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UWB to merge with IDBI on October 3
Bihar on India Inc’s radar
TN woos Japanese investors
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Gujarat NRE forays into oil exploration
A-I Express’ flights to Dubai
SBoP’s offer
Investor Guidance
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UWB to merge with IDBI on October 3
Mumbai, September 30 "The amalgamation will come into force on October 3. All branches of UWB will function as branches of IDBI with effect from this date," RBI said in a statement here. It said customers, including depositors of UWB, will be able to operate their accounts as customers of IDBI, which is making necessary arrangements to ensure smooth service. In accordance with the scheme of amalgamation, IDBI will make an upfront payment in cash of Rs 28 in respect of every fully paid-up share to the members of UWB, who were, as on the prescribed date, registered as the holders of shares of the bank, in partial satisfaction of their claim in respect of their interest in such shares. Further, in terms of the scheme, if any surplus remains after meeting all liabilities out of realisation of assets of UWB, the shareholders may receive pro-rata payment after the prescribed period, the release added. The Board of UWB, which was placed under moratorium on September 2 following erosion of its networth, had strongly objected to RBI's proposal to merge the bank with IDBI on the ground that it would lose its independent identity. UWB had contended that the Maharashtra Government's agency Sicom and HDFC were willing to bail out the bank without compromising its separate identity. As many as 17 banks and entities had shown interest to takeover UWB, which has over 230 branches across Maharashtra, Goa and Karnataka, Rs 6,400 crore deposit base and 3,000
employees. — Agencies |
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Bihar on India Inc’s radar
Patna, September 30 The state, where even angels were said to have feared to tread till last year, has suddenly turned into a new investment hub, with National Investment Commission (NIC) chief Ratan Tata projecting it as an "upcoming investment destination". Going by official statistics, in the past 10 months Bihar has received investment proposals worth Rs 10,000 crore as compared to the proposals amounting to Rs 700 crore received in the past 15 years. The investment process, which began with Coimbatore-based Rajshri Sugar Mills was followed by Prakash Jha's proposal to set up a chain of shopping malls and multiplexes. Even banks like HSBC have opened their first branch in the state. Filmstar-turned-politician Shatrughan Sinha has also shown interest to set up the biggest film city of Asia in Bihar. The British High Commissioner to India, Sir Michael Arthur, too, had expressed satisfaction over various development initiatives by the Nitish Kumar Government and promised to send a British trade and business delegation to the state to explore investment opportunities. |
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TN woos Japanese investors
Chennai, September 30 Chief Minister M Karunanidhi invited the Japanese business community to invest in Tamil Nadu and has offered to set up an industrial town if required, state Chief Secretary L K Tripathy said at the business interaction with the Economic Mission from the Japan Chamber of Commerce and Industry (JCCI), organised by the state council of Ficci. The state government is interested in developing Tamil Nadu as an auto-industry hub, Mr Tripathy said. There is a huge potential for investment in the state's small and medium enterprises (SMEs), JCCI Chairman Nobou Yamaguchi said. "It will be beneficial if Tamil Nadu can give SMEs complete freedom for entry and exit in the state," Mr Yamaguchi said adding that the sector would be able to invest in the state freely knowing that if things did not work out, they have the choice of closing the establishment. "Japan is looking at India more seriously than ever before. Its focus was China for a long time and now it is looking at a more balanced Asian partnership with India," he
said. — PTI |
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Gujarat NRE forays into oil exploration
Ahmedabad, September 30 “This is the first time we are entering the oil and gas exploration business,” company Vice-Chairman and Managing Director Arun Jagatramka said today. “We have bagged oil and gas exploration rights over a 10,000 sq km area to the south of Derby port in Western Australia,” Mr Jagatramka said, adding that an agreement in this regard was signed on September 26. Being a new entrant in this sector, the company is planning to start its oil and gas business in a small way, he said. “We have committed to invest about five million Australian dollars (about Rs 20 crore) in the project over a period of about four years,” he said. “As per the agreement, our company will hold 90 per cent of the ownership while the remaining 10 per cent would be held by an Australian company Rey Resources Limited,” he added.
— PTI |
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A-I Express’ flights to Dubai
Amritsar, September 30 The spokesman for the A-I said the no-frill airline would operate three weekly services connecting Amritsar with Dubai on every Monday, Thursday and Saturdays. He said A-I Express offered convenient connectivity at affordable fares. The baggage allowance for the passengers is 20 kg while on return journey the passenger would be allowed 30 kg. |
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SBoP’s offer
Patiala, September 30 Interest rate on car loan has been fixed at 9 per cent while that of personal loan at 12.25 per cent. The bank also offered 50 per cent concession in the processing fee on the above schemes. |
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Long-term gains from close-ended MF scheme tax-free
by A.N. Shanbhag Q: I have a query, related to a close-ended Mutual Fund. Is implication of capital gain income tax different for open/close-ended mutual fund. I understand that for open-ended mutual fund, the tax is nil, if hold over a period time, what about close-ended scheme? — Tarun Goel A: There is no difference. The long-term gain from close-ended scheme, which is an equity-based MF scheme, is exempt from tax. Senior citizen
Q: I am a senior citizen with an income of Rs 2,30,000 .I am in a position to contribute Rs 70,000 to PPF every year out of my savings. Shall I do so to earn the 8 PC tax-free interest? — G S.S.Murthy A: The threshold for senior citizens is Rs. 1,85,000. Consequently, a contribution of only Rs. 45,000 will bring you out of the tax net (230000 - 45000 = 185000). I suggest that you should strive to increase your income, by investing Rs. 2,77,000 in the 9 pc Senior Citizens Savings Scheme (SCSS), by around Rs. 25,000 (= 9 pc of 277000) and contribute this Rs 25,000 to PPF to continue to stay out of the tax net. For achieving this goal, you may withdraw from PPF as much as possible and contribute to SCSS. Thus, you will earn 9 PC interest on which no tax is payable by virtue of the deduction u/s 80C in place of 8 PC tax-free interest on PPF. Alternatively, you may contribute Rs 45,000 to PPF and invest the balance of Rs 25,000 (out of the Rs. 70,000 that you could contribute to PPF) and build up the investment in SCSS. After reaching this goal you will have exhausted the limit of PPF which is Rs. 70,000 but the limit of contribution to Sec. 80C is Rs. 1,00,000. Therefore, you can use the same strategy to increase your income by another Rs 30,000 and contribute this Rs. 30,000 to the other avenues to keep you out of the tax net. Which is the next best avenue? Strangely, the answer is PPF itself. You may contribute to PPF account of your wife or major children (including married daughter) and claim the deduction u/s 80C (presuming that your wife or your major children are not tax payers). This answer assumes that you desire safety of the nth order and have no risk appetite. If you have some risk appetite, you may opt for Equity Linked Savings Schemes (ELSS) of MFs. Capital gains
Q: I am the guardian of a minor, a US citizens who is staying with me in India She has some fixed assets in India acquired on the demise of her father. The date of demise was 22-06-2003 but the transfer of assets could be done only in January 2006. 1. I understand, though the actual transfer is done now only, incase the asset is disposed of now, i.e. after 22-06-2006, it will be a LTCG but indexation will not applicable. Is it correct? 2. Whether the entire sale proceeds can be deposited in REC, Nabard etc for a minimum period of 3 years in the name of the minor and tax can be avoided. 3. As the minor is a US citizen whether the entire sale proceeds can be remitted to her account in the USA with out any tax liability in India, if so any statutory clearances are to be obtained? 4. In case the amount is to be deposited in India in REC etc, will a PAN would be required as the amount would be more than Rs 50,000? — P. V. Rama A:
Your understanding of the subject matter appears to be more or less okay. Nonetheless, for clarity and to avoid any mishaps, we give hereunder all the answers: 1. 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 1.4.81 as assessed by an official chartered valuer, whichever is higher. Explanation ‘iii’ to Sec. 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 the 1st day of April, 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. 2. The tax on all long-term capital gains which are chargeable to tax, can be saved by investing within 6 months the amount of capital gains in infrastructure-related Bonds of NHAI or REC u/s 54 EC. The lock-in period is 3 years. The current interest rate is around 5.5% and this is fully taxable. FA06 has deleted NABARD, NHB and SIDBI from the eligible list. 3. From the query, it appears that the child is staying with you here in India. She is likely to be a Resident in India. An NRI (including a US citizen of Indian origin) can repatriate up to $ 1 million per year to the US out of the sale proceeds of inherited property. You have not indicated anything about her origin. If she is a rank foreigner, she will need RBI permission which can be easily obtained. 4. The capital gains will be taxable unless the gains (and not the entire sale proceeds) are invested in the abovementioned Bonds. However, in your case, you might prefer to pay the tax rather than wait for 3 more years. 5. You, as a guardian, will have to apply for a PAN for her. VRS benefits
Q: I am working as an officer in a development financial institution headquartered in Noida. Entire equity shares of the company are held by the Government of India. The company has introduced a voluntary retirement scheme (VRS). As per the said scheme, all employees irrespective of age and service period would be eligible to opt for voluntary retirement under the scheme. The scheme indicates that all payments under the scheme shall be subject to deduction of tax at source as per the Income Tax act 1961, wherever applicable. The voluntary retirement amount payment to the employees will be exempt upto Rs 5 lakh from income tax as per current income tax laws. In this connection, my query is as under:- (1) since there is no age and service period stipulated in the scheme, whether the payment under VRS would qualify the exemption amount of Rs 5 lakh. (2) besides VRS payments, employees will get gratuity (maximum of Rs 3.50 lakh), leave encashment for a maximum period of 10 months. Please inform whether above amounts would also be taxable at all. — Basudeb Sadhukhan A:
1. Only if the scheme is drawn as per the guidelines laid down for getting eligibility of exemption u/s 10(10C) up to Rs 5 lakh should be available to those who pass the criteria of either 10 years of service or 40 years of age. Check with your employer if the company’s scheme meets this criteria. 2. The exemption on gratuity and leave encashment will certainly be applicable as per the rules. |
L&T to invest $150 m overseas Markets closed Air Deccan pact Nalco dividend UTI MF scheme Vishal Mega Mart |
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