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Government declares war against vanishing firms
India Inc wants tax on farm income
Max TV to telecast programmes in Pak After making fairly strong waves in India, Sony’s Max TV channel has now set out to conquer the world. “We have started beaming our programmes to Middle East and Central Europe with effect from June 1”, says Mr Rajat Jain, Executive Vice President and Business Head of the company.
Sluggish cotton markets
FIIs invest Rs 106 cr in equity market
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Market may continue to slide
Tuition fees receipt must for tax rebate
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Government declares war against vanishing firms
New Delhi, June 20 “We have put the government machinery on a high alert to track such companies... we are also streamlining the prosecution machinery to bring the offenders to book,” Company Affairs Minister Prem Chand Gupta told PTI. “There were as many as 229 such companies that vanished, robbing investors of Rs 10,000 crore... We will go after these companies with all our might in the interest of small investors,” Gupta, a RJD MP from Rajya Sabha, said. Gupta said that the Centre would seek all possible support from states in the crusade against such fly-by-night companies that defrauded investors during the last ten years. He said so far 107 companies had been tracked down while 122 were still at large, falling truly in the category of “vanished” companies. The government has filed FIRs against 87 vanishing companies. Asked about the poor conviction rate, Gupta said “we will streamline the prosecution machinery for better and effective results.” In order to make the hunt more effective, the Centre would seek full support from state governments for the cause of investors, Gupta said. Admitting that the Centre had a limited role in policing, the Minister said he had directed his ministry to summon a meeting of Chief Secretaries of different states. “Policing is a state subject and we feel that for effective checks, the state governments have to play a more pro-active role,” Gupta said. He said considerable coordination was also going on by the field organisations of the Ministry of Company Affairs, the state governments, Income Tax authorities, financial institutions and the banking and other development financial institutions to locate such vanishing companies. Four separate task forces have already been constituted at Mumbai, Kolkata, Chennai and Delhi. “We have asked them to accelerate their pace of working with a view to identifying vanishing companies so that penal action can be initiated against such firms,” he said. Gupta said a Coordination and Monitoring Committee, co-chaired by DCA and market regulator SEBI, was already in place. He said the menace of vanishing companies had been noticed mainly in ten states — Andhra Pradesh, Delhi, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Punjab, Tamil Nadu and Uttar Pradesh.
— PTI
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India Inc wants tax on farm income
New Delhi, June 20 Responding to questionaire sent by PTI, industry captains also said they wanted reduction in indirect tax rates to make them globally competitive. Industrialists supported an early introduction of Value-added Tax and roping in of more services under the Service Tax net. On the controversial issue of taxing farm income, apex chambers like CII and FICCI said government should treat it at par with any other income and a beginning should be made by bringing income from organised farm sector under the tax net. “Time is ripe to tax agriculture income. Agriculture should be taxed beyond Rs 5.0 lakh at a flat rate of say 15 per cent,” FICCI said. CII said that equitable treatment of all income earners would imply that
agriculture income cannot be treated differently from any other income. PHDCCI said it will not be easy to levy tax on farm income unless agriculture activity is organised. Admitting that it was difficult to tax farm income as the sector was fragmented and the issue was politically sensitive, Indian Merchant Chamber President Nanik Rupani said, “there is a need to have a phased programme of taxing agricultural income. It will be prudent to make a beginning to organised farm sector.” Differing from other industry bodies, Assocham president M.K. Sanghi “agriculture should not be taxed.”
— PTI
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Max TV to telecast programmes in Pak Chandigarh, June 20 “We have started beaming our programmes to Middle East and Central Europe with effect from June 1”, says Mr Rajat Jain, Executive Vice President and Business Head of the company. “From September, we will begin beaming programmes to the US, Pakistan and South East Asia. Later, we plan to cover South Africa and the surrounding countries. Our objective is to have our presence in every country where people of Indian descent are settled.” Mr Jain outlined the growth plans for the TV channels. “Max is a five-year old channel with focus on entertainment. Our basic aim is to be a leader in contents including movies, soap operas and special events”. Mr Jain who was largely responsible for introducing Mandira Bedi with her “Extraaa Innings” as a TV anchor during World Cricket Cup 2002 in South Africa. Max is also “Hollywood Hungama” from June 27 in which it will telecast a dubbed version of a Hollywood blockbuster, like Anaconda, every Sunday at 9 p.m.
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Sluggish cotton markets Ludhiana, June 20 The reason for the slump is stated to be no fresh export orders from overseas countries. Enquiries reveal that the garments manufacturers have already exhausted the orders under the quota regime and no further orders are being received. The quota regime is coming to an end in December this year and already pressures are being built to further continue the quota system, say sources close to the textile industry. In the international market, the cotton prices have fallen by 15 per cent during the period of four months. The same was quoted at 68 cents per pound which was earlier 80 cents per pound. New York futures have also dropped to 58 cents per pound. The fall in the prices of cotton in the international market is attribute to low buying of cotton by China and rise in production of cotton worldwide. The trade sources say that it was expected that China would make bulk buying of cotton from the international market but the same did not happen as area under cotton increased in countries like China, USA, India and Pakistan. Even in Australia, area under cotton has increased. In India, the cotton production touched 170 lakh bales during 2003-2004 against 136 lakh bales of the previous year. The export and import of cotton during the same period was nine lakh bales each. The export of cotton garments during the first four months of the year January to April was 102 million pieces against 108.1 million pieces recording a fall of 4.9 per cent. However, in terms of value it was 391.3 million US dollars against 390.6 million US dollars.
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Wyeth’s net rises 95 pc
New Delhi, June 20 The company’s gross sales improved by 5.5 per cent to Rs 351.41 crore from Rs 332.98 crore. The operating profit before interest, depreciation and taxation improved by 39.2 per cent to Rs 76.91 crore during 2003-04 from Rs 55.26 crore in the previous year. It posted a net profit of Rs 8.32 crore for the quarter ended March 31, 2004, as compared to Rs 1.32 crore in the same period last year.
— UNI
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FIIs invest Rs 106 cr in equity market
Mumbai, June 20 According to the data available with SEBI, the FIIs invested Rs 243.90 crore in the equities while they sold Rs 137.30 crore. The FIIs made the highest investment in equities on Wednesday at Rs 503.30 crore and sold the most on Monday at Rs 429.30 crore. They were net buyers on three days — Tuesday, Wednesday and Thursday — and net sellers on Monday and Friday. Interestingly, FIIs did not enter into any transaction in the debt market during the week.
— UNI
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by S.C. Vasudeva
Tuition fees receipt must for tax rebate
Q: In the current financial year, Rs 12,000 as expenses on one child’s education are allowed as rebate. Is it obligatory to produce receipt of
expenditure such as tuition fee paid to the College/University or will the rebate allowed on a flat rate? Is the rebate on education subject to a ceiling of Rs 70,000 of the qualifying amount? Under which section is the rebate allowed? — Brij Mohan Ans: It is obligatory to produce receipt of expenditure in respect of tuition fees. The amount of Rs 12,000/- provided in Section 88 of the Act is the maximum amount that is allowable for computing the rebate available. If the expenditure incurred is less than Rs 12,000 then the rebate will be calculated on the actual amount of expenditure. Further, the rebate on education is subject to a ceiling of Rs 70,000 being the qualifying amount prescribed in Section 88 of the Act.
LIC scheme
Q: I retired on 31st March 2003 and am entitled to funds received in lieu of superannuation scheme by LIC. They issued quarterly cheques as pension and a cheque as lump sum. Please let me know whether lump sum attracts Income tax as TDS by the company while releasing payment to me. — N.K. Sharma Ans: It is not clear from your question whether the superannuation scheme is being administered by LIC for grant of pension to employees in accordance with the scheme approved by the tax department. Further it is also not clear whether the scheme was a contributory scheme by the employer and employee or it was a scheme in which contribution was being paid by the employee. In view of this proposition I am giving the legal position. You may examine the category in which you are covered. Section 10 (10A) the Income tax Act 1961 exempts the following amounts of pension. i) any payment in commutation of pension received under the Civil Pensions (Commutation) Rules of the Central Government or under any similar scheme applicable (to the members of the civil services of the Union or holders of posts connected with defence or of civil posts under the Union such members of the all-India services or to the members of the defence services or to the members of the civil services of a State or holders of civil posts under a State or to the employees of a local authority) or a corporation established by a Central, State or Provincial Act; ii) any payment in commutation of pension received under any scheme of any other employer, to the extent it does not exceed - a) In a case where the employee receives any gratuity, the commuted value of one-third of the pension which he is normally entitled to receive, and b) in any other case, the commuted value of one-half of such pension such commuted value being determined having regard to the age of the recipient, the state of his health, the rate of interest and officially recognized tables of morality; iii) any payment in commutation of pension received from a fund under clause (234AAB).
Standard deduction
Q: I am working as a principal G.S.S.S. Lahla, Teh Palampur, Distt Kangra (H.P.) I am an ex-serviceman and drawing pension. Please clarify whether standard deduction to be calculated separately on the pension and as well as on the salary or to be calculated on total income i.e. Salary + Pension. — M.R. Labana Ans:
Standard Deduction will be calculated on the aggregate amount of salary and pension i.e. salary + pension.
Tax limits
Q: I am in a fix over as to what is the actual limit of total income. For the purpose of rebate of 20 per cent on 1.5 lakh said to be Gross Total Income whether this 1.5 lakh is after deduction of Rs 10,000 of pension fund under Section 80CCC & standard deduction or before deduction. My mid-term assessment depicts-Gross Income from salaries: 1,52,986 + Total Value of Perks 33,379 Less: Value of Perks exempted- 4,529. Thus Income from salaries: 1,81,836 Less: Standard Rebate: 30,000 Gross Total Income: 1,51,836 I have savings worth: 24,458 (LIC PPF etc) & LIC Pension Fund: 10,000 (PPF=1,000) & IDBI T.S Bonds: 30,000/- & Direct LIC: 23, 572 NSC Interest: 5,000 Please tell from above that whether I shall be eligible for 20% rebate in savings or 15% after allowing 10,000/- deduction (u/s 80CCC) from 1,51,836/- i.e. 1,41,836 (Net). Harjeet Singh Ans: The rebate available to you would be 15 per cent of the amount invested by you in the various alternatives available u/s 88 of the Act as your gross total income exceeds Rs 1.5 lakh. Please note that the deduction u/s 80CCC is given after computing the gross total income, which in your case is the salary income amounting to Rs 1,51,836.
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