 |
|
|
Indirect tax kitty to exceed Budget target: FM
Budget 4 days to go |
|
||||||||||||||||||||||||||||||||||||||||||||||||||
No duty cut on Harley Davidson, India to US
Investors see RPower bonus as damage-control bid
ICAI told to prepare report
on IPO valuation
Forbes List
PSU bank staff on strike today
Market Scan
Tax Advice
|
|
Indirect tax kitty to exceed Budget target: FM
New Delhi, February 24 "I am confident that the Budget targets (for indirect tax collections) would exceed this year too," finance minister P Chidambaram said at an investiture ceremony of Presidential appreciation certificates for the officers of the Central Excise, Customs and Narcotics departments here. The finance minister said the indirect tax collections exceeded the Budget targets by Rs 8,615 crore in the 2005-06 fiscal, while in 2006-07, they surpassed the targets by Rs 11,300 crore. Accordingly, the departments concerned were given Rs 86 crore and Rs 113 crore for these two years to provide better service conditions to their officials as part of the scheme to give one per cent of excess collections for this purpose. Expressing confidence that the indirect tax collections would surpass the Budget targets this year as well, Chidambaram said this would enable the government to give one per cent excess collection to the departments concerned. However, Central Board of Excise and Customs (CBEC) chairman S.K. Shingal said growth rate of excise duty collections was a matter of concern. Excise duty collections have been growing at a sluggish pace. In the last fiscal, revised target for excise duty collections were lowered to Rs 1,17,266 crore from the Budget target of Rs 1,19,000 crore. This fiscal, excise duty collections were expected to grow to Rs 1,30,220 crore as per the Budget target, which would be 9.42 per cent growth as compared to the Budget target of last fiscal and 11.04 per cent growth over the revised target. According to controller general of accounts figures, net excise duty collections rose at a sluggish pace of over five per cent at Rs 75,485 crore till December this fiscal, against Rs 71,816 crore. Net customs duty collections, however, have grown to Rs 74,455 crore till December this fiscal, up around 17 per cent against Rs 63,655 crore in the corresponding period of last fiscal. Overall, indirect tax collections, including service tax, were targeted to rise to Rs 2,79,190 crore in the Budget 2007-08, approximately 51 per cent of the total tax revenue. However, Central Board of Direct Taxes officials claim that direct tax collections would exceed Rs three lakh crore this fiscal and would exceed indirect tax collections for the first time in India.
|
|
Budget 4 days to go
Chandigarh, February 24 In its wish list for the finance minister, the IT sector hopes that the software technology parks of India (STPI) scheme is extended further so that the interests of the small and medium enterprises (SMEs) in this sector are not hurt. They are hoping that the fringe benefit tax (FBT) on business promotion expenses is done away with and import/export processes are simplified. Keeping in mind that this budget will be all inclusive, with a tilt towards the rural sector, the IT industry, too, is willing to chip in their bit, if the government grants tax sops for its foray in the rural sector. Talking to The Tribune here today, Naveen Gupta, vice-president (finance), GlobalLogic Inc, a leading company in product development, says for most SMEs, continuation of the STPI tax holiday is very important. “We feel that in the event of the tax holiday under the STPI scheme being scrapped post 2009, the cost advantage that Indian IT companies have over their global counterparts, would no longer be there. The government should extend the scheme in Budget-2008.” Supporting his views on extension of the STPI scheme beyond 2009, Gowri Shankar Subramanian, CEO, Aspire Systems Pvt Ltd, says the service tax paid on services utilised for export of computer software and BPO services must be refunded. “The government can retain the corporate tax at 30 per cent, but the 10 per cent surcharge should be withdrawn. There should be some tax /capital investment incentives for the corporate sector for setting up IT/BPO units in tier-III towns and semi-urban areas, and for those investing in telecommunications and related infrastructure in semi-urban and rural areas,” he added. Lt Col (retd) H.S. Bedi, CMD, Tulip IT Services, feels that this budget is expected to focus primarily on the rural sector. “With 70 per cent of the population living in villages, there is a great growth potential for the services sector, especially IT. Since data connectivity is the key to growth in rural economy as it is a key part of infrastructure, the government should give a five-year tax holiday on service tax for companies providing data connectivity in rural areas. This would push more companies towards providing IT services for the rural sector,” he said. Most IT companies feel that inspite of the US economic crisis and appreciating rupee hurting the profitability of Indian software industry, there is a huge growth potential for the IT industry. “So while concerns over the rupee appreciation, wage inflation and a possible US recession are there, companies have to become more innovative and add more value to customers in order to achieve non-linear growth. On its part, the government will have to take pro-active measures like extending the STPI scheme to give a boost to this sector,” says Manik Shergill, country head of Heron Health Systems.
|
|
No duty cut on Harley Davidson, India to US
Chicago, February 24 The US Trade Department raised the demand for a duty cut on the Harley Davidson bikes at the meeting of the India-US Trade Policy Forum here early this week, but the Indian side did not agree to it, a high level official said. "After all, the bike is going to be imported by rich people. Let them pay duty," the official said. India imposes 60 per cent duty on import of motorcycles. However, Davidson Inc, the biggest motorcycle maker in the US, facing slackening growth in the home market, will now be able to stock and sell its bikes in India. "This means, instead of delivering its bikes to individual buyer, the company can appoint dealers in India," the official said. The India-US Trade Policy Forum is co-chaired by commerce and industry minister Kamal Nath and US trade representative Susan Schwab. India had liberalised the emission norms for Harley Davidson last year but the high-end motorcycle could not really take off its sales operations in the country, since the rules allowed it to sell only to individual buyers. — PTI
|
|
Investors see RPower bonus as damage-control bid
Mumbai, February 24 They feel that foreign institutional investors (FII) will be the major beneficiaries as the retail investors have a very small share participation in the offering. Reliance Power issue, the largest IPO in the history of Indian equity market, had left investors across the country with burnt fingers initially. Many of them had endeavoured to buy the shares by taking loans from relatives and friends, he said. ADAG chairman Anil Ambani today announced a bonus ratio of 3:5 to all non-promoter shareholders of Reliance Power and Reliance Energy. Investors pointed out that when the issue was launched, Ambani had said, if possible, he would have allotted 100 per cent shares to the retail investors. But, the retail investors have not been able to secure even 30 per cent participation, they said. This was only a damage control measure after the fall in the share prices before listing, market analysts said, adding that there is a lot of negative sentiment attributed to this particular stock from the listing. — UNI
|
|
ICAI told to prepare report
on IPO valuation
New Delhi, February 24 “The government has asked the ICAI to study the issue of IPO valuation and system of stock movements. The ICAI will submit a report in due course,” corporate affairs minister Prem Chand Gupta said. “The ICAI study would take into account the practice followed in other countries as well as India and suggest ways for dealing with it," he said, adding that the apex body would also advise the government on making the whole process of IPO valuation more transparent. The institute, ICAI president said, would compare the Indian practices with the best in the world. The problem of the IPO valuation came to fore with public issue of some companies plunging below the issue price even on the listing day or afterwards, leaving investors high and dry. According to reports, out of 85 companies, which raised about Rs 22,000 crore through IPOs last year, shares of 37 companies were being traded at discounts going up to as low as 68 per cent. Even the mega public issue of Reliance Power, which was oversubscribed by about 73 times, plunged to below the issue price on the day of listing.
— PTI |
|
Forbes List
New York, February 24 Chennai-born Nooyi has been placed at the 10th position in a Forbes list compiled on the basis of their company’s total return to investors since each of them took the top job. Even since Nooyi took over the top job, the beverages major has given a total return of 9.4 per cent on an annual basis and has an annual revenue of $39.47 billion. "After PepsiCo, I do want to go to Washington," another business magazine Fortune quoted Nooyi as saying in a report published in its latest issue. However, Nooyi said any such move could take time. The top place on the Forbes list has been grabbed by Catherine Burzik of medical technology company Kinetics Concept. — PTI
|
|
PSU bank staff on strike today
New Delhi, February 24 The union leaders decided to go ahead with the strike after their meeting with chief labour commissioner S.K. Mukopadhyay failed on Friday to resolve the issue. Some employees of small private banks are also jointing the PUS banks employees in the strike. Earlier, the union leaders had met the finance minister, who according to Gupta, had assured that he would take up their matter with the IBA. The unions are protesting the proposed merger between public sector banks and are pressing for an early settlement of the wage revision. Besides, they had been demanding another pension option for those who had opted for provident fund earlier.
|
|
Market Scan Last week, volatility in global markets and rising crude oil ensured prices that, the Sensex slipped by 766 points to 17,349 where as Nifty lost 3.62 per cent to 5,110. Small-and mid-cap stocks escaped the battering, as there have been comparatively less speculative positions in these counters. Information technology stocks also bucked the trend as rupee weakened to a five months low. Crude oil prices for the first time touched a three figure mark ($ 100 a barrel) giving rise to fear of higher commodity prices and hence inflation. The Union Budget 2008-09, to be presented by finance minister P. Chidambaram this Friday, (February 29, 2008), will be one event that the market will look forward to in the coming week. The market may see a pre-Budget rally. It may also see some upside from short covering ahead of the expiry of February 2008 derivatives contracts on February 28, 2008. Apart from the Budget, another trigger for the market is prospects of further softening of interest rates by the US Federal Reserve. The market is expecting a populist budget from the United Progressive Alliance (UPA) government this year, considering that parliamentary elections are due in 2009. Thus, the finance minister is likely to povide higher allocations to several social initiatives like rural upliftment, employment, education, agricultural growth and public health. If the Budget is market friendly, sentiments may turn positive in the immediate term at least. With a possibility of a recession in the US economy looming large and with no end to bad news regarding US sub-prime mortgage crisis, weak global market sentiments may also weight on the domestic bourses. HDFC
Bank-CBoP merger
In the otherwise morbid market, highlight of the week was news of the merger of HDFC Bank with Centurion Bank of Punjab (CBoP). The boards of HDFC Bank and CBoP met on Saturday to consider, in-principle, a merger between the two banks. The two boards have resolved to pursue the merger subject to satisfactory due diligence, a fair share-swap ratio and all the requisite statutory, regulatory and corporate approvals, including those from the RBI, stock exchanges, and the respective boards and shareholders of both banks. The boards of both banks will meet on Monday to consider the swap ratio after receipt of the valuation reports; and on February 28, 2008, to consider the draft scheme of amalgamation and any other matters as required. The HDFC Bank CBoP merger is expected to be a win-win for both banks in terms of both asset size and footprint, as the market gets competitive by the day, though in the short run, the stock price of both banks may react to swap ratio that may be decided by the boards. The biggest challenge for HDFC Bank would be integration of culture of the two banks. |
|
Tax Advice Q. I have retired from a PSU. I get from the company reimbursement of domiciliary medical expenses incurred by me on producing doctor's prescriptions, consultation fee and cashmemos from chemists. If me or my spouse are hospitalised, the company reimburses expenses incurred by me on hospitalisation. I wish to know if I have to pay any income tax on domiciliary and hospitalisation expenses incurred by me and reimbursed by the co. — Kaychand, via e-mail A. The expenses reimbursed to you with regard to the domiciliary medical expenses and hospitalisation expenses would not be liable to tax in the hands of a former employee as such expenses in my opinion are covered under the fringe benefit tax under Section 115WB(1) read with 115WB(2)(E) of the act. The employer would thus be liable to pay fringe benefit tax on such expenditure. Section 44AD
Q. My friend is a labour contractor at a private concern. His gross receipt is less than Rs 5,00,000 p.a. I would like to know that can Section 44AD applicable in this case. Can I file income tax return taking profit percentage more than 8 per cent of the gross receipt? Its urgent because I have to file his income tax return. — Inderjit Kapoor, via e-mail A.
Section 44AD of the act is applicable to a tax payer who is engaged in the business of civil construction or supply of labour for civil construction work. The tax payer may be an individual, HUF, association of person, firm, company or a co-operative society or any other person. The provisions of this section are applicable in case gross receipts from the aforesaid business do not exceed Rs 40 lakh. Therefore, in case your friend is engaged in the supply of labour for civil construction, he can take the benefit of the provisions of Section 44AD of the act and file income-tax return showing income at the rate of 8 per cent of the gross receipts. IT liability
Q. Please let me know my income tax liability; F.Y.2007-2008.
— Nipul Jain, via e-mail A. On the basis of figures given in the query, your total income works out at Rs 1,83,420/- (Rs. 1,98,720 - Rs.15,300). This working is based on the presumption that: (i) HRA is exempt from tax and 1/10th of the salary is required to be included in the salary. (ii) Transportation allowance and leave travel allowance are not taxable in view of the fact that relevant provisions of the Income-Tax Act, 1961, have been complied by you. (iii) Medical allowance being a fixed allowance is taxable. (iv) Conveyance reimbursement, communication expenses have been subjected to FBT in the hands of the employer. (v) The contribution to P.F. by employer is within limits prescribed by the act. Further, the same amount has been contributed by you for which rebate is allowable under Section 80C of the Act. (vi) Gratuity represents the amount paid by the company to an approved trust as its contribution. The total tax, including cess on Rs 1,83,420, would work out at Rs11,005. ITR form
Q. I am a pensioner (sr. citizen) filing income tax return in Form ITR-1. Now, I have become a partner in a firm with 50 per cent share. Please advise if I am to continue to file ITR in the same form i.e. ITR-1 also showing income from other source, if any, (from the firm) - the last date for which is June 30/July 31 or any other form. or Income-tax return of the firm as a whole is required to be filed - the last date for which is September 30. Also, whether separate PAN no. is required when the partners (both of us) are already having individual PAN nos. —T.S. Chhabra, Patiala A.
The answer to your queries is as under: (i) The relevant form for filing return of income for a partner of a firm would be Form ITR-3. (ii) The income-tax return of a firm, the accounts of which are subject to audit under Section 44AB of the act, is required to be filed by October 31 of the assessment year in respect of which the return is to be filed. (iii) There is no necessity to obtain another permanent account number if a person is already having such number and joins a firm as a partner. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| HOME PAGE | |
Punjab | Haryana | Jammu & Kashmir |
Himachal Pradesh | Regional Briefs |
Nation | Opinions | | Business | Sports | World | Mailbag | Chandigarh | Ludhiana | Delhi | | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail | |
Having relaxed emission norms for import of Harley Davidson motorcycles, India has informed the US that it cannot cut duties but will allow the American cult bike to be sold through dealers network.
The US Trade Department raised the demand for a duty cut on the Harley Davidson
bikes at the meeting of the India-US Trade Policy Forum here early this week,
but the Indian side did not agree to it, a high level official said.
Video
