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$3 b funds from Japan to swamp Indian bourses
Stage set for Lamborghini Gallardo’s
Maruti to showcase Suzuki’s Escudo, Solio
Centre’s compensation for VAT may be below Rs 5,000 crore Tax Advice No relief admissible for chronic diabetics Market Scan Flat Sensex likely to welcome 2006 |
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$3 b funds from Japan to swamp Indian bourses
Mumbai, December 25 A foreign firm that tracks stock and bond flows had recently put the whole year account of India equity funds from abroad at $2.5 billion. Indices have scaled new peaks to the worry of many, but still no slowdown looks likely in the near future as the market awaits a further flush of funds to the tune of $3 billion raised by three India-specific funds in Japan, market sources said. The money may flow into Indian equities anytime. Nomura Securities of Japan has collected $2 billion in its India-specific fund and may enter the Indian equities early next year. Two more, Nikko and Jardine Fleming, are also ready with their collected funds, according to brokers. This comes at a time when Merrill Lynch is still to inject the whole $750 million it recently raised in Japan. Analysts are of the view that though the market valuations look stretched at present, India’s growth out of the Emerging Market Fund map to a separate investment avenue coupled with the pitiful interest rates in Japan are the main triggers to this. “Valuations do look stretched. But FIIs seem to be looking for the long term and hence, the current valuations are not relevant for them. Further, the negative interest rates in Japan is forcing fund houses to move out in search of better investment opportunities,” Edelweiss Securities Institutional Equities Head Naresh Kothari said. The said funds, once start flowing in, would perhaps in a matter of days shade the estimate of $2.5 billion pumped in by India-specific funds year-to-date. With the foreign investment in Indian equities crossing $10 billion for 2005, the 30-share Sensex of the Bombay Stock Exchange (BSE) now stands at 9,256.91 points at a p/e of 18.37 and p/b of 4.46 as per the data on BSE website. The record-breaking journey of Sensex shows no signs of respite with more funds eagerly waiting with their loaded cash bags to get on board the Indian growth wagon, is the latest market buzz.
— PTI
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Stage set for Lamborghini Gallardo’s entry into India
New Delhi, December 25 Gallardo would be the latest in the series of crore-plus cars to hit the Indian roads after the likes of Maybach, Rolls Royce Phantom and Bentley Arnage in the recent past. Mr Grover said the target was to sell about two to three units of Gallardo in the next year. Automobili Lamborghini Holding SPA, a part of Volkswagen’s Audi Group, had rolled out 3,000th Gallardo earlier this month. It remains to be seen though how Gallardo, which competes with the likes of Ferrari’s F30 and Porsche’s 911 Turbo, fare in India. Lamborghini had stated said it was more concerned with the infrastructure in India than the purchasing capability of its potential customers.
— PTI
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Maruti to showcase Suzuki’s Escudo, Solio
New Delhi, December 25 Escudo, launched in international markets in August this year, is expected to be powered by a 2-litre and a 2.7-litre engine. It is already being sold as the Grand Vitara in certain markets of Suzuki. On the other hand, the Solio is a variant of the Wagon R, which has special features for the disabled to carry wheelchairs and rotating seats. Not only this, Maruti will also showcase its ‘Swift JWRC’, a specially designed variant for use in rallies. The Maruti stall will also showcase the single-seater formula series car, Hayabusa, famous on the motorsport circuit. Maruti will also showcase its latest initiative of cars that use non-conventional fuels. The LPG variants of Omni and Wagon R will be displayed at the expo. The company, which organises motorsports like the Raid de Himalaya’ and Rally Desert Storm, will also have a separate motorsport section at the Expo. Visitors will also get an opportunity to design cars and take a print of the same at the ‘Design Your Car Studio’, an interactive initiative of the company. Maruti has recently stepped up its design capabilities and wants to bring the designing aspect closer to the customers.
— PTI
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Centre’s compensation for VAT may be below
New Delhi, December 25 Maharashtra topped the list collecting Rs 8,364 crore from VAT in the first half of 2005-06, followed by Andhra Pradesh (Rs 5,431 crore), Karnataka (Rs 3,972 crore), Kerala (Rs 2,891 crore) and Delhi (Rs 2,529 crore). Three other states — West Bengal, Punjab and Haryana — collected between Rs 2,300-2,000 crore. “Going by the trend, we expect the compensation on account of VAT to be much less than Rs 5,000 crore this fiscal,” a Finance Ministry official said. The Centre has so far received claims worth Rs 1,598 crore for VAT compensation and has paid Rs 1,027 crore to various states that witnessed lower than expected revenue collection. Most of the states saw double digit growth in revenue after VAT implementation and the overall collection by the 23 states and union territories were up by 14.3 per cent at Rs 33,438 crore in the first half of 2005-06 compared to Rs 29,249 crore from sales tax in April-September last fiscal.
— PTI
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by S.C. Vasudeva No relief admissible for chronic diabetics
Q. I am a government pensioner and income-tax payee. I am suffering from chronic diabetes for the last 20 years and being treated with Himosulin injections of 20mg. (morning) and 18 mg (evening) dosages daily, besides other oral medicines prescribed by doctors. The annual expenditure on this incurable chronic disease comes between Rs 50,000 and Rs 60,000 annually (including the weekly, monthly tests etc.) Please advise can I get income-tax rebate of the amount spent on this chronic disease during the year. — N.K. Sharma, Yamunanagar A. The deduction in respect of medical treatment is allowable if the amount has actually been paid for the medical treatment of specified diseases or ailments prescribed in Rule 11DD(1) of the IT Rules 1962. The expenditure incurred for treatment of chronic diabetic case is not allowable, as the said disease is not covered in the aforesaid rule.
Physically challenged Q. I am a physically handicapped person and want to claim exemption under Section 80-U of Income Tax Act, 1961, for the financial year, 2005-06 (A.Y. 2006-07), also. This year on introduction of new Section 80-C, my DDO has refused to give me this benefit/rebate due to amendments in various sections of Income Tax Act. Since Section 80-U does not appear in amended part of the new Act, so kindly advice me, whether I am eligible for this exemption or not as I am handicapped person having 60 per cent disability (under Section 80-U) — Dhan Pal Jain, A. The deduction out of total income is allowable to a person who is suffering from the disability covered within the provisions of the Act. The deduction allowable is Rs.50,000. However a higher deduction of Rs.75,000 is allowable if a person is suffering from a severe disability. Section 80U of the Act still exists on the statute book. The DDO has not cared to look into the provisions of the Act properly. You may approach him again and explain that the provisions of Section 80U of the Act are very much applicable for the assessment year 2006-07 and the deduction out of the total income is allowable to a person suffering with a disability. I hope you are aware that the deduction can be claimed only if the return is accompanied by a certificate issued by the medical authority in the prescribed form.
Monthly Income Plan Q. Is the bonus 10 per cent earned over Monthly Income Plan (MIP) on maturity i.e. after six years, taxable or not? It is applicable on PO scheme. If the initial and maturity bonus are reinvested again in MIP, can it bring some tax benefits or not? If it is taxable, how can the same be avoided? Is it under income tax income or long-term capital gain? How much it would be, if the bonus income is Rs 40,000, Rs 4 lakh invested in 1999. Again then 10 per cent is advertised as incentive towards investment even now. — Y.L. Chopra, A. The bonus in respect of monthly income plan is taxable in the year of receipt. Even if the amount is re-invested in MIP, the same would be taxable. The bonus income earned would be treated as part of your regular income and brought to tax accordingly.
Mutual fund dividend Q. Please clarify: 1. If we invest money in mutual funds, should we have to pay any income tax as on profit or dividend? 2. What is MIS? At which limit can we get monthly interest so that we can get rid of any income tax? 3. Please tell about schemes, which are most beneficial 4. We have sold our property and now we want to invest Rs. 8 lakh. Please tell about the schemes that we can get the highest interest and security on our money — Harish Kumar, Ganganagar A. The answers to your queries is given as under: 1. The dividend received from mutual fund is exempt under Section 10(35) of the Act if the fund is specified under Section 10(23D) of the Act. 2. The monthly income scheme is the name given by the post office. Interest earned on such scheme is taxable now, in view of the deletion of Section 80L of the Act from the statute book. In ordinary course, investment in mutual fund and/or 8 per cent government bonds should be most beneficial. 3. Please refer to answer no. 3 with regard to the availability of highest rate of return. 4. I may add that if the amount of capital gains is not invested in specified bonds or in the acquisition or construction of a residential house within the specified time you will be liable to pay capital gains tax depending upon whether the same is a short-term capital gain or a long-term capital one.
Senior citizens Q. I am a retiree, 70 years old and PAN holder. Hitherto I have been claiming the following deductions in my IT returns: U/s 16i Rs 30,000 80L Rs 12,000 80G Rs 2,000 (I generally donate to PM’s Fund every year) 80GG Rs 24,000 88 20 per cent of new NSCs and interest on old NSCs 88B Rs 20,000 This year I have consolidated my accounts and made one deposit in the P.O. under Senior Citizens Scheme. So far no other investment has been made. Please let me know which of the above is still admissible. I shall feel highly obliged if you kindly calculate IT payable for assessment year 2006-07, F.Y. 2005-06. Total Pension Rs 1,43,710 Total Interest Rs 98,000 LTC Rs 9,778 House rent paid Rs 30,000 Donation to PMs Fund Rs 2,000 If any tax is payable, please let me know the total amount and type of investment to avoid tax. — D.K. Aggarwala, Hoshiarpur A. The answers to your queries is given as under: (a) The Finance Act, 2005, has changed the concept of allowability of rebate in respect of contributions made for saving schemes and/or other purposes which were specified in Section 88 of the Income Tax Act 1961 (The Act). According to the new scheme of things, the items which were specified in Section 88 of the Act are now contained in Section 80C of the Act. According to the provision of the said Section (80C), an aggregate sum of Rs 1 lakh is allowable as deduction from the total income in respect of contributions made for saving schemes and for amounts paid for certain other purposes. As far as the rebate allowable to senior citizen is concerned, the same has been discontinued and instead the total income on which tax is not payable by a senior citizen has been increased to Rs 1,85,000, as against the amount of Rs.1 lakh for persons other than senior citizens. The only other deductions allowable now are under Section 80G as well as under Section 80GG of the Act. (b) On the basis of the figures given by you, the total income (pension and interest) works out at Rs 2,41,710 against which deductions in respect of house rent paid and donation to Prime Minister Relief Fund are allowable. The total deduction allowable under the aforesaid section is Rs.8,029. The net taxable income would work out at Rs 2,33,681 on which a tax of Rs.9,931 would be payable. I may add that I have presumed that the amount received towards Leave Travel Concession is not taxable and the same is exempt having been incurred within the permitted block of years. |
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by J.C. Anand Flat Sensex likely to welcome 2006
A strong bull wave, with its sharp ups and downs, came to halt last week with the Sensex closing at 9,256.91 points, registering a loss of 115 points from the previous day’s close. In fact, for seven earlier weeks the market indices had registered gains. Even during the last week, the Sensex was only 27 points lower than the previous week’s close on December 16. The Sensex had scaled a new high of 9,447 points in the intra-day trading but profit-booking and sales by mutual funds brought the market down to 9,257 points. There are reports that leading mutual funds had to cap their credit limits to meet heavy redemption pressure from the mutual fund holders. It is difficult to forecast the market behaviour but it appears that the market indices would either stay flat or move down during this fortnight due to the Xmas holidays. The market may move up again by mid-January as the first fourth quarter results, which are expected to be good, would start pouring in.
Tata Chemicals One good news is that Tata Chemicals has gained control of UK soda-ash manufacturing company, Brunnermonde, for about Rs 5.08 billion. Its production capacity is only slightly less than that of Tata Chemicals itself. With 63.5 per cent purchase of equity in the UK company. Tata Chemicals would be among the top five soda-ash makers in the world. The company has en equity capital of Rs 215.10 crore and an EPS of Rs 15.83 for 2004-05. It has “security premium reserves” amounting to Rs 181.11 crore and ‘general reserves” (including balance in profit and loss account) of Rs 1,334.60 crore. As on March 31, 2005, the market value of its quoted investments were Rs 757.26 crore and in it unquoted investments, which include investment in Tata Industries and Tata Sons, apart from other shares and holdings in mutual funds, stands at Rs 803.13 crore. The present market value of its quoted investment must be more than Rs 1,400 crore and its total investment would be more than Rs 2,200 crore. For the accounting year 2004-05, it declared a dividend of 65 per cent with a total outgo of Rs 159.73 crore. Its investment income was Rs 70.87 crore which comes to 44 per cent of its dividend outgo. The book value of Rs 10 face value share is Rs 92.8. At present it is quoting around Rs 221. It is a safe investment for long-term shareholders.
Reliance demerger Reliance Industries demerger has announced its record date as January 25, 2006. Last Friday the market price of Reliance Industries share declined sharply but it would be rewarding to retain the scrip to take full advantage of the demerger scheme.
Tata Tele Tata Tele Services has announced its “rights issue” with two shares for every 25 shares held by a shareholder and the price tag is likely to be between Rs 25 and Rs 27. It is not a very attractive “right issue” and the prospects of the company are only on a long-term basis. |
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Italian luxury sports car maker Lamborghini is all set to drive in its best selling model, Gallardo, to India within the first quarter of next year.
“The plan is to bring the Lamborghini Gallardo within the first quarter of next year,” Exclusive Motors Manager (Sales) Rahul Grover (the distributor of Lamborghini in India) told PTI here.
While the exact pricing could be known only next month, he said Lamborghini Gallardo could be tagged anything between Rs 1 crore and Rs 1.5 crore.