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Adopt self-regulation, SEBI to MFs
ECS norms: Banks, RBI at loggerheads
TVS Motor rolls out three-wheeler
Tax Advice |
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Market Update
SBI opens 10,000th branch
Chalasani is RPower CEO
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Adopt self-regulation, SEBI to MFs
Mumbai, March 9 Selling of products without explaining the details, including the likely return, is referred as misselling. The mutual funds industry should be able to regulate its distributors in a manner that investors do not have to complain that the products were mis-sold to them, Bhave said. With the derivatives markets taking off, complaints are being heard from investors that derivative products have been offered without the complexity of these products being explained to them properly, he said. "As India integrates more and more with the world, and with our markets getting more sophisticated, we will see more complex products for investment available," he said, adding understanding the risks inherent in these products will become increasingly important. Bhave asked the mutual funds industry to tap the market not only in the metros but also in the hinterlands "There is a market out there, which is untapped. This is a challenge for all of us as to how to reach this market. We have to see that the message is delivered in a language the investor understands," Bhave said. MF industry body AMFI's chief A P Kurian, who also spoke at the function, said there was a need to change the mindset of the people and make them more aware of the opportunities available in MFs. "Only 4-5 per cent of saving comes to mutual funds while 50 per cent of household savings still go to traditional bank deposits. About 15-16 per cent goes to insurance and post office savings," Kurien said. Commenting on the challenges, HDFC Mutual Fund's managing director, Milind Barve, said, "the real challenge is to manage investors' expectations." Today, investors expect a return of not less than 35 per cent from mutual funds. "We need to manage to get people to accept that 15-20 per cent return in mutual funds is good," he said. Barve said while nearly 1.5-million agents were selling insurance, only 60,000 agents were selling MF products. Distribution is the key to reach rural areas, he said, adding the industry would have to work hard to penetrate these untapped
markets. — PTI |
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ECS norms: Banks, RBI at loggerheads
Chandigarh, March 9 This migration would help the customers realise their money within a day of the cheque being presented. If it comes into force, the ECS files will be completed and reports sent to destination banks on the day a cheque is presented and on the next day, settlement and return settlement will take place. Even as the March 31 deadline for the service to be made available by all banks draws near, the banks say that the migration would not be possible as a standardised mechanism for all banks is not available. They say that they have requested the RBI to provide a standardised mechanism, which can be used by all banks. However, the RBI has asked the banks to expedite the service and chalk out their own customised mechanism. RBI officials say that the data with regards to the ECS files can be downloaded from the RBI website. On the other hand, bankers contend that even this system of lifting data from the RBI website would require fine-tuning, and the service cannot be made available by the end of this month. The ECS is increasingly used by various government departments, boards and corporations and corporate bodies for repetitive payments like salary, pension, dividends and interest payments, which is of great convenience to the user institution and the beneficiary customer. Considering the benefits of the service, RBI has asked the banks to align the ECS processing cycle with MICR clearance, and thereby achieve uniformity of processing cycle. Though most of the banks have now ensured that the MICR cheques are settled within a day of being presented in the bank, the ECS processing cycle is of five days. Infact, the RBI had also set a deadline for December 3, 2007, for the reduction in ECS processing cycle from five days to three. However, a number of banks have failed to meet this deadline. Only a few leading banks have achieved this feat, who in turn are finding it difficult to complete the process in one day. Also, with the deadline coinciding with the end of the financial year, banks say they will not be able to start this service now.
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TVS Motor rolls out three-wheeler
Chennai, March 9 M. K. Stalin,Tamil Nadu minister for rural development and local administration, launched the three-wheeler, touted to be India’s first 200 cc two-stroke autorickshaw with electric start and a host of other features. Refined quality and engineering skills will ensure high value to its customers, both in terms of styling and efficiency, TVS Motor Company chairman Venu Srinivasan said here today. Executed at a cost of Rs 120 crore, the project entails production of over 30,000 units in the first lot and the company expects to cover about 20 countries in 2008 itself, he told reporters after the launch. With annual requirement in the developing countries pegged at 2.3 lakh per annum, the three-wheeler market held immense potential, H.S. Goindi, senior vice-president, international business and three-wheelers, TVS Motors, claimed. Standard accessories include a water bottle holder and a magazine holder. Styled on the lines of a car, the TVS King redefines all performance characteristics like initial pickup and power, comfort, convenience, fuel efficiency, reliability and safety to give value for the money, Srinivasan asserted. The vehicle has better head & legroom in the passenger compartment while the suspension and the seat are positioned so as to optimise superior ride quality for longer duration. Meanwhile, living up to its social commitment, the company used the launch ceremony to announce a slew of incentives for the auto drivers and their families. This policy will cover the owner and his family against medical care up to Rs 30,000 per annum on a floater basis. The owner will be covered with a personal accident policy for Rs 1 lakh, besides Rs 30,000 health policy for the family. Given that auto drivers are cultural ambassadors, the company also announced a novel training programme in courtesy friendliness, safety and preventive maintenance.
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Short-term capital loss can be set off against STCG
by S.C. Vasudeva Q. 1. I am holding shares of over 50 such companies which are not quoted on stock exchanges. A number of these companies are closed or liquidated. (i) Wherefrom I can get the list of such companies. (ii) For the companies that are closed or liquidated can I adjust the amount spent on shares as long-term losses with Indexation. 2. If my overall income falls short of the minimum limits of income eligile for taxation (Say I have income of Rs 55,000/- only for the financial year 2007-08) can I adjust the:- (i) Long-term gains (ii) Short-term gains, against the short fall. 3. I had incurred S.T. losses of over Rs 2 lakh in the last Financial Year. This year I expect to gain around Rs 2.4 lakh. Am I eligible to adjust this 2.4. lakh. Please clarify. — R.C. Khurana, Zirakpur A. 1. The list of companies which are under liquidation can be obtained from the Registrar of Comapnies of the State in which the Registered Office of the company is situated. 2. According to the provision of the Act any profit or gain arising from the transfer of a capital asset effected in the previous year is chargeable to tax as capital gain. The word transfer is defined in section 2(47) of the Act and includes extinguishment of any right in the capital asset. In my opinion unless the company is liquidated there cannot be a capital loss in respect of shares held in such a company as there is no extinguishment of any right therein. 3. The adjustment of capital gain means that the assessee would not be required to pay Income-tax till the applicable limit up to which no tax is chargeable in his case is exhausted. Therefore, in case you have capital gain (short-term and long-term) to the extent of Rs 55,000 you would not be liable to pay tax if your other income is Rs 55,000 for assessment year 2008-09. 4. As per the provisions of the Act, the short-term capital loss can be set off against income from shortterm capital gain (STCG) or long-term capital gain (LTCG). The long-term capital loss can, however, be adjusted against long-term capital loss only. Thus in case you have short-term capital loss of Rs 2 lakh, you can adjust the same against long-term or short-term gain. The excess of Rs 40,000 would become taxable if your other income exceeds Rs 70,000. Form 16-A Q. If TDS on payment of interest was deducted but form 16-A is not issued by the authority concerned. Is it not binding upon the concerned to issue certificate 16-A. What is way out to claim the refund in absence of the certificate? Please confirm. — Didar Saini, via e-mail A. In accordance with the provisions of Section 203 of the Income-tax Act 1961 (the Act) every person deducting tax in accordance with the provisions of the Act required to furnish to a person in respect of whose income, the payment of tax has been made, a certificate to the fact that tax has been paid to the Central Government specifying the amount so paid, the rate at which tax has been paid and such other particulars as have been prescribed. However, this section is applicable where tax has been deducted or paid before the 1st day of April, 2008. Accordingly, where tax has been deducted or paid after 1st day of April 2008 there is no requirement to furnish a certificate in Form 16A. In case such certificate has not been issued for tax deducted for a period prior to 1st April 2008 the entity responsible for issuing such certificate is liable to be penalised under Section 272(2)(g) of the Act. The penalty leviable is up to sum of Rs 100/- for every day during which failure continues. I presume that your query pertains to a period prior to 1st April 2008. No refund can be claimed by you. However, in case you can prove that tax has been deducted from the payment made to you and has been paid to the credit of the Government by the deductor, you cannot be made liable to pay the amount so deducted and paid to the Government of India by the deductor of tax Tax liability Q.
I am in Govt service. My income during this F.Y. 2007-08 is likely to be as under: 1. Salary including House Rent and other allowances (deduction of H.R. to be made on Rs 23000) Rs 2,50,000 2. Income from Bank interest Rs 25,000 3. Income from stock market (short term) Rs 20,000 4. Post office R.D. of child to be matured and likely gain Rs 4,000 5. Saving under Section 80C Rs 1 lakh My age is 40 years. Kindly compute my tax and guide me which form to be used and in which column and what rate item 3 & 4 to be taken. — Mohinder Singh, Chandigarh A. On the basis of the figures given you the gross total income in your case works out at Rs 2,76,000. After giving relief of Rs 1 lakh for savings under Section 80C of the Income-tax Act 1961 (the Act), the total income would work out at Rs 1,76,000/-. The tax payable thereon for the assessment year 2008-09 is Rs 9,200/- plus education cess of Rs 276/-. In your case, applicable return form would be ITR-2. The income from stock market has been presumed to be such which is not subjected to Securities Transaction Tax and therefore liable to be taxed at the normal slab rate. The likely gain on Recurring Deposit will also have to be added to the total income and taxed at normal slab rate. |
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US woes take toll on banking stocks
by Lalit Batra Stock prices took severe beating last week on the concerns of the slowdown in the US and spiralling crude prices. The sentiment was also hit by a hike in short-term capital gains tax and alternation of tax treatment of securities transaction in Union Budget 2008-09. The BSE Sensex lost over 9 per cent for the week to settle just below the 16,000. Nifty lost a little over 8.5 per cent to close the week at 4,771. Banking stocks were the hardest hit as ICICI Bank reported investment losses of $ 264.3 million due to the unfolding global sub-prime crisis. The banking stocks, which were as a jewel in the crown couple of months back, were suddenly at the receiving end. The reaction to ICICI disclosure is unwarranted and investors may use this opportunity for buying banking stocks on further declines with a two to three-year perspective. Markets are keenly awaiting an expected cut in interest rates by the US Federal reserve in its meeting scheduled for next Monday. Besides this, the markets will be closely watching the cues from the global markets as fears of more credit-related losses in the global financial sector resurface. Nestle India
Nestle India, promoted by Nestle Alimentana (Switzerland) is a food major and has business interest in milk products & nutrition, beverages, prepared dishes & cooking aids and chocolate & confectionery. The company was incorporated in 1959 as Food Specialities. Nestle’s first unit at Moga, Punjab, went on stream in 1962 for manufacturing milk products, infant milk food and weaning cereals, culinary products and beverages. The company owns some of the most coveted brands such as Milkmaid, Everyday, Cerelac, Nescafe, Maggi, Lactogen, Eclairs, etc. Going forward, Nestle India’s brand portfolio appears best positioned among listed FMCG companies to capture the rising urban spends on health products and convenience foods. Given the breath of company’s brand portfolio, there is ample scope for sustained double-digit growth in sales over the next few years. The wide repertoire of brands and presence in the under-penetrated segments also shield it from the bruising competition being witnessed in mature FMCG segments such as personal care or shampoos. Nestle came out with strong set of fourth quarter numbers last week. The sales were up by 22 per cent at Rs 896 crore for the quarter whereas the net profit was up by 50 per cent to Rs 94 crore. The current price discounts the annualized earnings by about 39 times. The company enjoys premium valuations to other FMCG majors (Such as HUL, Dabur) in light of the low competition and higher growth prospects. In light of the recent melt down in the stock market, Nestle, a defensive stock, appears to be a safe bet for investors at the current market price of Rs 1,498 with clear perspective of minimum two years. |
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SBI opens 10,000th branch
Puduvayal (TN), March 9 Speaking on the occasion, Chidambaram said China's ICBC Bank was the other bank to have 10,000 branches.
— PTI |
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Chalasani is RPower CEO
New Delhi, March 9 Chalasani, a former whole-time director (business development) of Reliance Energy Ltd, has taken over as the chief executive of RPL, the newest company from the ADAG stable to list on stock exchanges, a company press release said here.
— PTI |
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