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Global oil prices may flare up
Reliance set to launch retail operations in Punjab
Punjab moots cut in VAT on food, beverages
Hoteliers, travel agents ink pact
Mobile user base touches 13 crore
MRTPC notice to HDFC Bank
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Market
Scan
Tax
Advice
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Global oil prices may flare up
New Delhi, November 12 "Trends from future market trading suggests that oil prices may go up in the future months in view of tight spare capacity in global markets against the background of buoyant GDP growth," NCAER said in its latest quarterly review. Besides, rising geopolitical tensions in West Asia and risk to production in some other large oil producing countries, notably Nigeria, could further push the prices of international crude oil, it said. NCAER said the fact that major economies of the world are expected to see continuation of economic growth trends implies that demand pressure on energy supplies will remain. Moreover, oil producers' cartel OPEC appears keen in maintaining high prices by restricting output, while consumers show no signs of restraining demand. In the immediate medium-term, relatively high oil prices in international markets are likely to continue. This would put pressure on the external balances of oil importing countries, the think tank said. Although there appears to be some respite as prices have begun to decline, it still continue to be well above the level seen two years back. — PTI
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Reliance set to launch retail operations in Punjab
Chandigarh, November 12 Top officials in the company said that as of now the company proposed to open 32 Reliance fresh stores (fruits and vegetables), two CDIT stores and hyper markets each, besides super markets at various places. “We hope to get the Reliance fresh stores rolling by the end of December, with a store each in Ludhiana, Jalandhar and Amritsar,” said the official. The company has also decided on the locations for setting up these stores in Chandigarh and Panchkula (two each); while exercise is on to find locations for setting up these fruit and vegetable stores in Ambala, Karnal, Yamunanagar, Kurukshetra and Panipat in Haryana. The company has already taken land on lease for setting up ten Reliance fresh stores in Jalandhar and nine each in Ludhiana and Amritsar. About 38,000 sq. feet of land has been bought by the company in Ludhiana for setting up a CDIT store, while another 30,000 sq feet of area has been taken on lease in this industrial city for setting up another CDIT store on the Ferozepore road. “These stores will offer all kinds of multi brand computer hardware, consumer durables and white goods. The two CDIT stores are expected to open by the beginning of March,” said a company official. Other than these, the company will be coming up with two mega malls at Ludhiana and Sangrur. Reliance has bought 1. 2 acres of land at Ludhiana and 1.75 acres of land at Sangrur for this purpose.
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Punjab moots cut in VAT on food, beverages
Chandigarh, November 12 The government also aired its plans of issuing instructions to the police and senior functionaries of all the districts to maintain cordial relations with the tourism and hotel industry across the state. The state also called upon NRIs to set up tourism projects in the state. The enforcement of “Hotel land use policy” by early next year and the introduction of the Tourism Trade Act were also announced. Addressing hoteliers on the concluding day of 42nd annual convention organised by the Federation of Hotel and Restaurant Associations of India (FHRAI), Punjab’s Tourism Minister Jagmohan Singh Kang said a proposal for introducing “Bharat darshan special” train for enabling a common man to travel to different states across the country has been forwarded to the Railway Ministry. Mr Kang added that efforts were on for setting up another international airport in the state, in addition to the Amritsar airport. Amritsar is also being further developed as tourism destination. He said Rs 30 crore had already been released for the execution of tourism projects. The state’s Director, Tourism, Mr Jagjit Puri, said the Tourism Trade Act would go a long way in preventing the duping of youngsters eager to go abroad as it would also cover the travel agents. Under the land use policy, the state government would create a bank of land available in villages, towns and cities and float information about the same on the Internet. The sites would then be auctioned through a transparent bidding process. He added that all pending cases regarding release of subsidy to the hotel industry would be cleared soon.
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Hoteliers, travel agents ink pact
Chandigarh, November 12 Life-time achievement award was bestowed upon Executive Director of ITC Hotels S.S.H. Rehman. The Tribune was the media sponsor of the convention. The agreement made it mandatory for the hotel to confirm reservation in writing within three working days of receiving request from a tour operator. The type of room, validity of reservation and rates of the services would be specified. The acceptance of the hotel’s conditions would be notified by the operator in writing within specified time limit. TAFI president Praveen Chugh said, “Hotel can request for total or partial pre-payment which would be treated as a guarantee deposit except when cancellation was made in accordance with the hotel’s written cancellation policy or customary trade practices”.
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Mobile user base touches 13 crore
New Delhi, November 12 While GSM-based cellular subscriber base touched 9.6 crore in October, the CDMA-based mobile user base has swelled to 3.3 crore during the month, according to the data released by trade associations COAI and AUSPI, respectively. Reliance added over 10 lakh CDMA subscribers in October, taking its total subscriber base to 2.4 crore. Tata Teleservices's subscriber base reached over 93 lakh with the addition of 8.8 lakh subscribers in the month of October. In October, the cellular subscriber base of Bharti touched 2.86 crore, followed by BSNL at 2.20 crore with a market share of 23.03 per cent. Hutch-Essar has 2.12 crore subscribers and Idea has 1.09 crore subscribers. — PTI
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New Delhi, November 12 An MRTPC Bench headed by Justice O.P. Dwivedi directed the bank to file its reply within four weeks. The notice was issued on the basis of a preliminary report by the MRTPC's investigative arm -- Directorate General of Investigation and Registration. DGIR has started similar process of preliminary investigation reports (PIR) against ICICI Bank, Citi Bank, ABN Amro, HSBC, American Express Bank. The report alleged that the customers were not told the terms and conditions when they signed the documents given by direct selling agents (DSAs) and the card holders come to know about the terms only after receiving the plastic money. — PTI
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Market Scan During the last week, the Sensex gained 97 points and the bullish trend persisted. Last Friday, the Sensex closed at 13,282.91 points after touching 13,303.85 in intra-day trading and an all-time high record. According to an analysis by a leading financial paper, one in every six listed companies has surpassed last full year’s net profit in the first half of 2006-07. Net profit of 321 firms increased by 800 per cent to Rs 10,370 crore compared with Rs 6,157 crore in 2005-06. The industrial production grew at 11.4 per cent during September as against 9.9 per cent growth in August. A number of companies are spreading their wings across the globe to other countries. Tata Tea, Taj Hotels, Tata Moter Tata Steel, Aditya Birla group, Gujarat NRE Coke, Welspun India are some of the companies which have made large investments abroad. The major question is whether it is beneficial to make fresh investments in the equity market at present? No doubt that the Indian economy is on a roll and high GDP growth is on the cards; the stock market is expected to perform well in the long run. Some analysts are even expecting that the Sensex will touch 15,000 points during the next financial year. Many foreign analysts state that the valuation of the Indian equity market is higher than in the other emerging stock markets. At a P/E ratio 19.5, the Indian stock market is considered expensive and less competitive than the other emerging markets. On the positive side the Indian market is regarded as less risky than many other stock markets of Asia and Latin America. It is also potentially more stable as it has large and growing investment and consumer sector in the middle class section of the population. It would appear that fresh investment in equity shares at this time have higher chances of loss than of gain. There appears to be a strong possibility of market correction in the near future before the market starts moving up again. It would be wise to book profit in the scrips with high P/E ratios while taking into account their future prospects of growth and profitability. Some scrips like Reliance Industries, Reliance Capital, ABB, Larsen and Toubro, Tata Chemicals, Tata Tea should be left untouched. The textile scrips like Vardhman Textiles, Nahar Spinning and Centurian Textile etc. have chances of further growth. But pharmaceutical companies should be avoided for the present for the price control measures will sap their profitability. Those investors, who opt for high tax-free dividend income, should invest in good mutual fund schemes.
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Tax Advice
Q: I am a retired Central Government employee aged 70 years. I have been regularly filing income tax returns for the past few years with tax liability as nil since my income fall below the taxable income after standard deduction and other permissible deductions. My pension and income from other sources from 01.04.2005 to 31.03.2006 is appended below:
Kindly advise, if I am required to file a nil return for the financial year 2005-06 or to discontinue submission of the return as the above mentioned amount falls short of the taxable limit of Rs 1,85,000 for senior citizens. I also fall under the 1/6 scheme. — G.B. Sharma, LudhianaA: In accordance with the provisions of Section 139(1) of the Income Tax Act 1961 (the Act), every person, if his total income assessable under the Act during the previous year, exceeds the maximum amount which is not chargeable to income tax shall on or before the due date furnish his return of the income in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. Since, you are having an income of Rs 1,33,042 which is below the maximum amount which is not chargeable to income tax as applicable to senior citizens, you are not required to file income tax return. NRO or NRE bank accounts
Q: My son and his wife are holding Indian passports. Presently, they are in Canada on permanent resident visas. While in India, they had opened two joint savings bank accounts with two different banks, which are still in operation. They want to continue these accounts by making deposits in these accounts. Please advise: (i) Whether there is any legal hurdle or not? (ii) Whether there is any ban or formality to be completed as per Income Tax Rules? (iii) Whether they are required to pay any tax or not? — Ramesh Kumar, Chandigarh A: In the first instance your son and his wife should inform the bankers that they have become non-residents under the Foreign Exchange Management Act 1999. The bank, thereafter, will designate the rupee account as "Non-Resident Ordinary Account". They should open a separate account for foreign remittances, which will be designated as "Non Residence External Account". The amount deposited in such account can be utilised as per the purposes specified under the regulations issued under the Act. The interest earned on NRO account will be taxable in India whereas the interest earned on NRE account would be exempt from tax. There is no other formality under the Act except that income tax return in their case would be filed with the non-resident ward. Tax liability
Q: Kindly compute my income tax for the year ending 2006. I have become senior citizen on 05.03.2006. I am retired and getting pension from the Haryana Government. I am living in a rented house, as I have got no house anywhere. The details of income are as under:
— R.K. Gupta, Karnal A: On the basis of figures given in the query, your total taxable income would work out at Rs 1,92,725 and the tax thereon, including education cess, would work out at Rs 1,577. The tax liability has been computed without interest under Sections 234B and 234C of the Act. STCG taxable
Q: I bought 500 shares of a company in January 2005 @ Rs 100 per share and was allotted 1,000 shares as bonus in January 2005. I sold all shares in the following manner. 1. 500 shares @ Rs 40 for Rs 20,000 in May 2005 (original shares). 2. 500 (bonus) shares @ Rs 50 for Rs 25,000 in September 2005. 3. 500 (bonus) shares @ Rs 60 for Rs 30,000 in February 2006. I am a pensioner and my income falls in the taxable category. Please advise how the sale proceeds be counted and how income tax be computed. Keeping in view the short-term capital gain/loss and long-term capital gain/loss. B. Please also advise if interest on bank deposits and interest on debentures is taxable (if so to what extent). C. Please also advise what is the age for senior citizen for the purpose of income tax calculations (i.e. exemption income for female citizens). — J.K. Uppal, Amritsar A: The answers to your queries are as under: A. In accordance with the provisions of the Act, the cost of bonus shares is to be taken at Nil. As the bonus shares were received in January 2005 and a part of such shares have been sold in September 2005, the gain arising thereon would be treated as short-term capital gain. The original share holding of 500 shares having also been sold within a period of one year, the loss of Rs 30,000 would be short-term capital loss which would be set off against the short-term capital gain of Rs 25,000. The balance short-term capital loss would be carried forward for a period of 8 years. The other 500 shares sold in February 2006 would be a case of long-term capital gain and same would be exempt from tax in case the transaction has been effected through stock exchange and the securities transactions tax has been paid thereon. B. Interest on bank deposits as well as interest on debentures is taxable. C. A person is treated as a senior citizen when he attains the age of 65 years. The age criteria for both male and female for senior citizenship remains the same. Interest on NSCs taxable
Q: I am semi-government retired employee. I have been purchasing NSCs to get benefit under Section 88, now 80C. I wanted to know if interest on NSCs is taxable or not. Is the interest so accrued also qualify for the purpose of section 80C and to what extent. — V.K. Sharma, Bilaspur A: Interest on NSCs is taxable. However, the accrued interest on the NSCs is covered for the purpose of grant of benefit u/s 80C subject to the maximum limit of Rs 1 lakh provided under the aforesaid section. |
Microsoft, Airtel sign agreement Air-India plan |
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