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Monetary policy to remain tight: report
PSIDC to take on defaulters
Steel producers to rein in prices
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Volkswagen to drive in with small cars
Liberty plans to invest Rs 140 cr in sanitary biz
Tata Steel condemns mineral policy panel
J&K Bank dividend
Posco pays Rs 2.83 cr to Orissa for land
MARKET
UPDATE
Time to book profit
TAX
ADVICE
Long-term capital loss cannot be set off against STCG
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Monetary policy to remain tight: report
New Delhi, September 10 These trends as well as signals from credit and money supply growth in the coming months might provide crucial inputs to the RBI's policy decisions going forward, a report said. The central bank's monetary policy, which is a combination of various factors, including global cues on interest rates, inflation and oil prices, do effect the trade or capital flows into India, besides domestic inflation. The 25 basis point hike in reverse repo rate in the recent quarterly review as well as medium term signalling measures like the bank rate and the cash reserve ratio (CRR) rate remaining unchanged, however, suggest that the RBI continues to take a pre-emptive stance to contain inflationary pressures, while trying to maintain a conducive environment for growth, the report added. Previous interest rate hikes, which lead to the tightening of the monetary policy, have not significantly impacted either the credit offtake or growth trends, in a probable relief to the bank. However, though the decision on interest rates was something that was expected by the bond markets, the policy statement, with its specific warnings on inflation and credit numbers, was unexpected and suggests a negative bias to the policy in the coming months. Credit growth numbers showed a 32.9 per cent increase in the April-June period, which is well ahead of the targeted 20 per cent expansion for this fiscal, prompting the RBI to express concerns, stating that this warranted ''closer policy attention'' in the coming months. Global rate signals have been a key influence on the domestic monetary policy. While on the one hand, cues from Asia and Europe continue to point towards tightening, China, on the other hand, is attempting to cool its economy by raising reserve requirements for banks with Japan ending its zero rate policy. The Bank of England has already increased its rates, while declining economic growth in the US has weakened expectations of further
tightening. — UNI |
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PSIDC to take on defaulters
Chandigarh, September 10 Mr Avtar Henry, Commerce and Industry Minister, said yesterday the PSIDC was incorporated with a view to promote medium and large-scale industry. With this objective, it had made its equity contribution in about 308 companies. Reviewing the equity portfolio, Mr Henry said, 51 companies opted for one-time settlement (OTS) under the scheme declared by the state government in the 2003-04. All these companies initially paid 10 per cent of the OTS amount and were expected to pay the balance amount to the tune of Rs 100 crore by June 30, 2007. He has directed the PSIDC to take effective measures to recover the money under its loan portfolio, which was given to various companies. He also directed the officers to invoke the provisions of Section 29 of the State Financial Corporation Act to take over the units of the defaulters. He also said the units which had already been taken over should be disposed of through auction. |
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Steel producers to rein in prices
New Delhi, September 10 The decision was taken at a meeting of the steel producers held under the chairmanship of Steel Secretary R.S. Pandey yesterday. The meeting was convened to address the issue of rising prices of steel. The steel producers decided to make available items of common consumption in the rural districts/blocks through their dealer network at the same price as applicable at metros. Among the decisions taken at the meeting were that cost of transportation as well as distributors/wholesalers’ margin would be borne by the producers. This would result in relief of about Rs 600 to 1,000 per tonne to the individual customer in the hinterland. It was further agreed that the concern of the common man would be kept in view by the producers while fixing the prices of such items. All main producers will adopt villages around their plants and as part of their corporate social responsibility (CSR) and help develop these villages as model steel villages. Appropriate schemes in the areas of health, education, livelihood promotion through agriculture and/or small-scale industries will be drawn preferably in conjunction with government development schemes operated in the area. In such endeavours the use of steel will specially be made in items such as bullock carts, buildings such as school buildings, panchayat halls, health centres, water tanks and waiting
sheds. — UNI |
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Volkswagen to drive in with small cars
New Delhi, September 10 He, however, declined to comment when the car was expected to hit the Indian market but said modifications in the vehicle were “inevitable” considering the Indian road conditions that were far more different from Europe. When asked where the company had decided to set up is manufacturing unit in India, he said: “A decision would be taken in a week’s time”.” The company has been reported to be in talks with various state governments, including Maharashtra, Tamil Nadu and Punjab, after the problems it had undergone while trying to set up shop in Andhra
Pradesh. — PTI |
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Liberty plans to invest Rs 140 cr in sanitary biz
Mumbai, September 10 It will open 30 company-managed and 100-200 franchise stores over the next three years to ensure a strong retail presence. “Of the Rs 200-crore investments planned in phases over three to four years, we have already invested Rs 60 crore in setting up a plant in Rajasthan. The remaining Rs 140 crore would be deployed in our second and third phase,” Liberty Whiteware Ltd CEO Adarsh Gupta said on the sidelines of India Retail Forum, 2006. The new stores will come up in big cities, including Delhi, Mumbai, Bangalore, Hyderabad, Chennai and Kolkata. It currently has a store at Gurgaon.
— PTI |
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Tata Steel condemns mineral policy panel
New Delhi, September 10 “Unfortunately, it appears that for some reasons the final report was not circulated among the members for their signatures as a token of their concurrence with the recommendations,” Tata Steel Managing Director B. Muthuraman said in a letter to Mr Hoda. Mr Hoda, however, refuted the charge saying that on the last day of the meeting of the committee, the views of every member were recorded.
— PTI |
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J&K Bank dividend
Srinagar, September 10 This was disclosed by Chairman of the bank Haseeb. A. Drabu while presenting the first cheque for Rs 20.62 crore as the dividend for 2005-06 with its new logo and design to the Chief Minister. |
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Posco pays Rs 2.83 cr to Orissa for land
Bhubaneswar, September 10 A bank cheque was deposited with the Infrastructure Development Corporation of Orissa
(IDCO) on Friday on behalf of Posco-India, the Indian subsidiary of
Posco, official sources said. — PTI |
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by Lalit Batra
Time to book profit
Last week Sensex edged close to 12,000. The bulls continued to charge ahead with Sensex and Nifty gaining 1.2 per cent and 1 per cent, respectively. This was due to the easing crude oil prices, the possibility of the government not banning the participatory notes and strong US economic numbers reported previous week.
There was good amount of buying interest in frontline stocks with metal index outperforming all key indices, as commodity prices firmed up at the London Metal Exchange (LME). The auto sector was also in action as the SIAM meeting held in Delhi saw top people of the auto industry making bullish statements on potential growth of volumes in sales and margins in years ahead. The Indian market trades at higher valuations compared to its emerging market peers, and may be a reason for triggering a possible correction. The BSE Sensex trades at a PE multiple of about 20, based on its trailing 12-month June, 2006, earnings. Coupled with the uncertainty over US interest rate policy, it would be prudent for an investor to keep booking profit. Sintex Industries
Sintex is a leader in the manufacture and sales of plastic products in India. The company holds a 60 per cent share in the water tank business and is amongst the prominent players in the prefab structure and custom moulding businesses in the country. I believe that Sintex is a player on India’s housing and infrastructure sector in the long term. India is a country where water is a scarce commodity in a large number of areas and, therefore, there is an ardent need to store it safely for a longer period. And this is unlikely to change in the future. This is one fundamental growth driver for the company. Sintex, through its prefab business, also caters to the need of other focused sectors of the government like education and affordable housing for the common man. With an increased demand for lightweight plastic components from the automobile industry, and protective shelters from the telecom and power companies, Sintex’s plastics business is on for a superior growth trajectory. Sintex is also toying with the idea of demerging its plastic and textile divisions into separate entities. In the event of a de-merger, the plastic business will realise the real value, generating an upside to the overall valuation of the company. Investors may buy the stock at the current level of Rs 180 with a three-year perspective. |
by S.C. Vasudeva
Long-term capital loss cannot be set off against STCG
Q. Ten years back some equity shares of various companies were taken through their issues. Meanwhile, certain companies disappeared from the market. Certain shares of certain companies were sold at throwaway rates.
In this connection, on the following points may be advised, whether. 1. Loss occurred to the shares of those companies which are not trading in the stock market can be setoff. 2. Long-term capital loss can be set off against STCG. 3. Long-term capital loss can be set off against any one way and can be transferred to next years return. 4. Is LTCG for shares sold through STT after 01.04.2005 not taxable? — O.P. Chopra, Chandigarh A.
1. The loss arising on the sale of shares which are not traded on the stock market can be allowed to be set off in accordance with the provisions of the Act. 2. Long-term capital loss cannot be set off against a short-term capital gain (STCG) in accordance with the provisions of Section 74(1) (b) of the Act. Long-term capital loss can be set off against long-term capital gain and if the same is not so set off in a particular year the same can be carried forward for not more than 8 assessment years immediately succeeding the assessment year for which the loss was first computed. 3. The long-term capital gain arising from the transfer of an equity share in a company is exempt from tax where the transaction of sale of such equity shares is entered into on or after the date on which the Securities Transaction Tax came into force and such transaction is chargeable to Securities Transaction Tax. The Securities Transaction Tax came into operation w.e.f. 1st October 2004. Therefore, any long-term capital gain on or after the said date, arising from the sale of such equity shares as are referred to herein above shall be exempt from the levy of capital gains tax under Section 10(38) of the Act. Tax
liability
Q. I am an employee of Punjab State Electricity Board. My pay particulars are as below: For the year 2005-06 Pay (Basic + DP)
Rs 1,92,600 Dearness allowance
Rs 38,900
Rs 2,31,500 Medical allowance
Rs 3,000 Conveyance allowance Rs 5,760
Rs 2,40,260 Deduction on account Net income
Rs 2,30,630 and Rs 28,890 (i.e. 15 per cent of pay) is not paid to me because of Board's accommodation allotted to me. Now my query is:- Is there any tax liability towards my house rent i.e. Rs 28,890 which is not paid to me because of Board accommodation? Or is it a fringe benefit, and income tax is to be paid by the Board. — G.C. Patial, Patiala A.
The house rent allowance not granted to you is not taxable in view of the fact that you have been provided accommodation by the Punjab State Electricity Board and the deduction in respect of rent for such accommodation is being made from your salary. This is on the basis of the facts given in your query. The amount of HRA not paid to you is not a fringe benefit as defined under Section 115WB of the Act. Rebate on medicines
Q. I am a chronic diabetic since last 20 years and for the last five years I am regularly taking himasulin injections with a doze of 25mg, before lunch and 20mg before dinner, besides taking other medicines as prescribed by the doctors from time to time. I spend more that Rs 50,000 to Rs 90,000 annually. Kindly advise: (i) Whether I can get rebate on the amount spent on medicines/ himasulin injections in the treatment of this chronic disease. (ii) If yes, the extent of amount that could be deducted as rebate while filing the income tax returns. — N.K. Sharma, Yamunanagar A.
Your query does not indicate the nature of income earned by you. However, as you are pensioner it is presumed that you have an income from pension as well as from interest earned on various saving schemes. The deduction under the provisions of Income Tax Act 1961 (the Act) is allowable in case a person with a disability. However, the word 'disability' as defined in the Persons with Disabilities (equal opportunities, protection of rights and full participation) Act, 1995 means blindness, low vision, leprosy, hearing impairment, locomotor disability, mental retardation, mental illness. A diabetic is not covered within the definition of disability and, therefore, you would not be entitled to any deduction for the expenditure incurred by you on taking insulin. Deduction on tuition fee
Q. Can I claim a rebate of tuition fee of my son's wife under Section 80C. (ii) Can I claim rebate of tuition fee of my son who is studying in foreign under Section 80C. — Parshotam Goyal, Ahmedgarh A.
Section 80C of the Act provides that tuition fees (excluding any payment towards any development fees or donation or payment of similar nature) whether at the time of admission or thereafter to any university, college, school or other educational institution situated within India, paid by the assessee, shall be allowed as deduction within the overall limit of Rs 1,00,000. The section further provides that such payment has to be for the full time education of any two children of such individual. In view of the above, no deduction is allowable to you in respect of tuition fee paid for your son's wife or in respect of your son who is studying in a foreign university. SIDBI Bonds
Q. Can I invest long-term capital gain arising out of payment on maturity of Unit Linked Insurance Plan of UTA Mutual Fund in SIDBI Capital Gains Bond to get exemption from payment of income tax on the said amount. 2. Can I invest Rs 20,000 even though the amount of long-term capital gain is Rs 12,000 as the investment is required to be made in a multiple of Rs 10,000. — Arun Sharma Bilaspur A. 1. According to the provisions of Section 54EC of the Act as amended by the Finance Act 2006 effective assessment year 2006-07, the specified bonds for the purposes of making investment for saving capital gains tax can be only in the bonds issued by National Highway Authority of India or Rural Electrification Corporation Limited. The investment cannot be made in SIDBI bonds for the purposes of seeking exemption under Section 54EC of the Act. 2. You will have to check-up with the above institutions, the multiple for which the bonds by the aforesaid authorities are issued and the investment will have to be made accordingly. |
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