New Delhi, April 8
The country’s second-biggest bike maker Bajaj Auto today said it would launch CNG and LPG two-wheelers over the next 12 months while the company’s four-wheel cargo vehicles would hit the roads by 2008-09.

“What we are developing is a dual-fuel two-wheeler which will, apart from CNG/LPG, will also have the option of running on petrol,” Bajaj Auto Managing Director Rajiv Bajaj told reporters here.

He said the product was currently under development “and we hope that it will be out in the next 12 months.”

Mr Bajaj said the company would like to see significant sales numbers from the vehicle when launched. “Obviously, we are a mass-market player,” he said.

On the foray in the four-wheeler segment, he said the cargo vehicle was currently under development. “We expect it to be in the market in the next two-and-a-half years,” Mr Bajaj said.

“This is the first time we are developing a diesel engine,” he said, adding that the entire research and development was being done in-house.

The company is also planning to start assembly facility in Indonesia and Nigeria apart from eyeing some SE Asian countries.

Bajaj Auto today launched a new 100-cc bike, Platina, which it hopes will become its highest-selling bike in the coming months.

The bike is the company’s latest entry-level offering where it also sells the popular CT100, its biggest number grosser.

The company, which aims to sell about 25 lakh units this fiscal, is setting up a new plant in Uttaranchal from which it hopes to produce an additional 10 lakh units, primarily Platina.

He said compared to CT100, which would see 50 per cent diversion of sales to Platina, the new model enjoyed better margins. “Platina will have better margins than CT100,” he said. — PTI 

New Delhi, April 8
Peace may finally be at hand in India's two oldest corporate houses, which have been fighting for about a month over their joint venture Idea Cellular, with Tatas virtually agreeing to sell their stake in it to A.V. Birla group for an estimated Rs 4,600-4,800 crore.

While spokespersons of the two sides declined to comment on the issue that saw the business houses slugging it out in public, sources in the know of the development said the deal may be struck at a price band of Rs 42 to Rs 44 a share.

Almost signalling a solution to the imbroglio, Tata Group chief Ratan Tata had yesterday said, "We have already indicated that we will dilute stake (in Idea) at the right time and right price." The Birlas' price offer may have come in response to the poser by Tatas about the offer they are believed to have got from the Malaysian telecom company Mexis, which recently bought Aircel Telecom, from Sivasankaran.

There was speculation that Tatas may consider Maxis offer in case Birlas failed to match the Malaysian company's offer in 45 days.

A final decision and subsequent agreement between the two sides is yet to be formalised for deal under which Tatas would sell about 110 crore shares (equivalent to over 48 per cent equity).

In case Birlas fail to match the offer, Maxis telecom of Malaysia would automatically buy Tata's stake. Maxis, which has six circles after it bought Aircel, could increase its footprint in 11 more circles in which Idea has operations.

The fight between the two groups became public when Birlas wrote to the government seeking direction for ouster of Tatas from the joint venture on the grounds that the latter had violated the telecom licensing conditions. The other side retaliated by serving a termination notice and declaring that they would buy out their partner.

The Department of Telecom is yet to take a position on the issue raised by Birlas, even as the two sides later decided to keep off the media on the subject. — PTI

Q: I was working in the USA on work visa (H1B) from January 1998 to December 2004. After the expiry of my visa, I came back to India in January 2005. I have a bank account in the US and an NRE account in India. I am unemployed in India till date and the only source of income is the interest earned on my bank account, which is around Rs 65,000 per annum. Since it has been more than six months of stay in India, I can no longer claim to be an NRI to claim tax benefits. I don’t have PAN in India. My questions are: Do I need to file income-tax return in India? How long I can continue to hold my bank account in the USA? Do I need to close my NRE account in India as Indian Bank sends the interest earned report to USA federal tax department and I have filed US Tax returns till last year?

— Dilip Bhatia

Q: I have a query, which nobody I know has been able to give me a categorical answer.

This relates to short-term capital gains on stock exchange traded stocks and STT paid thereon at 10 per cent for fiscal 2005-06. In the computation of such capital gains, is the STT allowed to be deducted from profit on sale? This query arises as Saral tax form requires STT to be declared (along with certificate of payment from sharebroker).

— A. K. Gupta

Q: I shall be grateful if you can kindly clarify as to whether 10 per cent income tax on short-term capital gains has to be paid separately even if my total income for financial year 2005-06 is within the taxable limit of Rs 1.35 lakh set for women. My income is as follows:

Short-term capital gains for the year expected Rs 1,75,000

Other income excluding non-taxable dividends Rs 25,000

Total income expected: Rs 2 lakh

Payment of PPF: Rs 70,000

Net income for the year expected: Rs 1,30,000

Do I have to pay income tax for FY 2005-06?

I hope whatever I pay for buying shares, including share transaction tax, is my cost and whatever I get on the sale of shares, excluding STT, is the sale proceeds, the difference being the margin on which tax is payable.

— Nirmala Sharma

A: You should have mentioned whether you are a resident Indian or an NRI.

In the case of capital gains arising out of securities and equity-based units of MFs sold on a recognised stock exchange in India or equity-based units repurchased from MFs —

a) LTCG is exempt under Section 10(38).

b) STCG is taxed @10 per cent flat, under a new Section 111A and amended Section 115AD.

In the case of all other assets, including equities and equity-based MFs, which have not been sold on a recognised stock exchange in India or repurchased from the MF and consequently have not suffered STT -

a) LTCG is charged to tax at the flat rate of 20 per cent. However, if the assets happen to be debt-based units or shares sold outside the stock exchange, additional option of paying the tax @10 per cent of the profit is also available, if more beneficial. An important aspect, which is mostly misunderstood, is that the long-term capital gains are always computed with indexation. It is only the tax that can be paid @10 per cent or @20 per cent, whichever is less.

b) STCG is treated as normal income of the assessee and charged to tax at the rate applicable to his slab of income.

Where LTCG is taxed and STCG is taxed @10 per cent, the assessee will not get any deduction u/s 80C, 80D etc., against these gains which will be treated as a separate block.

For a resident individual or an HUF, where the total income as reduced by -

a) STCG which is charged to tax @10 per cent and

b) LTCG which is charged to tax falls below the tax threshold applicable to the assessee, the gains would be reduced by the amount by which the total income so reduced falls short of the threshold and the balance of the gains would be taxed at the rates applicable. In short, where the tax liability arises only because of inclusion of the capital gains in the total income, tax is levied at the corresponding flat rates on the excess over the minimum taxable limit.

Consequently, in your case, the benefit of Section 80C can be claimed up to Rs 25,000 (your other income), bringing your total income from sources other than short-term capital gains down to zero.

If you are a resident, you can claim the benefit of threshold of Rs 1,35,000. Your tax liability then is Rs 4,500 (= 10 per cent of 1,75,000 - 1,35,000).

If you are an NRI, the benefit of the threshold is not available for capital gains. Therefore, your tax liability will be Rs 17,500 (10 per cent of Rs 1,75,000).

Q: Some say that the recently launched 100 per cent close-ended funds’ dividend payable will be taxed. Is it true?

— Narendra Singh

A: This is the situation for FY 2005-06. Of course, in the Budget 2006, this situation has been amended and even close-ended equity oriented funds are granted the dividend distribution tax break.

Till this year, under Section 115R, the exemption from dividend distribution tax is only available to open-ended equity funds. Therefore, close-ended funds, even if equity-oriented, would be subject to dividend distribution tax on similar lines as is applicable to non-equity oriented funds. However, the dividend continues to be tax-free in the hands of the recipients.

Q: If I take an equity-linked savings scheme on my wife’s name, will I get benefit from tax? My wife is working as a government-school teacher.

— D. V. Shastri

A: No. Investment by you in the ELSS in the name of your wife does not entitle you to any deduction u/s 80C, irrespective of whether she is dependant on you or not. This is as per the provisions of Section 80C.

The author may be contacted at wonderlandconsultants@yahoo.com