The Tribune, Chandigarh, India

	Tata Motors sales go north in July New Delhi, August 1 Tata Motors today reported a 41 per cent increase in vehicle sales to 67,799 units in July 2010 compared to 48,054 units in the same month of the previous year. The firm's total passenger vehicles sales in the domestic market stood at 30,165 units in July this year, as against 19,881 units in the same month last year, a jump of 52 per cent, the company said in a statement. The company's exports grew by 73 per cent to 4,241 units in July, 2010, compared to 2,455 units in the same month last year, it added. During the month, the company sold 9,000 units of its small car Nano. The Indica reported sales of 8,606 units, a marginal increase of over 1 per cent compared to the figure for July 2009, Tata Motors said. The Indigo family recorded sales of 7,007 units, a two-fold increase over the same month last year. Tata Motors' Sumo and Safari accounted for 3,251 units, an increase of 22 per cent compared to the same month last year. Ford rides high on Figo Ford India today reported a four-fold increase in sales to 8,739 units in July 2010 compared to 2,146 units in the same period last year. "The sales boom is driven by overwhelming consumer demand for the new Ford Figo," the company said in a statement. Since its launch in March, the company has received 29,000 bookings for Figo so far. Ford sold 46,751 vehicles during the January-July, 2010, period. GM ups output In the face of zooming demand and a mounting backlog for its hatch-back Beat and sedan Cruze models, General Motor India has ramped up its production in its two manufacturing facilities, a top official said. "To meet the rising demand, a second shift has been introduced in Halol and Talegaon plants. The production capacity has been enhanced from 6,000 to 12,000 units per month," General Motors India vice-president P Balendran said here. The Halol and Talegaon plants together have an annual production capacity of 2.25 lakh units. The primarily small-car plant at Talegaon has an annual capacity of 1.4 lakh units while Halol can produce 85,000 units a year. "We are confident to clear the backlog for Beat and Cruze by August," he said. — PTI
	Economy moving fast towards $ 2 tn mark New Delhi, August 1 The economy will grow to $ 1.72 trillion in 2011-12, moving closer towards the $ 2 trillion mark, according to an assessment by the Prime Minister's Economic Advisory Council (PMEAC). The country's GDP at the market and current prices was measured at $1.31 trillion in 2009-10 and is estimated to be $ 1.52 trillion in the current fiscal, the PMEAC said in its latest economic outlook. Pegging the GDP growth at 9 per cent, the economy would reach a level of $1.72 trillion in 2011-12, it said. If the 9 per cent growth trend is maintained, India will become $ two trillion economy in 2013-14 fiscal. In the assessment, the PMEAC, headed by economist C Rangarajan, said it was imperative for India "to preserve conditions that will enable it to return to the 9 per cent growth trajectory". After slowing down to 6.7 per cent in 2008-09 and 7.4 per cent in 2009-10, the Indian economy is projected to expand at 8.5 per cent this fiscal and by 9 per cent in 2011-12. According to experts, services and manufacturing sectors will remain the key drivers pushing the coveted growth to $ 2 trillion mark. "Services sectors, particularly transportation and telecom sectors, will lead the growth. Rising income levels and aspirations of people will further the industrial output," CRISIL's chief economist D K Joshi said. In the first two months of current fiscal, the industrial production recorded an annual growth of 14 per cent. "The lead indicators of the service sector also suggest increased economic activity," Reserve Bank Governor D Subbarao said in the first quarter credit policy review. If the tax reforms are implemented as planned from next fiscal, the economy will get further push. "The gain from GST will propel the country from $1-trillion economy to $2 trillion economy in a short span of time," Finance Minister Pranab Mukherjee recently said. Before the global economic slowdown since 2008, the Indian economy grew by over 9 per cent for three years in a row from 2005-06 to 2007-08 and expansion was maintained by industry and services sectors. — PTI
	Economists see another rate hike on Sept 16 New Delhi, August 1 Leading economists expect the Reserve Bank to further raise its short-term rates in its mid-quarter review in September to rein in inflation, but do not think that it will suck out liquidity from the system. "We could see a hike of 25 basis points in the repo (lending) and reverse repo (borrowing) rates at the mid-quarterly review on September 16, depending on the inflationary situation," Yes Bank chief economist Shubhada Rao told PTI here. The apex bank in its monetary review on Tuesday had decided to come out with a mid-quarterly review, first of which is scheduled for September 16. Rao also said there was a likelihood of an overall 50-75 basis points hike, more probably 75 bps, in the overnight rates during the rest of the fiscal and the expected hike in September would be part of that. "A lot depends on inflation. By September 15, the RBI will have a complete assessment of the monsoon. In the coming month or two, if there is an escalation in the core inflation, then there will be hikes," she added. As for the CRR, which is the money that banks have to park with the RBI, she does not see a strong possibility of a hike. "Liquidity will be on an even keel in the next few months," Rao said. In its monetary review on July 27, the RBI had hiked the short-term borrowing (reverse repo) rate by 50 bps and lending (repo) rate by 25 bps to bring down inflation, but refrained from sucking out liquidity through a CRR hike. Liquidity in the system dried up after telcos paid over Rs 1 lakh crore towards spectrum fees in May and June. However, a key RBI official had recently said the central bank needed to adopt a more hawkish monetary policy to tame inflation. "There is a need for aggressive monetary policy to anchor inflation," the official had said. Crisil chief economist DK Joshi, too, said he expected hikes in the short-term lending and borrowing rates, probably in the next review meeting of the RBI. "We can expect hikes in the repo and reverse repo rates... maybe in the next review meeting. We believe there is a strong possibility of 50-75 bps rise in the short-term lending and borrowing rates by end of the fiscal. It will happen in a gradual manner," he said. He, however, said inflation seemed to be on a downward swing. Inflation has been in double digits for the fifth consecutive weeks till June. — PTI
	FII inflow crosses $10-bn mark New Delhi, August 1 Further reposing their faith in the India growth story, overseas fund houses pumped a whopping Rs 16,600 crore ($3.5 billion) into the domestic stock market in June, taking their total investment so far this year to over Rs 47,690 crore ($10.4 billion). An analysis of the data available with Sebi shows that FIIs were gross buyers of domestic equities worth Rs 60,687 crore, while they sold shares worth Rs 44,070 crore, resulting in a net inflow of Rs 16,617 crore in June. Significantly, a persistent inflow of overseas money also helped the BSE benchmark Sensex to regain the psychological 18,000-level last month, after struggling to scale the same for 30-long months. Though the Sensex could not sustain the 18,000 level for long and ended July at 17,841.74, analysts believe that the inflow will continue in the coming months and that benchmark will scale new highs. — PTI
	ICICI Pru top fund manager of EPFO New Delhi, August 1 ICICI Pru emerged as the top fund manager for the Employees Provident Fund Organisation (EPFO) giving a return of 8.72 per cent since September 2008 till the end of June 2010. Out of the four fund managers appointed by the EPFO in September 2008, Reliance Capital came at the bottom, giving only 8.53 per cent return, which is even below the prescribed benchmark of 8.57 per cent, a source said. The source said as per the latest performance evaluation by the EPFO, the other two fund managers--HSBC and SBI-- provided returns of 8.64 per cent and 8.58 per cent, respectively, during the period under review. The performance of the four fund managers has been evaluated on the basis of a composite score which includes 80 per cent weight to return on investment and 10 per cent each to average maturity and asset quality. This performance benchmark has been developed by Crisil, the official consultant of EPFO. However, the EPFO rejected this method at a meeting of its advisory body, Finance and Investment Committee, on Wednesday. The Organisation pointed out in the performance evaluation report placed before the committee, "It is the actual yield (return on funds invested) generated which is the true parameter for measuring the performance." — PTI
	Tax Advice LTC, conveyance allowance not taxable by SC Vasudeva Q. I am a 60-year-old Punjab Govt pensioner and at present working as part-time doctor with semi-govt firm.Please let me know whether Rs.20,000 paid as LTC to me for 2009-10 is taxable or not? Conveyance allowance of Rs.1,200 p.m. Rs.14,400 received by me for performing my duties as part time doctor for 2009-10 is taxable or not. — Dr Suman A. The LTC received by an employee for himself and his family in connection with his proceeding on leave to any place in India is exempt from tax subject to the condition that the amount has actually been spent on the performance of the journey. The amount of exemption is required to be computed in accordance with the provisions of Rule 2B of the Income-tax Rules 1962. Further, the exemption is available to an individual in respect of two journeys performed in a block of four calendar years commencing from the calendar year 1986. Accordingly, in case you satisfy the condition, the amount of Rs 20,000 received by you as LTC from your employer for 2009-10 would not be taxable. The amount of conveyance allowance is exempt from tax provided the same has been granted to meet the expenditure incurred on conveyance in performance of duties of an office. This exemption is subject to the condition that no free conveyance is provided by the employer and the amount of conveyance allowance has actually been incurred. The claim for such exemption will require evidence to be produced (in case so required by the tax authorities) for incurring such expenditure in performance of duties of an office. In case the conveyance allowance has been granted for meeting expenditure for the purpose of commuting between place of residence to office, the same will be exempt to the extent of Rs 800 pm only. Estimate basis Q. I refer to Bishan Chand’s query (June 7) regarding difficulties faced by him in obtaining exact amount of accrued interest income from the banks or post offices to be shown in the IT return every year. Most of us encounter similar problems. But I think there is a way out. One wonders whether it would suffice to mention an approximate figure calculated by the individual himself as long as it does not differ much from the exact amount of interest so as to make things easier for the taxpayers, especially the senior citizens. Let us take the example of an FD of Rs 1 lakh for 3 years having a maturity value of say Rs 1,30,000. Would it not meet the requirement of the IT department to show an average figure of Rs.10,000 of interest income every year in the IT return instead of making futile visits to the banks for obtaining the exact amount? Incidentally, I am also a pensioner and a senior citizen. I have been following the procedure for showing interest income in my return every year for the past several years without inviting any adverse observations from the department. Rules only serve as a guideline and there is always a scope for flexibility as long as it does not adversely affect the tax collection. — C L Sehgal A. I appreciate the difficulty experienced by the senior citizens regarding obtaining the certificate etc. in respect of the interest earned on the deposit account with banks or post office. I have also noted that you have been declaring interest on estimate basis in your tax return and you have not faced any difficulty at the time of assessment. However, such estimates can create a problem for the purposes of claiming a benefit for the tax deducted by bank/post office. There can be been other disadvantages of declaring the income on estimate basis. A variance of large amount may lead to the initiation and levy of penalty at the initial stage. Finance Bill 2009 Q. I have come to know that there is an amendment in the Finance Bill 2009 for financial year 2010-11 (w.e.f. assessment year 2011-12) that the maintenance of account books are not required, if the total sales /gross receipts is below 40 lakh and income is declared 8 per cent or more of the total sale gross receipts. If yes, please let me know that I am running an STD and photostat shop I am also covered under section 44AD. My wife is running recruitment service if she is also covered under above section 44AD. — G.N. Singh A. The provisions of Section 44AD of the Income-tax Act 1961 (the Act) have been amended w.e.f. 01.04.2011. The amended provisions are thus applicable for assessment year 2011-12 corresponding to the financial year 2010-11. According to the amended provisions, a resident assessee being an individual, HUF or a partnership firm who is engaged in any business except the business of plying, hiring or leasing goods carriages referred to in Section 44AE of the Act and whose total turnover or gross receipts in the previous year do not exceed an amount of Rs.60 lakh, is not required to maintain books of account. This concession is subject to the following conditions: (i) The profits and gains from business shall be deemed to be 8 per cent of the total turnover or gross receipts of the assessee in the previous year or a higher sum as may be declared by him and the said deemed income would be chargeable to tax under the head ‘profits and gains of the business and profession’. (ii) No deduction shall be allowable in respect of various sums specified under section 30 to 38 of the Act. (iii) Depreciation on assets owned by the assessee shall be deemed to have been allowed. (iv) The remunerations allowable to partners as per the provisions of the Act would be allowable as deduction from profits so computed. You and your wife can therefore be assessed under the above provisions of the Act subject to the above conditions. FDs Q. This is with reference to query made by Bishan Chand in the Tribune dated 7th June 2010. My query is that if FDs are made in various banks in April, say 10th or any other date in the month and then interest will not exceed Rs.10,000 so that it may not attract TDS, then will there be necessity to get interest certificate from the banks. The full year’s interest of the F.D. (April to April) will be taken in the Income Tax return. This will avoid hardship to the aged person who are not able to make rounds of the banks time and again. — Kewal Krishan Sanon A. The provisions for deduction of tax at source on any income by way of interest on deposits with bank, are applicable if the amount of interest payable by a bank exceeds Rs.10,000. Therefore, in case the interest earned on deposit made by you does not exceed the above amount, the bank is not required to deduct tax at source.