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Improve M&A rules, US tells India
Dena Bank to write off
200-cr loan
Market Scan |
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| Tax Advice NRI can take LIC policies in India Q. I came to Canada in Oct. 2006 along with my family & got permanent resident status here. I have a couple of LIC policies back home which I had started in 1993 & 2003. My question is; 1. Is it ok to continue those policies & will I get the same benefits as I would have got if I stayed there? 2. Can I invest or purchase new policies now? If not, then what are the fields other than shares where I can invest back home? 3. Can my father invest there on my name? — Dinesh, Vancouver
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Improve M&A rules, US tells India
New Delhi, March 30 In a report submitted to the Congress, the US Trade Department has said it has taken up the issue with the Indian government to change the new regulation governing M&As under the amended Competition Act. "The United States is working with industry, foreign governments, and Indian companies and industry groups to persuade the government to promulgate regulations under the new law to correct the most problematic aspects of the M&A provisions," the National Trade Estimate Report 2008 has said. In September 2007, the Indian government introduced new merger control amendments to its Competition Act. The M&A provisions, once notified, will require foreign companies, including those with a limited access to Indian markets, to seek approvals from the Competition Commission for M&As made anywhere in the world, even outside India and the company's home country. Under the new law, a waiting period of 210 days would be imposed before a transaction could take place, even if it would have little or no impact on business within India. "If enacted, a broad swath of global mergers and acquisitions will be potentially caught up in this new law," the NTE report, prepared by the Office of US Trade Representative, said. The report said the country suffers from a slow bureaucracy "with little or no fear of government action and a clogged court system where cases can linger for years". Indian firms face few, if any, disincentives to engage in anti-competitive business practices, it said. The report said, while most sectors of the Indian economy are now partially open to foreign investment, the government continues to prohibit or severely restrict FDI in certain politically sensitive sectors, such as agriculture, retail trading, railways and real estate. But the Indian government's stringent and non-transparent regulations and procedures governing local shareholding inhibit inward investment and increase risk to new entrants. "Attempts by non-Indians to acquire 100 per cent ownership of a locally traded company, permissible in principle, face regulatory hurdles that render 100 per cent ownership unobtainable under current practice," the report said. — PTI
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Dena Bank to write off
200-cr loan
Mumbai, March 30 "Dena Bank will write off about Rs 200 crore worth agriculture loans," bank's CMD P.L. Gairola told reporters here. The government had announced a Rs 60,000 crore loan waiver package for farmers which has to be implemented by June end this year while the banks would be provided adequate liquidity in the next three years. He said the bank would set focus on agriculture, SME, retail and corporate segments in next fiscal which have been the key growth-drivers in the current fiscal. Yesterday, the bank launched Dena International Gold Debit card and Internet banking services. The gold card debit card will enable customers to withdraw up to Rs 1.5 lakh per day in the point of sales terminals across the world and up to Rs 50,000 from the ATMs, Gairola said.— PTI |
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Bear trend to persist
by J.C. Anand The Sensex last Friday rose by 355.73 points (2.2 per cent) and closed at 16,371.29 points. During the week, the Sensex rose by 9.2 per cent. This trend, however, is unlikely to continue during the next few weeks or rather months. How the stock market is likely to move would depend on three factors: (i) the state of US economy, (ii) whether the Indian economy is able to sustain its upward tempo in the face of high inflation rate, high international crude prices, tightened liquidity, flight of FIIs, lower exports and high input cost of industries and lower industrial growth, high interest rates? (iii) and annual corporate results announced by the companies for the fiscal year ended March 31, 2008. Each of these needs further analysis. State of US economy
The American economy is in real distress. On March 16, Bear Stearns, America’s 5th biggest investment bank had to be rescued by the Federal Reserve by advancing to it billions of dollars and the next day Bear Stearns’ shares were sold to JP Morgan at the rate of $ 2 per share which was quoting a year back at $ 170. The other investment banks, including Lehman Brothers, Merill Lynch and Morgan Stanley, are also facing crises. The Federal Reserve has also advanced emergency loans, both to commercial banks and investment companies @ 2.5 per cent interest. The analysts predict negative growth for the US economy for 6 months of the year. Federal Reserve’s National Interest Activity Index has also sent a signal that recession has probably begun in the US. When the America’s economy slows down and is in depression, it will affect the global economies and all stock markets, including India. So long as the economy does not settle down, the global markets will not do well. Indian economy’s growth prospects
The inflation rate is now at 13 month high of 6.68 per cent and our finance minister has said (in an interview in Singapore) that slowdown in the growth was inevitable. According to UN’s Economic and Social Commission for Asia and Pacific, India may be relatively insulated from slowing regional growth amid global turbulence, yet India’s growth will be lowered by less than 1 to 2 per cent. Our finance minister has also said that in order to check inflation, growth rate may have to be checked and lowered. Corporate results
Some of the top companies like Reliance Industries, State Bank of India and Larsen and Toubro may announce better results than in the previous year. But on the whole, annual results by majority of the companies are likely to be lower and rather disappointing. Of the first 10 companies that have deposited higher advance tax up to March 15, 2008, are: ONGC, SBI, SAIL, IOC, LIC, Reliance Industries, NTPC, BHEL, and Tata Steel. The markets are likely to suffer from a lot of volatility and with a few bull rallies, but, in general, bear trend will persist at least for the next few months. The FIIs will continue to move away from the emerging markets to the relatively safer European markets. Even last Friday the FIIs were sellers. Investors should keep low, wait and watch, till conditions improve. Shares to be kept on the watch list are: NTPC, Tata Chemicals and Tata Tea. Investment may also be made through mutual funds at an appropriate time. |
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NRI can take LIC policies in India
by S.C. Vasudeva Q. I came to Canada in Oct. 2006 along with my family & got permanent resident status here. I have a couple of LIC policies back home which I had started in 1993 & 2003. My question is; 1. Is it ok to continue those policies & will I get the same benefits as I would have got if I stayed there? 2. Can I invest or purchase new policies now? If not, then what are the fields other than shares where I can invest back home? 3. Can my father invest there on my name? — Dinesh, Vancouver A. (i) You can continue to pay premiums for the policies issued before your departure to Canada. You would be entitled to the same benefit of deduction against your total income of the amount paid as premium, under Section 80C of the Income-tax Act 1961 (the Act) subject to a maximum amount of Rs1 lakh. You can take up new policies and there is no problem in this regard. (ii) Your father can also take a policy in your name. If he does so, he will be entitled to a deduction of the premium paid under Section 80C of the Act subject to the maximum amount of Rs1 lakh. Tax liability for trusts Q. A trust which is duly registered by the Registrar as also by the Income-tax Commissioner under Section 10A and formed for good of general public has the following income: Financial Year 2005-06 Gross income from interest 25,000 Amount spent as per objects of the Trust 15,000 Balance 10,000 Financial Year 2006-07: Gross income from interest 25,000 Amount spent NIL Balance 25,000 Having regard to the fact that taxable limit is 1 lakh is it obligatory on the part of the Trust to file income-tax returns and also whether any income-tax liability is involved. — M.L. Gupta, Jalandhar A. In accordance with the provisions of Section 139(4A) of the Income-tax Act, 1961, a charitable or a religious trust, if its total income exceeds the maximum amount which is not chargeable to tax without giving effect to the provisions of Section 11 & 12 of the Act, is required to file the Income-tax return by the date specified by the Act. In the given case, no return was required to be filed for assessment years 2005-06 and 2006-07 as even the gross income was below taxable limit. ii) As stated hereinabove the gross income itself being less than the taxable limit, there may not be a tax liability even though the utilisation for the purpose of the trust is less than 85 per cent. It may be added that it is presumed that the registration has been granted to the trust under Section 12A of the Act and Section 10A of the Act has wrongly been mentioned in the query. Legal heirs & family pension
Q. In your advice to the query raised by Harnek Singh from Patiala in the Tribune dated 09.04.2007, you have clarified that the amount of family pension can be divided amongst major legal heirs of the deceased government employee. The Haryana government has recently modified the ex gratia scheme under which the family of the deceased government employee will receive the last pay drawn by the employee for certain years depending upon his age at the time of death, and thereafter the family will receive admissible family pension. Kindly advise if the pay so received by the wife can also be divided amongst major legal heirs (as per definition of the family) of the deceased employee. — L.R. Sharma, Panchkula A. The question whether ex gratia payment received after the death of an employee by the family, will be on some footing as family pension will have to be decided on the basis of the provisions of the applicable Act or notification regarding the definition of the word 'family'. In the absence of any clarification on the subject in the Act or the notification, such exgratia amount should belong to all the legal heirs of the deceased in accordance with the provisions of the Hindu Succession Act, 1956. |
REL bags contracts worth Rs 1,200 cr Havells to invest Rs 400 cr Airtel portal
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