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Punjab to
get Rs 763 crore debt waiver Women
who made it BBMB to
float firm for hydel projects Air Sahara
keen to assess Punjab-Delhi route
Aviation
Notes A-I
fleet expansion may get delayed if Airbus moves court
No tax
levied on notional profits |
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Punjab to get Rs 763 crore debt waiver New Delhi, April 30 The 12th Finance Commission, which has been accepted by the Central Government in totality, has given a series of recommendations for debt consolidation and waiver of outstanding central debts to state governments. In addition to the debt waiver, Punjab will benefit with an estimated lower interest of Rs 523.18 crore and also be entitled to reduced payment of the principal outstanding to the tune of Rs 351.48 crore between 2005-10. Total outstanding loan of Punjab payable to the Centre as on March 31, 2005, is Rs 7,182.58 crore. Interest payments estimated for financial year 2005-06 (without taking debt consolidation into account) is Rs 887.88 crore. The Punjab government has also requested for waiver of the balance special term loan granted to the state for combating insurgency, even though it has not made any specific request for reducing its debt servicing burden. Special term loans, amounting to Rs 5799.92 crore, were given to Punjab by the Centre during 1984-85 to 1988-89 for combating insurgency. In its submissions to the 12th Finance Commission, the state government had requested that the outstanding special term loan of Rs 3,772 crore as on March 31, 2000, plus the interest thereon might be waived by the Government of India. The state government has cited Article 355 of the Constitution, the assurance by the then Prime Minister of India and the poor financial condition of the state in support of its request. Punjab was granted a moratorium on payment of instalments of debt and interest during the period 2000-05 on the outstanding special term loans amounting to Rs 3,772 crore.
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Teacher who got awards for making export-quality shawls Shveta Pathak Tribune News Service
Ludhiana, April 30 For Mridula Jain, Managing Director, Shingora Shawls, vanishing into obscurity would have been quite natural after an early marriage and kids. But she chose not to tread the path many women would conveniently opt for. Today, in less than two decades of having started a venture of her own, she is among the top shawl manufacturers of the country. Since the last five consecutive years, her unit is being awarded for showing top export performance. Shingora Shawls is a household name not just in domestic but in global markets as well. The unit produces almost 40,000 pieces a month and over 80 per cent of products are exported to the US, Japan, Italy, France, Germany and various other countries. Unlike many of her counterparts, Jain sells under her own brand name to various countries. Gap, Ralphraunan, Marks and Spencer, Banana Republic, Zara, Donna Karen and Valentino are among a few of her leading buyers. Many would be surprised to learn that before starting her own venture, she ran private coaching classes for over 10 years. Also, the fact that she is a relatively late beginner in the field. She entered the field almost 17 years after her marriage. This did not mellow her desire to make a mark. “I always had this craving to do something and I know nothing would have stopped me,” the unrelenting self of the dynamic lady speaks. And again unlike many others, she portrays her focus and clarity of mind: “I knew I would make it. I used to dream of it and it has not ended.” It was in 1987 that she started with 8 to 10 workers and a couple of small handlooms. The unit produced around 300 shawls a month. Operations expanded, but that was not just what Mridula had dreamt of. “I wanted to bring in the latest technology and compete globally. So I told the chairperson of the export promotion council that I wanted to tour Europe to see what more we could do.” It was unusual at that time, but that is how actions turned to achievements. Efforts to improve and upgrade continued and by 1990, Shingora started exporting. Jain attributes this to the professional approach she and those around her had. And that precisely was the reason she sent her son, who now takes care of product development in her unit, to pursue graduation in textiles in USA. “Besides measures towards improvement, upgradation, I also took calculated risks. They are an important part of business,” Mridula opines. It wasn’t an even path. “But instead of diverting my energy to what people advised, I focused on doing what I wanted and managed to handle things tactfully,” she reveals. While she is known for her forthrightness, she does not hesitate to take up industry’s problems and it is for this quality that she is also the vice-president of the shawl club here. One often gets to witness this indomitable aspect of her personality in industry meetings where she minces little words to voice industry’s concerns in front of politicians or senior government officials. The recognition she got through awards — she received Mahila Udyog Ratna in 1993, IMM-LIC Woman Entrepreneur of the Year Awards in 1994, was awarded by Punjab government in 1995 as Best Woman Entrepreneur and since 2000-01, her unit has remained among the top three in terms of export performance — has added to the motivation. “Appreciation is always good, but it is more important to be content and achieve your aim,” she feels. For those who look up to her, Jain only has one advice — Keep on dreaming and dare to be determined enough to realise those dreams.
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by A.N. Shanbhag No tax levied on notional profits
Q: If one sells units of a mutual fund after holding for a period of more than one year what are his capital gains tax liabilities? Also, if total investment of Rs 10,000 becomes 12,000 as per today’s repurchase price, will he need to pay income tax on profit of Rs 2,000? Secondly, in Budget of FY ’05-06, a provision has been made that even investment in ELSS up to Rs. 1 lakh will be directly deducted from income before income tax. If a person directly invests in stocks through IPO or secondary market will such investments qualify for above benefit? — Sujit Modak A:
Long Term Capital Gains (LTCG) from units of equity-based schemes of MFs is exempt. The tax is eligible only when the units are sold and the profit booked. If there is no sale, no tax is payable. Just because the price of the asset has increased and even if this increase is very substantial, no tax is payable. In other words, there is no tax levied on paper profits, which have not been pocketed. If the scheme is debt-based the profits pocketed are taxable. The rate is 20 per cent on indexed LTCG or 10 per cent on gains without indexation. 2. The purchases of stocks through IPO or secondary market are not entitled to any deduction from income u/s 80C.
India -US treaty
Q: I am an Indian citizen residing in the USA (Green card holder) for the past 10 years. I have made some capital gains on investments (stock and real estate) that I made while I was in India 14 years ago. I have paid taxes on the gains in India. Do I also need to pay taxes on the same gains in the USA? I have not made any investments out of money earned in the USA, nor have I repatriated any money from India to the USA. — Mr Narula A: Double tax avoidance treaties between countries generally confer the right of taxation of capital gains to the source state i.e. the country in which the capital gains arise, in this case India. However, in a departure from the normal, a treaty between the US and India allows capital gains to be taxed by each country as per the provisions of its domestic law. This would essentially mean that India would tax the capital gains as per its domestic law provisions. Now, since you are a resident of the US (does not matter if you are an Indian citizen), you would need to ascertain whether the US tax laws tax capital gains of a resident on a global basis. If so, then double taxation would arise. Under such circumstances, you would need to take recourse under Article 25 of the Treaty. As per the article, you would get credit for the tax paid in India on the capital gains from the tax payable on the gains in US.
Account in US
Q: I am transferring money to my bank account in India from my bank account here in the US. I wanted to know if the money being sent to that account would be taxed or only the interest earned on that account would be taxed. My understanding is that since I have already paid income tax in the US, the money would not be taxed in India. However if I earn any interest on that money in India, it would be taxed since the money is not being held in an NRI a/c. — Shashikant A: Your understanding is correct. Transfer by itself does not create any tax liability. If the money transferred is capital in nature, the question of paying tax thereon does not arise. However, if the transfer is a compensation received in India against some service rendered or some goods exported outside India, the amount becomes chargeable to tax in the hands of the recipient. If your status for the financial year ‘April-March’ is NRI and if the money earned is an income not arisen out of some nexus with India, either by way of Indian employment or business, the amount is tax free without any limits. If the money is taxable in India as well as your host country, you need not worry. The DTAA between India and your host country will help avoid double taxation. Such agreements are available on — www.incometaxindia.gov.in The interest will be taxable if the money is not being transferred to an NRE or FCNR account.
Funds in US
Q: Is it advisable to leave some of your funds in an US bank even after you return to India. Are there any legal implications for the same? — Manish A: The laws of FEMA grant general permissions to a person resident in India to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such ‘Foreign Currency Assets’ were acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India. If the residential status of the returning NRI has become RNOR, his forex income will be tax-free in his hands until he becomes a full-fledged Resident. Whether you should leave some money abroad or not depends upon your perception of the interest rate abroad and here in India and also of course the expected appreciation or depreciation of the dollar. The author may be contacted at wonderlandconsultants@yahoo.com
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Panel for traders Economic census
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