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Murthy highlights lack of infrastructure
Survey upbeat on pension reforms |
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NDMC to
dig gold
in Tanzania Stronger rupee may pin down exports Market Update
Tax Advice
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Murthy highlights lack of infrastructure Mysore, April 8 Murthy, while interacting with reporters after the President’s visit to its sprawling 350 acre campus here, said the government had even been unable to set right a traffic bottleneck in the Electronic City despite a demand by thousand of women commuters. “The women came to us and wanted to launch a dharna but we assured them that we would take up the issue with the government. “We did that but have not heard anything. In such a situation what is the point of talking about IT progress in the state”, he added. The Infosys chief mentor went on to say that Chief Minister H.D. Kumaraswamy probably had valid reasons for not righting the infrastructure bottleneck. When questioned about the President’s remarks at the function held on the campus during which he had replied “I say fantastic” to a question on Murthy’s candidature for Presidentship, the Infosys mentor said: “the President has always been very kind to me”. Asked if any political party had approached him on the issue, Murthy said, “No. Not at all.” He went on to say that he was grateful to the President for his kind words but the question itself was hypothetical. “What will happen in the future nobody can say but when we have a President who bonds so well with the youth it would be best for him to continue for another term”. Mr Abdul Kalam was a hit with Infosicians at the function earlier with trainees cheering him on and taking oaths administered by him with enthusiasm and fervour. The President said a convergence of technology was taking place the world over. He said convergence of IT, BT and nano-technology could lead to nano-robots which could provide new opportunities in the field of medicine. Answering a question as to what he expected from Infosys for the nation, the President said youth all over the country were asking him why knowledge workers were migrating abroad. “I would like to have a reversal and Infosys can establish a model in this regard”, he added. |
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A fantastic proposal
President APJ Abdul Kalam today said it would be "fantastic" if software industry icon
N.R. Narayana Murthy succeeded him. “Fantastic, fantastic, fantastic,” Kalam said when asked if he wanted the Infosys chief mentor to become president. “I will say fantastic,” Kalam remarked at an interactive session at the Infosys Global Education Centre here in response to the question: “Do you want Murthy to become President?” Speaking to reporters who asked him about the President's remarks, Murthy said it would be “wonderful” if
Kalam, who has “bonded” with the youth who are the nation's future, continued for another term. — PTI |
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Survey upbeat on pension reforms New Delhi, April 8 The overall economic gains would be substantial as the mobilisation of assets would lead to effective investments in the stock, bond and mortgage markets, thus supplying the capital to finance corporate growth, government infrastructure and to finance housing through market choice. This prognosis has been held out by a FICCI-KPMG paper on Pension Reforms in India prepared for the two-day 'PFRDA-FICCI conference on Pension Reforms in India: Opportunities and Challenges', which gets under way on April 10, 2007. The FICCI-KPMG paper notes that the need for reform arises from the various challenges and concerns with respect to the existing pension provisions in India, which primarily includes skewed coverage, diversity in terms of income and employment of the working population,low income levels of a large population base and large and fast growing informal sector, which is not, covered under any formal or mandatory pension schemes "Since the capital market and pension sector are closely related, it will become necessary to undertake capital market reforms along with pension reforms," says Ficci president Habil Khorakiwala. The paper states that reforms in the pension sector will inflate the capital markets and thus will require advanced management techniques in the capital markets for managing the extra inflow of funds. “These would include leveraging technology to provide information to individual pensioners on their asset allocation which will create an interest for individuals and also create accountability on the part of fund managers." The success of the pension reform would depend on the ability of the regulator to operationalise the system around the three corner stones of operational processes, product and distribution. The paper notes that a strong and stable pension system has some very positive impact on the capital markets. |
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NDMC to dig gold in Tanzania
Hyderabad, April 8 Addressing a press conference here last night, NMDC Chairman and Managing Director B Ramesh Kumar said detailed geological mapping, systematic geo-chemical sampling and ground magnetic survey had been completed at Bulyang’Ombe. He said drilling was in progress at identified target areas, which would be followed by pre-feasibility studies. He said three prospecting licence applications had been filed for Shinyanga, Tabora and Singida region, which had good potential for gold exploration. Regarding diamond exploration, he said based on the results of reconnaissance permit work done by the NMDC, the Centre had granted eight prospecting licences to NMDC for exploration in an area of about 123 sq km in Anatapur district. The corporation is also mulling setting up an integrated steel plant in Chhattisgarh.
— UNI |
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Stronger rupee may pin down exports New Delhi, April 8 Exporters are worried that the ongoing trend would adversely affect their future export prospects in the US market by making their goods more expensive. These are the findings of the recent survey carried out by the PHD Chamber of Commerce and Industry (PHDCCI) for units located in Punjab, Haryana, Chandigarh, Delhi, UP, Rajasthan, Himachal Pradesh and J&K. As per the survey findings, exporters are particularly perturbed by the fall in profits arising out of the recent surge of the rupee. The survey shows that the international buyer is not willing to pay to the exporter the extra price accruing from currency appreciation. Exporters also complain of incurring a loss between the period of invoicing and realisation of proceeds on account of rupee appreciation. The study said, the strengthening of the rupee is particularly detrimental for the low import intensive and price sensitive terms such as textiles especially when competitors such as Pakistan have not witnessed a similar currency appreciation. At the same time, the capital goods industries are also not being spared and are beginning to feel the heat of the rising rupee. Appreciation of the rupee has also helped to enhance the competitiveness of industries, which rely heavily on imported raw materials, components in their production process. The revenues of IT companies are expected to take a hit and would evidence a pressure on their margins on account of hardening of rupee. Besides, companies, which have taken loans in foreign currency, are benefited, as the recent appreciation would result in lower repayment in terms of rupees. A fresh appreciation is bound to hurt export prospects of domestic industries in the future. |
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Global trends to dictate the market by Lalit Batra A surprise hike in the repo rate and the cash reserve ratio (CRR) announced by the Reserve Bank of India (RBI) after trading hours on previous Friday spooked the bourses last Monday. The markets plunged by 616 points, which is the second largest fall in the history of Sensex. The latest rate hike reignited concerns that economic growth will slow down due to sustained rate rises. The RBI raised short-term lending rate, the repo rate, by 25 basis points to 7.75 per cent. The central bank also raised the cash reserve ratio (CRR) by half a percentage point. The CRR will rise to 6.50 per cent in two tranches, the first on April 14 and the other on April 28 and will drain Rs 15,500 crore from the banking system. The markets staged recovery from Monday’s fall on the back of firm global markets and cooling off oil prices. But the markets ended the last week in the red with Sensex losing 216 points to close at 12,856 and Nifty shed 69 points to close at 3,752. The market is expected to consolidate at current levels, before making any big move further. Information technology (IT) bellwether Infosys, which is set to kickstart the earnings season with fourth quarter results, on April 13, may provide the trigger for the market. A lot will also depend on how the global markets pan out. Over a past few months, local bourses have been tracking global cues in the similar direction. Any sharp correction will lead to a fall here as well. The Chinese central bank last week raised the rate that lenders must hold in reserves by 50 basis points starting 16 April. This will dampen the sentiment globally. Often tax saving is left to fend off during the month of March; I have always advocated the idea of starting the tax planning exercise earlier in the year. Now with the financial year 2006-07 behind us, there is a danger of complacency setting in with regards to tax planning for the next financial year. In my view, it is a good idea to commence tax planning exercise for the next year beginning now, rather than wait for March. HDFC Tax Saver
Launched in December 1995 as Zurich India Tax Saver Fund, the fund was re-christened HDFC Tax Saver, subsequent to its take over by HDFC Mutual Fund. HTS is among a handful of tax-saving funds to have completed more than a decade in business, and over this period, it has been among the more consistent funds in the tax-saving category. The HTS is managed aggressively in line with the growth style of investing. This involves investing in well-managed companies that may be fairly valued, with the expectation that they are likely to do even better going forward. As a mandatory feature, tax-saving funds have a three year lock-in period, thus compelling investors to take a long-term view on equity markets. The same duration, in my view, is ideal for analysing the performance of all equity funds, including tax-saving funds. HTS’s NAV (net asset value) has risen by 50 per cent CAGR (compounded annualised growth rate) and 46 per cent CAGR over three year and five year, respectively. Since inception (in December 1995), the NAV has risen by 40 per cent CAGR. Over the years, HTS has developed a knack for making relatively correct investment calls (like selling technology stocks well before the meltdown in February 2000). This has helped the fund tide over volatility despite pursuing a relatively aggressive investment strategy. Its aggressive style is particularly evident in its top 10 holdings (44.7 per cent of net assets as on February 28, 2007, although this is a marked departure from the 60 per cent, we have seen earlier). In my view, investors with an appetite for higher risk must consider adding HTS to their portfolios through systematic investment plan on a monthly basis. |
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Claiming rebate on third child’s fee by S.C. Vasudeva Q. Me and my wife are government employees and both are income tax assesses. We have three children. I am claiming exemption under 80C on the tuition fee for two children. The third child was admitted in school in March 2007 in nursery and fee for April to June 2007 was paid in March 2007. My question is whether my wife can claim exemption under heading tuition fee exemption for the third child and from which assessment year 2007-08 or 2008-09. — Khushi Ram Garg A. Section 80C of the Act, that provides for deduction in respect of 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 for the purposes of full time education of any of the persons specified in sub-section (4) of Section 80C of the Act. Clause (c) of sub section (4) provides that such deduction shall be allowed in the case of any two children of such individual. On a literal interpretation of the aforesaid clause (c) of the said sub section, it should be possible for your wife to get the deduction for the payment of tuition fee in respect of the third child. Contractual employee Q. I am on a contractual job with Punjab. I am getting Rs 30,000 per month, out of which I have to pay the pharmacist, whom I am paying Rs 5,000 per month and a sweeper who is being paid Rs 1,500 per month. Please advise me regarding tax planning. Am I entitled to get house rent allowance? If yes, how much, though nothing is mentioned in my contract by the house rent allowance. — Hamita Gupta A. The payments made by you towards the salary of the pharmacist and the sweeper will be deductible against the amount of Rs 30,000 received in respect of your contract job provided you can satisfy the department that these amounts have been paid wholly and exclusively for earning the said income of Rs 30,000. You are not entitled to any deduction towards house rent allowance as you are not an employee and not receiving the same. You are however, entitled towards deduction of rent paid under Section 80GG of the IT Act, 1961 (The Act). The deduction is subject to the following conditions: (i) The rent paid is in excess of 10 per cent of the total income. (ii) The rent paid is in respect of the accommodation occupied for the purposes of your residence subject to the filing of the declaration in Form 10BA under Rules 11B of the IT Rules, 1962. (iii) No residential accommodation is owned by you or by your spouse or minor child or by HUF of which you are a member. (iv) You are not entitled to HRA. The deduction is limited to 25 per cent of the total income or Rs 2,000 per month, whichever is less. Family pension Q. I am a PSEB employee having salary income about Rs 2.40 lakh (2006-07). Also, I am getting family pension (Rs 90,000) on account of death of my wife who was a government teacher. I have two major children and have PAN issued from income tax department. My query is: 1. I want to divide the total amount of pension into three equal parts among three family members. A part of my pension i.e. 1/3 rd (30,000) is to be added to my income under other sources. Under what provisions, could this be allowed to for rebate? Are my officers empowered to allow this rebate? 2. I do not want to include my total pension in my salary income to be received from the department and file the income tax statement without adding the total pension. But I want to file the revised income tax statement after dividing the amount of pension into three equal parts among family members and adding my pension share to my salary income. Is it possible? — Harnek Singh, Patiala A. The family pension should in any case be divided amongst all legal heirs of the deceased. You should therefore include in your total income the amount of Rs 30,000 and the remaining amount of Rs 60,000 should be taxable in the hands of your two sons in equal shares. In case the family pension is being received in your name you should ask the disbursing officer to make the payment in the names of the legal heirs separately so that the issue is resolved at the level of the disbursing officer itself. In case the cheque is being received in your name, you should issue the cheques for children’s share and deposit the same in their bank account. NRI investment Q. I have, for some time, a term deposit with Vijaya Bank, Hauz Khas Branch. It has matured in October 2005. I am a US citizen living in Texas. I am considering cashing the deposit and investing in rupees or repatriating in US dollars. Can you help me in sorting this out? — Rahul Biswas A. The matured amount of fixed deposit can be invested in rupees in the purchase of equity shares of a good company or in the units of the mutual funds. The dividend receivable on units as well as on equity shares is exempt from tax in India. Therefore, this will have no tax consequence as far as you are concerned. In case you intend to repatriate the matured amount of fixed deposit the same can also be done. Stock options Q. I have sold my ESOP granted shares within 8 months of acquiring the grant. Please advise me whether I should pay 10 per cent tax on the profit or should I have to pay the tax @ of my tax as per my salary slab? — Vikas Malhotra, Ludhiana A. It is not clear from your query whether the stock options granted to you were in accordance with the scheme framed, which conformed to the guidelines issued by the Centre for the grant of stock options to the employees. Presuming that the options received were in accordance with the scheme so framed, the capital gain arising on the sale of stock options within 8 months of acquisition will be treated as a short-term capital gain. The same shall be chargeable to tax @ 10 per cent provided the transaction is entered into on or after October 2004 and the transaction is chargeable to securities transaction tax. The tax so computed shall be enhanced by education cess of 2 per cent on such tax.
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