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New twist to telecom tangle
Budget 2008
Oil Products
Toyota recalls 20K Innovas
Market Scan
Tax Advice |
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New twist to telecom tangle
New Delhi, January 20 CVC's queries on the controversial issue have forced DoT and the Telecom Commission to convene meetings over the next few days to prepare their replies. The vigilance agency has also asked the department to make a detailed presentation on all the issues related to spectrum allocation on January 28. "When in the licence agreements it was written that the operators would be provided a cumulative maximum spectrum of 6.2 MHz, then under what circumstances did DoT permit higher quantum of spectrum?" CVC said in a communication to DoT secretary Siddhartha Behura. Most of the existing GSM players have been allotted 10 MHz or even higher in some of the circles based on number subscribers decided earlier. Rival CDMA operators Tata Teleservices and Reliance Communications have also raised the matter with the DoT over what they call the indiscriminatory approach of allotting extra frequency to GSM players. A host of Members of Parliament have also written letters to the Prime Minister's Office and communications minister A Raja, seeking spectrum beyond 6.2 MHz back from GSM players. CVC has also asked DoT as to why additional spectrum beyond 6.2 MHz was not auctioned as this has resulted a huge financial loss to the exchequer. CDMA players have been alleging that spectrum has been given to the GSM players virtually free and top GSM service providers have saved thousands of crores of rupees by not investing in network infrastructure. CVC's intervention would give further boost to CDMA players' demand to ask GSM operators to return spectrum beyond 6.2 MHz so that it could be allotted to new players. As per DoT policy, the start-up spectrum has to be given in a tranche of 4.4 MHz but in many cases DoT allotted 6.2 MHz. CVC has sought explanation for this deviation from the policy. — PTI
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Budget 2008
New Delhi, January 20 It is obvious that the budget has sops for the sectors that are vital to the vote bank for any party in power. "Even though winning elections is important and sops are a part of such a budget, the government should not lose sight of the development of key sectors of the economy" said Prof G.K. Chaddha, member, Prime Minister's Advisory Council, while talking to The Tribune when asked about the council's suggestions to the finance minister. "The budget-making process has to strike a balance so that the development of the country continues to meet the targeted growth rate" he added. The Prime Minister’s Advisory Council, which met finance minister P Chidambaram recently, gave suggestions on all aspects of the economy — like improving agriculture, giving boost to manufacturing sector, solutions to meet the mounting fertiliser subsidy, sops for education and development of skilled manpower. "The way agriculture is carried out is changing all over the world. We need to take more long-lasting steps to see that better agriculture practices are carried out. What needs to be done is a great deal of investment in agriculture research and development and in developing technology in carrying out better practices for agriculture," said Prof Chaddha. There is a severe need to improvise better agriculture practices in face of the changing weather conditions like global warming and El Nino, which requires spending more in developing agriculture-based training and bringing in new technology. With regards to fertilisers, the council has suggested distributing small quantity of fertilisers to all farmers, specially to small and medium-sized farmers. But the big farmers who can afford should go and procure the same from This will make sure that the really needy farmers get the subsidy, thus reducing the burden on the subsidy bill. With regard to increasing the industrial productivity in the consumer durable sector, which has shown a stagnant growth in the past few years, Prof Chaddha said "there should be some tax incentives for the manufacturing sector so that the goods become more cost competitive. Add to that, they will be competitive in the international market as well, thus giving a boost to this stagnating sector". For the education sector, the council has recommended to develop manpower and skilled labour, especially when the large part of population is below the age of 30. With regards to burgeoning foreign exchange reserves, the council has suggested that the reserves be used with great urgency for the development of infrastructure projects. As a reward to the honest taxpayers, the council has suggested that there should be an increase in tax slabs and standard deduction as "this will help common man tide over the inflation and give him more savings", said Prof Chaddha.
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Oil Products
New Delhi, January 20 Besides, the industry has also given a strong call for a review of the customs and excise duty structure on oil and oil products and suggested that the government should look at a floating tariff regime for oil products. These views of the Indian industry has come out in a intensive firm-level Ficci survey on 'Emerging oil price scenario and the Indian industry', which elicited responses from 163 companies with a wide sectoral and geographical spread and with different oil consumption intensities. "The Indian industry, which is groaning under the impact of rising prices of oil and petrochemical products in the past six months, is changing tack. There is a massive bid to switch over to energy-efficient and non-oil technologies, for which industry is clamouring for a 'new fund' to access cheap loans to finance the adoption of these technologies," the Ficci survey said. While Indian companies readjust to the high price scenario and adopt a medium to long- term strategy, they suggest that in the forthcoming budget the government should announce a 'new fund' for providing subsidised loans to industry for switching over to energy-efficient technologies.
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New Delhi, January 20 "The problem, we have found, is in the differential carrier mounting nuts, which becomes loose, and on long usage could lead to oil leakage. It has been detected in about 20,000 Innovas," Toyota Kirloskar Motor deputy managing director KK Swamy told PTI. He said Innovas manufactured only between April and October 2007 have been recalled to repair the faulty part. — PTI
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Market Scan
Last week there were two important developments: the stock market crash and Reliance Power IPO response.
The stock market crashed with the Sensex down by 8.70 per cent and Nifty by 7.98 per cent. The Sensex slumped from 20,827 points on January 11 to 19,013 points on January 18.
Nifty, which touched 6,388 points at its highest some weeks back, closed at 5,705 points, down by 6.9 per cent. In the Sensex list of 30 shares, 25 shares closed in the negative.
In the 50 listed Nifty shares, 45 shares closed negatively. All the BSE sectoral indices were down: High losses were in the oil and gas (-5.88 per cent) realty (-5.87 per cent) and bankex (-5 per cent). The market crash was due to a number of factors: the slowdown in the US economy, heavy sales by the FIIs, slowdown in the inter-bank call money transit due to some fault in the Reserve Bank’s transfer system software, heavy losses to traders in the future and derivative market due to market crash and the demands for higher margins by the banks. Another factor was that the Indian market with the high valuation in the P/E ratios was considered expensive by the FIIs, who shifted funds from the Indian market to the other relatively cheaper markets. It was also on record that correction was on the way in the overheated stock market valuations. The Prime Minister’s Economic Advisory Council also brought down the target of economic growth in the fiscal year 2008-09 from 9 per cent to 8.5 per cent in view of slowdown in the US economy, high crude prices and slow infrastructure development in India. The Reliance Power IPO was oversubscribed by 72 times. it set up a new record.The retail investors’ subscription is estimated at 15 times.
This may be good for Reliance Power Company but it led to heavy profit taking in the stock market by the retail investors who collected funds for subscribing to this IPO. A major question today is when would the market recover? The market has already corrected itself by a fall in market indices between 8 to 9 per cent. some of the top blue-chip scrips have suffered in the Sensex. Reliance industries is down by 6.57 per cent, DLF by 7.37 per cent, ICICI Bank by 5.78 per cent, Reliance Energy by 4.01 per cent and Larsen and Toubro by 3.62 per cent. It may also be noted that the market fall took place in spite of excellent quarterly results declared by Reliance Industries and some other companies. Even the latest quarterly results in most cases were in accord with market expectations. On last Friday, even the US, European and even the Asian stock markets were positive while the Indian stock market slumped. It would appear that though early this week there may be some minor fall in the market indices, the market is likely to stabilise and turn positive later this week and, if not, surely next week. Investors, both long term and short term, have the opportunity to go in for select buying in those shares which are fundamentally sound and are backed by trusted managements.
Reliance Industries, ABB, Larsen and Toubro are excellent scrips. Among the low-priced shares, one may list Tata Chemicals, Gujarat Alkalies. Infosys may also be good on a long-term basis. |
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Tax Advice
Q. I have made investment in Senior Citizens Scheme as well as in five year Post Office Time Deposit Account in August - September 2007.
I am a senior citizen and my total income is about Rs 2,20,000/ after taking into account the benefit of section 80C deductions to the extent of Rs 50,000/.
Please let me know my tax liability as also whether interest earned on the above savings schemes is exempt from tax. A. Your queries are replied hereunder: (i) In accordance with the latest press release by the Government of India, the investments made in Senior Citizen Scheme and five-year Post Office Time Deposit Account schemes have been covered under the provisions of section 80C of the Act within the overall limit of Rs 1,00,000/. This amendment is applicable w.e.f. financial year 2007-08. You can, therefore, take the benefit of this provision. On the basis of figures given in the query in case you have deposited Rs 25,000/- or more in either or both the schemes, such deposit would reduce your total income to a non-taxable limit of Rs 1,95,000 which is applicable to a senior citizen. There will thus be no tax liability in such a case. (ii) The interest earned on the deposits under the above schemes is taxable. Tax on gift
Q. An Indian (now British national and settled in the UK) wants to give around 5,000 pounds to a family in India. (a) What is the most effective way of doing so which has least or no tax implications under the Indian tax laws? (b) If above is not possible, what is the best way for him to park these funds with the family or in a company owned by the family so that these funds can be used here. In that case, what permissions are to be sought from Indian authorities? A. (a)Any amount of gift received by an Indian who is not a relative of the donee in terms of Section 56 of the Income-tax Act 1961 (The Act), will become taxable in the hands of the donee if the amount is in excess of Rs 50,000 in a year. The query does not indicate the nature of relationship and, therefore, it is not possible to explain the position of taxability in the hands of recipient. (b) In case the relationship is not covered within the definition of the ‘relative’ as specified in the aforesaid section, the amount can be given as a loan to the family through the medium of Non-Resident Ordinary Account. The amount received back can be deposited in such rupee account. It may be added that amount deposited in NRO account is normally not repatriable. Advance tax
Q. I am a senior citizen having an annual income of Rs 1.85 lakh without having any benefit u/s 80c. After having benefit u/s 80 c the income remains Rs 1.85 lakh which is exempted. Besides this income, I have an income of (approx) Rs 2.00 lakh from share business. I contacted my C.A. to deposit the advance income tax on this share income. He advised that this share income shall be clubbed in my trading business for calculation of income tax purpose. Some told me that there is a govt. policy to deposit 10 per cent flat on share business income. Kindly advise me which ever is correct and under which section of I. Tax Act as I am already overdelayed in depositing the advance tax. A. The information given by your chartered accountant is correct. The income from shares business will have to be taken as part of your total income on which advance tax would be payable. The rate of 10 per cent is applicable for the taxability of short term capital gains arising from the transfer of equity shares in a company or units of equity oriented funds held for less than 12 months. The above rate of 10 per cent would be applicable if the transfer of such shares is entered into on or after the applicability of the Securities Transaction Tax and such transaction has been subjected to Securities Transaction Tax. Since you have stated that you were carrying on the business of purchase and sale of shares, the above provisions of the Act would not be applicable to you and the profit from the business of share dealings will have to be clubbed with the other income on which tax would be charged at the normal slab rate. IT return
Q. I am a retail trader i.e. having a shop of daily needs such as bread, butter, soap, etc. My turnover is approximately Rs 30 lakh a year. I am not maintaining any accounts but have complete bills of purchase and sales and memoranda recovered of recoverables. I have received a notice for filing the return of income. Please guide me as to what should I do. A. The notice for filing a return of income being a statutory notice should be complied with and the return in respect of the assessment year for which notice has been received should be filed. You can take a recourse to the provisions of the Act whereby you can declare your total income @ 5% of the turnover for the year. If you have made any investments/deposits which are covered under Section 80C of the Act, you can claim the deduction in respect thereof from the total income so determined. |
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