The Tribune, Chandigarh, India

Direct Taxes Code from April 2012
Increased exemption limits to benefit 96% taxpayers
n No special tax status for women

New Delhi, August 30
The government will lose over Rs 53,000 crore in tax revenue on account of the increase in exemption limits and tweaking of slabs in the Direct Taxes Code Bill, which will come into effect from April 1, 2012, a year behind the previous deadline.

The DTC was proposed to come into effect from April 1, 2011, but had to be pushed back by a year to allow a smooth switchover and understanding of the new regime.

Revenue Secretary Sunil Mitra said delayed implementation of DTC would give corporates and individuals enough time to set themselves on the right foot for the switchover from the Income Tax Act, 1961. As per the Bill, income from Rs 2-5 lakh will be taxed at 10 per cent; Rs 5-10 lakh at 20 per cent and 30 per cent thereafter.

The exemption on savings and as also payment of interest up to Rs 1.5 lakh on housing loan have been retained in the proposed DTC Bill.

Finance Minister Pranab Mukherjee tabled the Bill in the Lok Sabha and it has been referred to select committee of Parliament for scrutiny.

Similarly, the exemption limit for senior citizens, is sought to be raised marginally to Rs 2.5 lakh from Rs 2.40 lakh now. The proposed tax slabs are much lower than originally suggested in the draft DTC bill - 10 per cent for Rs 1.6 lakh to Rs 10 lakh, 20 per cent from Rs 10-25 lakh and 30 per cent for income above Rs 30 lakh.

According to estimates, an individual taxpayer earning more than Rs 10 lakh would save up to Rs 41,040 annually.

The legislation also proposes to increase MAT from 18 per cent to 20 per cent of book profit of a company. It seeks to levy dividend distribution tax at 15 per cent.

Women tax payers will lose their special status under the proposed Direct Taxes Code.

Relief to corporate taxpayers

The government today proposed to retain corporate tax at 30 per cent, but without the surcharge and cess that increase the current levy to over 33 per cent. The current tax rate for domestic companies, including surcharge and cesses, comes to about 33.22 per cent, while foreign companies pay over 40 per cent.

The bill sought to levy the same corporate tax rate on domestic and foreign companies. Tax experts said the proposal in the DTC Bill will provide much-needed relief to the industry and bring the levy on par with global standards.

In addition, the DTC also proposed to increase the minimum alternate tax rate to 20 per cent of book profit from the current 18 per cent. — PTI

Highlights

l I-T exemption limit raised to Rs 2 lakh

l Tax payer at highest level will save Rs 41,040

l I-T limit for senior citizens: Rs 2.5 lakh

l Corporate tax at 30%, Surcharge, cess to go

l MAT to be 20% of book profit

l Dividend distribution tax at 15%

Original draft

Income slab Tax

Rs 1.6L-10L 10%

Rs 10L-25L 20%

Above 25L 30%

DTC Bill

Income slab Tax

Rs 2L-5L 10%

Rs 5L-10L 20%

Above 10L 30%

RIL checks into Oberoi Hotels
Buys 14.12 pc stake in EIH for `1,021 crore
Tribune News Service

Mumbai, August 30
Reliance Industries today announced that it has picked up a 14.12 per cent stake in EIH Hotels Ltd which owns the Oberoi brand of hotels.

The stake was picked up by Reliance Industries Investment and Holding Private Limited, a wholly owned subsidiary of RIL.

Both companies in a filing to the exchanges said the deal was made at Rs 1,021 crore. RIL paid Rs 182 per share of EIH as against its closing price today of Rs 150.

RIL said it was not interested in changing the management of EIH Hotels.

“RIL has full faith in and would support the management of EIH and there is no change of management, operation or control of EIH,” the statement by Reliance Industries said.

Another major stakeholder in EIH is tobacco major ITC which holds 14.98 per cent stake in the company, slightly lower than the 15 per cent threshold under which it would be required to make an open offer to increase its stake to 35 per cent. Under proposed changes in the law, ITC, which owns the third biggest hotel chain in the country, would have been allowed to raise its stake to 25 per cent triggering an open offer to take over the entire company.

Mukesh Ambani's RIL is seen as a white knight brought in by the Oberois to prevent their hotel chain being taken over by ITC.

Cairn can’t sell stake to Vedanta, says ONGC

New Delhi, August 30
State-owned ONGC today said UK's Cairn Energy Plc cannot sell a majority stake in Cairn India to Vedanta Resources without its consent.

ONGC's claim is based on what it called pre-emptive rights in oilfields like Rajasthan, where it is an equity partner with Cairn India.

In a letter to Cairn Energy Plc Chief Executive Bill Gammell, ONGC company secretary N K Sinha sought details of the Vedanta deal, saying the Edinburgh-based firm required "consent of ONGC besides other governmental approvals to consummate the proposed" sale of up to a 51 per cent stake in Cairn India to London-listed Vedanta.

ONGC owns 30 per cent in the 6.5 billion barrels Rajasthan block that is at the centre of Cairn Energy Plc's $8.48 billion deal to sell its majority stake in Cairn India to Vedanta Resources. Cairn India, 62.37 per cent owned by Cairn Energy, is the operator of the block with a 70 per cent stake.

ONGC believes that by virtue of its stake in Rajasthan block, it has the pre-emption or right of first refusal to buy Cairn India in case the company's ownership changed.

But the Joint Operating Agreement between Cairn India and ONGC gives partners pre-emption rights in case of sale of interest by either parties in the block, but not in the case of corporate ownership change, which is what is happening in the Cairn-Vedanta deal. — PTI

Pak to import 1 m cotton bales from India

Islamabad, August 30
Pakistani spinners have finalised deals with Indian exporters for import of one million bales of cotton since cotton crop has been extensively damaged in the floods that ravaged the country.

Mohammad Akber, vice-chairman of the All Pakistan Textile Mills Association (APTMA), said: "The spinners are scouring cotton growing countries for importing the fiber on concerns of disruption to domestic supply chain."

Akber said the floods triggered by torrential rains could have destroyed 2.5 million to 3 million bales (1 bale weighs 170 kg) of cotton in Pakistan.

"It is difficult to say anything on the exact crop losses because floods are still playing havoc in Sindh. But it is safe to assume that our domestic cotton output will not exceed 11 million bales," Akber told the Dawn.

The loss of cotton crop means that the spinning industry will have to import up to four million bales this year to meet its requirements.

He said most mills were running far below their installed capacity because of the shortage of raw material. — IANS

RCom sets up 3G innovation lab
Tribune News Service

New Delhi, August 30
Telecom major Reliance Communications (RCom) has set up an integrated third generation (3G) innovation laboratory to develop applications for mobile subscribers and has appointed Prashant Gokarn as the head for its 3G business operations.

The company’s statement said,"The objective of the innovation lab is to facilitate the development of mobile service innovations through collaboration with third party developers".

The laboratory is set up at R-ADAG’s headquarters in Dhirubhai Ambani Knowledge City, near Mumbai.

The lab would involve a community of content developers, product innovators, technology platforms enablers and device manufacturers. The collaborative unit will be formed through tie-ups with top local as well as global partners who would further aid in improvising the innovation quotient, it said.

The company had won 3G spectrum in 13 circles, including the metros of Delhi, Mumbai and Kolkata.

According to sources, RCom is planning to rope in strategic partners for its infrastructure and technology innovation unit for 3G mobile business, and is in discussions with global players like Motorola and HP.

Discussions are also being held with likes of Intel and Sony besides global technology players such as Red Hat, SNAPin Software, weComm, Rubberduck Media Lab and Skyfire Labs.

Nokia server in India by Nov

New Delhi, August 30
Finnish mobile handset firm Nokia today said it will set up its enterprise server in India in November this year to adhere to the government's security concerns, a move that may force BlackBerry to also follow it.

"We are launching the server on November 5 in compliance with all the rules and regulation in the country...It is for hosting mail and ensuring that the government has access (to the data)," Nokia India MD Shivakumar told reporters here.The Indian government has been demanding greater access to mobile and online communications on the back of national security concerns.

"We met Home Secretary GK Pillai about a month ago and explained as to what Nokia is doing. He was fully satisfied," Shivakumar said. — PTI

SC notice to ex-Satyam MD

New Delhi, August 30
The Supreme Court today asked former Satyam managing director B Rama Raju and four others, accused in Rs 14,000-crore accounting fraud in Satyam, as to why their bails should not be cancelled.

The Supreme Court Bench comprising Justice Deepak Verma and Justice Dalbeer Bhandari issued notices to the five accused on a petition filed by CBI.

The Andhra Pradesh high court in July had granted bails to Rama Raju, brother of Satyam founder B Ramalinga Raju, former Satyam CFO V Srinivas and three others former IT company employees G Ramakrishna, Venkatapathi Raju and Ch Srisailam accused in the India's largest corporate fraud.

Solicitor-General Gopal Subramanium appearing for CBI submitted before the court that these are the persons who have recruited some of the key witnesses in Satyam and may alter the evidences. — PTI

Intel buys Infineon's wireless business for $1.4 bn

New York, August 30
World's largest chipmaker Intel today announced its plan to acquire Infineon Technologies AG's Wireless Solutions (WLS) business in a cash deal worth about $1.4 billion.

Intel has entered into a definitive agreement with global semiconductor and system solutions firm Infineon to acquire its WLS business in a cash transaction, valued at around $1.4 billion, read the joint statement by the two companies. — PTI

Recycled notebooks in J&K
Tribune News Service

Jammu, August 30
The MBD group launched MBD Write-well and Print-well recycled eco-friendly notebooks and copier in Jammu and Kashmir at a function held here yesterday.

Further taking up another noble cause, MBD Printographics will share part proceeds from the sale of its product with the Child Right and You (CRY) to ensure the rights of underprivileged children.

Monica Malhotra Kandhari, senior director of the MBD group, said MBD write-well notebooks and copier were a unique venture not only in terms of the magnitude of production it will undertake but also in its contribution to the environment.

She added that MBD write-well and print-well saves almost 1 million trees a year by making use of recycled paper.

Pandey acting chairman of J&K Bank
Tribune News Service

Srinagar, August 30
Sudhanshu Pandey, Commissioner and Secretary, Finance Department of the state government, has been appointed acting chairman of the J&K Bank, following the resignation of its chairman and chief executive, Haseeb Drabu, here.

This was decided at a meeting of the Board of Directors of the bank, its spokesman said, adding that the RBI was being approached for seeking requisite approval.

Sudhanshu Pandey has been on the board of the bank since March 31 last year.

Meanwhile, the board of the bank has constituted a search committee to identify a panel of suitable candidates for filling the vacancy due to the resignation of the chairman of the bank, the spokesman said.

BRIEFLY

Ford recalls 462,750 vans
New York: Ford Motor Co. is recalling a total of 462,750 Windstar mini vans made during 1998-2003 over concerns that the rear axles could corrode and fail. The recall covers vans sold or registered in 21 states, following reports that after years of running, "corrosion can weaken the rear axle" and possibly crack it, leading to crashes, Xinhua reported citing Detroit News. The automaker will also recall about 113,000 Windstars in Canada, Ford spokesman Said Deep said. — IANS