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FM for FDI in more sectors
Rural areas to get MICR facility for cheque clearance
Wipro plans presence in Romania
Lakshmi Mittal to sue ex-partner
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FM for FDI in more sectors
New Delhi, November 27 "We must open the doors far and wide for FDI in more sectors... FDI worked wonders in China. I believe it can work wonders in India," Chidambaram said
while inaugurating 21st India Economic Summit organised by the World Economic Forum and the CII. Asked about the long-pending demand for allowing FDI in retail, he said Commerce Ministry has already started a public debate on the issue. "The ministry will be able to arrive at a solution that will satisfy all," he said indicating it would be decided within four months. Asserting FDI and higher investment in infrastructure and farm sectors were key to sustaining high growth, he said "eight per cent is not a magic number. No Finance Minister can conjure a 8 per cent growth." Asked if coalition politics was a drag on reforms and growth, he said the UPA coalition achieved 7 per cent growth and coalition partners were committed to pushing it to 8 per cent. Admitting that high growth in industry and services depended on infrastructure, Chidambaram said "we are aware that there is a huge infrastructure deficit." The newly set up Infrastructure Special Purpose Vehicle will mobilise $2-2.5 billion and leverage another $3-4 billion, he said adding the Viability Gap Funding mechanism would also enable India to address funding problems for mega projects. "It is important for corporates to enter agriculture in order to take agriculture growth to over 4 per cent," he said. He asked India Inc to step up funding in R&D as the demand was more for product engineering and design.
— PTI
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Rural areas to get MICR facility for cheque clearance
Chandigarh, November 27 For the past three years, residents of the urban areas have been using cheques/drafts based on Magnetic Ink Corrector Recognition (MICR) technology. The Reserve Bank of India (RBI) has issued instructions to all leading banks in the region that all cheques and drafts, which were not in MICR format, be phased out by December 31. The order says all cheques issued by the banks and government departments should be in MICR format. This would bring about a uniform system of cheque/draft clearing which is routed through a computerised machine and is faster. At present, there are two forms of cheque clearing. One is of MICR cheques, which allows money transfer in a single day. On the other hand, non-MICR cheques, originating from smaller towns and villages, take up to 10 days for clearing as the banks have the days fixed for clearing such non-MICR cheques. Once a uniform pattern is adopted, money transferred through cheques and drafts will reach the bank account of the depositor much faster. Sources in the banking sector said under the new instructions, MICR cheque books would be issued in the areas where MICR clearing does exist.
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Wipro plans presence in Romania
New Delhi, November 27 “We are planning to set up an integrated centre of software development and BPO in Bucharest to serve our clients in France and Germany which will be operational in the next 8 to 12 weeks while another such centre in Far East region is also planned,” Mr Azim Premji, Chairman, Wipro said here. He said he was open to his stake dilution in the company from the current 81 per cent through various methods that include an American Depository Shares conversion and would remain at the helm of the affairs at least for the next five years. Shareholders of Wipro can expect windfall as the soap-to-software maker is considering “generous” dividend pay-outs than the last two years, from its approximate $1 billion cash reserves. — PTI
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Lakshmi Mittal to sue ex-partner
London, November 27 The case, due before the court in the next few days, is being brought by Allenby Finance, a company based in the British Virgin Islands and owned by Mittal, against Dallah Albaraka, a group based in the Isle of Man, The Sunday Telegraph reported. According to court documents seen by the newspaper, Allenby is suing Dallah Albaraka for damages of $3.7 million (£2 million). The dispute centres on a “funding agreement” signed in October 1997. Under the agreement, Allenby Finance, Dallah Albaraka and a third party, Gokul Binani, committed funds to acquire two copper mines in Zambia from the state-owned Zambian Consolidated Copper Mine. Relations between the partners turned sour after Dallah Albaraka allegedly withdrew a bank facility it had secured for the investment. “Dallah Albaraka (Ireland) Limited confirms it is involved in litigation with Allenby Finance Limited,” the paper quoted a spokesman for Dallah Albaraka as saying. A spokeswoman for Mittal declined to comment on the case but said: “Allenby Finance is a vehicle owned by Mittal. It has nothing to do with Mittal Steel Company.”
— PTI
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Public Provident Fund account has a cap of Rs 70,000 pa
by S.C. Vasudeva Q I am thankful to you for giving advice regarding income tax and capital gains tax through The Tribune. In the current Budget, Section 80C has been re-introduced in the amended form in the Income Tax Act which is to come into force w.e.f. 01.04.2006. It has been provided in this section that in computing the total income of an assessee there shall be deduction. The whole of the amount deposited in the previous year being the aggregate of sums referred to as sub-Section (2)of Section 80C as does not exceed Rs 1 lakh. The clause (iv) of the sub-Section. (2) aforesaid maintains about contribution by an individual to the Public Provident Account (being under the Provident Funds Act, of Rs 1 lakh so that the same would be deductible from the taxable income liable to tax for the assessment year 2006-07 or for the financial year 2005-06 being the previous year. Kindly advise whether this presumption is correct that during the current financial year Rs 1 lakh can be deposited in the Public Provident Fund Account. In case it is so, then why the banks or the post offices are not accepting amount exceeding Rs 70,000/- up to Rs 1 lakh from any individual? — Des Raj A The provisions of Section 80C of the Act provide for the deduction of Rs 1,00,000 paid by the assessee during the previous year in respect of certain sums which are specified in the aforesaid section. The aggregate amount of deduction allowable is limited to Rs 1,00,000 which includes contribution to Public Provident Fund. The Public Provident Fund is governed by its own rules which does not permit the deposit beyond Rs 70,000. Section 80C of the Act does not override the aforesaid rules and, therefore, it would not be possible for you to deposit more than Rs 70,000 in a Public Provident Fund Account. IT on arrears Q I am a Punjab Government pensioner prior 01.01.1996. My yearly income is Rs 1,95,900 My pension would be raised from 01.01.1996. Thus I would get arrears of Rs 1,85,000 as pension from 01.01.1996 to 28.02.2005. Thus total income would be Rs. 3,89,000 for income tax purposes 2005-06, I deposited Rs 70,000 in my PPF account & Rs 30,000 in National Saving Certificate. How to save income tax 1. Under which section of income tax is and to what extent can gift money to my grand daughter PAN holder for the education of her son. Which would no taxable for her? 2. Any other income tax saving scheme I can make use of? — Asa Singh A The provisions of the Act as amended by Finance Act 2005 do not provide for any other avenue except that provided by Section 80C of the Income-tax Act 1961. You have already deposited the amount of Rs. 1,00,000/- in the prescribed savings. You may, however, approach your assessing officer for a relief under Section 89 of the Act as you would be receiving pension for more than 12 months in one year. You can file the particulars in Form 10E prescribed by the Income-tax rules 1962 along with your return to seek such relief. The gifting of any amount would not entitle you for any tax relief as such a gift would not be deductible from your total income. Banking Transaction Tax Q Kindly clarify whether the Banking transaction Tax of 0.1 pc rule does not apply on the withdrawal above Rs 25,000 from a current account of the ‘The Central Co-op. Bank Ltd.’ Punjab by the proprietary firm in a single day. — Parveen Goyal A The banking cash transaction tax is chargeable on a transaction, being withdrawal of cash (by whatever mode) on any single day from an account (other than a savings bank account) maintained with any scheduled bank, exceeding, - (a) Rs 25,000 in case such withdrawal is from the account maintained by any individual or Hindu undivided family; (b) Rs 1 lakh, in case such withdrawal is from the account maintained by a person other than any individual or Hindu undivided family. As is evident, the tax is chargeable for a withdrawal from scheduled bank. You will have, therefore, to ascertain whether Central Co-operative Bank Ltd., Punjab is a scheduled bank. If the same is a scheduled bank, banking transaction tax would become chargeable if the withdrawal by an individual is of more than Rs 25,000. Capital gain tax Q I sold my old house for Rs 20 lakh in April, 2005 which was constructed in 1985 costing Rs 500,000. Kindly advise 1. Whether now I have to deposit the long-term gain tax during current financial year or later on? 2. Whether I can purchase the other house in my name or my elder son? 3. Is tax to be deposited in State Bank of India or any nationalised bank? 4. If the money so received can be transferred as gift to my son without tax for purchasing a new house? If so, what is the procedure? 5. Any other legal method to save the capital gain Tax in this case — Mohinder Singh A The answer to your queries is as under: 1. The long-term capital gains tax would be payable within the financial year 2005-06 by way of advance tax. 2. The capital gain earned on the sale of your house can be utilised for the acquisition/construction of a residential house within the specified period. 3. The tax can be deposited with the State Bank of India or any other nationalised bank approved for the purpose. The tax is to be paid by filling the prescribed challan which can be obtained from the Income Tax Department. 4. The gift of any amount to your son would not enable you to save the capital gains tax. 5. You could have invested in capital gains tax saving bonds within six months of the date of transfer of your house. However, as the period of six months has already expired, this option is not available to you. EET Q (a) Has committee on EET submitted its report? If yes what are its findings? (b) If we invest Rs. 100,000 u/s 80C in ELSS and suppose it becomes 1,50,000 on maturity after 3 years. Will all Rs.1,50,000 be added in our income on maturity? — Ramesh Marwaha A The committee on EET has yet not submitted its report. The taxability on maturity of any sum deposited under the said scheme will depend on the provisions of the Act as and when these are introduced. IT return Q I retired from a government job on 30.04.2004. I neither pay income tax nor I filed my return for the Financial Year 2004-05. Earlier, I was filing my return every year. During this financial year my income is as follows: - 1 Total pension 93,207 2 DA allowance 3,492 3 Bonus 2,419 4 MIS interest (Joint account with my wife) 12,000/- —————- Total Rs 1,11,118/- Contribution towards LIC Rs 16076. During the financial year 2004-05, I purchased a house worth Rs 6,00,000 from my gratuity amount. Please guide me what should I do now? — B.S. Soni A Since you are the owner of a house it was incumbent upon you to file a return of income. I would suggest that the return for both the Assessment Year 2005-06 and 2006-07 may be filed without any further delay.
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