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MNCs line up to invest in Haryana
Villagers’ stance to delay JP cement project
BSNL wants IPO deferred by a year
Insurance co blacklisted
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Market surge continues
Employer should contribute towards EPF if employee does
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MNCs line up to invest in Haryana
Chandigarh , March 26 Sonepat seems to be the next best bet for the new industry, mainly because of its proximity to the National Capital. Japanese health drink major, Yakult Danone, will invest Rs 150 crore at Rai, while Korean abrasive manufacturer, Kaicodeer, has been allotted 9,000 sq ft of land at Barhi to set up their manufacturing facility. Other than these two companies, EOC Polymers, a Belgian company, will invest Rs 10 crore for setting up its facility at Barhi. Haryana State Industrial Development Corporation (HSIDC) has also allotted two industrial plots of 15 acres each at Rai and Saha (Yamunanagar) to Reliance Industries. The company proposes to set up food-processing units at both places by investing Rs 20 crore. Reliance Industries is also setting up a Special Economic Zone on over 15,000 acres in Jhajjar district. Bawal, which is about 90 km from Delhi, too, is attracting huge investments. Officials in HSIDC say that they have received investment proposals of over Rs 1,100 crore in this industrial estate of Rewari. Officials say that the main reason for the shift in industrial focus to other cities of Haryana (from Gurgaon and Faridabad) is the near exhaustion of industrial land bank in the two cities. "Till two years ago, the industrial estates developed by HSIDC at Sirsa, Saha and Manakpur (Yamunanagar), Barwala (Panchkula), Tohana (Fatehabad), had no takers. But now we are in the sellers market," says a senior official of HSIDC, explaining how industrial plots floated by HSIDC in the past one year have been a complete sell-out.
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Villagers’ stance to delay JP cement project
Solan, March 26 Even efforts of JP Industries Managing Director Manoj Gaur proved futile when the villagers refused to accept an award of Rs 2.75 lakh per bigha as against the earlier amount of Rs 2.10 lakh. Deputy Commissioner Rajesh Kumar said that added incentives like a one-time 14 per cent interest on fixed deposits of Rs 2lakh to Rs10 lakh, cement dealerships to those surrendering more than 15 bighas, provision of trucks to the land losers depending on the amount of land surrendered and job to at least one member of land losers’ families had failed to appease the villagers. Reiterating the demand for compensation at par with the Kol Dam land losers the villagers asserted that when a higher compensation of Rs 5.25 lakh per bigha and Rs 3.56 lakh per bigha was calculated on the basis of a monthly average of stamp duty of the area, why Rs 40,000 to Rs 2.10 lakh per bigha had been finalised as the land award. As much as 454 bighas was to be acquired in the first phase from the Mangal panchayat where 70 families would surrender land. The JP cement plant, which is coming up in 2,100 bighas, has to acquire another about 900 bighas in the second phase. The non-acceptance of this award will delay the plant further.
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BSNL wants IPO deferred by a year
New Delhi, March 26 The PSU’s response comes in the wake of the Ministry of Finance asking BSNL for its view on listing the company by selling some government shares to the public. After consulting its adviser ICICI Securities, the PSU said the IPO should be delayed by one year. BSNL has been valued by various estimates at about $25 billion (above Rs 100,000 crore), and a 5-10 per cent stake sale could fetch the government up to Rs 12,000
crore. — PTI
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Insurance co blacklisted
Madurai, March 26 The societies which had insured with United India Insurance had been asked to change the company after the expiry of the coverage period, according to a notification issued by the Additional Commissioner of Industries and Commerce and the Registrar of Industrial Cooperative Societies here. The official specifically alleged that United India had failed to render proper service in settling the insurance claim of the Tamil Nadu Rubberised Coir Industrial Cooperative Society. The department also instructed the inspecting authorities to ensure that the societies did not use the service of the
insurance company, the communication
said. — PTI
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New bank EDs
New Delhi, March 26
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by Lalit Batra
Market surge continues
Incessant money flows, both from international and domestic players, helped Sensex touch the 11000-point mark last week. Due to profit booking at higher levels, Sensex closed the week at an all-time high closing of 10,950. Nifty gained 1.4 per cent to close the last week at 3280.
The market sentiment was aided by the news that the central bank would soon announce steps on-rupee convertibility and also due to passage of the Union Budget, 2006-07, in Parliament. Volatility may heighten this week ahead of the expiry of March derivatives contracts on this Thursday and due to financial year-end consideration. Volumes may also fall due to year-end considerations as traders avoid taking fresh positions at year-end. Moreover, brokers temporarily put off margin funding to clients for year-end considerations. Technical charts indicate that in the short term, Sensex may test 11017. A break above 11,017 points may take Sensex to the 11,175 level. On the downside, Sensex has a strong support at 10,764. On the similar lines, nifty looks all set to touch 3,335.
HDFC long-term advantage fund The fund was launched in December, 2000, with a primary objective to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments. Since it inception, the scheme has delivered close to 50 per cent compounded annualised returns. Starting with a corpus of just Rs 56 lakh, the fund today manages assets of over Rs 344 crore. The fund endeavors to maintain a minimum of 80 per cent of its assets in equity at all times and has a mandate to reduce this exposure as a defensive strategy in a falling market. The fund started as a large-cap oriented fund, but it soon realised potential of mid and small-cap stocks and, accordingly, increased their weightage from August, 2001, onwards. The fund has marginally changed its focus now. With the equity markets hitting a new high everyday and with increased volatility, the fund has hiked its exposure to large cap and quality mid-cap stocks. It has also substantially cut down on its small-cap exposure. The top stocks in its folio are Goodlass Nerolac Paints, Motor Industries Company Limited, Container Corporation of India, Tata Motors and Nestle. This scheme has consistently performed well and has delivered 64 per cent absolute returns in the past one year. Investors looking for a tax break and decent long-term returns may add HDFC Advantage Fund to his folio by investing in lumsum or through the systematic investment plant.
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by S.C. Vasudeva
Employer should contribute towards EPF if employee does
Q. I worked in a school from June 2001 to March 31, 2005. My salary was 4,000, including basic and DA. I was a member of the EPF. Till date I have not withdrawn the amount from EPF. Now I joined other school on April 1, 2005, where my basic salary and DA is more than Rs 6,500. The school management is not continuing my EPF. Reason told to me is that basic + DA is more than Rs 6,500. There is no break of my service in both schools. I want to know as per the EPF rules, is it compulsory for the school management to make me a member? You are requested to let me exact ruling in this regard.
— Rakesh Sharma A. I have been informed by the Provident Fund authorities that in case you have opted for continuance of the deduction for EPF, the new employer would have to contribute towards the EPF. In this connection you may invite the kind attention of your new employer to provisions contained in Paragraph 34 of the Employees Provident Fund Scheme, 1952, and contents of Form 11 to the said scheme.
Sale of plot
Q. My mother is holding a 10-marla plot in Panchkula. This plot was allotted to her in a lottery draw during 1970-72. She had been paying plot instalments, enhancements, non-construction fees for the last 30 years. Now for the past five years, she is residing in the USA and likely to attain US Citizenship. She wants to dispose of the Panchkula plot and the sale proceeds are desired to be converted to US dollars so that she can buy a house in the USA. My question is: Will the government deduct any capital gains tax. If so, at what per cent? I also understand that out of the sale proceed of a plot if the seller purchases another house for primary residence then there is no capital gains tax deduction. Please advice. — Jaswinder S. Bhatia, USA A. Your mother will have to pay capital gains tax on the sale of Panchkula plot. Since she is holding the plot for more than three years, she will be liable to pay long-term capital gains tax at the rate of 20 per cent of long-term capital gain plus applicable surcharge and the education cess on the tax so levied. Section 54F of the Act which provides for exemption in respect of taxability of long-term capital gain earned on the sale of a plot and invested in purchase or acquisition of a residential house does not mention the place of such purchase or acquisition. However, looking into the intent of the beneficial legislation such purchase or acquisition should be in India only.
PPF account
Q. I have opened a PPF account in my name and one in my minor daughter’s name. There seems to be difference in opinion whether Rs 70,000 is the total amount per year that can be deposited in either accounts or Rs 70,000 in each account. In case, it is the total amount in both accounts then what happens to additional amount, I inadvertently deposited in these accounts, as bank did not object to it even though both accounts are in same branch and money deposited same time. (ii) My friend got immigration family visa to Canada. He went there with family, spent about a month, received permanent resident card and came back for family commitment, however with the intention of finally settling abroad. Please clarify: (a) In terms of income tax consideration what is his status, is it NRI or something else. (b) Can he invest in post office schemes (NSC, PPF, MIS), bank FDs, MFs, shares, RBI bonds? (c) What type of bank accounts he can have? (d) What are NRE, NRO, FCNR accounts? — Baljit Singh A. The answers to your queries are as under: (i) According to the latest notification of the government you can open only one account in respect of PPF, which can be in your name, your wives’ name or in the name of children or the HUF. The maximum permissible amount of deposit is Rs 70,000. In case two accounts have been opened and the aggregate amount exceeds Rs 70,000, you would not be entitled to interest on the amount in excess of Rs 70,000. (ii) (a) The details given by you in the query are incomplete as the relevant dates are not indicated. It is therefore not possible to find out the residential status of your friend. (b) A non-resident having an income in India can make deposits in the specified schemes and shall be entitled to deduction of Rs 1 lakh against his Indian income. (c) NRE and the FCNR accounts are foreign currency account. (d) NRO is an account in which the rupee transactions in respect of an Indian income are contained and the withdrawals are permitted for personal use of the account holder.
NRO account
Q. Can I transfer the amount of my property, which was constructed with foreign money and now being sold (commercial building). — J.S. Paul A. You can transfer the amount received on the sale of your property constructed with foreign money in accordance with the new foreign exchange provisions. In accordance with the Regulation (3) of Foreign Exchange Management (Remittance of Assets) Regulations, 2000, a non-resident is allowed to repatriate an amount not exceeding $1 lakh per calendar year out of balance held in NRO account.
Lock-in period
Q. I am a PPF account holder and have been claiming rebate in income tax on deposits in this scheme under Section 88 at 15 per cent till now while total deposits up to Rs 1 lakh were considered for rebate deposits in PPF were “capped” at Rs 70,000 in the Budget for income year 2005-06, changes have been made in the pattern of deposits under this section and perhaps while keeping the total amount same at Rs 1 lakh the “cap” of Rs 70,000 in PPF has been removed 1. Is my presumption correct — Implying that deposits up to Rs 1 lakh in PPF only will “earn” (Full) rebate. 2. If so, does it also imply that deposits beyond Rs 70,000 (and up to) Rs 1 lakh will “also” earn full interest at “normal rate” and 3. Are tax saving bonds preferably with a “lock-in” period of three years or less “available” if so from which agency? — Dr S. Shah A.
The answers to your queries are as under: 1. The maximum amount permitted in respect of PPF deposit is Rs 70,000. 2. The balance amount of Rs 30,000 will have to be deposited in other specified securities. 3. The tax saving bonds are only available in respect of saving the tax on long-term capital gains. The lock-in period is three years. There are no bonds for a period, which is less than three years. Such bonds can be purchased in respect of National Rural Electrical Corporation Ltd. and National Highway Authority Ltd. For the above purpose the bonds from other entities like Nabard, NHB and Sidbi could have also been purchased. However the same are being discontinued with effect from April 1, 2006.
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