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Investors in a tizzy over SEZs
AGM nod to LKB merger with Centurion Bank
Assocham seeks new cenvat credit rules
Pearl Fashion mulls retail foray, eyes cos in US, UK
Qantas to move 300 jobs to India
Tata car plant as scheduled
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Lankan firm to invest $1 b
Tax
Advice
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Investors in a tizzy over SEZs
Mumbai, October 1 “On the prowl, India needs investment to figure itself in the league of developed countries. SEZs with its incentives are not just an attractive investment destination for many in India and overseas, but these are really an important step for India’s industrialisation path also,” an industry source said. Industry sources said the Maharashtra Government’s draft legislation `SEZ and designated Areas Act’, submitted to the Centre in February, was still pending, acting as a dampener for industry to commit investments in SEZs. Maintaining that India needs to compensate with agricultural land, another source said, while America had positioned itself as the numero uno grains producer in the world by employing only 6 per cent of its populace, India lagged far behind by employing close to 70 per cent of its populace in agriculture. “To combat unemployment, it’s necessary for India to make productive use of lands. But, with frequent changes in the SEZ policy, India could lose investment worth of millions,” he said. So far 150 SEZs have been cleared. Recently, 18 others were cleared by the Board of Approvals and 13 more given in-principle nod. Following farmers’ agitations in different parts of the country over land acquisition, the Centre has put a blanket ban on prime agricultural land acquisition for industrial purposes. To aggravate the problem, the RBI hiked the risk weightage on SEZ lending for commercial banks directing them to treat SEZs at par with real estate projects. “How can India resist flight of investment with such poor infrastructure and without offering any incentive to the industry, while China offers free of land to investors?,” a top industrialist said. India Inc, on a roll now, was taken aback by the decision and are now preferring to adopt a wait- and-watch’ approach till there is greater clarity on SEZ policies. Already the Union Commerce Minister Kamal Nath has said that the government would not allow SEZs to be sabotaged and stated that he would write to the RBI as lending to SEZs could not be comparable with lendings to real estate projects since the primary activity of the former is manufacturing. Bankers also want greater clarity on the SEZ policies before increasing their exposure to the sector. — PTI
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AGM nod to LKB merger with Centurion Bank
Kochi, October 1 The resolution on the proposed merger was passed with “requisite majority” a press release quoting Mr R.C. Bhargava, who was appointed Chairman of yesterday’s AGM, said. There was a strong contingent of the police inside the hall, where the meeting was being held, and outside the venue. As soon as the meeting began, some shareholders and employees asked the Directors to remove the police personnel from the meeting venue. When the Directors continued with the meeting, they raised slogans and held a parallel meeting inside the hall itself. Over 1,200 shareholders, including 700 employees of the bank, participated in the meeting. Most of the shareholders abstained from voting, it is learnt. All 12 Directors, including Mr Mohan Puri, who hold the majority shares, attended the meeting. The employees’ organisation also took out a protest march against the merger. — PTI
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Assocham seeks new cenvat credit rules
New Delhi, October 1 In a representation submitted to the Finance Minister, Mr P. Chidambaram, Assocham had identified a couple of instances on which the assesses and the government were confused for availability of cenvat credit which should be urgently removed, said Mr Anil K. Agarwal, Assocham President. These issues include service tax paid by a manufacturer on the transportation of final product from the place of removal and availability of cenvat credit of service tax paid on mobile phones. The other two issues listed by the chamber include service tax paid on various input services which are commonly utilised for the taxable and non-taxable services as also service tax payable on various input services by a person or a company which is engaged in trading as well as manufacturing activities. The chamber pointed out that on number of issues, there were diversion of views even from the different states and the Department of Revenue. It urged the Finance Minister to intervene and issue directives to authorities concerned so that new cenvat credit rules 2006 were put in place. |
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Pearl Fashion mulls retail foray, eyes cos in US, UK
New Delhi, October 1 “We are evaluating a foray in the retail segment in India, US and UK, which would be a natural progression of our existing business,” Group Chairman Deepak Seth said. The company planned to invest about Rs 50 crore to set up 20-30 stores in the next three years in India and was talking to a few large retailers for a joint venture. Mr Seth said the company would roll out its retail plans by March, 2007. On the overseas plans, Mr Seth said Pearl was looking at acquiring companies in the US and the UK and synergise its brand and infrastructural capabilities with those of the target
companies. — PTI |
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Qantas to move 300 jobs to India
Sydney, October 1 A Qantas spokesperson said it was finalising a review of its IT development, maintenance and support services. In July the airline shortlisted two Indian companies, Tata Consulting Services and Satyam, to take over the work. Tata has already signed a $3.85 million deal with the Victorian Government’s Curriculum Assessment Authority (ASU). Jobs at risk are in the airline’s Internet operation that deal with holiday bookings, frequent-flyer programs, operational logistics, crew and engineering operations, financial and payroll systems. ASU said Qantas had already granted a contract to one of the Indian companies that allowed 30 of its workers to “scope out” work in the Mascot IT office. Prime Minister John Howard, however, refused to enter into a debate over the proposed transfer of jobs, saying that staff decisions are a matter for the employer. — PTI
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Tata car plant as scheduled
Pursurah (WB), October 1 “The Tata Motors project will come up at Singur. Is there any doubt about it?” he asked at a press conference here in Hooghly district. The government has called an all-party meeting next week to discuss the controversy over the acquisition of agricultural land. The government has already said the Tatas will be given possession of the land required for the project after the puja festival.
— PTI |
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Lankan firm to invest $1 b
Colombo, October 1 Spread over 1,000 acres, it will serve as a production base for the Brandix Group, Mr Peter Sun, Chief Executive Officer of Brandix India Apparel City, said here.
— PTI |
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No rebate on fee paid to private institutes
by S.C. Vasudeva Q. Please advise whether the accrued interest for the 6th year on NSC – VIII issue purchased on 13.09.2000, for Rs 10,000 is admissible as deduction under section 80C and if so, what is the admissible amount? Whether the total fees of a child paid to private educational institutions, namely Bulls Eye and NIIT (branch and licensee), in addition to the tuition fee paid to a government college (CCET), are admissible as deduction under Section 80C. Whether the deduction under section 80U, 80DD, etc. is independent and exclusive of deductions under section 80C, in favour of a disabled income tax payee. — Manjit Singh A. The interest accrued for the 6th year on National Saving Certificates (VIII Issue) is admissible as deduction under section 80C. The amount to be included for the NSCs purchased on 13.09.2000 would be Rs 1,931 as per the table provided by the relevant rules. The deduction for the tuition fee is allowable in respect of the full time education for two children provided it has been paid to any university, college, school or any other education institutions situated within India. In my opinion, the tuition fee paid for government college should be only admissible under section 80C of the Act as the other payments do not seem to be for fulltime education. iii) The deduction under section 80U and 80DD is independent and exclusive of deduction under section 80C of the Act. Death gratuity Q. What is the tax liability on the amount of death gratuity, EPF, EDLI (Employees Deposit Linked Insurance), insurance claim and grant from Employees Welfare Trust Fund, received by me and my wife (50 per cent each) on account of death of our son. I am a taxpayer and my wife is a housewife. Do I have to show this amount in tax return even if the entire amount is tax free? Is it advisable for my wife to file income tax return (if the amount is taxable), since the amount received falls in the taxable bracket? — S.S. Gill, Jalandhar A. The death-cum-retirement gratuity received in excess of the prescribed amount is taxable in the case of employees of private sector. In such a case gratuity not exceeding half month’s salary for each completed year of service calculated on the basis of average salary for 10 months immediately preceding the month in which the event of retirement/ death occurs, or Rs 3,50,000 whichever is lower is exempt from tax. The balance amount is taxable. The amount received at the time of death of the policyholder from the insurance company is exempt from tax. The taxability of the grant received from the Employees Welfare Trust Fund would depend on the terms on which such grants are sanctioned. The amount received towards the death-cum-retirement gratuity, EDLI against the life insurance policy should be disclosed in the income tax return under the category of exempt income. There is no necessity for your wife to file the return of income in case she does not have any income chargeable to tax. Medical bills Q. I am a senior citizen and retired from government service in March 2004. I had to undergo an open-heart surgery costing Rs 2.05 lakh based on hospital bills. In August 2005, the government reimbursed me Rs 1.67 lakh leaving a gap of Rs 38,000 to be borne by me. Now, kindly let me know whether I could claim any kind of rebate/deduction in the income tax return for the FY 2005-06 against Rs 38,000. The board of government doctors has diagnosed my disease as chronic. Whether premium paid for Jeevan Suraksha Policy of LIC is covered under section 80C for the year 2005-06. A few weeks ago while commenting on Ghanshyam Das Bhunja’s question regarding section 80C; 80D; you mentioned; “LTCG is taxed at the rate of 20 per cent (or 10 per cent)”. Kindly let me know that under what conditions LTCG invokes income tax at the rate of 10 per cent? — M.L. Lamba A. The amount of Rs 38,000, which has not been reimbursed by the government, is not allowable as deduction under any of the sections of the Income Tax Act 1961 (the Act). The premium paid towards Jeeven Suraksha Policy of LIC is covered under section 80C of the Act. The long-term capital gain is taxable at 10 per cent in case it is on the sale of listed securities, units or zero coupon bonds. GPF exemption Q. I am Punjab Government employee. My contribution towards GPF during the year 2005-06 is Rs 84,000. Can I claim the whole amount as deduction under section 80C. Also intimate limit of tuition fee. — G.S. Kahlon A. Your contribution to GPF to the extent of Rs 84,000 would be covered under the provisions of section 80C of the Act. You would thus be entitled to a deduction of the said amount from your total income. The amount paid as tuition fee for children is also covered as an allowable deduction under section 80C of the Act. Pension policy Q. I am a retired semi-government officer and my total income from pension, interest from 9 per cent Senior Citizen Scheme, interest from FDs etc is likely to be Rs 2,75,000 for the FY ending 31.03.2006. I have purchased NSCs worth Rs 70,000 and have paid Rs 10,000 as premium for LIC pension policy fully exempt under section 80CCC in 2004-05. Please advise as to whether the amount of premium for LIC Pension Policy is still exempted fully for FY 2005-06 over and above Rs 1 lakh exempted under 80C or not? If not, can this amount be covered in Rs 1 lakh of 80C and can I invest balance Rs 20,000 in similar pension schemes of LIC/ICICI/HDFC etc.? Whether the limit of purchasing NSCs is Rs 70,000 for FY 2005-06 as is for PPF or NSCs can be purchased for full amount of Rs 1 lakh under 80C? If the limit is Rs 70,000, in which schemes should I invest balance, taking into account that I do not want to invest in mutual funds and there are speculations that infrastructure bonds may not be floated before 31.03.2006. I have no PPF account. — Vijay Kumar A. The deduction in respect of LIC pension policy is allowed to be deducted to the extent of Rs 10,000 from the total income. However, this amount would be covered within the overall limit of Rs 1 lakh permissible under Section 80C of the Act. The balance amount of Rs 20,000 can be invested in other saving instruments as provided for in section 80C of the Act. NSCs can be purchased for the full amount of Rs 1 lakh. You can also open a PPF account and deposit the balance amount of Rs 30,000 in the said account. |
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