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Freeze on opening petrol stations goes
Sensex attains new peak during
Markets closed tomorrow
PSB plans public issue
Investor guidance
Aviation Notes |
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Freeze on opening petrol stations goes
New Delhi, April 29 Petroleum Minister Murli Deora has directed that the selection of retail outlet (RO) dealerships by OMCs should be resumed with immediate effect to avoid hurdles in expanding marketing network to low service, remote and rural areas and in allotment of dealerships to weaker sections like SCs/STs, physically handicapped, war widows.” He, however, asked the oil companies to complete the survey of ROs in four months for strengthening and revamping their marketing network. Notably, few months ago, the Petroleum Ministry was forced to withdraw its decision on putting curbs on the release of new LPG connections and refill cylinders as well following chaos in the market. Sources said the ministry had decided to debar the oil companies from opening retail outlets allegedly under the pressure of a private oil marketing company, which is finding it difficult to get prime properties to open its outlets. The public oil sector oil companies, led by IOC and HPCL, have aggressively opened their outlet as part of the strategy to face competition from private giant in oil sector. There has been a rapid expansion of the number of OMCs’ retail outlets from 18,848 to 29,951 within four years. Oil companies maintained that though some outlets were not doing well for the time being, yet with tie up other FMCG companies they hope to make them profitable. Besides, demand for petrol and diesel is also picking up. The declining OMCs performance has come in for criticism from different quarters, including by several Parliamentary Committees. There is also a concern that OMCs have been engaged in unhealthy competition among themselves, while the private sector, which entered the market just a few years ago, appear to have been able to wean away a large section of the public sector OMCs’ customers and corner a huge market share. Kolkata: Faced with huge under-recoveries, Indian Oil Corporation (IOC) today sought an immediate upward revision of petrol and diesel prices to the the extent of Rs 10.50 paise per litre. “At present prices, the company is incurring a daily loss of Rs 160 crore. IOC is facing under-recovery to the extent of Rs 10.50 per litre in petrol and diesel,” IOC Chairman Sarthak Behuria said. He said these prices were not sustainable, adding that the government should revise the prices upwards. In addition to this, Mr Behuria also urged the government to lighten the subsidy burden on account of LPG and kerosene by way of loss sharing formula along with other oil companies. — PTI
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Sensex attains new peak during special trading
Mumbai, April 29 In a special trading session held between 1030-1330 hrs, the Sensex opened firm at 11,881.51 points and gradually moved up to touch the intra-day high of 12,061.06 before ending at a closing peak of 12,042.56 — a gain of 190.63 points or 1.61 per cent over the previous session's close. Sensex had lost 491 points in initial trading yesterday after market regulator SEBI asked 24 operators to stop trading for allegedly opening fake accounts to corner retail quotas in 105 IPOs, but it recovered lost ground after the ban on one of the operators was suspended temporarily. Besides, the regulator clarified that transactions carried out by these operators on behalf of clients would remain unaffected. The NSE Nifty also spurted sharply by 49.25 points to 3,557.60 today from the previous close of 3,508.35.
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PSB plans public issue
Chandigarh, April 29 When it ended its 2004-2005 financial year, its net NPA stood at a whopping 8.11 per cent, return on assets at minus 0.45 per cent and the overall loss was Rs 71.06 crore. Last month, it not only registered a 26 per cent growth in business from Rs 21,144 crore to Rs 26,724 crore but also managed to slash down its net NPA to 2.43 per cent. The bank, with its fiscal health satisfactory, may soon go in for a public issue. Talking to TNS, Mr R.P. Singh, the new head of the bank, said that the gross advances of the bank have shown a growth of 40.53 per cent against just 5.24 per cent last year. The growth in non-food credit was still higher — 45.94 per cent. The interest income on the advances by the bank has improved. Belonging to Andhra Pradesh cadre of the IAS, Mr R.P. Singh added that as a strategic shift, the bank has reduced its investment portfolio considerably and utilised the funds for growth in credit portfolio. While talking about the future plans, he said the bank would further improve its credit-deposit ratio, make advances, especially in agriculture as well as in housing sectors, focusing on middle and lower middle class. The bank may also make advances to SMEs in the north. “We are investing, though not that much, in real estate as we are not in the speculative business,” says Mr Singh, holding that most recent investments in real estate sector were made only in doubly secure areas.
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Investor guidance
Q: My query relates to taxation on earnings (capital gains and dividends) from investments in stocks and mutual funds.
My husband and I are investing from a joint bank a/c (NRE) with co-held demat accounts. On whose name will the income be assessed? Can we opt to have the income assessed on any one name?
— Ashmita A: In case of MF schemes and equity shares dividend is tax-free in the hands of the investor. However, there is a dividend distribution tax @14.025 per cent payable by the MF (for debt-based schemes) and company in case of shares directly to the exchequer whereas the equity-based MF schemes are exempt from this tax. Equity-based schemes sold back to MFs and equity shares sold on recognised stock exchanges in India are also exempt from long-term capital gains tax. The short-term capital gains are taxed @10 per cent only. In the case of debt-based schemes, short-term gains are treated as normal income of the assessee and taxed at the rates applicable to the assessee. The long-term gains will attract tax @10 per cent without indexation or 0 per cent with indexation, whichever is more beneficial to the assessee. 2. Normally taxpayers treat any income from investments as the income of the first holder. However, it is the source of the funds invested that the taxability depends upon. If the funds invested belonged to you, the income will be treated as yours and tax if applicable has to be paid by you. And vice-versa. If you both of you have separate sources of income and both intend to invest, then it is best to have separate accounts. These separate accounts may be held jointly, however, each account will have one principal source and there will be mix up as far as taxation is concerned.
Business loss — Magdhum A: No you are allowed to set-off losses against profits. You have made a business loss and not short-term loss.
Capital gains bonds — Virendra Arora A: This is a dilemma faced by many investors and even after repeated requests, the authorities have failed to come out with any specific directions in this regard. Therefore, the only way forward would be to claim the deduction under Sec. 54EC prematurely without having made the investment. Obviously you cannot attach the proof thereof. If the issue comes up in assessment, you can always produce the proof since by that time you would have made the investment.
GPF withdrawal The above period of five year expired in 2004 and hence I withdrew the total amount of GPF and interest incurred therein from PSEB. Now I had received notices from Income Tax department for last three years wherein they stated that my last three returns needs to re-assessed. I personally met the IT officer concerned to seek the reason for such revision. He pleaded that the amount of interest earned by me on my GPF balance during the last three years needs to be included in the total taxable income for computing of income tax. I argued that this interest on GPF earned is not taxable as the same previous account, without opening of any new account but the officer insisted that the interest earned on GPF in the period of service is not taxable but the same is taxable when earned during retirement In view of aforesaid, your clarification is solicited, with reference to the IT rules. Therefore it shall be appreciated if the various clauses of Income Tax are mentioned in the reply. — J. S. Cheema A: We do not have good news for you. Hereunder is an extract from one of my books - There are many retiring employees who prefer to retain their funds in RPF just to earn the tax-free interest. They should take cognizance of the following case law. In the case of ONGC Ltd. v Income-tax Officer (TDS), Dehradun ITAT Delhi Bench ‘A’ observed, “Accumulated balance due to employees’ as provided in rule 2(f) of Part A of the Fourth Schedule, to the Income Tax Act 1961, would mean the balance due or claimable by an employee on the day he ceased to be the employee of the employer maintaining the provident fund and therefore, such balances would imply amounts credited to the accounts of employees during their employment. It was only these balances that were exempt from tax u/s 10(12). The assessee, a recognised provident fund, had made the impugned credits to persons who were no longer employees of ONGC. The cessation was not due to their ill-health, the discontinuation of the employer’s business or for any other cause beyond their control. The amounts credited in the accounts of former employees would not be exempt from tax. We do not subscribe to this view because - The Fourth Schedule, Part-A dealing with Recognised Provident Funds, Rule 5(3) of the ITA states: a) At the request made in writing by the employee who ceases to be an employee of the employer maintaining the fund, the trustees of the fund may consent to retain the whole or any part of the accumulated balance due to the employee to be drawn by him at any time on demand; b) Where the accumulated balance due to an employee who has ceased to be an employee is retained in the fund in accordance with the preceding clause, the fund may consist also of interest in respect of such accumulated balance; Obviously, any retiring employee may retain his funds in RPF without losing the benefit of tax-free interest during this period. Nonetheless, for abundant precautions, avoid doing so. They should use PPF to earn the 8 per cent tax-free interest by contributing as much as is possible in the names of their major children and spouse.
MF for employees — Trambak A: Sec. 80C stipulates that the investment in any of the instruments should be made by the assessee himself. This means that if the company makes any investment on behalf of the employees, the employees concerned will not be entitled to the deduction. Also, such an investment will be taxed in our opinion under Sec. 17(3) as profits in lieu of salary in the employees’ hands. In the light of the above, there will be no benefit to the employees on account of such transaction.
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Aviation Notes
Despite tall claims, the modernisation project of two international airports at Delhi and Mumbai has encountered another setback as affected party has moved the Supreme Court on airport bids. The Special Leave Petition (SLP) against the High Court order of April 21 has been filed on the premise of ‘inconsistency’ of the government in awarding clearance to two bidders — GVK and GMR. Regardless of the Supreme Court’s decision, the delay is causing anxiety to all those who have been connected with civil aviation. They have a reason to feel disturbed because until airports are modernised, massive A-380 aircraft cannot operate through this country. The civil aviation authorities are in jitters as some foreign carriers, like Singapore Airlines and Lufthansa have already announced their plans to operate the gigantic aircraft. For this aircraft to land and take-off, Delhi and Mumbai have to have wider runways, broader bridges and parking bays. The Delhi Airport’s main runway, for example, is 45 metres wide. The minimum required width for the A-380 is 60 metres. This being the situation, the modernisation project, if and when started, will have to be executed on war-footing so that operations of new version mammoth aircraft is rendered possible. In this fluid scenario, some prominent unions have raised fresh objections against privatisation. Regardless of the validity of objections, the modernisation project is getting messier. While modernisation plan has run into a problem, the quantum of incidents, like tyre burst and other technical snags have increased. According to aviation experts, maintenance of aircrafts is poor and aircraft are flying without undergoing strict checks, as stipulated by the International Civil Aviation Organisation (ICAO). Incidents of bird hits have also increased apart from the recent fire at the IB terminal disrupting several flights. The International Federation of Airline Pilots Association (IFALPA) has filed official protests against Air-India for blatantly flouting safety norms. Its president Capt Dennis J. Dolan, in a letter to Prime Minister Manmohan Singh, has expressed his deep concern. He has gone on record as saying that ‘there is a considerable risk of Air-India being denied the certification for operating on certain routes’. The Director-General of Civil Aviation (DGCA) is aware of the complex situation and is said to have written to the Air-India authorities to improve safety norms keeping in mind ‘Maharaja’s reputation’. The good news is that defence authorities are cooperating with the civil authorities so that the congestion at the Delhi airport is reduced. Hindon airspace, for example, can be selectively used for handling commercial flights. Similarly, defence has allowed civil operation from Halwara. A lot of congestion at Delhi airport can be reduced if more international operations take place from the Amritsar airport.
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CPI-IW static Inflation rises NFL profit Gold zooms Karnataka Bank Stake in SSKI |
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