the proposal of merger of IBP with IOC. Now, we are sending the proposal to the Ministry of Company Affairs. The whole process is likely to be completed within six months,” he said. To start with, IBP brands may continue, including its retail outlets. However, ultimately there will be a single entity — IOC. On the impact of merger, said Mr Agrawal: “there will be virtually no impact on the consumers as they would continue enjoying the best products of IndianOil at our outlets. As far as the employees are concerned, we will have to redeploy a section of the employees considering the merger of some divisions like corporate communications, marketing and accounting.” There should be no fear of retrenchment among the employees of IBP, he asserted, as IndianOil was a growing organisation and “we would require additional manpower to handle expanding operations.” About the impact on the dealer network, wherever retail outlets of both companies are close to each other, some retail outlets may be closed down to improve productivity. A review of the operations of retail outlets is independent of the decision to merge, Mr Agrawal said. On acquisition of the Haldia project, he said: “IndianOil is very much interested in acquiring management control of Haldia Petrochemicals in West Bengal. The state government is also interested in offering a stake to us.” Since there is a dispute between the state government and other HPL promoter, TCG group, on the issue, the IOC would have to wait for the final decision. On the rising international crude oil prices, he said there was need for restructuring the pricing mechanism though “we do understand that it is not easy for a common man to shell out Rs 50 a litre for petrol. There was also a proposal to introduce smart cards to kerosene and LPG users to monitor the supply of subsidised fuel. Mr Agrawal added the increasing price difference in the kerosene, petrol and diesel prices was also encouraging a section of the dealers to indulge in adulteration.
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by Lalit Batra Q1 results show robust growth Indian markets shrugged off terror attacks and moved higher on alternate bouts of buying and selling. Sensex during the week was volatile. The global factor that made the market trade in a range-bound fashion was the announcement made by the Bank of Japan. For the first time over the past six years the Bank of Japan raised its interest rates by 0.25 per cent from almost zero, thereby ending the zero-interest rate policy. Moreover, weak global markets and crude oil price touching a record high of above $78 a barrel lead Sensex to settle at 10678, a gain of 169 points. Nifty rose by 47.5 points to settle at 3,123.35. Another good news came in from latest economic data, which showed industrial production in May, 2006, rose by 10 per cent from a year earlier, higher than market expectations due to strong manufacturing output growth. Manufacturing, which represents more than 75 per cent of the industrial output, rose by 11.3 per cent in May from a year earlier, compared with 10.4 per cent in April. The last week was also witness to some leading corporates announcing their first quarter ended June, 2006 results. Infosys, HDFC Bank and UTI Bank all three have surprised the stock market with its strong results. Wipro
Wipro is India’s third-largest software services exporter and has diversified business interests, which include software development, hardware and consumer care and lighting. The company began its swift transformation from a predominantly hardware company to a software services company in the year 1999. Since then, the contribution of Wipro Technologies, Wipro’s global IT services business has consistently been on the rise and has been the major driver of revenue and profit growth. Global technology spending has been on an uptrend over the past two years with the offshore component seeing impressive traction, driven by increasing acceptance of the ‘global delivery model’. However, the demand has shifted from low-end services to high-end ones, like IT consulting, package implementation and systems integration. Indian IT companies that provide a broad range of services and have proven capabilities in executing large and complex projects are likely to emerge winners over the long term and Wipro is one of them. Wipro is witnessing strong traction in its existing information technology (IT) service business. In addition to this, the incremental growth from the recent inorganic initiatives has considerably improved the visibility of growth in its global software service business. The margins are also sustainable at the current level, given the positive pricing environment and the other operating levers (like a higher offshore contribution and utilisation rate) that are likely to cushion any adverse impact of wage inflation on the company’s profitability. The stock’s valuations are quite compelling and Wipro seems to be a good pick at current levels. |
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Bajaj Auto Q1 net up at Rs 266 cr Mumbai, July 16 Announcing the results, the company said its total income (net of excise) had increased from Rs 1726.93 crore in Q1 FY 05-06 to Rs 2297.22 crore for Q1 FY 06-07. The group has posted an income attributable to the consolidated group at Rs 255.77 crore for the quarter ended June 30, 2006 (Q1 FY 06-07) as compared to Rs 230.15 crore for the quarter ended June 30, 2005 (Q1 FY 05-06). Net sales increased to Rs 2294.28 crore for Q1 FY 06-07 from Rs 1755.83 crore in Q1 FY 05-06. PUNE: Bajaj Auto will set up a joint venture in Indonesia, Executive Director of the company Sanjiv Bajaj said. The approval to set up the assembling unit at a cost of $50 million was received from the Indonesian Government a month ago and the joint venture would be called P.T. Bajaj Auto Indonesia, Mr Bajaj said here. Initially, $12.5 million would be invested in the joint venture, he said, adding that Indonesian partner Doentora would hold a 5 per cent stake, and the rest with Bajaj Auto. The annual output from the facility for three-wheelers was expected to be 10,000 units and for two-wheelers, it would be about one lakh units. HDFC Bank profit up
HDFC Bank Ltd has posted a 30.38 per cent rise in net profit at Rs 239.30 crore for the quarter ended June 30, as compared to Rs 183.53 crore for the corresponding quarter in 2005-06. The total income rose to Rs 1855.08 crore for the first quarter in 2006-07 from Rs 1157.68 crore in the year-ago period. Net revenues, consisting of net interest income and other income, were up by 48.4 per cent at Rs 1168.4 crore for the quarter ended June 30, as against Rs 787.2 crore for the corresponding period last year. Recording an increase of 47.6 per cent, the total balance sheet size of the bank as on June 30, grew up to Rs 79,697 crore.
— Agencies |
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by S.C. Vasudeva Penalty under Section 271F for not filing income tax return Q: One of my friends in individual capacity did not file the return on due date for the Assessment Year 2005-06 whose income details is given below: Gross salary 1,07,000 Less: standard 30,000 Income from salary 77,000 Income from other sources 24,000 Total income 1,01,000 Less:- Deduction U/s 80L 12,000 Taxable income 89,000 Tax on total income 6,800 Less:- Rebate U/s 88 for LIC Premium
of Rs 29,000 5,800 Rebate Net tax payable: NIL Kindly advise if my friend files his return now, what is the penalty my friend has to pay or is there no penalty. What would be his position, if the amount of gross salary is substituted by Rs 99,000. — Bhushan A: As per the calculations given by you, no tax would have been payable on the total income of your friend. The return by your friend should have been filed by July 31, 2005. However, the same could have been filed by March 31, 2006 to avoid penalty. As your friend did not file the return by March 31, 2006, he will be liable to pay penalty under Section 271F of the Act. The maximum amount prescribed under the said section is Rs 5,000 Even if the amount of salary is substituted by Rs 99,000 though the tax payable will be nil yet the default of not filing the return by March 31, 2006 would still be there. Tax liability Q: Kindly advise my income tax liability for the Assessment Year 2005-06 from the following particulars: (Rs) 1. Annual
pension for Assessment year 1,00,000 2. LTC 5,000 3. Income from
small saving schemes MIS & SCS 20,000 4. Sale of plot
by my wife purchased during year 1982 from her My wife is dependent on me now and she has handed over the money to me, which has been deposited by me in my own name in the Senior Citizen Scheme. Both of us are Senior Citizens. Kindly advise me my income tax liabilities and the manner in which the same can be saved/invested. — J.S. Dhiman, Patiala A: On the basis of figures given by you, your total income works out at Rs 1,25,000 including LTC which is presumed to be taxable. Since you are a senior citizen, the above amount is below the taxable limit of Rs 1,85,000 applicable for senior citizens. Accordingly, no tax is payable on your total income. The capital gain on the sale of plot earned by your wife shall be taxable in her hands. This is on the basis of facts given in the query. It is, however, not evident from the query as to whether the amount of Rs 1,50,000 represents the capital gain or is the sale price of the plot. In case the amount of Rs 1,50,000 represents sale price, the capital gain would be worked out by deducting the indexed cost from the sale price. The net amount so arrived will be the amount of capital gain. It may be added that the amount of interest earned by you on the amount of Rs 1,50,000 deposited in Senior Citizen Scheme would be taxable in the hands of your wife. PF Scheme Q: My son, who served in a computer firm (TCS) for about 18 months, left the job by giving 3 months notice to the company as per rules and joined as a regular student for MBA. He has accumulated provident fund of approximately Rs 50,000. 1. Please advise whether same can be refunded by company or some minimum period is required for retaining the provident fund since he has taken benefit of rebate for income tax liability. 2. I have taken two life insurance policies in his name. Since he has left service and is studying, I have paid insurance premium on his behalf out of my bank A/c. Can I avail income tax relief in case of my salary/pension if I submit proof from my banker. — P.K. Kataria, A: The answers to your queries are as under:- 1. I presume that the Provident Fund Scheme by TCS is recognised under the provisions of the Act. Rule 4(g) of Schedule IV to the Act dealing with the Recognised Provident Funds provides that the accumulated balance due to an employee shall be payable on the day he ceases to be an employee of the employer. However, such accumulated balance would be includible in the total income of your son in terms of Rule 8 and Rule 9 of the above schedule. 2. It should be possible for you to claim the deduction in respect of insurance premium paid towards the life policy of your son. Senior citizen Q: Please clarify: 1. What is the age to be senior to get benefit of senior citizen saving schemes deposits of bank for 9 pc interest on deposits. 2. What is the age to be senior citizen to get benefit of income-tax (return filings). 3. Punjab Government retires its employees at the age of 58 years. Can they also avail above benefits. 4. What is the best alternative to get maximum return on funds one get after retiring at the age of 58 years on his deposits in banks or post office? — H.S. Cheema, Ludhiana A: The answers to your queries are as under: (i) The Senior Citizen Saving Scheme in the first instance was started to cover individuals who had attained the age of 60 years or above. However, the relevant scheme was amended in October 2004 so as to include an individual who has attained the age of 55 years or more, but less than 60 years and who has retired on superannuation or otherwise on the date of opening an account under Senior Citizen Saving Schemes Rules 2004 subject to the condition that the account is opened by such individual within one month of the date of receipt of retirement benefits and the proof of date of disbursal of such retirement benefits alongwith the certificate from the employer indicating the fact of retirement on superannuation or otherwise, retirement benefits, employment held and period of such employment with the employer is attached with the application form. (ii) For the purpose of Income-Tax Act 1961 (the Act), a person who has attained the age of 65 years or more is eligible for the benefit available to a senior citizen. The benefit is in the shape of a higher exemption limit of Rs 1,85,000. (iii) As indicated in (i) above, a person who retires at the age of 55 years or thereafter can avail the benefit by depositing the retirement benefits in an account opened under the aforesaid scheme. (iv) It would be better to deposit the amount in the above scheme so as to get the maximum possible interest on your retirement benefits. Tuition fee Q: I am an employee of Railways. My elder son is studying in a college affiliated to Kurukshetra University Kurukshetra. I am paying Rs 34,500 as tuition fee for the current year for him and paid Rs 3,600 as tuition fee in school for my younger son for the current year. My question is how much tuition fee is deductible from my income as saving for the current year. — Aman Gupta A: Section 80C of the Act provides that in computing the total income of an assessee, being an individual or a HUF, there shall be deduction, the whole of amount paid or deposited in the previous year, being the aggregate of sums specified in the said section as does not exceeds Rs 1,00,000. One of the items covered in Section 80C of the Act, is the amount of tuition fee paid (excluding any payment towards any development fee or donation or payment of similar nature) whether at the time of admission or thereafter to any university, college, school or other educational institution situated within India for the full-time education of any two children of such individual. Accordingly, you would be entitled to the deduction against your total income the tuition fee paid for both children.
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