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RBI moratorium on United Western Bank
RBI panel’s roadmap for full rupee float
Surrender fake PAN cards or face action
Liberty to pull out controversial shoes
Airlines hike fuel surcharge
A-I to induct 68 aircraft: CMD
AVIATION NOTES
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INVESTOR GUIDANCE
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RBI moratorium on United Western Bank
Mumbai, September 2 The moratorium will be effective from 2 p.m. today up to December 1, 2006, or an earlier date, if alternative arrangements are put in place, the RBI said. “The bank’s assessed capital to risk weighted asset ratio (CRAR) turned negative at (-) 0.3 per cent as on June 30, 2006. This has jeopardised the depositors’ interest,” it said. The bank was also unable to come up with any credible plan to raise fresh capital to bring its CRAR to the prescribed level, the apex bank said. During the period of moratorium, the depositors of United Western Bank (UWB) will be permitted to withdraw up to Rs 10,000 in total from their savings bank account or current account or any other deposit account through any of the branches of the bank. Further, customers will not be able to withdraw money through the ATMs of the bank or ATMs shared with other banks so as to give effect to the monetary ceiling prescribed in the moratorium. The Satara-based private bank has incurred net losses of Rs 98.64 crore and Rs 106.48 crore during 2004-05 and 2005-06, respectively. Its net non-performing assets were 5.66 per cent as on March 31, as compared to the peer group figure of 1.97 per cent. The RBI said it would consider various options, including the amalgamation of UWB with any other bank, and finalise the plans in public interest and with a view to ensuring that the public deposits are protected. Established in 1936, UWB has a network of 230 branches, 12 extension counters and 75 ATMs and its operations are mainly concentrated in Maharashatra. Listed on the Bombay Stock Exchange, the bank s deposits were Rs 6480.19 crore and advances Rs 4006.27 crore as on March 31.— PTI
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RBI panel’s roadmap for full rupee float
Mumbai, September 2 For instance, resident Indians in five years will freely remit as much as $2,00,000 abroad and open bank accounts anywhere in the world, foreign individuals will invest in Indian stock market, local corporates and banks will take large foreign loans, and overseas companies will do rupee borrowings from India. It calls for lower government stake in PSU banks, and asks that industrial banks be allowed in the Indian banking space, among other measures. The report lays down a five-year roadmap, saying that the overall external commercial borrowing (ECB) ceiling and automatic approval ceiling should be gradually raised. It proposes that ECBs of 10-year maturity in 2006-07 and seven-year maturity in 2007-08 should be outside ceiling, while end use restriction on ECBs should be removed for 2006-07. It further advocates the review of transaction limit of $20 million on import-linked loans. It asks for the revamping of import-linked loan scheme to unlimited borrowing. Further, the limits for corporate investment abroad should be doubled in phases. It calls for prohibiting the FIIs from investing fresh money via participatory notes (P-Notes) and recommends phasing out of existing P-Notes within one year. It has recommended for allowing the non-resident corporates to invest in Indian equities via mutual funds (MFs) and portfolio management service (PMS) schemes. Non-multilateral foreign institutions, it suggests, should be allowed to raise rupee bonds; while banks' overseas borrowings should be linked to paid-up capital and free reserves. The report advocates raising banks' overseas borrowings substantially to 100 per cent by 2008-09. According to the report, Indian MFs' overseas investment limit should be doubled to $4 billion by 2007-08 and should go up to $5 billion by 2008-09. Similarly, it says that Indian portfolio management schemes should be allowed to invest abroad. Limit on individual foreign currency account overseas has also been proposed to be hiked to $2,00,000 by 2008-09. The first phase of the three-part road map begins in 2006-07 followed by the second spread over 2007-09 with the third ending in 2011. Corporate investments abroad should be made easier, the report says and argues for lifting the cap on such outflows from 200 per cent of net worth to 400 per cent of net worth by 2011.— UNI
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Surrender fake PAN cards or face action
New Delhi, September 2 Claiming that 13 lakh persons were in possession of duplicate PAN cards out of 4 crore PAN card holders, he said, " We are not interested in taking penal action, and appeal to people to surrender if they have duplicate PAN. If the department finds them with 'intentional possession of duplicate PAN' or quoting them for tax evasion purposes, action would be taken as per the Act," he added. Meanwhile, the northern states can expect more funds from the Centre next year as the direct tax collections comprising personal income tax and corporate tax have almost doubled in the region this year. "In the Chandigarh region, comprising Punjab, Haryana, Himachal Pradesh, J&K and UT of Chandigarh, the direct tax collections have increased to Rs 1,172 crore during April-July 2006 period as against Rs 634 crore during the corresponding period last year, posting a growth of 85 per cent," a senior official in the Finance Ministry said. In fact, the Chandigarh region has shown highest growth in comparison to Delhi, Bangalore, Chennai and Kolkata regions. However, the financial capital of India, Mumbai, has shown the highest growth of 155 per cent during that period, with tax collections rising to Rs 7,940 crore from Rs 3,103 crore. Mr Sinha said with the efforts of department and rising awareness among the people 1.26 crore IT returns were filed by July 31 this year as against 77 lakh returns filed during the corresponding period last year. At the India level, the total direct tax collections have gone up to Rs 36,119 crore during April 1 to July 31, 2006, as against Rs 22,385 crore during April-July 2005 period, registering a growth of 61.35 per cent. The individual income tax collections increased to Rs 16,528 crore from Rs 11,823 crore.
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Liberty to pull out controversial shoes
New Delhi, September 2 “One of the insoles of the shoes bears numeric numbers as design that seemed similar to a religious name of a certain community. This was purely unintentional and the company apologises if it hurt anybody,” Liberty Managing Director Anupam Bansal said here. Mr Bansal said the company had already withdrawn that product from the shelves in Hyderabad and was in the process of pulling it out from other cities as well. The Hyderabad police yesterday seized Liberty’s Glider brand on which the controversial design was imprinted. Three showrooms of the company were told to close their sale. Such footwears were introduced about six months ago, but the objectionable design was first noticed in Bangalore only five days ago.— PTI
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Airlines hike fuel surcharge
New Delhi, September 2 While the hike by Jet and Indian would be effective from September 5, Air Deccan said it would raise the surcharge from September 22 on all sectors. This will be the third hike in three months and fourth this year. The fuel surcharge has soared from Rs 300 in the past three months to Rs 500 and then to Rs 650, which is again being hiked to Rs 750. The hike in fuel surcharge comes in the wake of continued increase in ATF prices, which were further raised by 4 per cent on Thursday.
— PTI |
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A-I to induct 68 aircraft: CMD
Varca (Goa), September 2 He was here to address a conference on ‘logistics’ organised by the Goa Institute of Management in south Goa. Pointing out that Air- India was being ‘rebuilt’, Mr Thulasidas said the airlines would induct 68 brand new state-of-the-art aircraft in its fleet soon.
— PTI |
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Apology should come from Northwest Airline
by K.R. Wadhwaney Who is more blame worthy — United States or Holland — for the unprecedented, nasty drama in the air, detention and release of 12 passengers at Amsterdam airport on August 23, 2006? All aviation and security analysts are unanimous in saying that the entire fault of passengers facing humiliation in aircraft and on Amsterdam airport rests wholly with the USA as Americans were in command of the Mumbai-bound northwest Airline flight NW-0041. Analysts’ observation is based on their vast experience, good logic and acme of high sense. They say that Northwest is American, pilots are Americans, hostesses are Americans and all marshals, Americans. It is established beyond any shadow of doubt that American marshals and highly-stung hostesses indulged in tantrums and acted in panic considering innocent passengers’ moments of happiness of returning home after business-holiday trip into ‘behaviour of concern’. Twelve passengers, most of them Bohras from Mumbai, were merely making merry in their own language and style. They spoke loudly; jumped and danced. The marshals, some of them were merely brawny, misinterpreted their lusty actions. They thought the group had some foul designs up their sleeves. Panic-ridden, they wrongly briefed commander who, without verifying the facts, chose to return to Amsterdam’s Schiphol airport after seeking ‘defence protection’. On the basis of commander’s demand, the Dutch provided two F-16s and the flight landed amidst ‘warlike situation’. As commander and marshals had painted a ‘very disturbing picture the Dutch authorities were left with no option except to subject passengers with ‘third degree treatment’. How and why Dutch authorities be accused of awarding ‘harsh treatment to Indian passengers’? The fault clearly was of Americans, who mishandled the entire exercise. Taking the entire exercise, as it stands, the Dutch government has done right in expressing ‘regret’ but has declined to ‘aplogise’. Why should Dutch apologise? The apology should be secured from Northwest and USA for creating crisis and compensation should also be claimed from the American airliner for needlessly pressing the panic button. According to airline manuals worldwide, high degree of care and caution should be exercised in the event of emergency, including terrorism on board the flight. Had marshals in general and commander, in particular, displayed restraint, the ugly situation could have been averted.
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Invest LTCG within 6 months to save tax
by A.N. Shanbhag
Q: I had purchased a house property in Lucknow in October 1980 & I would like to dispose it of shortly. In this connection I would like to know the following: — Satish Kumar A: Long-term capital gain (LTCG) is to be computed by deducting from the full value of the consideration i) any expenditure incurred in connection with the transfer ii) indexed cost of acquisition and iii) indexed cost of improvement. In the case of assets, acquired prior to 1.4.81, the option of substituting the fair market value (FMV) in place of original cost is open to the investor. In other words, if the actual cost of acquisition is lower than FMV as on 1.4.81, the investor may adopt the FMV to be his cost of acquisition. On the other hand, if the actual cost of acquisition is greater than the FMV as on 1.4.81, the investor may adopt such cost. The CII based on 1981-82 only will be taken into account, whatever be the choice of the investor. LTCG is taken as a separate block and charged to tax at a flat rate of 20 pc. No deductions are allowed under Chapter-VIA like u/s 80C, 80D etc, for LTCG. The tax on all long-term capital gains which are chargeable to taxes can be saved by investing within 6 months the amount of capital gains in infrastructure-related Bonds of NHAI and REC or u/s 54 EC. The lock-in period is 3 years. The current interest rate is around 5.2 pc and this is fully taxable. Obviously, the interest is quite low and what is given by savings in tax is taken away by earning low interest and the tax on this interest. The assessee may also claim similar benefit u/s 54 by investing the LTCG to purchase a residential house within 1 year before or 2 years after the date of sale of the old house. Alternatively, he may construct a residential house within 3 years after the date. The new house has a lock-in of 3 years. The indexed cost is computed by multiplying the cost of acquisition with the ratio of the CII of the year of sale and the CII of the year of acquisition. The CII for FY 05-06 is 497. Whenever a taxpayer acquired a new asset before the stipulated dates as required u/ss 54, 54B, 54D, 54F or 54G it was necessary to reopen original assessments for rectification. These hardships have been eliminated through a special bank account called CGAS. The amount deposited in such an account before the last date of furnishing returns of income (or actual date, if earlier) along with the amount already utilised as required, is deemed to be the amount utilised for the purpose. If the amount is not utilised wholly or partly for the stipulated purpose, then, the amount of capital gains related with the unutilised portion of the deposit in CGAS shall be charged as the capital gains of the year in which the period expires. Theoretically, since the source of funds is coming out of your own pocket, it does not matter in which order of the names the new property is held. Demat account Q: I have a demat account. Whenever I buy shares, it simply updates and shows number of shares I have. So when I sell some of the existing shares of one company then how will I come to know whether I am selling 1-yr-old share or the one that I bought very recently? How will I decide capital gain tax when I do not know how long I held the shares I sold? — Praveen A: The demat statement would show the date on which the shares are dematted. As per law first in first out method is followed. The lot of shares that you first dematted will taken to be sold first. If you have maintained your records of purchases date-wise, you can claim that you will setoff any lot of your choice against the shares sold. The balance number of shares as per your record and those as per demat record should tally.
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Tax-saving plan Indian offer Bahrain project |
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