The Tribune, Chandigarh, India

	Export duty on iron ore up by 5 per cent New Delhi, December 26 The government has imposed an additional 5 per cent export duty on iron ore fines and lumps, a move aimed at curbing iron ore exports, which the industry said would adversely affect the mining sector. The government has raised export duty on iron ore lumps to 10 per cent from 5 per cent and on iron ore fines to 5 per cent from nil, said a Finance Ministry notification. “This decision has come at a wrong time when the exports were picking up and showing signs of recovery,” Federation of Indian Minerals Industries secretary general RK Sharma said. “This will have cascading effect on the steel industry. The Finance Ministry should have waited for some time before increasing the export duty and should have allowed the steel industry to recover from the global economic meltdown,” he said. Iron ore fines are not consumed by the domestic industry, he added. India is third largest exporter of iron ore in the world after Australia and Brazil. Steel Minister Virbhadra Singh had earlier in a letter to Finance Minister Pranab Mukherjee demanded 10 per cent export duty on all grades of iron ore in order to ensure availability of raw material for the domestic steel makers. Virbhadra had said the steel industry, already facing acute shortage of coking coal and natural gas, was facing shortage of quality iron ore as the country exported almost 50 per cent of the total ore produced. The Steel Ministry had cautioned that if the present trend of iron ore exports continued, it may result in a steep increase in prices of ore for domestic industry, creating a pressure on steel prices in the market. — PTI
	World’s fastest train link gets going Beijing, December 26 China today started operation on its fastest rail link in the world with a high-speed train connecting the cities of Guangzhou and Wuhan at an average speed of 350 km an hour. The super-high-speed train reduces the 1,069 KM journey linking Guangzhou, a business hub in southern China near Hong Kong, with the capital Beijing, to a three-hour ride and cuts the previous journey time by more than seven-and-a-half hours, Xinhua news agency said. Test runs for the rail link began earlier in December during which it recorded a maximum speed of 394.2 km per hour and the operations officially began today, said Xu Fangliang, general engineer in charge of designing the link, according to Xinhua. By comparison, the average for high-speed trains in Japan was 243 km per hour while in France it was 277 km per hour, he said. The network uses technology developed in co-operation with foreign firms such as Siemens, Bombardier and Alstom. The work on the project began in 2005 as part of plans to expand country's high-speed network, Xinhua added.China unveiled its first high-speed line at the time of the Beijing Olympics in 2008. Country's ambitious rail development programme aims at increasing the national network from the current 86,000 km to 1,20,000 km, making it the most extensive rail system outside the US. — PTI
	Gold regains Rs 17k level New Delhi, December 26 Gold prices regained the Rs 17,000-level in the national capital today on fresh buying by stockists and jewellery fabricators amid pick up in demand. The precious metal, which dipped below Rs 17,000 level four days ago, today rose by Rs 80 to trade at Rs 17,040 per 10 gram on fresh buying for festivals like Christmas and New Year celebrations. Marketmen said stockists and jewellery fabricators indulging in enlarging their positions on pick up in demand mainly pushed up both bullion prices. Standard gold and ornaments rose by Rs 80 each to Rs 17,040 and Rs 16,890 per 10 gram, respectively, while sovereign held unchanged at Rs 14,000 per piece of eight gram. Silver ready and weekly based delivery also gained Rs 100 each at Rs 27,900 and Rs 27,500 per kg. However, silver coins continued to be traded around previous levels of Rs 33,400 for buying and Rs 33,500 for selling of 100 pieces. Domestic market witnessed subdued trading activity in the absence of any major cues from the global front as most of the markets were closed for Christmas break.— PTI
	YEAR AHEAD Realty firms see ray of hope New Delhi, December 26 After five years of robust growth till the middle of 2008, the $14-billion Indian realty industry faced a major crisis this year, not just because of a sharp fall in demand but due also to high cost of credit in executing ongoing projects. The same set of realtors who were happy hiking the cost of both residential and commercial project t in the past years were forced to launch low-cost ventures and reduce prices. Even the big players like DLF and Unitech had to mop up funds through qualified institutional placements to feed their cash-starved enterprises. City-based real estate developer BPTP even had to surrender the biggest ever land deal in India worth Rs 5,006 crore that was clinched in 2008 at Noida as it was unable to make the payment. “It was definitely a tough year for the realty sector, mainly because of the global crisis,” said Pradeep Jain, chairman of Parsvnath Developers. “But strong fundamentals helped us overcome it to some extent," Jain said. According to data compiled by leading brokerage and research firm SMC Capital, about Rs 10,300 crore was mobilised by realty firms such as DLF, Unitech and Indiabulls in the first half of 2009 through private placements. This apart, over 15 players such as Emaar MGF, Lodha Developers and Sahara Prime City are set to come up with initial public offerings to raise about Rs 15,000 crore to tide over their funds crisis. Among them, Delhi-based Emaar MGF Land alone proposes to raise Rs.3,850 crore, while Sahara is targeting Rs 3,450 crore. Lodha Developers have targeted Rs 3,000 crore and Godrej Properties want to raise Rs 600 crore. As the year draws to a close, it has regained momentum in sync with the broader market and the realty index is now quoting 75.11 per cent above the levels seen on December 26 last year. Yet, as the year draws to a close, realty industry is optimistic over the prospects in the New Year and believes it would pay to remain focused on low-cost housing projects. But analysts fear that the rising inflation may trigger a rise in interest rate. As a result, real estate players could once again be seen grasping for breath in 2010 as well. — IANS
	Aviation Notes Air India hits bottom by K.R. Wadhwaney Air India has descended abysmal low. In a recent survey, it has been ranked last among Indian carriers. There was a time when AI was one of the best in international skies and Indian Airlines (IA) had complete monopoly in Indian skies. Kingfisher has been adjudged on top with 794 points (56 points ahead of AI that is at 736), while Jet Airways is 50 ahead of the national airline. Reacting to the survey, AI chief Arvind Jadhav has gone on record saying: “The national carrier has made improvements and we will use these key parameters for bringing about further improvements in our services”. Whatever the utterances of the AI chief, the truth is that the merger has turned a huge liability. Indian Airlines has lost its identity altogether. It is no longer on the radar. Thousands of employees have been rendered “unsettled” while hundreds are shuttling between Mumbai and Delhi. In-depth study classifies 15 major causes of failures: (1) Political stranglehold, (2) bureaucracy interference, (3) top heavy, (4) faulty route-structure, (5) discontinuation of flights on profitable routes, (6) part of the fleet lying on ground knowing fully that stay of aircraft on ground is costlier than flying, (7) meaningless acquisition of aircraft without adequate flying programme, (8) paying a huge rental for the leased aircraft, (9) unwieldy staff, (10) mammoth expenditure on overheads, (11) lack of rapport between cockpit crew and cabin crew, (12) unrealistic adherence to flight and time regulation for flying crews, (13) gross misuse of upgradation of staff and favourites on flights, (14) injudicious utilisation of spare parts and (15) unprofessional and non-commercial functions. The future of AI is bleak as long as politicians and bureaucrats continue to be at the helm. If the government sincerely wishes to bail out the national carrier, it should draw a leaf out of the book of several other governments like Britain, France, Germany, Singapore and Sri Lanka, which accord complete autonomy to their nationalised airlines to operate professionally. In sharp contrast to the national carrier, the private operators are functioning nicely despite rise in fuel prices. If Kingfisher is controlled by flamboyant and aggressive businessman Vijay Mallya, Jet Airways is fully in the grasp of subtle operator Naresh Goyal. Dissimilar in many aspect, both possess sharp minds and are master manipulators in figures. They are running their outfits as commercial units. Judging from the existing complex scenario, survival of the national carrier is possible if the government grants its staff the freedom of actions and functions. If this is done, the ‘maharaja’ will be able to walk upright once again.
	Investor Guidance No need to file return on investment income by A.N. Shanbhag Q I am an NRI settled in Kuwait. I have both NRE and NRO accounts in India. I know that interest from NRE account is tax-free. Interest from NRO account is taxed through TDS at the rate of 12.5% (not 33% due to DTAA with Kuwait) by the bank. The interest earned from NRO account is more than 1.5 lakh per year. My only income in India is from interest these accounts. I do not wish to claim any refunds from as banks are already cutting TDS. Am I correct in not filing returns as per the IT Act/rule 115G (return of income not to be filed in certain cases). — Kumar Viswanathan A Under Section 115G, a return need not be filed if the taxpayer’s total income consists only of investment or long-term capital gains (LTCG). Now, investment income means any income derived from a foreign exchange asset and in turn a foreign exchange asset means any specified asset that the taxpayer has acquired or subscribed to in convertible foreign exchange. Therefore, if your have made NRO fixed deposits through foreign exchange only and there is no Indian income that has been used to purchase the deposits, Section 115G will be applicable and a return need not be filed. Exchange traded fund Q I have read that the best way to invest in gold is through Exchange Traded Fund (ETF). But the ETFs attract brokerage and STT for both buy and sell transactions, leading to an additional expense. In contrast, since there is no entry load on MFs and one can also do away with the exit load if we hold the units for a longer period. Hence, if one purchases corresponding MF units directly, extra cost can be saved. In addition, in both the transaction types , I think the tax treatment on capital gains should be the same. — Dharmesh Gangani A The main idea is to invest in gold and not in any other asset class. There are no gold-based MFs that are not ETFs. In other words, all MFs that are available in the traditional sense are either equity or debt based. There are a couple of MFs that invest in gold mining companies, but at the end of the day once again these are MFs that invest in equity shares of such gold mining companies. So you are in effect buying equity and not gold. Regarding the STT issue, please note that there is no STT applicable on gold ETFs since they are not equity-based MFs. All in all, the only way one can invest (through the MF route) in gold is through ETFs. Transfer of proceeds Q I have been a German citizen for many years and now also am registered as an OCI. When leaving for Germany on July 3, 2010, I shall have spent one year in India. I have inherited some apartments that I have given on rent. Can I transfer the proceeds to Germany on a monthly basis? Must the account into which the rents are paid be of a specific category? — Arun A If you spend more than 182 days in India in any financial year, you will be a Resident in that year. Since you are leaving for Germany on July 3, in FY 09-10 you would not be spending 182 days in India and hence you will be an NRI. An NRI cannot have regular Resident savings bank accounts. Instead they are supposed to open NRO accounts. You may transfer the proceeds of the rental income to Germany on a monthly basis though doing so at a lesser frequency may prove to be more convenient. The reason for this is that every time you intent to remit the proceeds abroad, your application for the same has to be accompanied by a certificate from an Indian chartered accountant certifying that taxes due, if any, on the amount intended to be remitted have been paid. Short-term capital gains Q If I have no other income except for short-term capital gains (say Rs 4 lakh) and I have saved Rs 1 lakh in instruments that are eligible for tax exemption under Section 80C, what will be my total taxable income? — Shuba A The answer to your query would depend upon the type of asset from which the capital gains flow. 1. In case of capital gains arising out of securities (including shares) and equity-based units of MFs sold on a recognised stock exchange or equity-based units repurchased from MFs STCG is taxed at the rate of 15% flat. 2. In case of (i) listed securities, or units or zero coupon bonds not sold on a recognised stock exchange in India or repurchased from MF and consequently have not suffered STT, and (ii) units of debt-based MFs STCG is treated as normal income of the assessee and charged to tax at the rate applicable to his slab of income. Where STCG is taxed at concessional rates, the assessee will not get any deduction under Section 80C, 80D etc, against these gains. 3. For all other assets like real estate, jewellery etc, STCG is treated as normal income of the assessee and charged to tax at the rate applicable to his slab of income.For a resident individual or an HUF, where the income that is charged to tax, falls below the tax threshold applicable to the assessee, the gains can be reduced by this gap between the total income and the threshold. The balance of the gains would be taxed at the rates applicable.The current tax threshold is Rs. 1.60 lakh for non-senior males, 1.90 for non-senior females and Rs 2.40 lakh for senior citizens, males or females. The authors may be contacted at wonderlandconsultants@yahoo.com