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New Exim policy in July
Airport Authority’s CUTE proposal
Kangra brew not buyer’s
cup of tea MARKET
UPDATE
FIIs’ crutches for maimed market
No tax rebate on plot purchase loan
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New Exim policy in July
New Delhi, June 6 “A special package is being worked out. Since it may take some time we would like to extend some of the benefits indicated in the proposed SEZ Act in the Exim policy,” Commerce and Industry Minister Kamal Nath said at an open house organised by Export Promotion Council for EOUs and SEZ. The government is also considering a proposal for enactment of SEZ Act to provide stability of regime and single window clearance to SEZ, he said. Mr Nath said he would also ask Finance Minister to consider extending the income tax package as indicated in the proposed SEZ act to SEZ units in the next Budget. SEZs must take off as they can significantly contribute towards achieving quantum growth in exports as experience in China has shown, he said yesterday. Emphasising that SEZ could act as magnets for foreign direct investment into the export sector, he said the impediments coming on the way of SEZ taking off must be fully analysed and steps be taken to ensure that the objectives of SEZ scheme were fulfilled. Allaying the fears of EOUs about any discrimination against them, Mr Nath said both in the Exim Policy and Budget, the government would like to work out a package for EOUs which would take into consideration some of the major issues raised by them like exemption from Central Sales Tax, Service tax. “I would also take up the matter with Finance Minister regarding extending the benefit of Income tax under section 10 B beyond 2010 as well as extending the benefits of Income tax for domestic units converted into EOUs without any conditions,” he said. The minister said he would ask the Department of Revenue to consider the request of EOUs like exemption from the requirement of bank guarantee, working out Golden EoU scheme and to carry other simplifications. Pointing out that the scheme (SEZ and EOUs) also generated tremendous employment in the country, Mr Kamal Nath said: “I have no doubt in mind that SEZ and EOUs are the schemes of the future and will help increasing manufacturing activity as well as the value addition in the country.”
— PTI |
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Airport Authority’s CUTE proposal
New Delhi, June 6 In a recent presentation on restructuring the Delhi airport, AAI suggested shifting all courier operations to a separate courier terminal, besides implementing the Common Use Terminal Equipment (CUTE) on international side under which airlines can share airport space and provide better customer service based on specific needs, they said. The AAI has also planned linking the ATC flight timings with its Website to disseminate flight information online. The Authority has planned ways to deal with situations when there is an unexpected need for more ticket counters to reroute hundreds of passengers due to a cancelled flight, the sources said, adding the planned changes would ensure efficiency and flexibility in the system. Explaining the benefits of CUTE, the sources said in case a flight arrives early and the designated gate is occupied, the system allows a gate change. Similarly, if a gate is occupied by a delayed flight, the outgoing flight can be reassigned to an open gate to facilitate departure. This will reduce the ‘in-airport’ passenger travel distance. Other changes suggested by AAI include realigning the traffic flow system between domestic and international airport and opening additional eight immigration counters and also a beer bar at the transit lounge of the international airport, besides introduction of "cool cabs".
— PTI |
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Kangra brew not buyer’s cup of tea Palampur, June 6 Over 5 lakh kg tea has been piling up in different parts of the valley as well as with brokers in Kolkata for the past one year but no buyer has come forward to purchase it. Many times Kangra tea under the registered trademark of “Himalyan Teas” was put up for sale in the open auction but it failed to attract the buyer. Higher rate of cost of production and flooding of tea from African countries are the main reasons, which have kept out this tea from the international market. The sudden fall in the demand of Kangra tea has not only caused concern among tea growers here but it has also affected the financial health of four cooperative tea factories in Palampur, Baijnath, Bir and Sidhwari. Two units had already been closed for want of working capital. Whatever the capital state government had provided to these units has already been exhausted in losses suffered in the past three years. Only two tea factories in Palampur and Dharamsala are functional. Crises in the tea industry has forced over 100 tea growers in Bir and Baijnath to abandoned their tea gardens as there is no buyer for their green tea leaves. Earlier, co-operative tea factories were buying their produce. Mr Bishan Dass, a tea grower of Chogan village, who also served as Director of the Bir Cooperative Tea Factory for 15 years, says with the closure of tea factory at Bir 5,000 persons have been rendered jobless. He says no tea grower in the area has plucked green tea leaves in past two years. Growers are yet to receive the payment of their produce supplied to factories in 2000 and 2001. |
FIIs’ crutches for maimed market Last week the market was on a see-saw with huge intra-day volatility. At the end of the week, the Sensex gained 1.1 per cent to 4889 and Nifty moved up 0.81 per cent to 1521. The market sentiment turned cautiously optimist and profit-taking emerged every time the market went up. The major positive in the last week trading was the inflow from FIIs (Foreign Institutional Investors) to the tune of Rs 600 crores, after record outflow last month. This breathed some life into the market, which had been stunned by the election results and was concerned about the fate of economic reforms under a new regime. In addition to the FIIs inflow, fall in crude oil prices also added to the buying interest by investors. The immediate triggers for the market are the south-west monsoon, the forth-coming Budget and the first-quarter results. Though the market may remain range bound with intra-day volatility, a clear and definitive direction of the markets would be arrived at only after the Budget in July.
Banking Almost all-banking stocks crashed after the election results due to the perception among the investors that the banks may be forced to lend more to fulfil social objectives at the cost of their bottomline. This perception, though far-fetched, could be true for the public sector banks but their private sector rivals might not be affected at all. HDFC Bank and ICICI Bank offer excellent opportunity for investors to invest with a two-year perspective. HDFC Bank is looking at a 40-50 per cent growth this year compared to 30 per cent growth reported last year. Its credit-card business may break even sooner than expected and its tie-up with HDFC for distribution of mortgage loans should add to bottomline this fiscal. The stock is currently trading at Rs 356, which discounts its earning 20 times. The positives for ICICI Bank are that asset quality continues to improve with falling restructured non-accrual loans and improving overall coverage for weak loans. The bank also has strong return on equity (RoE), consumer loan focus and a tight control on previously ballooning operating expenses. What’s more, it is available at a price (Rs 268) below its recently concluded public offering of Rs 280 per share.
Hind Lever HLL’s (Hindustan Lever) first quarter results had been extremely disappointing. The net profit was down 23 per cent to Rs 294 crores on sales of 2,353 crores. Good monsoon had resulted in improved volumes, margins in soaps, a detergents and personal products had declined due to the price-cuts and trade-rebates. Processed foods and ice-creams, which had turned around last year, had also seen a sharp decline in profitability. Given this backdrop, the HLLs valuations, which is trading at Rs 138 at about 18 times its last year’s earnings, looks stretched. However, the worst is over for the stocks and any positives would lead to a sharp upward movement. Therefore, long-term investors can buy this FMCG major with a strict long-term perspective. |
by S.C. Vasudeva No tax rebate on plot purchase loan
Q. I had been allotted a plot at Mohali by PUDA on Sept 3, 2002. I had made full and final payment of the plot by taking a loan of Rs. 2.90 lakh from my department on October 30, 2003, whose recovery from my pay is Rs. 2500 pm. I further raised a loan of Rs. 3.96 lakh for the construction on above said plot during 2002-2003 and 2003-2004 from my department. I had completed the construction and Estate Officer PUDA, Mohali, issued me occupation certificate on 2.12.2003. Kindly let me know that whether I am eligible for 1. Exemption for interest accured on plot loan u/s 24 of Income Tax, 1961. 2. Principal rebate on plot loan u/s 88 of Income Tax, 1961. Devinder Kumar, Patiala A. Section 24 of the Income Tax Act, 1961, provides that the income chargeable under the head income from house property shall be computed after deducting the amount of any interest paid for the capital borrowed for the purposes of acquisition, construction repair, renewable or reconstruction of the property. The interest payable on the loan taken for the purchase of plot would not get covered in the above terminology, and therefore, the deduction for loan obtained for the purchase of plot itself may not be covered under the provisions of Section 24 of the Act. 2. Section 88 of the Income Tax Act allows a rebate for the instalment paid for the purposes of purchase or construction of residential house. The said section also, therefore, does not cover the rebate for loan instalment payable towards a loan taken for the purpose of purchase of a plot.
Loan for house repair
Q. I am a Punjab government employee. I had taken a loan for repair/addition of my house in 2000. Whether the interest on above repair/addition loan is exempted from total income for income tax purpose. If yes then: i) How much interest amounts: under which Section of the Income Tax Act? ii) Can I now claim refund from the Income Tax department by claiming exemption of above interest for the last two years (financial year 2001-02 & 2002-03) by filling revised returns. Daljeet Singh, Jalandhar A. i) The interest allowable as deduction against income from house property is limited to Rs 30,000/-, in case the loan is taken for the repair, renewable or reconstruction of the house. ii) The revised return can be filed at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. Accordingly the revised return for the assessment year 2002-2003 (financial year 2001-2002) could have been filed by March 31, 2004. Similarly, the revised return for assessment year 2003-04 (financial year 2002-03) can be filed by March 31, 2005. Therefore, in your case if the assessment for the assessment year 2003-04 has not taken place you may file the revised return and claim the reduction for the interest paid in respect of the loan borrowed for repair/addition to your house.
Rebate on wife’s name
Q. I am working as Accounts Officer in the electricity board at Patiala. I am interested in ICICI Prudential Life Term Pension Scheme policy in the name of my wife who is a housewife to save tax & avail the benefit of tax u/s 80CCC (1). It may please be advised/clarified whether I am eligible/entitle for tax rebate under 80 CCC(1) if the amount is invested by me in the name of my wife. Narinder Dewan, Patiala A. Section 80 CCC of the Income Tax Act, 1961, provides where an assessee being in individual has in the previous year paid or deposited any amount, out of the income chargeable to tax, to effect or keep in force a contract for any annuity plan of LIC or any other insurer, for receiving pension from the fund, he shall be allowed a deduction of the whole of the amount paid or deposited (excluding interest or bonus accrued or credited to the assessee’s account, if any) as does not exceed the amount of Rs 10,000 in any previous year. The pension so received is taxable in the year of receipt as income of the year in which it is so received. You may, therefore, take a pension scheme policy from ICICI Prudential Life Insurance and the money paid by you could be taxable in your hand even if it is received by your nominee, i.e. your wife. |
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