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Fiscal 2008-09
Rly plans bullet train on Delhi-Amritsar route
New airport at Hyderabad starts operations
Market Update |
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| Tax Advice Interest on RD account taxable by S.C. Vasudeva Q. I have an RD account in the post office, which is to mature next month. The maturity value is Rs 30,000. I want to know whether this amount is taxable or not? If taxable, how can I save this tax? Can I invest in mutual fund? Subha Rathore, Chandigarh
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Fiscal 2008-09
New Delhi, March 23 "I think that (GDP growth of 8.5 per cent in 2008-09) should still hold," Council chairman C Rangarajan told PTI. Earlier, reacting to slowdown in industrial growth for the month of January, he had said the GDP growth next fiscal would depend on "whether trend in industrial production will reverse or not". What has happened to consumer durable sector can reverse itself if cyclical upturn begins, he had said. Growth in industrial production slipped to 8.7 per cent in April-January 2007-08, compared to 11.2 per cent in 2006-07. Industrial growth for January nosedived to 5.3 per cent compared to 11.6 per cent in the same month last year. Output of consumer durables registered a negative growth of 3.1 per cent in January, against positive 5.3 per cent growth in the same month last year. "Slowdown in industrial production could be cyclical and budget steps could boost industrial production," he had said. The council has, however, marginally scaled down its growth projections to 8.9 per cent for this fiscal from 9 per cent earlier, on account of slow expansion in manufacturing and energy generation. The Central Statistical Organisation, on the other hand, projected the economy to grow at 8.7 per cent this fiscal. Releasing the council report, Rangarajan had said the sub-prime mortgage crisis in the US and its effect on other European countries would have a bearing on India's growth. While the council expected the slowdown in the developed world to be modest and not dent India's economy much, it feared that the global situation could turn out to be recessionary due to geo-political factors and may significantly affect the domestic economy. Rangarajan had said "if recession turns deep in US followed by slowdown in Europe, it will have consequences for India." Last week, he said weak sentiments in the US could slow down capital flows into India, which is not a bad thing for the country. "To some extent, capital flows may come down a little bit... because the flow of funds from other countries going abroad may be affected by sentiments prevailing in the United States," he had said. PTI
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Rly plans bullet train on Delhi-Amritsar route
New Delhi, March 23 Currently, the 520-km long distance between Delhi and Amritsar is covered by a Shatabdi Express in five-and-a-half hours. The proposed high speed train or bullet train, is expected to run at 300 km per hour on a dedicated fast track. A consultant will be appointed to carry out the study on the proposed high speed corridor connecting Delhi with Amritsar, said a senior railway ministry official. The study will focus on technicalities, financial and operational viability of the project. There are many countries, including Japan, China, France and Germany, which have shown interest in being part of the high speed corridor project. Since the proposed Delhi-Amritsar bullet train is to pass through Panipat, Ambala, Chandigarh and Jalandhar, the cost of the pre-feasibility study would be shared by Punjab, Haryana and railway ministry. The pre-feasibility study will be followed by a more detailed study focusing on traffic pattern, funding plan, stakeholders' view, fare structure and other related issues before beginning the work, said the official. Besides Delhi-Amritsar route, the Railways have decided to conduct pre-feasibility studies for four more high-speed passenger routes. They are Pune-Mumbai-Ahmedabad, Hyderabad-Dornakal-Vijaywada-Chennai, Chennai-Bangalore-Coimbatore-Ernakulum and Howrah-Haldia. PTI
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New airport at Hyderabad starts operations
Hyderabad, March 23 A Lufthansa flight from Frankfurt LH 753 was scheduled to be the first flight marking the beginning of commercial operations at the new airport but two SpiceJet aircraft cornered the credit accidentally when they made some unscheduled arrival last night. The two SpiceJet flights SG 397 from Ahmedabad and SG 393 from Mumbai landed 40 minutes ahead of schedule at the Rajiv Gandhi International Airport. However, the ceremonial welcome as per the scheduled programme was given to the passengers of the Lufthansa flight only which touched down at 0030 hrs midnight, officials added. A number of passengers expressed great admiration for the new airport, saying it can rival any international airport in global standards. The emigration formalities at the old airport used to take more than two hours but at the new airport it was over in 30 minutes, said one of the passengers. Commencement of commercial operations at the airport, about 40 km from the heart of the city where the old one at Begumpet simultaneously shut down at midnight, came eight days after UPA chairperson Sonia Gandhi inaugurated it on March 14. The switchover due on March 16 had to be postponed following a request from some private airlines for more time besides "operational reasons" such as shifting of equipment.
PTI |
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Market Update
The Indian stock market, along with the world markets, are currently facing challenging times.
Worsening subprime crisis, slumping dollar, rising commodity prices, especially crude and food, and the slowdown of the US economy has led the indices to shed considerable losses and revert to the levels seen last year.
In the last couple of months sensex has lost close to 22 per cent, where as it is down by about 28 per cent from the peak in January this year. Last week, weak global markets and heavy selling by foreign institutional investors led the market to suffer losses for third straight week. Lack of buying at lower levels accentuated the fall. Volatility was high in the truncated week with only three trading sessions. The BSE Sensex lost close to 5 per cent to close at 14,995, where as Nifty closed at 4,574 with a loss of 171 points. This week volatility on the bourses may raise ahead of the expiry of March 2008 derivative contracts on Thursday, 27 March 2008. Investors are keenly awaiting the fourth quarter numbers though robust advance tax payments by the corporate point to strong numbers. From now we will go with the axiom that while sentiments affect performance over a short period of time, in the long term, it is the fundamentals, which finally gets it going. Hence, the weakness in the stock markets at present should be looked upon as an opportunity to invest in good quality stocks with strong fundamentals. Banking sector
The worst hit has been the banking sector where stocks have lost anywhere between 30 to 60 per cent in the past two months. The ongoing credit crises have impacted the banking sector across the world. The collapse of the sub-prime mortgage market wiped out almost $ 100 billon of value from the three biggest US banks in the past six months. In India, though the banks do not have direct exposure to sub-prime, they have overseas exposure in credit derivative products through companies and therefore have to bear the brunt of mark to market losses. ICICI Bank has reported marked-to-market losses of % 264 million in its overseas operations on account of its exposure to credit derivatives and investments at the end of January 2008. Even SBI and Bank of Baroda have some exposure and their stocks have plunged 30 per cent and 45 per cent respectively since Jan 2008. The Rs 60,000 crore debt relief package announced in the budget was also instrumental in adding fuel to the fire. We continue to remain bullish on banking as a sector, with HDFC Bank, Yes Bank and SBI being our preferred pick in this sector. Pharma & FMCG
Both, pharma and Fast Moving Consumer Goods (FMCG), the sectors are of defensive nature. This is because even in times of recession, people would continue to use daily products and medicines. With increasing income, growing consumerism and health awareness, the growth of these two sectors is expected to be robust. Also, given that the budget has been beneficial to these sectors, the outlook looks positive. In pharma space we like Ranbaxy, Sun Pharma in the large caps and Surya Pharma in the small cap, whereas in FMCG we are bullish on Nestle and ITC. |
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Tax Advice
Q. I have an RD account in the post office, which is to mature next month. The maturity value is Rs 30,000. I want to know whether this amount is taxable or not? If taxable, how can I save this tax? Can I invest in mutual fund? A. The amount of recurring deposit is not taxable. However, the amount of interest earned on such deposit would be taxable. You will have to include the amount of interest earned on such recurring deposit in your other income. The amount of interest on such recurring deposit can be deposited in a notified mutual fund for which you can claim a deduction under Section 80C of the act within the over all limit.
Rebate under Section 80U
Q. I am a Punjab govt retiree and a senior citizen residing in Punjab. I was recommended a hearing aid after the tests at
PGI, Chandigarh, but neither I requested, nor the PGI issued me the certificate showing the percentage of hearing impairment. Now, I read in your column that a person having 40% or more hearing impairment is entitled to the deduction of Rs 50,000 from his income (for income tax) under Section 80U. Please let me know which is the medical authority for the issuance of such certificate. A. The medical authority as defined by Section 2 of Person with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, any hospital or any institution specified for the purposes of the act by notification by the appropriate government. The appropriate government has been defined as under: i) In relation to the central government or any establishment wholly or substantially financed by that government, or a cantonment board constituted under the Cantonment Act, 1924 (2 of 1924), the central government; ii) In relation to a state government or any establishment wholly or substantially financed by that government, or any local authority, other than a cantonment board, the state government; iii) In respect of the central co-ordination committee and the central executive committee, the central government; iv) In respect of the state co-ordination committee and the state executive committee, the state government; It would thus be observed that any medical authority, which is wholly or substantially financed by the central government or the state government, would get covered as medical authority under the above said act. You can therefore obtain the certificate that is required to be filed along with the return from the medical authority so covered. Deduction on HRA
Q. My annual salary is Rs 2,30,000. I am paying rent of Rs 2,000 pm in Kurukshetra. My employer is not giving me house rent allowance from April to December and now from January onwards they are giving us HRA @ 7.5%. Shall I claim HRA deduction under 80GG for 12 months? Is this amount deducted from gross salary or it is included as deduction under 80C. A. A deduction under Section 80GG of the act is allowed if the following conditions are satisfied: (i) The rent paid is in excess of 10% of the total income before allowing any deduction under Section 80GG of the act. (ii) The rent paid is in respect of accommodation occupied for the purposes of residence of the assessee. (iii) The deduction can be claimed only if no residential accommodation is owned by the assessee or by his spouse or minor child or by Hindu Undivided Family of which he is a member. (iv) The employee, who is entitled to house rent allowance from employer, will not be allowed deduction under the aforesaid section. In the given case the rent paid being Rs 17,250 for nine months, you would be entitled to a deduction of Rs 750 only (Rs 18,000-17,250) under Section 80GG of the act. The deduction in respect of house rent allowance is allowable in case the actual rent paid by an assessee exceeds 1/10 of the amount of salary for the relevant period. The deduction for HRA would be limited to Rs. 250 (Rs 6000 - Rs 5750) for three months. This would represent the amount of rent paid minus 10% of Rs 5,750 being salary for three months. Payment of tax
Q. During the financial year 2007-2008, I had worked in company A from April 2007 to August 2007 and in company B from September 2007 till date. The earnings, savings & tax deducted are mentioned below: Earnings Savings Tax Deducted Company A Rs 1,37,804 Rs 47,872 Nil Company B Rs 1,30,138 Rs 52,993 Rs 1,300 Total Rs 2,67,942 Rs 1,00,865 Rs 1,300 After calculating the total tax on my income (salaried individual in my case) and after deducting the savings (1 lakh) following figures are arrived. Total tax Rs 7,816 Tax already paid: Rs 1,300 Balance tax to be paid Rs 6,516 My queries are: (a) How to deposit the balance tax? Which form/challan is to be used? (b) Is the balance tax to be deposited by me is advance tax or self assessment tax? (c) What is the last date for the payment of this balance tax? (d) If I have to use challan 280 then please guide me how to fill the various fields mentioned below? i) Tax applicable (major head) 0020 or 0021? ii) Type of payment (minor head) 100 or 300 or 400 or 102 or 106 or 107? A. The last date for the payment of tax in your case should have been made on 15th September, 15th December and 15th March. Now, you have an option to deposit the entire tax by 31st March along with interest under Section 234B of the act. This would be treated as advance tax. The relevant challan to be used would be 280. The relevant columns would be major head 0021 and minor head 100. |
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New Delhi, March 23
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