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India assures Canada on BlackBerry issue
Consumer Finance
Ratan Tata among biggest brains in biz: US magazine
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Ban on gold, sugar futures sought
Rupee loss is exporters’ gain
IEG expects inflation to cool at 6.4 pc
President’s nod to Finance Bill
Vodafone examining £20-b MTN bid: Report
Tax Advice
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India assures Canada on BlackBerry issue
New Delhi, May 11 The assurance has come from the ministry of external affairs (MEA) in a letter, which says: “It would be advisable for RIM to recognise that the Department of Telecommunications (DoT) is trying to be helpful in the case and to work together with them. It may not help the RIM cause to make allegations about those who are trying to help them". In the letter written to Canadian High Commissioner David M Malone on April 25 last, the MEA said all efforts were being made by India to see that issues of concern vis-a-vis BlackBerry services were resolved in a "mutually satisfactory” manner through discussions with the company. Malone had doubt on whether those involved on the Indian side are actually empowered to settle the matter. The issue has been threatening to balloon into a diplomatic row as the security agencies have expressed concern that the services provided by BlackBerry were a threat to national security. Following the letter from Malon, DoT secretary Siddhartha Behura had apprised foreign secretary Shiv Shankar Menon about the talks between the DoT and RIM officials and had assured Canada that commercial interests of the company would be kept in mind while taking any decision. Security agencies have been insisting that the company must place one of its server, through which the information is routed to BlackBerry handsets in India. The recent meetings between the DoT, RIM and Canadian authorities have led to heated exchange of words over sharing of public key (code of customer’s handset) and private key (code with the RIM). The two codes need to be in place to ensure transaction on a BlackBerry set. The DoT said unless the required monitoring system was in place to the satisfaction of the security agencies of the country and the master key and algorithm are deposited by the licensor (DoT), no new connection for BlackBerry should be provided. Telecom secretary in his letter had also said: "We are fully aware of the sensitivity and confidentiality of our conversation with RIM and would like to assure them that we respect their commercial interest and would do nothing to jeopardise the same". As per available figure there are about four lakh BlackBerry subscribers in India and the services are being offered by Bharti Airtel, Vodafone Essar, Reliance Communications and BPL. Tata Teleservices wanted to start offering the service but was stopped from it until the issue was resolved to the satisfaction of security agencies. The matter was also discussed by DoT secretary with home secretary and it was felt that security concerns have to be jointly addressed for finding solution. The issue came to the fore after the directorate of revenue intelligence expressed inability to intercept any conversation between hawala dealers and militant groups that use BlackBerry set. |
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Consumer Finance
New Delhi, May 11 The two partners are believed to have decided on giving Sandeep Soni, who heads Citibank’s new strategic initiatives for alliance and partnerships, the charge of the new venture. The companies are expected to announce a 50:50 joint venture shortly, for which the basic understanding has been reached. It would start with focus on more than 38 lakh customers of Reliance Retail loyalty programme ‘Reliance One’. The proposed entity is expected to mainly deal in loans and credit cards for the country’s leading retail chain. Reliance Retail has over 1,000 stores across the nation. A formal announcement is expected to be made this month, sources said. When contacted Reliance Retail officials declined to comment. “Our joint venture with Reliance would come during the course of time,” CitiIndia country business manager (global consumer group) P. S Jayakumar had earlier said. He also stated that the company would be introducing a couple of new co-branded cards during the year. Citibank had recently tied-up with Delhi Metro Rail Corporation to launch a co-branded credit card for users of the transport system. Consumer finance, which includes loans and credit cards, is one of the fastest growing segments in the financial services sector. CitiIndia alone has been witnessing a growth of 25-30 per cent in the business. Reliance Retail has been aggressively pursuing joint ventures to strengthen its presence in India.
— PTI |
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Ratan Tata among biggest brains in biz: US magazine
New York, May 11 The list of ‘73 biggest brains in business’, compiled by business publication Conde Nast Portfolio, features Tata for his $2,500 car - Nano, along with the likes of media mogul Rupert Murdoch and chief executive of investment bank Goldman Sachs Lloyd Blankfein. The list published in the latest issue of the magazine is further classified into five groups - game changers, connectors, tastemakers, rebels and upstarts. About Tata, the magazine said he believed the future of the auto industry rests in the hands of people who do not yet drive. Tata Group, which recently snapped up British luxury brands Jaguar and Land Rover, has unveiled Tata Nano - world’s cheapest car. “The model won’t be sold in the US but has the potential to radically alter the market for manufacturers here. Tata-inspired followers are already revving up their engines: Nissan-Renault partnering with India’s Bajaj Auto to develop a car by 2010 that will sell for less than $3,000. “But except for Ford India, US companies can’t produce a model this cheaply. Which means they risk being run over,” the magazine noted. Last week, Time magazine had named Ratan Tata as one of the 100 most influential people in the world. The magazine talked to CEOs, economists and power players to prepare the list. “The kind of brilliance were looking at is not measured in IQ. It manifests itself in work that is changing entire industries and influencing others,” the report added.
— PTI |
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Ban on gold, sugar futures sought
New Delhi, May 11 The All India Sarafa Association, an umbrella body for bullion traders, has written to the Prime Minister and finance minister seeking a ban in futures trading of gold and silver. "Sudden rise and fall in the prices of gold and silver, many times in a day, has created instability in the minds of consumers and adversely affected the bullion trade,” the traders’ body president Sheel Chand Jain said here. Echoing his view, Delhi Grain Merchant Association president Om Prakash Jain said a few companies controlled the price movement in forward trading and they are responsible for the artificial rise or decline in commodity prices including that of sugar. Commodity market analysts, however, are of the view that a ban in these commodities would not help control volatility as prices are determined by fundamentals and international factors like forex movement and crude oil prices. "Speculation is not the only reason for the price movement of the sweetener. It can affect only up to 5 per cent of the movement, not beyond that. The price movement mainly depends on demand and supply situation in the country," Karvy Comtrade’s G Harish said. However, another industry association, All India Gems and Jewellery Trade Federation's Chairman Ashok Minawala said that the volatility might not be avoided by a ban on futures trading.
— PTI |
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Rupee loss is exporters’ gain
New Delhi, May 11 The Indian currency, which had made strong gains in excess of 10 per cent in 2007-08, started losing ground since April 30 due to increased demand for US dollar in importing crude oil at the skyrocketing price of over $120 a barrel. The rupee has lost value against the greenback by about 3 per cent in the last 10 days, reaching a level of 41.8, resulting into commensurate increase in the realisations for exporters. “Our competitiveness has gone up by 3-4 per cent and the traditional exporting sectors like textile, handicrafts and leather would stand to gain more,” Federation of Indian Export Organisations president Ganesh Gupta said. With the weak rupee resulting into improved remittances, export target of $200 billion, that looked ambitious till about a few weeks back, would become achievable, Gupta stated. India missed its export target by $5 billion closing the previous fiscal with $155 billion.
— PTI |
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IEG expects inflation to cool at 6.4 pc
New Delhi, May 11 In its latest issue of monthly journal Monthly Monitor, the Institute of Economic Growth (IEG) also predicted lending rates to remain stable despite tightening of money supply by the RBI. Rise in cost of capital along with inflation and decline in demand would lead to moderation in industrial production growth to around 8 per cent this fiscal against nearly 9 per cent till February in 2007-08, the journal said. “We expect inflationary pressure (wholesale prices index) to cool down and would be below 7 per cent in the coming months,” the IEG said. The institute said the spurt in inflation has been due to supply side factors, largely contributed by rising prices of commodities like edible oil, iron and steel. But the situation would soon cool off to some extent due to fiscal measures taken by the government. Also, the recent decision of steel companies to reduce their prices coupled with good rabi crop forecast is likely to start the downward trend in inflation. However, it added, the reduction may not be much due to consistence increase in crude oil prices, which touched $123.53 per barrel.
— PTI |
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President’s nod to Finance Bill
New Delhi, May 11 As per the amendment, service tax is required to be paid even if the consideration for the taxable services provided is not actually received. In addition, service tax on seven new categories of services and amendments to existing taxable services will be effective from May 16. The seven new categories are services provided by stock exchanges, commodity exchanges, processing and clearing houses and management of unit-linked insurance plans. Others include services provided in relation to information technology software for use in the course of business, services provided in relation to supply of tangible goods without transferring right of possession and services provided in relation to Internet telecommunication. Amendments in the Export of Services Rules, 2005, and the Taxation of Services (provided from outside India and received in India) will also come into effect from May 16. The ministry also notified service tax refunds to exporters on three additional services, including purchase or sale of foreign currency, purchase or sale of foreign currency under foreign exchange broking services and services related to supply of tangible goods for use. These provisions will come into effect from May 16.
— UNI |
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Vodafone examining £20-b MTN bid: Report
London, May 11 The Sunday Times today reported that Vodafone is examining a “£20 billion bid for MTN...” "Chief Executive Arun Sarin has instructed his in-house acquisition team, led by former UBS banker Warren Finegold, to examine options to buy MTN. The African company was in effect put into play last week after revealing talks to sell a majority stake to Bharti Airtel of India,” the newspaper said in an article published in its online edition. Vodafone officials could not be contacted for comments. Last week, Sunil Mittal-led Bharti Airtel and MTN said they had initiated “exploratory discussions” for a possible stake acquisition in the South African mobile player. The Sunday Telegraph also reported that Vodafone is contemplating a bid for MTN and that the move could cost as much as £19 billion. Noting that the deal would be India-born Sarin’s largest acquisition as chief executive, The Sunday Times report said it would greatly increase the firm’s exposure to emerging markets. The Sunday Telegraph said if Sarin decided to pursue an offer for MTN’s domestic and international business, the Vodafone’s chief executive would pick up assets in more than 20 emerging markets.
— PTI |
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No such plan, says company
Vodafone Group has no intention of pursuing a bid for the South African company MTN, a spokesman said on Sunday. Reports in Britain’s The Sunday Telegraph and The Sunday Times said Vodafone was considering making a bid for part or all of MTN, which could cost around £20 billion.
The papers said Vodafone’s interest had been triggered by India’s top mobile operator Bharti Airtel which said last week it was in exploratory talks with MTN that may or may not lead to a deal.
— Reuters |
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Tax Advice
Q. For rebate under Section 80(E) on account of education loans as per direct taxes ready reconer, Rs 40,000 per year up to period of eight years is permissible. Most of the chartered accountants advise that the rebate is permissible on interest payable/paid on such loan taken from the bank.
Kindly solicit which of these two is correct and applicable for the year 2007-08 (A.Y. 2008-09). — B.D. Kalara, Paonta Sahib A.
The deduction under Section 80E of the Income-tax Act, 1961, (the Act) is allowable in respect of interest on loan taken by a person from any financial institution or any charitable institution for the purposes of pursuing his higher education or for higher education of his relative. The deduction in respect of loan taken for higher education was allowable earlier. However, with effect from assessment year 2006-07, the provisions have been changed so as to provide for deduction of interest on such loans. Tax liability on shares
Q. I am a govt pensioner. I have some interest income. I am a senior citizen and filing my income tax returns regularly. I am also holding some shares as: - I was allotted 100 shares of RPPL/RPEL at the rate of Rs10 each, through public issue in 1991-92. In March 1995, the company was merged with Reliance Industries Ltd. and against my 100 shares, I was allotted 25 shares of RIL. In Nov 1997, RIL allotted me 25 shares as bonus shares. Thus, I was holding 50 shares of RIL. In 2005, in addition to 50 shares of RIL, I was allotted 50 shares each of four companies owned by Anil Dhirubahai Ambani Group i.e. (1) Reliance Communications Ventures Ltd., (2) Reliance Natural Resources Ltd., (3) Reliance Capital Ventures Ltd., (4) Reliance Energy Ventures. In July 2006, amalgamation of above companies took place. As a result, against 50 shares of RCVL, I was allotted two shares of Reliance Capital and against 50 shares of REVL, I was allotted three shares of Reliance Energy. About 3-4 months back, the company asked the shareholders, who were holding odd lots (i.e. less than 50) shares, to sell these shares to KARVY in physical form at the market price. And after dematerialising these shares, KARVY will sell these shares in the market within five days. So, I sent my two shares of RCL and three shares of REL to KARVY. They remitted me Rs 4,578 for two shares and Rs 5,478.30 for three shares of REL. Suppose my other income for 2007-08 financial year is Rs 1,95,000, which is exempted. What will be my tax liability on the amount of Rs 10,056.30 received against these five shares. — Gurbachan Singh, Moga A.
It is most likely that such shares have been sold through the stock brokers and the transactions have been subjected to the payment of Securities Transaction Tax. This aspect can be checked up with the various documents sent to you for the sale of such odd-lots shares. If my presumption is correct, the capital gain on the sale of such odd-lots shares would be exempt from tax. In case my presumption is not correct, the tax liability on the amount of Rs.10,056.30 will have to be computed after taking into consideration the cost of the shares which were allotted to you in 2005. Such a cost would be indexed which will be deducted from the sale consideration to arrive at the amount of capital gain. Such capital gain would be taxable at the rate of 10 per cent plus applicable education cess. Kisan vikas patra
Q. A kisan vikas patra of Rs 1 lakh was purchased on May 1, 2003. The date of maturity is December 1, 2011, i.e. after 8 years and 7 months. The amount of interest accrued on it in financial year 2006-07 and then in the next financial year 2007-08. Two different sources have calculated it differently, and, hence, the problem. — R.S. Bhatia, Faridabad A. On the basis of the table notified by the government for the purposes of interest payable on the maturity of kisan vikas patra, the interest for the financial year 2006-07 and financial year 2007-08 should work out at Rs.10,042 and Rs 12,300 respectively. Gold under VDS
Q. My late father gifted my sister and me gold declared under VDS. She is a U.K. national and wants to take it with her. Can I also take mine when I go to the US. Please advice on the rules and procedures. — Dr Rabinder Singh Batra A. The issue raised in the query requires to be checked up with a consultant dealing with customs law. You are requested to get his opinion on the subject. IT return
Q. I file my income tax return each year. I have my P.A.N. My sources of income are pension, interest from bank and post office and lease amount from my agriculture land. I am a senior citizen male. Which form shall I need to file my return for financial year 1907-08? — Amrit Lal, Bathinda A.
The applicable form for assessment year 2008-09 would be ITR-2. |
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