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Call to increase oil output
Markets to remain subdued, say analysts
IBM unfazed by HP-EDS deal
DIAL promoters question viability |
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Bharti set to expand retail
Retail Sector
Tax Advice
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Call to increase oil output
Aomori (Japan), June 8 Ministers meeting in Aomori, Japan, said there was an "urgent need for increased and timely investment in the energy sector." "We affirm the need to maximise investment in our own domestic production and we call on other oil producing countries to increase investment to keep markets well supplied in response to rising world demand," the ministers said in a joint statement. The meeting came after oil prices on Friday posted their highest ever one-day gain of nearly $11, hitting a new record of $138.54 a barrel in New York trade. "We share serious concerns over the current level of oil prices," the joint statement said. "We call for enhanced oil market dialogue and cooperation between producers and consumers," it added. In a sign they were not pinning all the blame on oil producers, the statement said: "Some factors contributing to the oil market are more structural and longer term in nature, including the growth of global oil demand, particularly in the transportation sector." Oil prices have soared five-fold since 2003 due to a variety of factors including turbulence in the Middle East and rising demand in emerging economies such as China and India. — AFP |
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Markets to remain subdued, say analysts
Mumbai, June 8 Investors should tread a cautious path since the week would begin with negative sentiments primarily owing to the repercussions of higher fuel price, analysts have said. Last week's fuel price hike is expected to have a cascading effect on all commodities, products and services and is likely to stoke inflation to higher levels, they added. The government on last Wednesday raised petrol price by Rs 5 a litre and that of diesel by Rs 3 a litre in an attempt to offset the mounting losses of state-owned refiners due to higher global crude prices. Inflationary pressure is expected to continue, at least in the near term, they said. Inflation surged to 8.24 per cent for the week ended May 24 from 8.1 per cent in the previous week, despite a fall in prices of some essential commodities, fruits, vegetables spices. Wholesale prices-based inflation stood at 5.15 per cent a year ago. The rate of price rise is expected to advance further after two weeks, when the June 5 increase in prices of petrol, diesel and cooking gas would be taken into account. Hinting at a possible increase in cash reserve ratio (CRR) — the amount banks are mandated to keep with the central bank — or short-term rates, RBI Governor Y.V. Reddy last Thursday said the central bank would take all measures to curb inflation. The next policy review meeting of RBI is on July 29. — PTI |
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IBM unfazed by HP-EDS deal
New Delhi, June 8 "Hewlett-Packard has bought 'yesterday's business model'... it is unlikely to challenge our presence in the IT services space," IBM India VP & general manager (global delivery) Rajesh Nambiar said. —
PTI |
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DIAL promoters question viability
New Delhi, June 8 The promoters of DIAL, in a letter to the civil aviation ministry, have said they were not against having a second airport, however, this should come after sufficient passenger volumes were achieved. The DIAL spokesperson refused to comment on the issue. According to sources, DIAL had made it clear that an airport so close to the Delhi airport would be a violation of an agreement, the Airports Authority of India signed with it to revamp the domestic terminals, build a new terminal and a new runway at the Indira Gandhi International Airport. The agreement barred two greenfield airports from coming up within 150 km radius from each other. The DIAL could also seek first right to bid for the new airport at Greater Noida. It could also argue that the revenue the government was to get from the DIAL for the Indira Gandhi Airport should be reduced. The upcoming new airport terminal at the IGI and domestic terminals at Delhi will cater to 60 million passengers annually by 2010. The volume of traffic is at present about 24 million. The DIAL has also suggested that a study needs to be done in cities where two airports exist, to find out when was the second airport started and what was the passenger volume that triggered off the need to have another airport. The UP government has said that the “Delhi airport is already congested with virtually no possibility of any extension”. It has also quoted a study by the Airports Authority of India that has estimated that by 2015-16, air traffic at the IGI Airport will hit the 108-million mark, which by any standard, would lead to severe air congestion. To offset this, a second airport was the answer. Mayawati has named her project as the Taj International Airport and aims to handle around 3.9 million passengers annually by 2011-12. The airport aims to derive a significant share of revenue through shopping malls, hotels, a cargo hub, an aviation academy and residential complexes as part of the airport project. |
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Bharti set to expand retail business
Bentonville (Arkansas), June 8 Mittal, who was here to attend the Wal-Mart annual shareholders meeting, said next year the company would set up hyper market stores, which would be in a covered area ranging from 75,000 to 1 lakh square feet. After opening stores in North India, the company will enter in the western states like Maharashtra. "We have been working to expand retail business in the country", Mittal said. Raj Jain, president of Wal-Mart in India and CEO of Bharti-Wal Mart Inc in India, said Wal-Mart was providing training to the employees in India to run the store and related supply and distribution operations smoothly. He said the three stores already set up in India were doing well. Raj said there was only 4 per cent retail business handled by the organised sector while the remaining 96 per cent was in the unogranised sector. There was a lot of scope for the expansion of organised retail business in India, he added. Meanwhile, Wal-Mart shareholders’ meeting was a like a big carnival. Wall Mart chief executive H.Lee Scot said the company with its partners was looking for good opportunities to do business in India. He said other country where it was looking for opportunities was Russia. Wal-Mart’s net sales in various countries hit $374.5 billion, an increase of 8.6 per cent over the previous fiscal year. Wal-Mart delivered returns to the shareholders to the tune of $11billion through share repurchase and
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Retail Sector
New Delhi, June 8 In the retail sector, the dialogue recommends that there should be liberalisation and refinement of the current FDI limits, allowing all retailers to operate a variety of formats and sell full assortment of food and general merchandise without restrictions on product categories. The forum feels that traditional small family outlets will have improved product assortment and quality stock if this sector is liberalised and stronger supply chains are built between the farmers, manufacturers and consumers in India. This will lead to dynamic and positive changes in the rural, agricultural and manufacturing sectors. The CEOs Forum has recommended that the Federal Reserve Board should expedite branch licences requested by Indian banks and it should be based broadly on a principle of reciprocity. Over the next year or two, the Federal Reserve Board should come out with clearly stipulated guidelines and criteria for approval by bank licensing, making the process less uncertain and faster. These set of recommendations of the India-US CEO Forum are being examined by the deputy chairman of Planning Commission Montek Singh Ahluwalia, along with the US deputy national security adviser for international economic affairs. The two have agreed to examine the CEOs’ recommendations in consultation with the concerned ministries and departments in India and the US government. The US-India Forum was launched in 2006 during US President George Bush’s visit to India. The idea was to harness private sector energy and ideas to deepen the bilateral economic relationship. |
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Leave encashment up to Rs 3 lakh tax-free
by S.C. Vasudeva Q. My son was working with a private MNC and resigned recently to join some other company. He has been paid approx Rs 27,000 as leave encashment for unutilised period of leave as full and final settlement. Kindly advise whether the same amount of leave encashment paid on quitting services due to resignation is taxable or not. If the same is exempt from income tax, the relevant section of I.T. Rules may kindly be intimated for guidance. — Kuldip Singh, Ludhiana A. Any payment received by an employee other than an employee of the Central Government or State Government which is in the nature of cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of retirement whether on superannuation or otherwise as does not exceeds 10 months calculated on the basis of the average salary drawn by the employee during the period of 10 months immediately preceding the retirement or superannuation or otherwise subject to a limit of Rs 3 lakh is exempt from tax under Section 10(10AA) of the Act. The Allahabad High Court in 144 Taxman 504 has held that the benefit of exemption is allowable with respect to the amount received by the employee at the time of his retirement or superannuation or severance of relationship. The Madras High Court in 159 ITR 160 has, however, held that amount received in the case of resignation would also be exempt. However, the circular no. 394 dated 14th September 1984 provides that such payment would be exempt only if the same is received on retirement. There is thus divergence of opinion on this issue and you can, therefore, claim the exemption on the basis of the above decisions but you will have to be prepared for the litigation on the subject. NSS withdrawals
Q. I have a NSS (1987) account with Post Office. I understand that withdrawn amount will be added to income during the year. In my case (if withdrawn) it exceeds income tax limit permitted to a senior citizen. However, (if withdrawn) after availing the provisions of Section 80C of Act, the income becomes non-taxable. My query is: Whether by submitting Form H, can I withdraw certain amount from NSS (1987) account without inviting simultaneous deduction of tax at source (TDS). — M.M. Lal, Haryana A. A senior citizen is permitted under Section 197A(1C) of the Income-tax Act 1961 (the Act) to file a declaration in writing in duplicate to the person responsible for paying any amount referred to in the said section on which tax is required to be deducted under the provisions of the Act. One of the items covered under the said section is the payment out of National Saving Scheme Account. The declaration has to be made in Form 15H and is required to be verified to the effect that the tax on the estimated total income of the declarant, for the previous year for which such income is to be included in computing his total income, will be Nil. In case you satisfy the above condition you can file Form 15H for withdrawing the amount from the National Saving Scheme Account without deduction of tax at source. Nominees & legal heirs
Q. In a Joint A/c of FD with the Bank, payable 'anyone or survivor' with 1st my name and joint with my wife and daughter. Please advise:- How the interest earned would be treated for income tax purpose. After the death of 1st account holder, would both joint account holders be treated legal owners of the amount equally or other my legal heirs would also be entitled to share the amount? In case one of the joint holders is also made nominee under the FD how the ownership of amount would be treated and what would be tax liability of the owner in this case after death of 1st A/c holder. — Surinder Sharma, Chandigarh A. The answer to your queries is as under: (a) The taxability of interest on a fixed deposit held in joint name would depend upon the source of investment. Therefore, such interest would be taxable in the hands of the person who has earned and invested such an amount. Such interest would be taxable in the hands of the legal heirs of the deceased after his death. The legal heirs will be those who are entitled to the proceeds of the fixed deposits on the basis of the Will or in case no Will has been executed, in accordance with the provisions of Hindu Succession Act 1956. In case the surviving joint holders are not the only legal heirs, the amount of fixed deposit will be shared by them with other legal heirs. (b) The nominee does not become a legal heir. The nomination benefit is allowed so as to enable a nominee to receive the payment of any deposit in respect to which he is a nominee without any hassles of complying with the requirements of obtaining a succession certificate/ probate of Will. The nominee would be accountable to the legal heirs in respect of the amount received by him on the death of a person. Tax liability
Q. Please help me to calculate income tax for the F/Y 2006-07, income details are as under:- Income from pension (self) 1,17,150 Income from Family Pension (husband) 55,398 Income from FDR+S.B. A/c Interest 26,527 Gross Income 1,99,075 Saving U/S 80C L.I.C. policies premium 29,300 F.D. (5 Year) 22,000 Total Savings 51,300 Rebate Women exemption i.e. Rs.1,35,000. Family Pension rebate i.e. Rs.15,000 or 33%, which ever is less. TDS Rs 2,420 deducted by bank as TDS and issued form-16A for the refund if applicable. Please clarify:- 1. Is ITR-1 Form applicable to me? 2. Whether I am eligible for Family Pension Rebate, also tell section? 3. Whether I am eligible for 100% TDS Refund i.e. Rs.2420.00 for the A/Y 2007-08? — Shakuntla Devi Saini, Chandigarh A. The answer to your queries is as under: (i) Your total income after giving deduction under Section 80C of the Act works out at Rs 1,32,775 which is below the maximum amount up to which tax is not payable. You are thus entitled to claim a refund of Rs 2,420 in respect of the tax deducted at source. You will thus have to file the return to claim this refund. (ii) In your case ITR-1 form would be applicable. (iii) The rebate for family pension is allowable under Section 57 of the Act. (iv) As stated above you are entitled to the refund of the tax deducted at source. |
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