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BSNL serves notice on HFCL, Huawei
No BCTT on inter-bank transactions
Bio-fertiliser plant goes on stream Tax Advice Gift amount can be invested in Senior Citizen’s Savings
Scheme
Indices
recover sharply
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BSNL serves notice on HFCL, Huawei
New Delhi, November 6 “They (HFCL, SCL and Huawei Technologies) have not accepted the advance purchase orders (APOs) after becoming L1 and L2 bidders. We have encashed their bank guarantee and cancelled the order,” BSNL CMD A.K. Sinha told PTI. “We have issued them a show cause notice asking why they should not be barred from participating in future tenders from BSNL and this could include the upcoming 60 million GSM tender also”, he said. The PSU is currently studying their replies to the show-cause notice before taking any decision that could take the shape of a complete blacklisting or a partial one limited to some time-period like an year or so. But for the re-tendering of this contract, BSNL has barred all three players from participating. Huawei officials did not respond to the queries. Mr Sinha said the decision on HFCL and Huawei have delayed the PSUs rural telephony, MaRR project and it would now take minimum six months to place the tender again and go ahead with the schedule. “They have caused us a lot of difficulty and the penalty should be by not allowing them to bid again and ever. But we have to give them an opportunity to explain their position and we are going through their replies before taking any action. No decision has been taken yet”, Mr Sinha said. If blacklisted, Huawei’s other plans, including manufacturing, may face a setback as the overall standing of the company would suffer in the highly competitive Indian telecom bidding market. In fact, if Huawei is barred from BSNL tenders, the purpose of manufacturing also gets diluted as BSNL is the country’s largest telecom operator and being part of its network has a distinctive advantage for any vendor. Huawei’s manufacturing plans have already been opposed by Ministries of External Affairs and Home on the grounds of “security risk.” The DoT, however, has favoured the proposal subject to the security
clearance by these ministries citing that more local manufacturing should take place. Huawei in India focuses mostly on CDMA projects and Reliance Infocomm and Tatas are its
customers. — PTI
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No BCTT on inter-bank transactions
New Delhi, November 6 An ordinance was recently promulgated by the President to carry out the necessary modifications in Chapter VII of the Finance Act, 2005, for this purpose. BCTT was imposed for the first time this year as part of the measure to curb black money without providing any amnesty to tax-evaders. There was a lot of resistance from various quarters when Finance
Minister P. Chidambaram introduced the measure in the Budget. As such, Mr Chidambaram had modified the proposal at the time of passage of the Finance Bill by sparing savings accounts from BCTT and raising the minimum cash withdrawal to Rs 25,000 for individuals and Rs 1 lakh for corporates on a single day in all non-savings accounts.
— PTI
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Bio-fertiliser plant goes on stream Una, November 6 This bio-fertiliser has been developed by TERI (The Energy and Resources Institute), a Delhi-based research organisation. Majestic Agronomics Pvt Ltd, a Una-based company, has set up a production facility of 1,000 metric tonnes per annum to manufacture this bio-fertiliser. The company has secured the licence from TERI to manufacture and market this product and proposes to enhance the production capacity to 3,000 tonnes in the next two years. Majestic Agronomics is the third company in India to set up facilities for this bio-fertiliser’s production, the other two being at Ahmedabad and Vijaywada. TERI, earlier known as Tata Energy and Research Institute, is an Indian research organisation and has presence in Washington, London, Japan, Bangkok and Germany. Mr Anoop Sharma, Chairman of Majestic Agronomics, said this bio-fertiliser had a competitive cost, offering dual advantage to the users. Dr Alok Adholeya, Director, TERI, said the use of this fertiliser might result in 50 to 60 per cent savings for marginal farmers at the input level and also yield 20 to 25 per cent more production. Mr Kuldip Kumar informed that in the past more than two years, industrial projects worth Rs 15,000 crore had been cleared by the Himachal Government. He said when all these projects go on stream, about 2 lakh persons would get direct or indirect employment.
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by S.C. Vasudeva Gift amount can be invested in Senior Citizen’s Savings
Scheme
Q: 1. Can the amount proposed to be gifted by a son to his father and mother jointly be invested in Senior Citizen Savings Scheme (SCSS) launched by the Govt. of India sometime in 2004? The rate of interest for the scheme is 9 pc with maximum investment limited to Rs 15 lakh. 2. The gifted amount has to be offered along with a written intention of the son while gifting the amount. Would this letter be on some proforma or would it be a simple letter on a plain sheet of paper? 3. While father is an income tax payee with a PAN and the mother is a simple housewife with no source of income except her husband’s. Kindly advice. — R.C. Sharma A: The answer to your queries is as under: - 1. A gift by son to his father and/or mother can be made by a simple gift letter. The gift however, must be accepted by the donee. A separate letter accepting the gift would be a proper course. There is no gift tax or income tax payable as such gifts. 2. The gift amount can be invested jointly in the Senior Citizen Saving Scheme. The interest would be taxable in the hands of donees in proportion to the amount of gift received. 3. Your wife will have to apply for a Permanent Account Number so that the same can be quoted in any transaction as well as in the return to be filed by her if the interest exceeds the maximum limit above which the tax become payable.
Section 80 DD
Q: (a) My wife and I are government employees. We have purchased a plot in my own name. Now we want to build a house on said plot by taking a joint loan. Kindly guide us as the plot is in my own name. How can my wife get income tax rebate for the home loan on the said plot? (b) My father is an ex-serviceman drawing a pension Rs\ 2,500 per month and handicapped by his right arm. He is dependent on me. Can I get a dependent handicapped income tax rebate? — Jaspal Singh, Amritsar A: The answer to your queries is as under: (i) The income tax rebate can be claimed by your wife only if she acquires a part of the plot from you at the prevailing market rate and both of you construct the house and spend the amount on construction in the same proportion in which the plot is owned. (ii) Section 80DD of the Act provides for the deduction of an amount of Rs 50,000 or Rs 75,000 as the case may be, from the gross total income of the assessee in case the following conditions are satisfied: (a) The assessee has incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or (b) Paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability. A copy of certificate with regard to the disability of your father will have to be furnished along with the return which has to be issued by the medical authority in the prescribed form. The word ‘dependant’ includes parents. The disability should be such which is covered within the meaning specified in the aforesaid section.
Capital gains & tax
Q: My son is on deputation in South Africa from a reputed firm from Gurgaon. He purchased a plot in the jurisdiction of M.C. Kharar near Mohali, district Ropar after taking loan from HDFC bank for its purchase. He has no other plot/house in India and abroad even on lease. In these days the prices of the plots are 4/5 times more than the construction of a house. Please give your advice whether he is entitled for relief from income tax. If so, up to which extent and under which clause of the income tax rules/act. — Amarjit Singh, Mohali A: The question does not specify the relief, which you are seeking from the income tax authorities in respect of plot owned by your son. Presumably, you intend to know the position with regard to the capital gains tax on the sale of such plot. The answer to your query is therefore based on such presumption. The capital gains tax liability would depend on the holding period of capital asset i.e. the plot of land. If the plot has been held for the period of three or more years the excess realisation of this plot would be taxable as long-term capital gain. If the plot is held for less than the aforesaid period, the excess realisation would be taxed as short-term capital gain. The long-term capital gain is taxable at a lower rate of 20 pc plus the applicable surcharge and education cess. The short-term capital gain is clubbed with the other income of the assessee and the total income, including short-term capital gains is taxed at a normal slab rate. In case of long-term capital gain, the cost of the plot can be indexed on the basis of Cost Inflation index notified by the government for every year and the indexed cost so determined shall be deductible from the sale consideration so as to arrive at the capital gain. The long-term capital gain tax can be saved by purchasing capital gains saving bonds, if investment in such bonds is made within a period of six months from the date of transfer of the plot.
Relief on perquisite
Q: On 23.05.2002, I.T. Tribunal Chandigarh gave decision to waive off income tax imposed for perquisite by Kurukshetra University, Kurukshetra to its employees for the accommodation, similar to decision taken by ITR (A.P.), Cal and (M.P.) etc. As attached to the post, a quarter was allotted to me by the Deptt. of Telecom; now BSNL to have the expert technical assistance during off duty hours too i.e. round the clock. Sometimes I tried to vacate the government accommodation, but I was forced to remain in the government accommodation for fulfilling the interest of the department for keeping the communication fault free round-the-clock. As per the order of C.I.T. Panchkula, who did not consider fit for waiver of income tax imposed for perquisite inspite of the decision of hon’ble ITAT Chandigarh dated 23.05.2002. The Sr. Accounts Officer (Cash) O/o DGM (Meter) NTSR Northern Telecom Sub Region) Ambala advised to deposit Rs 2,093 as short recovery of income tax for the Assessment year 2001-02 for value perquisite. I have been retired from service w.e.f. 31.01.2005. Please advise me whose orders are to be followed. ITAT Chandigarh or C.I.T., Panchkula. Whether I should deposit the said amount or not? In Haryana Telecom Circle, Ambala there are 9 SSAs (Short Switching Areas), but the said deduction is not implemented in any SSAs except NTSR Ambala. — B.K. Goel, Kurukshetra A: In this case, the matter will have to be taken up before the ITAT by BSNL so as to seek the relief in respect of perquisite value of the accommodation provided to employees who are required to stay within the vicinity of the work area for providing assistance round-the-clock. This is because it is BSNL which has been asked to make payment in respect of short recovery of income tax from the company employees.
Cash transaction tax
Q: The government of HP has intimated in a circular dated June 13, 2005 that Banking Cash Transaction Tax is also payable by an office or establishment of the state government. Thus to save tax liability by the government, for disbursement of salaries of government employees, it has been directed to open bank accounts by the employees. My query is that salary of the government employees is drawn from the consolidated fund of the state through its treasury. Can public money be taxed? — Jassal, M., Shimla A: The taxability under the banking cash transaction tax is in respect of withdrawals by a specified entity. It is the act of withdrawal which is subjected to tax. Such an act cannot be equated with the taxability of government funds.
Section 56
Q: Kindly clarify what exactly are the provisions under Section 56(v) or is it 56(2)(v) with regard to the gift in cash from parents to their children or children to parents. — Balbir Atal A: Section 56(2)(v) of the Income-tax Act 1961 does not bring the gift in cash from parents to their children or children to their parents within its ambit. Such gifts are therefore not exigible to income tax.
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:
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by Lalit Batra Indices recover sharply
The Indian bourses were on fire this week as the benchmark indices staged a smart rally in the holiday-shortened week, Thursday and Friday being holidays. While Sensex gained 5 per cent (387 points) in the three trading sessions during the week, Nifty notched up gains of 4.4 per cent. This week’s gains must have come as great relief for investors, who had been facing bad times with Sensex collapsing by over 1,000 points within a month. It must be noted that this was on account of FIIs selling equities all through the month of October. We believe that as far as the Indian market is concerned — while the economic growth remains strong — the Indian equity market is no more an undervalued market. The S&P CNX Nifty currently trades at a PE multiple of 14. While the markets have rebounded sharply, selling may emerge at higher levels. Investors, therefore, should take a long-term view of the markets before making any investments, as short-term returns in near term look difficult.
Container Corporation of India
(Concor) Concor was set up as a 100 per cent subsidiary of the Indian Railways
(IR) in 1988 to promote and manage the growth of containerised traffic. Concor has become a full-fledged multi-model logistics company today. The company offers an effective and seamless landrail-sea linkage along with a bouquet of value-added services. Smooth and efficient transport of both export-import (EXIM) traffic and domestic traffic (DT) over long distances is, therefore, its competitive advantage. Its core business involves the company playing three roles — that of a carrier, a terminal operator and a warehouse
operator. Concor practically rules the domestic logistics management market-of the container cargo going to the hinterland from the ports, 80 per cent is transported by rail through the company. The two factors contributing to its virtual monopoly status are its umbilical linkages with the Railways and its sound infrastructure. As a subsidiary of the Indian Railways, Concor enjoys access to the entire
rail infrastructure of the railways and so can transport cargo to even remote areas where road transport is not possible due to poor road conditions. The Concor revenues have grown by 19.3 per cent to Rs 585 crore due to strong growth in both EXIM and domestic segments. The revenue growth was entirely on the back of the volume growth while the pricing remained flat during the quarter. Due to an increase in the haulage charges by the Indian Railways, the profit grew by 8.3 per cent to Rs 122.2 crore. Strong growth in the
international trade will lead to sharp growth in the EXIM volumes and this, coupled with a turn-around in the domestic volumes due to the strong wagon acquisition, will continue to drive earnings growth. Investors can safely buy into Concor (Rs 1,303) for a 15 to 20 per cent return in a year. |
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