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Lord Krishna Bank to merge with CBoP
9.5 pc growth rate feasible, says Montek
Murthy to step down today
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Patiala-Malerkotla road by
J&K marketing agreement
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Long-term capital gains are not taxable
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Lord Krishna Bank to merge with CBoP
Mumbai, August 19 "Both Boards have given an in-principle approval for the exercise," CBoP Chief Operating Officer Anil Jaggia said here today. "The merger process will be done through a share swap, the details of which will be worked out in the coming days", Mr Jaggia said. The merger is subject to satisfactory due diligence, a fair share swap ratio and receipt of approvals from the RBI, stock exchanges and other requisite statutory and regulatory authorities and the respective shareholders, the CBoP informed the bourses. It will enable the CBoP to strengthen its presence in the South. "At present, we have 250 branches while LKB has around 112 branches. We have also applied for licences to open more branches and if this transaction goes through, by the end of this fiscal, we should have a branch network of 400 pan-India," Mr Jaggia said. Ambit Corporate Finance and DSP Merrill Lynch have been appointed as investment bankers of the CBoP and LKB, respectively. Chartered Accountants N M Raiji and Co and Deloitte Haskins and Sells have been jointly appointed as independent valuers to determine the share swap ratio. The Board of CBoP will meet again on September 4 to consider the terms of the merger and other related documents after receipts of valuation reports. The main promoter of LKB is Mr Mohan Puri, who holds a 65 per cent stake in the bank with Burman family of Dabur holding around 5 per cent. This is the second merger effected by the CBoP, the first being the merger of Centurion Bank with the Bank of Punjab. — PTI
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9.5 pc growth rate feasible, says Montek
New Delhi, August 19 “I have absolutely no doubt that you can achieve 9.5 per cent if you do what is necessary. The Indian economy has reached there. The question is will we be able to take the supportive measures,” he said in an interview to Karan Thapar on the Devil’s Advocate programme to be telecast on CNN-IBN on Sunday. The Planning Commission has targeted a 9.5 per cent growth in the last year of the approaching 11th Five-Year Plan (2007-2012) to realise an average 8.5 per cent growth during recent years. Dr Ahluwalia, however, said that this growth was “not going to happen automatically. We are on a very good wicket. The average growth rate is over 7 per cent. But to get from that to 8.5 per cent is not just a matter of coasting along. We have to do far more.” He was cautious on labour reforms and ruled out a hire-and-fire policy as desired by the industry. He said there were other ways to ensure labour reforms. With a coalition government at the helm of affairs, the name of the game is to make “labour realise that labour reform is in their interest.” On permitting FDI in retail trade, he said he did not share the view that it was necessary in achieving 8-plus rate of growth.
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Murthy to step down today
Bangalore, August 19 IT icon Murthy’s retirement tomorrow, besides setting an example for corporate governance in India, has also paved the way for a further infusion of professionalism in Infosys. The Nasdaq-listed firm has kept the post vacant and announced last month that he would serve as the non-executive Chairman and continue as the Chief Mentor from August 21. The Board of Directors had also appointed Murthy, who turns 60 tomorrow and will retire as per the company service rules, as an Additional Director of the company. Starting as an outsourcing company, which it largely remains with more than 90 per cent, work being done for foreign clients, it has grown into an institution worldwide despite not having any ground breaking technology or patents to its credit. This is because of the manner in which Mr Murthy has wielded the company mixing the best of the East and the West to provide the most efficient services to its clients in the quickest time possible. This is largely why it retains eminent position in the IT industry. Murthy, while speaking about his retirement during an informal interaction with newspersons at the 25th anniversary of his company, said he had mixed feelings. He ruled out a career in politics post-retirement.
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Patiala-Malerkotla road by Oct 2007
New Delhi, August 19 The company started work on the stretch 10 days ago and will construct, upgrade and operate the stretch for 16.5 years, which also includes the construction period of 18 months. Mr Bedi hopes to complete the work within 15 months and make it operational by October 2007. The company will collect toll on the road for the next 15.5 years. For this project, IDEB received 40 per cent of the total cost amounting to Rs 26 crore from the state as positive grant. The two-lane road project with paved shoulders and 72 bridges, including four major ones.
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J&K marketing agreement
Srinagar, August 19 The objective of the marketing tie-up is to utilise modern cold chain technology available with the CWCCPL for enhancing shelf life of fresh fruit for giving recognition to the horticulture produce of the state all over the country. |
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New Delhi, August 19 Vijaya Bank also hiked interest rates on other fixed deposits by 0.25-0.75 per cent with Vijaya Platinum Jubilee Term Deposit Scheme giving 8 per annum while senior citizens get an additional 0.75 per cent interest on all deposits. The government had recently allowed bank term deposit with a lock-in period of five-years as an approved form of investment to get qualified for benefits under Section 80C PNB Tax Saver Fixed Deposit gives 8 per cent interest and for senior citizens 8.5 per cent interest per annum. Similarly, Bangalore-based Vijaya Bank has launched ‘Vijaya Tax Savings Scheme’, which gives 8 per cent interest and for senior citizens an interest rate of 8.75 per cent per annum, effective from August 18. India’s largest lender State Bank of India had raised deposit rates by up to 0.5 per cent yesterday. UCO Bank
UCO Bank will soon open its representative office in China, bank Executive Director S A Bhat said today. Talking to reporters in Jalandhar, Mr Bhat said that the Reserve Bank of India (RBI) had already granted permission for setting up the office in China. However, the clearance from the Chinese Banking Regulatory Authority was yet to be obtained, he added. With this, the number of overseas offices or branches of the bank would be four, Mr Bhat said. He also advocated the outsourcing of the RBI clearing house operations but ruled out possibility of privatisation of UCO Bank. Talking to reporters here Mr Bhat said that the clearing house operational time was required to be shortened in the interest of bank clients and if this could not be done by internal resources of the RBI then there would be no harm in opting for outsourcing for the task. Mr Bhat was in the town today to launch the Small Entrepreneurs and Retail Sale Force (SERSF) programme for providing doorstep banking services to retail traders, small entrepreneurs and other customers. He said that this programme had presently been launched in 55 towns of the country, including Jalandhar, Ludhiana, Chandigarh. IndusInd Bank
Private sector bank, IndusInd Bank Ltd today announced the launch tax saving term deposit scheme. Under the ‘Indus Tax Saver Scheme’, an individual or a Hindu Undivided Family can invest any amount ranging from a minimum of Rs 100 up to Rs 1 lakh a year in tax-saving term deposits with maturities not less than five years, the bank informed the Bombay Stock Exchange. Depositors will get exemption under Section 80C to the extent of Rs 1 lakh per year under this scheme and the bank will pay an interest rate of 8.5 per cent.
— Agencies |
by A.N. Shanbhag Long-term capital gains are not taxable Q: I have one doubt. Let’s say the Finance Minister announces that there will be no capital gains tax on long-term equity holdings from 1st April 04 onwards. I invest in equity mutual funds after 1st April 04 and hold on to them for 10 years. Now in the 10th year when I want to redeem my units, the tax policy is such that capital gains will be taxed for long-term equity holdings. Will my capital gains also be taxed even though I had invested at a time when there was no such tax? — Nitesh A: Looking at the issue from the flip side, as of now, long-term gains are tax-free. It doesn’t matter when you had originally invested. Say when you had invested, the long term rate was 20pc. You were fine with that. However, now, you can sell your shares and not pay any tax at all. Similarly, the flip side is also true. Investment by NRI
Q: My son is studying in the US on a student visa. He wants to invest a very nominal amount from his savings every month in some pension plan. How should he go about it? Can he send the amount to me and I invest or should he open an account in a bank here and then do it. I request you to advise the best and a legal way of doing it. — Iqbal Bains A:
You should have indicated whether your son is an NRI from income tax point of view. We assume that he is an NRI. He can invest in NRE account of a bank which is an authorised dealer. However, please note that opening an NRE account when he is abroad involves quite a lot of hassles. Most of the investment avenues in India now require the investor to have a Permanent Account Number of the Income Tax Department. If he does not have a PAN, he will have to apply for one, which involves a bigger hassle. In the circumstances, it appears that the most convenient way is for him to send the money through proper banking channels as a gift to you and you can invest this amount in your own name. The income there from will be taxable in your hands. Proper gift procedure will have to be followed for abundant precaution. All that is required is an offer by the donor and acceptance thereof by the donee in black and white. To safeguard against any hassles, the donee should request the donor for a gift and then the donor should remit the amount to the donee. Alternatively, the donor can offer the gift. In either case, it is necessary for the donee to accept the gift in writing (maybe through a thank you note). Only then it would be considered as a gift in India. It is preferable to mention the relationship between the donor and the donee. However, if he already has an account (preferably a joint account with you) in any bank, you may use the same for this purpose. You should have a power of attorney from him to invest on his behalf as also to operate the account. PPF account
Q: My questions are pertaining to PPF. My father expired on 4 May 06. He had a PPF account wherein he had nominated me and my brother. My brother lives abroad and till such time he does not come, we can not complete the formalities to claim the amount in the PPF account. I would like to know whether interest will be paid on the amount in PPF till the time we are able to complete the formalities and if so, what would be the tax liabilities on the interest paid after the date of death of my father. I am Karta of an HUF account and have a PPF account. As per government policy, I will not be able to extend the PPF account for another period of five years. Can I open a PPF account in my wife’s name and deposit Rs 70,000 and claim tax benefit u/s 80C for our HUF. My wife does not have any income of her own. — Charanjeev Singh A: 1. In the case of joint nominees, PPF rules allow allocating percentage of benefits against each nominee. But the form does not provide a specific place to indicate the same and, therefore, many fail to indicate the percentages. In that case, the nominees are treated as joint holders and are expected to apply together for the closure. Each nominee is required to identify himself to the satisfaction of the concerned officer. This, by itself, is a big hassle. After completing all the formalities, a single cheque is issued in favour of all of them together. This cannot be encashed, unless all the nominees have a joint account. The tax-free interest on PPF funds will be paid till the month prior to the date of settlement. 2. The idea is to deny the benefit of PPF investment to HUF. It cannot be bypassed by opening an account in your wife’s name and paying from HUF funds. However, it is a good idea to contribute Rs 30,000 of your own funds to her account if you are contributing Rs 70,000 to your own account. In that case, you can claim full deduction u/s 80C of Rs 1,00,000. You can go a step ahead and contribute Rs 70,000 to her account. The extra Rs 40,000 will not earn any deduction but will be eligible to earn tax-free interest of 8pc. Section 56
Q: After the recent death of my husband who died suddenly through an heart attack at the age of 81, I have received some income, which, in the normal course would have gone to his account and taxed in his hands. Now that I have become the owner of all his assets by way of inheritance, I am under the impression that I have to pay tax on this income. My accountant tells me that this would be treated as a gift ‘under a will or by way of inheritance’ and as per the recently introduced Sec. 56(v), it would be tax-free in my hands. Please advise. — Ansuya A: This is income of your husband and it is he who has to pay tax thereon. The balance money coming to you was and is not exigible to tax since this is a capital receipt. Sec. 56(v) makes it abundantly clear that this gift will not be treated as taxable income. You can adopt a nice strategy if you like it. Treat the income earned after the date of death of your husband as income earned by the estate of your husband. This would be a tax entity different from your husband. In other words, if this income is under Rs 1 lakh (not Rs 1.85 lakh), it will escape the tax net. Though the law is not clear on whether you can use the same PAN as that of your husband, you may file tax returns using this PAN. The authors may be contacted at wonderlandconsultants@yahoo.com |
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