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VAT: UP traders in no mood to relent
24 PSUs drain on HP
Azim Premji
Inter-state trade council soon
US envoy calls upon corporates to combat AIDS
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Maruti Omni upgraded
After selling house, construct one within 3 years to avoid tax
Corporate results to drive Sensex this week
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VAT: UP traders in no mood to relent
Lucknow, April 10 Tens days since VAT notification was issued in 18 states, UP traders are witnessing a spurt in sales. Explaining the phenomenon, National President Akhil Bharatiya Udyog Vyapar Mandal Sandeep Bansal says nervous by the uncertainty prevailing in neighbouring Delhi, Haryana and Punjab, UP traders are procuring supplies from within the state causing this temporary surge. If things remain as they are, in times of globalisation, UP might witness a reverse phenomena with intra-state business getting an impetus, points out General Secretary Bhartiya Udyog Vyapar Mandal Banwari Lal Kanchal who is also the economic advisor to the state government with the rank of a minister of state. Not ruling out Delhi businessmen shifting base to Ghaziabad and Noida in the near future where the VAT regime has not been implemented, Kanchal hoped Delhi businessman will work in UP and return to Delhi to sleep. Calling it a consumer’s battle being fought by the traders, Kanchal says: “Double-triple taxation will eat into traders profit margins. But ultimately the burden would be shifted on the consumer who will be short-changed if VAT is implemented in its present form”. While BJP backed Akhil Bhartiya Udyog Vyapar Mandal has its differences with Kanchal’s association on various counts on VAT, its President Sandeep Bansal completely agrees with Kanchal. Calling it an ill-conceived tax, he demanded the resignation of the central VAT empowered committee head and Left Front Finance Minister Ashim Dasgupta for rushing to implement the tax without building a consensus on the issue. While one faction of traders led by Uttar Pradesh Udyog Vyapar Mandal president Radhey Shyam Gupta has demanded the introduction of VAT in the “larger interest of the public and traders,” Kanchal says Gupta has no following among traders and his demand for VAT held no significance. The main objection of the anti-VAT traders is that in countries like Germany, Canada and France where VAT has been implemented, all other taxes except income tax has been merged into it. Here only sales tax is being replaced by VAT while a legion of other central and state taxes remain like the service tax, turnover tax, mandi fee, surcharge, entry tax, entertainment tax and so on. They also disagree with Dasgupta’s claim that after VAT many consumer items will become cheaper. Kanchal asserts after VAT even salt and water would not remain outside the tax net. According to the traders VAT is being introduced at the behest of MNCs who are facing competition from the local businesses. “The amount of complicated paperwork which VAT demands is totally beyond a small trader operating from a 10 x 10 shop. It will usher in a regime of huge franchise with 1000 square foot business establishments.”
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24 PSUs drain on HP
Shimla, April 10 Only four companies — the HP Small Industries Corporation, the HP General Industries Corporation, the HP Civil Supplies Corporation and the HP Industrial Development Corporation — earned a profit of Rs 5.72 crore during 2003-04. Out fo these, only the civil supplies corporation declared a dividend of Rs 24.61 lakh. The amount of dividend works out to a meagre 0.21 per cent of the total equity. The state government had formulated a policy for payment of the minimum dividend of 3 per cent but it was fulfilled by only one company. Of the loss-making government companies, Agro Packaging India, the HP Electronics Development Corporation and the HP Handicrafts and Handloom Corporation had accumulated losses aggregating Rs 57.42 crore, which exceed the paid up capital of Rs 25.58 crore. In the case of Agro-Packaging India Limited, the accumulated losses stood at Rs 27.44 crore against the paid-up capital of Rs 17.81 crore. The HPMC had been incurring losses for the past four years and had a negative net worth. The turnover of the HP Electronic Development Corporation had been less than Rs 5 crore in each of the preceding five years. The investment in four non-functional corporations was Rs 1,385 crore. The government had in July, 2002, decided to wind up the HP Road and Other Infrastructure Corporation and the HP Health Systems Corporation and transfer their assets and liabilities to the newly constituted Infrastructure Development Board. However, the winding-up process had not yet been initiated. The Comptroller and Auditor-General has recommended that in view of the continuous losses and poor turnover, the government should either improve the functioning of Agro-Packaging India Limited, the HPMC and the HP Electronics Development Corporation or consider their closure.
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Azim Premji
London, April 10 Premji is the richest Indian while Mukesh and Anil
Ambani, Chairman and Vice-Chairman, respectively, of the Reliance Group, are the second richest in India with a combined wealth of Rs 24,172 crore, according to ‘Success 2005’, a new business magazine launched by the Eastern Eye Group of Publications. Sunil Mittal, Chairman and Managing Director of Bharti Tele-Ventures, is third in the list with a wealth worth Rs 12,552 crore. He is followed by Shiv
Nadar, Chairman, President and CEO, HCL Technologies (Rs 7,929 crore). —
PTI
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Inter-state trade council soon
New Delhi, April 10 The modalities and terms of reference of the council are in the process of formulation and would focus on optimally engaging state governments in providing an enabling environment for promotion of international trade, Commerce and Industry Minister Kamal Nath told The Tribune in an interview. “The objective is to make states more actively involved in trade. I want to create the forum for inter-state action. This will not be statutory or a quasi-judicial body. I want to say that states must be partners in this endeavour and they must be the prime drivers of international trade and economic activity,” Mr Nath said. Coherence and consistency among trade and other economic policies of both Centre and state governments “is important for maximising the contribution of such policies to development,” he said. “This will also drive the spirit of competitiveness and provide an opportunity for each state to know what others are doing to promote trade. It would also allow a forum to know what the states would like the Centre to do for their own enhancing their own economic activity,” Mr Nath said. The Annual Supplement to the Foreign Trade Policy unveiled by Mr Nath observed that though some states have formulated export policies yet a lot needs to be done to coordinate this.
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US envoy calls upon corporates to combat AIDS
New Delhi, April 10 Inaugurating a workshop on corporate social responsibility on HIV/AIDS, trafficking and substance abuse organised by the American Chamber of Commerce (Amcham) here yesterday, the US Ambassador said that India and the United States are vibrant democracies committed to the health and welfare of their citizens and are cooperating to address the most fundamental social issues that need attention.
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Maruti Omni upgraded
New Delhi, April 10 Available in new colours of Crystal Gold, Icy Blue, Bright Red and Caribbean Blue in addition to the existing Silky Silver and Superior White, the new Omni is a result of customer feedback. —
UNI
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by S.C. Vasudeva After selling house, construct one within 3 years to avoid tax Q I retired in October 2003 at 60 years of age and have annual pension plus other income of Rs 1 lakh. I sold a house for Rs 11 lakh in July 2004, which was purchased by me for Rs. 45,500 in May 1972. My queries are: (i) How much income tax do I have to pay for the financial year 2004-05, including the money from the sale of the house? Give detail calculations. (ii) Is there any way to save income tax, if due. For example, by investing money from the sale of the house? — S. Pal A. You have not given the break up of your other income and pension income in the question as a result of which it is not possible to compute the standard deduction and deduction allowable, under Section 80-L of the Income Tax Act, 1961 (The Act). The tax payable by you in respect of such income cannot be ascertained on account thereof. (ii) The computation of capital gain and tax payable thereon is as under: Sales consideration Less: Indexed cost of acquisition: Rs 45,500 x 480/100 Long term capital gain: Rs 11,00,000 Rs 2,18,400 Rs 8,81,600 Tax on above @ 20 per cent education cess @ 2 per cent: Rs 1,76,320 Rs 3,526 Rs 1,79,846 Note: You have the option of substituting the fair market value of the house as on April 1, 1981 in place of original cost of Rs. 45,500 while computing the capital gains. (iii) The capital gain earned by you can be invested in buying or constructing a residential house. However, such investment in purchase of a residential house must be made within one year before or two years after the date of transfer of the property. The period allowed for construction of house is three years after the date of transfer of property. If the amount is not appropriated for the above purpose before March 31, 2005, but you intend to invest in acquisition or construction of a house, you must deposit the amount of capital gain in a specified bank or institution under the capital gain scheme and the sum so deposited has to be utilised for the aforesaid purpose within the specified period referred to hereinabove. Such deposit must be made before the due date of filing the return of income. The other scheme available for saving capital gain tax i.e. buying specified bonds is not available in your case as such investment is to be made within six months of the date of transfer and in your case said period of six months has already expired, the property having sold in July 2004. Saving tax Q I am Punjab Government employee. For the financial year 2005-06, I want to invest Rs 12,000 in GPF, Rs 300 in GIS and Rs 60,000 in NSC. In total, salary for this financial year will be Rs 1,82,000. Will the NSC savings be of any help in escaping the tax net? If yes, to what extent? Please also guide about the maximum investment in NSCs that will be of some help in reducing my tax burden for the financial year 2005-06. I don’t want to invest in NSCs without any tax benefit? — Surinder Kumar Jindal A: As proposed in the Finance Bill, 2005, an individual assessee will be entitled to a deduction of Rs 1 lakh from his total income, in respect to investments made in specified saving schemes. Accordingly, you will be allowed the benefit of Rs 60,000 that you propose to invest in NSCs. You need to invest an aggregate sum of Rs 82,000 in order to avoid any payment of tax as income up to Rs 1,00,000 is proposed to be exempt from payment of tax in accordance with the provisions of Finance Bill, 2005.Family pension Q My total salary income for the financial year 2004-05 will be Rs 1,88,000. In addition to my salary, I am also getting "family pension" and total family pension for this financial year will be Rs. 98,000 (including arrear). I have invested Rs 1 lakh (Rs 70,000+ Rs 30,000) during this year. As per circular number 103 no. AT/Tech/228-Vol-IV issued by the PCDA (A), Allahabad (copy enclosed) vide which, CBDT has clarified that "family pension" does not fall under the definition of salary as per section 17(I)(II) and therefore no tax can be deducted at source from "family pension" u/s 192 of the Income Tax Act. My query is whether the income from "family pension" is added to my salary income for calculating income tax. — Surinder Kaur A As per explanation to Section 57 (iia) of the Act, family pension means a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of his death. Accordingly, there is no employer-employee relationship in case of family pension and, therefore, no tax can be deducted u/s 192 of the Act. However, under the aforesaid Section a deduction equal to thirty three and one third per cent of such income or Rs. 15,000, whichever is less is allowable as a deduction from the family pension. The amount of Rs. 98,000, less Rs. 15,000, would be added to your income. Your taxable income for assessment year 2005-06 (financial year 2004-05) would work out as under:Salary income Rs 1,88,000 Less: Standard deduction Rs 30,000 Rs 1,58,000 Family pension Rs 98,000 Less; Deduction u/s 57 (iia) of the Act Rs 15,000 Rs 83,000 Total taxable income Rs 2,41,000 Tax on above Rs 46,300 Less: Rebate @ 15 per cent of Rs 1,00,000 is Rs 15,000 Net tax payable Rs 31,300 Add: Education cess @ 2 per cent Rs 626 Total tax payable Rs 31,926 In computing the above tax liability it has been presumed that the investment of Rs 1 lakh has been made in accordance with the limits laid down in Section 88 of the Act.
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by Lalit Batra Corporate results to drive Sensex this week Markets have turned cautious ahead of the earning season and market indices lost close to two per cent last week. While Sensex lost 125 points to close the week at 6,379, Nifty lost 1.7 per cent to close at 2,031. Though there was no specific reason that could be attributed to decline in indices, it seemed that investors are taking a cautious stand ahead of the earning season. That Foreign Institutional Investors (FIIs) have continued to remain net buyers on the Indian bourses last week is silver lining of last week’s trading. Though global crude oil prices have come off from a record high of above $ 58 a barrel hit last Monday, its upward pressure on domestic interest rate continues. This week is slated to witness some key corporate results’ announcements that include Software. The outcome of these results would decide the direction of the markets. Investors are keenly waiting for the guidance from Infosys, along with its results to be declared this Wednesday. Markets on technical charts still looks weak and Sensex may go down further to test the 6,300 support level. Nifty has a strong support at 2,014. A break below 2,014 may push Nifty to test lower levels. NDTV Incorporated in 1988, NDTV started off as a news and current affairs content provider to broadcasters. In April 2003, It itself became a news broadcaster by launching two news channels, namely NDTV 24x7 and NDTV India, providing news in English and Hindi, respectively. The company launched its third channel — a business news channel called NDTV Profit — on January 17, 2005. The Indian television broadcasting industry has two main sources of revenues, namely advertisements and subscriptions. The industry is poised to see a good growth owing to the increase in its advertisement revenues and the possible rise in its share of subscription revenues. With the second week of its launch, NDTV Profit emerged as the leader among the business news channels. This will ensure higher billing rates for the channel going forward. Given the leadership status of its two channels, NDTV 24x7 and NDTV Profit, and the strong second position of NDTV India, we expect NDTV to benefit the most from the increased ad spend on TV news channels and emerge the leading news broadcaster in the next couple of years. Valuations can also get a boost if foreign institutional investors (FIIs) are allowed to invest in media stocks. Currently while foreign investment of up to 26 per cent is permitted in news channels, this has to be in the nature of foreign direct investment (FDI). Investors with a two to three years perspective can buy the stock and wait for the story of NDTV to pan out.
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