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Govt may inject dose of health cess to boost economy
Companies Act being revised
US court rules against Ranbaxy
MMTC plans to double output
No tax on money transfer from US to own savings account in India
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Give international status to Agra, Chandigarh airports
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Govt may inject dose of health cess to boost economy
Mumbai, December 17 “Under the new Drug Policy for 2006-10, we have proposed introduction of a 2 per cent health cess across all sectors of the country on the lines of education cess,” Chemicals and Petrochemicals Joint Secretary G.S. Sandhu said at the annual day celebrations of Indian Drug Manufacturers Association here. The cess is expected to give the government Rs 6,000 crore, he added. “This is a special scheme for them to provide medicine for almost free of cost at their doorsteps itself. One such scheme called the Universal Insurance scheme is already operational,” he said. But this has not yielded results since it required the families to contribute Re 1 each per day amounting to Rs 365. “It never came. So we want whatever we do should really have some positive effect,” Mr Sandhu said. “This is also in accordance with the National Common Minimum Programme which promises to increase health care expenditure from current 0.9 per cent to 2 per cent of the GDP within next five years,” he said. He also said that under the new drug policy the government has proposed to slash the excise duty on the MRP by half, from 18 per cent to 6. “This will help in reducing the medicine costs and remove the imbalance created due to Excise Duty being made applicable on maximum retail price (MRP),” the Secretary said. He said “according to the rules, all packaged items should have MRP inclusive of taxes. By April 1, 2006, we hope to introduce this consumer-friendly step.” Proposing a special package for R&D companies, Mr Sandhu said: “Under the new drug policy we have drafted, a comprehensive package for the drug R&D companies by broadening the items covered under it.” The package will cover clinical trial expenditures, patent filing expenditure abroad and the expenditure on fixed assets to create the infrastructure. “This package would remain applicable for 10 years as part of long-term commitment from the Government towards the industry’s growth,” the Secretary said. He also exhorted pharma companies to take advantage of the growing trade in South Asia and the Far East. “Safta will come into effect in January next year. It will provide trade opportunities worth $350 billion to the seven Saarc countries. We are also soon signing Free Trade Agreement with Asean. These opportunities must be tapped,” he said.
— PTI
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Companies Act being revised
New Delhi: The government is undertaking a major revision of the Companies Act, which is at an advanced stage to improve the image of corporate governance in the country.
''This is one of the several initiatives taken by the government for furthering and promoting good corporate governance,'' Minister of State (Independent Charge) for Company Affairs Prem Chand Gupta said today. The setting up of the National Foundation for Corporate Governance in partnership with the CII and the Institute of Chartered Accountants of India
(ICAI), he said, was a reflection of the government's commitment. Mr Gupta was speaking at a Round Table conference on 'Role of Institutional Investors in the Corporate Governance of their Portfolio Companies', here today.
— UNI
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US court rules against Ranbaxy
New York, December 17 Marketed by Pfizer under brand name Lipitor, the medicine is the largest selling drug in the world. Judge Joseph J Farnan of the US District Court of Delaware held yesterday that Ranbaxy Laboratories’ atorvastatin infringes New York-based Pfizer’s US patent number 4,681,893, and at the same time upheld the validity of another, Pfizer US patent number 5,273,995, which Ranbaxy had claimed was invalid. The ruling followed a hearing, which took place earlier this month. Ranbaxy plans to begin the appeals process immediately. “We remain undeterred in our resolve on this issue, and will press our case in the US Court of Appeals for the Federal Circuit. We are committed to bringing lower cost, reliable medicines to health care systems worldwide,” President and Executive Director of Ranbaxy Malvinder M. Singh said commenting on the decision. Ranbaxy Laboratories Limited, headquartered in India, is an integrated, research based, international pharmaceutical company producing a wide range of quality, affordable generic medicines. It serves customers in over 100 countries and has an expanding international portfolio of affiliates, joint ventures and alliances, ground operations in 46 countries and manufacturing operations in seven countries.
— PTI
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MMTC plans to double output
Ludhiana, December 17 “The company’s business volumes last year touched Rs 15,138 crore, the highest-ever since its inception, with a growth of 66 per cent over previous year. As all segments, in which the company is trading, has shown a significant growth, within two to three years, we are expecting this volume to double and continue to be among the highest foreign exchange earners for the country,” Ms Preeti Kaur, Chief General Manager, Precious Metals Division, said here today. She said precious metals group contributed a significant Rs 8,200 crore in the turnover last year and would remain a key focus area. She said MMTC remained a major importer with one-eighth share in the total gold import. The company imports around 100 tonnes of gold every year. The company plans to conduct ‘gold festivals’ in Jalandhar and Chandigarh shortly.
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by A.N. Shanbhag No tax on money transfer from US to own savings account in India
Q: I am in US since last one year. I have saving account in India. Are money transfers to savings account in India taxable?
2. When can I open an NRI account? — Mahindra A: The simple answer to your question is — No, the transfer is not taxable. In fact, transfer by itself never does 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. In your case, it is a capital receipt in India and not taxable. This is assuming you transfer the funds to your own account or that of a relative. If you transfer the funds to someone who is not your relative and such transfer is over Rs 25,000, the entire money would be taxable for the recipient. 2. You may open the NRE account as soon as you are NRI. On becoming an NRI, legally you are required to inform all your banks and also all companies where you have investments about the change in your status within a reasonable time. What is reasonable has not been defined by the legislature. The banks will redesignate your accounts as NRO. It is also necessary to inform all companies of whose shares you hold, and UTI/MFs about change in your status. In practice, most of the NRIs do not follow these rules and do not face any problems because the regulatory mechanism of the income tax department is not yet in place. Obviously, a few are apprehended and I hope you are not one of them. Realise that you do not gain anything by not following the rules.
Redemption for nominee Q: Kindly advise me whether the nominee of the 8 per cent savings bonds where the sold holder has deceased, claim redemption amount of the bonds. I have been advised that the bonds will be transferred in the name of the nominee and he/she will be entitled to the payment only on maturity of the bonds from the date of original investment made by the sole holder (now deceased). Is there any other way for the nominee to get the payment immediately? If the nominee does not make any representation and kept the investment as it is and on maturity claimed the amount as nominee, if there will be any difficulty in that or is it better to get the bonds transmitted to the nominee right now? Kindly advise because this query is on behalf of very old and poor lady known to me. — Diwakar Desai A: As per the RBI bonds regulations and procedures, the bonds will be transferred in the name of the nominee. It is always better to go by the legal way to avoid complications later on. The deceased cannot legally hold the bonds or receive interest. Also, a nominee cannot nominate. However, when the nominee gets the bonds in his or her name, he or she can nominate another person. So all in all, it is always advisable and correct for the prescribed procedure to be followed.
Income funds Q: I have incurred some short-term capital gains on income funds. Kindly let me know the taxability of the same. Also, can I claim rebate u/s 80C? — Sanchali A: Normally, STCG, which is to be taxed @10 per cent and non-exempt LTCG are treated as separate blocks and no deduction under Chapter VI-A, including deduction u/s 80C is allowed. However, the transfer of avenues under the umbrella of Sec 88 offering rebate to Sec 80C offering deduction has resulted in a strange effect which is possibly not the intention of the legislation. The provision of Section 111A states: “In the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income tax and the tax on the balance of such short-term capital gains shall be computed at the rate of 10 per cent.” Now, suppose the deduction of contribution up to Rs 1 lakh takes the income below the minimum tax threshold. Then, short-term capital gains can occupy the space between the threshold and the income so reduced. An example for clarity — Normal Income Rs. 1,75,000 Contributions to Sec. 80C — Rs. 1,20,000 Restricted to 1,00,000 Income charged to tax 75,000 Short-term capital gains 85,000 Total 1,60,000 Threshold 1,00,000 Taxable short-term capital gain 60,000 Tax thereon @10 per cent 6,000 Same is the case with non-exempt LTCG.
Section 80G Q: Should one take into account the capital gains while computing the ceiling of Section 80G? — Anu A: The answer is in the positive. Sec. 80G deals with the deduction for donations to specified institutions, trusts, temples, etc. The ceiling on the deduction is 10 per cent of gross total income as reduced by other deductions such as 80C, 80D, 80U etc. Long-term capital gains are considered separate block for the purpose of income tax. ‘Gross total income’ includes capital gains, long-term as well as short-term. Therefore, you have to add your normal income chargeable to tax to capital gains and subtract deductions other than u/s 80G itself. The ceiling would be 10 per cent of this amount.
Switching schemes Q: Is capital gains attracted when I switch from one scheme of the same mutual fund to another? What about switching from one option of the scheme to another? For example, from dividend option to growth option. — Sudhir A: When you switch from one scheme to another of the same MF, essentially (though notionally), you are selling the units of one scheme at its prevalent repurchase price and purchasing units of another scheme at its sale price. The time and wastage involved in receiving a cheque, crediting it to your bank account and issuing a cheque for purchase of new units is eliminated but that does not mean that a constructive transfer has not taken place. The same rule applies even when you switch from one option to another option (dividend to growth or vice versa) within the same scheme. However, switching between ‘dividend’ and ‘dividend reinvestment’ options cannot be considered as a transfer. |
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