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Rs 21,000-crore ONGC project gets PM’s nod
IOC on way to new refining process
Erratic power supply main irritant, says PHDCCI
Hutch violated licence norms, says TRAI
NPAs bane of coops, says Nabard chief
Men top women in online beauty items’ purchases
Deduction up to Rs 1 lakh allowed for rebate on house-building loan
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Crompton Greaves Q1 net up by 78 pc
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Rs 21,000-crore ONGC project gets PM’s nod
New Delhi, July 24 A comminuque from the Prime Minister’s Office said: “After due consideration of all aspects of the matter, the Prime Minister has approved the various projects at Mangalore under the MoU between the ONGC and Karnataka. The ONGC plans to set up a Rs 7,475 crore petrochemical and aromatic plant, Rs 8594 crore LNG-based power project, a Rs 3590 crore C2/C3 recovery plant and LNG terminal and Rs 945 crore gas transportation pipelines. Officials said the state-owned firm had last year signed a memorandum of understanding (MoU) with the Karanataka Government for projects worth Rs 25,000 crore but could not proceed due to objections from the Petroleum Ministry. The Petroleum Ministry on May 19, a day after the Prime Minister reviewed the ONGC plans, contended that the ONGC had made the investment plan “without approval of the government and the company board.” Officials said the order from the Prime Minister’s Office said Mangalore Refinery and Petrochemicals Ltd, a subsidiary of the ONGC, would be the implementing agency for the total project while the ONGC would provide finances and guarantees. “LNG imports will be contracted by the ONGC,” it said. The Prime Minister also approved the ONGC as co-promoter of the Mangalore special economic zone with the state government. He allowed the ONGC to float wholly owned subsidiaries for a petrochemicals and power project and “float equity in market and/or to non-competing technology partners, retailing minimum 26 per cent and exclusive management control.” The approach suggested by the Prime Minister would help execute projects off-ONGC balance sheet by raising funds in the capital market. — PTI
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IOC on way to new refining process
Mumbai, July 24 The move seeks to ensure a comfortable high refining margin (GRM) in the years to come by using cheaper and easily available heavy and sour (high sulphur content) crude, by taking advantage of emerging technologies, in place of the costlier light and sweet variety. Heavy and sour varieties are currently cheaper by $ 3-6 a barrel. The project is to be aligned with the company’s plan to be a $ 60 billion company by 2011-12, by expanding refining capacity, diversification in petrochemicals, gas and upstream oil besides gas exploration and production business, according to IOC sources here. The sources said that following completion of the IOC’s technology upgradation and capacity expansion drive at the existing refineries at Koyali, Panipat and Haldia and the proposed refinery at Paradip, the company would be meeting 75 per cent of its crude requirement through the heavy and sour variety. The IOC currently consumes 54 million tonne of crude oil. Of this, the IOC alone consumes 41 million tonnes through its seven refineries. Approximately, 55 per cent of the total requirement is met through imports. The usage of heavy variety stands close to 50 per cent. The sources said that following the ongoing upgradation, the company’s largest refinery at Koyali (13.7 million tonnes) will be using 75 per cent of heavy and sour variety as against a mere 28 per cent now. The project will be completed in 2006. The company is considering expansion of the capacity to 18 million tonnes. The Panipat refinery, which is being expanded from six to 12 million tonnes at a cost of Rs 4,165 crore, will be using close to over 60 per cent of cheaper crude after expansion. — UNI
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Erratic power supply main irritant, says PHDCCI
New Delhi, July 24 Frequent power cuts lead to dependence on generators, pushing up production cost, which is undermining competitiveness and global reach of the industries, the chamber said in a press note. Ninety companies in the northern region participated in the survey, the PHDCCI said, adding that almost all participants said that unreliable power supply forced them to turn to captive power generation. About 55 per cent said they met 10-40 per cent of their power needs through captive power plants. As many as 20 per cent of the companies depend on diesel generator sets for more than 40 per cent of their power requirements. All respondents agreed that with the use of generators, electricity was costing them Rs 8-9 per unit. As many as 60 per cent of the respondents said this led to a 5 per cent increase in the production cost. Even worse is the position of small-scale unit owners — constituting 10 per cent of the respondents — who could not afford captive power plants, the survey said. Most of the respondents cited poor power infrastructure as the biggest constraint on growth. Regarding the reasons for a power shortage, most respondents felt that government investment in transmission and distribution was inadequate. As many as 60 per cent of them said the shortage could be overcome if the existing power generation capacity was used to the optimum, the chamber said.
— PTI
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Hutch violated licence norms, says TRAI
New Delhi, July 24 Sources in TRAI said today it had recommended that action be taken against Hutch for offering the push- to-talk service, which it called personal messaging service. The regulator had also recommended action against Tatas' PTT, following which the Department of Telecom (DoT) sent a show-cause notice to it last week asking it to explain why a penalty of Rs 50 crore not be imposed on it for violating the licence. However, in case of Hutch, DoT has forwarded the case to Telecom Engineering Consultant (TEC) to ascertain whether there was a violation.
— PTI
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NPAs bane of coops, says Nabard chief
New Delhi, July 24 Nabard chairperson Ranjana Kumar said the revamp of cooperatives was essential for the country to push up agriculture growth to 4 per cent annually from the present 1.5 per cent. "The mounting NPAs have become a bane of long-term cooperative credit structure," she said. "While across the banking structure, NPAs are showing a declining trend, state and primary cooperatives are moving in the reverse direction," Kumar said. Gross NPAs at State Cooperative Agriculture and Rural Development Banks (SCARDBs) level increased from 18.8 per cent during 1999-2000 to 26.6 per cent in 2003-04 against the tolerable limit of 5 per cent.
— PTI
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Men top women in online beauty items’ purchases
New Delhi, July 24 People in the 18 to 35 age group are the highest buyers of jewellery online, accounting for 74 per cent of the purchases. Among cities, Delhi tops the list with 30 per cent purchases, followed by Mumbai (29 per cent), Chennai and Bangalore at 6 per cent each. Further, 15 per cent of online shoppers bought jewellery and 18 per cent are likely to buy it in the near future, it said. For beauty products too, 72 per cent of the online buyers are males and the 18 to 35 age group accounts for 73 per cent of the purchases.
— UNI
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by S.C. Vasudeva
Deduction up to Rs 1 lakh allowed for Q. I am an employee in education department. I have taken a house loan from ICICI bank. The purpose of borrowing loan is purchasing a residential building. The registry of the building contains the two owners i.e. myself and my wife (Ravi Kansal). Therefore, the bank gave the loan to both of us. But my wife is a housewife and all the instalments are paid by me. Now I wish to know about whether I can take full benefits of rebate in my income tax or not. — Amrit Kansal A. Section 80C of the Act (which has been re-introduced by the Finance Act 2005 w.e.f. Assessment Year 2006-07) provides that in computing the total income of an assessee being an individual or a Hindu Undivided Family, there shall be deduction of a sum not exceeding Rs 1,00,000 paid to a bank towards the repayment of the amount borrowed by the assessee for the purposes of purchase or construction of a residential house property, the income from which is chargeable to tax under the head “Income from house property” or which would, if it had not been used for the assessee’s own residence have been chargeable to tax under such head. In your case, therefore, if the income from house property is being taxed in your hands only and you have indicated in the return that you are the owner of the property and your wife is not a co-owner but only a name lender, it would be possible for you to get the deduction of the instalments paid towards the re-payment of the loan to ICICI bank subject however to the ceiling of Rs 1,00,000 as provided for in the section. Form 15-H
Q. Apropos of the answer to my previous question which was replied by you on April 18, 2005 wherein it was advised that I should wait for the notification of the new Form 15-H which was to be notified after the Finance Bill is enacted as Finance Act 2005. Since the same has been done and the new Form 15-H must have been notified, kindly arrange to clarify the following: I am a senior citizen and in receipt of Rs 1,20,000 as pension annually. Besides this, I am getting an income of Rs 15,000 from ban interest and Rs 45,000 as income on deposit made in the post office in the deposit scheme meant for senior citizens fetching interest at the rate of 9 pc annually. Thus, my total annual income will be Rs 1,80,000 which is below the minimum taxable limit of Rs 1,85,000 for senior citizens. Can I file declaration (submit Form 15-H) with the postal authorities not to deduct TDS from interest paid to me on the deposit made under the deposits scheme for senior Citizens. I live in a village and own a motor vehicle, kindly clarify if I am liable to file income-tax return for the Assessment year 2006-2007 in 1/6 Scheme. — Harbhajan S. Ranote A. The Income-Tax Rules 1962 have not been amended because benefit allowable to the senior citizens has now been incorporated to the Finance Act 2005 by providing a separate slab for senior citizens. In view thereof, Form 15-H has not been modified and, therefore, can be used for the purposes of seeking the due relief under Section 197A of the Income-Tax Act 1961. You can, therefore, file the said form with the concerned authorities. With regard to the filing of return in 1/6 scheme, you have to give the details of the village in which you are living to enable me to ascertain the coverage of the area in terms of the notification issued by the department.
Capital gain and tax
Q. My wife purchased a Trust’s plot from original allottee in 1983 by paying a premium of Rs 15,000. The cost of the plot was to be paid in 15 years in instalments. Since my wife is a household lady, I got executed general power of attorney from the allottee in my favour for the above plot. I constructed house in 1985 and in 1991-92 on the said plot by incurring Rs 3 lakh approx. and deposited all instalments plus other dues to the trust and got sale deed executed in favour of allottee. Being an attorney, I sold the house for Rs 10.50 lakh recently and deposited the sale proceeds in joint account with my wife. Please clarify the following points: 1. Can my wife first invest Rs 2.5 lakh in MIS from the sale proceeds, before investing remaining sum to purchase property within two years? 2. Can my wife pay some amount to my house loan account out of the above sale proceeds? If so, please suggest investment to avoid tax liability. 3. Can my wife spend some amount on the education/marriage of our children out of the above capital gain. — Gurdial Singh A. It is not clear from your query as to who is the real owner of the property purchased from the trust. I have, therefore, presumed that even though your wife is a house hold lady, she had provided the funds for the acquisition and the construction of the house which has been sold for a sum of Rs 10.50 lakh. Section 54 of the Act provides that capital gains earned on the sale of a residential house property if invested towards the purchase of a residential house within a period of one year before or two years after the date of on which the transfer took place or towards the construction of a residential house within three years of the date transfer, then the capital gain so earned shall not be charged to tax if the amount of the capital gain is equal or less than the cost of the new residential house. The said Section further provides that in case the amount of capital gain is not appropriated by the assessee towards the purchase of new asset or utilised for the construction of the new asset before the date of furnishing the return of income, it shall be deposited by the assessee before furnishing such return of income in an account with a bank or an institution as may be specified and utilised in accordance with the scheme notified by the Central Government and the return shall be accompanied by proof of such deposit. In view of the above legal position, your wife would be able to utilise only such sum which is available after depositing the amount of capital gain in the specified account. Readers are welcome to send questions for tax advice. These should be brief, to the point and not exceed 100-150 words. The letters should be sent to Tax Advice C/o The Tribune, Sector 29, Chandigarh-160020 or emailed to:
taxadvice@tribunemail.com
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DSP Merrill Lynch Excise return
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