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15 pc export duty on iron ore likely
Premji, Murthy among top outsourcing billionaires
Tax Advice |
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Market Update
3G Services
Koutons Retail in expansion mode
Air India hikes fares
Organised Retail
India Inc seeks review of interest rates
ADAG looks for presence in Gulf
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15 pc export duty on iron ore likely
New Delhi, June 1 The decision was taken at the meeting of the Committee of Secretaries (CoS) on May 30, a highly placed source said. The CoS has also decided to roll back export duty on steel, barring primary and semi-finished products, in return for the Rs 4,000 per tonne reduction in prices announced by them early last month. At present, an export duty at a specific rate of Rs 300 per tonne is imposed on iron ore with 62 per cent of higher iron content and Rs 50 per tonne on lower grade ore. Under the new dispensation, the export duty would be based on the value of the product shipped abroad. Decisions on both roll back of export duty on steel and imposition of the same on its raw material are expected to be announced in the next few days. "The Department of Revenue will notify the decision once the CoS minutes are issued," an official said. Steelmakers and iron ore producers have been at loggerheads over export of the raw material. Steelmakers have been demanding restrictions on raw material export while iron ore producers, helped by a section in the government, had contended that the ore meant for exports was of no use to Indian steelmakers. However, the claim was contested by the steel industry. "What is good for China is good for India as well," vice-chairman and managing director of JSW Steel Sajjan Jindal said. The domestic prices of steel have seen an increase since 2006-07. Between January and April 2008, price of pig iron went up by more than 70 per cent, construction steel like TMT and wire rods by more than 36 per cent and HR coils by more than 40 per cent. Rise in raw material prices, strong demand in international and domestic market and increase in global steel prices are some of the reasons cited by the industry for increase in the domestic prices, which have been further impacted by the demand-supply mismatch.
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Premji, Murthy among top outsourcing billionaires
New York, June 1 Wipro chairman Azim Premji, Infosys' N R Narayana Murthy, Nandan Nilekani and Senapathy Gopalakrishnan and HCL Technologies' Shiv Nadar are among the world's top outsourcing billionaires named by Forbes magazine. The list also features two from Taiwan Terry Gou, chairman of the world's largest contract manufacturer Hai, and Barry Lam of Quanta Computer. In March, Forbes had published 'The World's Billionaires' list, which was topped by legendary investor Warren Buffett. Together, the five Indian outsourcing billionaires are estimated to be worth $20.7 billion, with Azim Premji's wealth pegged at $12.7 billion. In the Forbes list of 1,125 billionaires, Azim Premji was ranked 60th, while Shiv Nadar with a fortune worth $3.9 billion ranked 277. — PTI
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NRIs can maintain LIC policy in India
by S.C. Vasudeva Q. My daughter is a doctor. She got married in Jan 05 and she along with her husband went to the UK to appear for PLAB. In India she was having a PAN and filing regular returns. Before going to the UK she opened a savings bank account with HSBC Delhi and transferred nearly Rs 5 lakh from her regular bank account at Hisar. She cleared the PLAB and was lucky enough to get an appointment. She came to India in Nov-Dec 05, got visa, went back to the UK in Jan 06 & joined the hospital there. Since then she has been able to get an appointment. She visited India in Nov 06 for a few days i.e. nearly 15-16 days and closed her account with HSBC Delhi and transferred the amount to her regular bank account at Hisar. Since Nov 06 she has not visited India and paying the taxes in the UK as per their regulation. She has not transferred any amount from UK to India. Before going to UK, she was having two LIC policies. I am paying the premium from her bank account. At present, there is nearly Rs 2 lakh in her savings bank account and 2 lakh in fixed deposit. My questions are: 1. What is status of her saving and fixed deposit account with bank. Can she maintain it or not. 2. Can she pay her LIC premium from this saving bank account. 3. As these LIC Policies are money back, what about the survival benefit to be received from LIC. She is not likely to come back in near future. — Dr N.C. Bansal A. The answers to your queries are as under: (i) She can maintain her savings and fixed deposit account with the bank. Since she is a nonresident, these accounts should be designated as Non-Resident Ordinary (NRO) Account by the bank. (ii) She can pay LIC premium from her NRO savings bank account. (iii) The money received under money back policies will have to be deposited in her NRO Account. Tax liability Q. I am working in a Public Sector Undertaking and during the financial year (2007-08), my taxable income from salary will be approximately Rs 3,10,000. Besides this, I will have an income from agricultural land amounting approximately to Rs 1,20,000. Please calculate the total income tax payable by me during 2007-2008 (Assessment Year 2008-09)? — Baljeet Singh Sidhu, Faridkot A. The tax payable on Rs 3,10,000 after taking into account the agricultural income would work out at Rs 59,740 without interest under Section 234B and Section 234C of the Income-tax Act 1961 (the Act). HRA deduction Q. I am a senior lecturer and my annual salary is Rs2,50,000. I worked in two organisations. For 1st employer I have to pay tax as advance tax. Which form I have to use. I am residing in Karnal at a rent of Rs 60,000 annually. Second employer is giving me HRA of Rs 750 per month for six months only. What is my HRA deduction under 80GG. — Dolly Gupta A. The facts given in the query indicate that your are entitled to a house rent allowance of Rs 750 per month but the same was paid for a period of six months only. It may be possible for you to claim the deduction under Section 80GG of the Act for a period of six months only. The deduction allowable in your case would work out as under: Rent paid for six months 30,000 Less: 10% of 1,25,000 12,500
17,500 Rent paid in excess of 10% of total income (for six months) 17,500 25% of total income for six months (1,25,000 / 4) 31,250 Ceiling amount of Rs 2,000 per month (2,000 X 6) 12,000 Least of the above is Rs12,000, which may be allowable as a deduction under Section 80GG of the Act. Gift and tax Q. My father-in-law has gifted Rs 3 lakh to my daughter (minor) out of his retirement benefits for investment in Kisan Vikas Patras in the name of my daughter. KVPs were taken from the post offices. Being minor, I was made the guardian till she becomes major. As the maturity period is more than 8 years when the amount becomes double is Rs 6 lakh (3 lac interest accrued). I am a housewife and have no other source of income. Can I distribute the interest accrued during each financial year in the Income-tax return till its maturity? If the interest income is much below the exempt limit for ladies during the relevant financial year, is it essential to file Income-tax return in the Income-tax Department or may be kept ready for reference and record? — Rajni Goel, Patiala A. The accrued amount of interest on Kissan Vikas Patras gifted by your father-in-law to his grand daughter (i.e. your daughter) has to be included in your income in accordance with the provisions of the Act. If your total income, including the accrued interest on Kissan Vikas Patras so gifted to your daughter, is below the taxable limit applicable to you, you need not file the Income-tax return. |
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Soaring inflation worrisome
by Lalit Batra Heavy unwinding in derivatives positions coupled with inflation at a 45-month high dragged the markets to close in red for second consecutive week. Last week, Sensex lost 234 points to close at 16,415 and Nifty 1.5 per cent to close at 4,870. Foreign institutional investors (FIIs) sold stocks worth Rs 2,204 crore in the first three trading sessions of the last week which accentuated the downfall. FIIs in the current calendar year have sold equities worth $ 3 billion, out of which $ 1 billion have been sold in May. An imminent hike in domestic retail fuel prices due to soaring crude oil prices also weighed on the market last week. Going forward, the market is slated to track global equities in the absence of major domestic trigger. The spiralling inflation has been a major cause of concern for Indian equities market. Forthcoming inflation data will be closely watched as it remains a major worry and hindrance for the domestic growth. With parliamentary elections scheduled next year (May 2009), the government may leave no stone unturned in its attempt to tame inflation. This is bad news for commodity shares. Larsen & Toubro Incorporated in 1938 by two engineering professionals, L&T in India’s largest engineering, construction and manufacturing company. It is one of the largest and most respected companies in India’s private sector with an excellent track record of successful project implementation. The company is a direct play on the booming Indian infrastructure sector. It also has additional interests in other sectors such as information technology (IT), financial services, real estate etc through its various subsidiaries. Larsen & Toubro (L&T) being the largest engineering and construction (E&C) company in India, is a direct beneficiary of the strong domestic infrastructure boom and industrial capital expenditure (capex). Strong infrastructure spend is set to ensure strong growth momentum in the company’s order inflows. There lies on immense opportunity in the new verticals in which the company is entering namely ship building, defence, railways, thermal and
nuclear power. Given the company’s excellent track record, we are quite confident of its success. Sound execution track record, bulging order book, and strong performance of subsidiaries reinforces faith in L&T. The current correction in the stock price should be used as an opportunity to buy the stock. L&T has been consistently growing at high rates, which is extremely commendable for a company of its size. Infrastructure boom and strong buoyancy in industrial capex is set to benefit L&T going forward. Investors may buy the stock at current levels with a medium-term perspective. |
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TRAI, DoT differences widen
New Delhi, June 1 The DoT is in favour of allowing foreign players in the 3G segment, while TRAI says it should be limited to existing players as permitting foreign players would negatively affect the affordability of services. A section in the DoT has also expressed concern over TRAI's interference on policy issues and said the regulator's powers are limited to giving recommendations and the policy has to be framed by the government. TRAI had earlier written a letter to the finance secretary cautioning the ministry over permitting foreign players in 3G services and also to the Telecom Secretary, saying there would be enough competition among the existing mobile operators. Asked whether the issue has been referred to the eGoM, sources said DoT has not taken a final view but a decision is likely soon. Communication and IT minister A Raja is understood to have discussed the matter with Prime Minister Manmohan Singh and finance minister P. Chidambaram, sources said, but the outcome of the meetings was not known. Raja had recently said foreign players will be allowed to offer 3G services in India and modalities of allocating spectrum through auction for 3G services would be worked out soon. — PTI
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Koutons Retail in expansion mode
Ludhiana, June 1 Having cut middlemen and directly supplying readymade garments to retailers, the company feels that its strategy of offering heavy discounts throughout the year would held it emerge stronger amid competition intensified with the entry of multiple brands in this industry. Its expansion plans include a major focus on family stores, one of which was opened in Ludhiana yesterday. "We are generating around Rs 125 crore from Punjab and expect a 70 per cent rise in turnover this year. To tap this market, we would increase the number of stores from the existing 70 to 125 here and open at least 10 more family stores of the 100 that we have planned across the country this year," said Balvinder Singh Ahluwalia, president, Koutons Retail India, while talking to The Tribune. He said the company would maintain its focus on the existing customer segment of middle income group as it was the largest segment with immense growth potential. On changing retail scenario, he said: "Pricing is a critical factor but in the coming days, consumers would seek better quality along with."
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Air India hikes fares
New Delhi, June 1 The decision was taken after ATF prices reported an increase of 18 per cent today as compared to the prices in May 2008. Air India officials said it would be increasing its fares by Rs 300 on all flights up to 750 km and Rs 550 after that. The prices would come in force from June 3, the airlines officials said, adding that with the present hike, the fuel surcharge on short haul flights would go up to Rs 2,250 and on long haul flights it would be Rs 2,900 from Rs 2,350. The aviation public sector undertaking had not increased its fares during the last fare hike in May last month when other major airlines had increased their prices by Rs 150 (short haul) and Rs 300 for long haul flights. When contacted, a Jet Airways spokesperson said the company was studying the impact of the present ATF hike and would come up with revised fuel surcharge soon.
— PTI |
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Traders’ body rejects ICRIER report
New Delhi, June 1 The Confederation of All India Traders Associations (CAIT) has announced to set up an expert group and would carry out a study on the impact of big corporate retails on small neighbourhood stores. "To carry out this study we will hire a research agency within a week to prepare an impartial and transparent report," CAIT secretary-general Praveen Khandelwal told reporters here. Commenting on the ICRIER report, he said it was biased and has overlooked the ground realities of Indian retail trade. "It has been designed in a manner to draw a rosy picture and would facilitate further entry and continuance of organised retail." He claimed that small retailers have been badly hit by big players, and their profit margins have come down to below 5 per cent from 8-10 per cent few years back, said the traders' body. — PTI
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India Inc seeks review of interest rates
New Delhi, June 1 "The impact of hardening interest rate has been severe on industrial production, especially on the consumer durable sector," Confederation of Indian Industry (CII) has said.
Ficci also expressed concern at the "significant downward revision" of growth in the manufacturing sector. The chamber suggested a review of interest rates to encourage the growth of the sector. RBI has tightened money supply by raising mandatory deposit requirement for banks to control inflation. This has been hitting the sector hard through rise in interest rates.
Manufacturing growth declined to 8.8 per cent last fiscal against 12 per cent in 2006-07, according to official data released recently. The rate was put at 9.4 per cent in advance estimates of the Central Statistical Organisation. The overall economic expansion rate was revised upward to 9 per cent from 8.7 per cent estimated
earlier. Crisil principal economist D.K. Joshi said, "I think the GDP figures are in line with expectations, but the only surprise is the agriculture sector which had nearly doubled".
Joshi projected GDP growth to be 8.1 per cent for 2008-09, below 8.5 per cent as expected by finance minister P Chidambaram.
— PTI |
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ADAG looks for presence in Gulf
Dubai, June 1 The group is looking at opportunities in sectors such as telecom, power, film entertainment and financial services, according to group managing director Gautam Doshi. "We are looking for opportunities. A general interest is there in the Gulf area," he was quoted as saying in Gulf News. Reliance Capital, the group's financial services company, has applied for a licence to operate from the Dubai International Finance Centre. The company hopes to tap the large Indian client base in the UAE for selling products like mutual funds and insurance policies. Doshi said Reliance is also keen to develop power projects in the region. He said the group is willing to join hands with Arab investors and use Gulf money in its overseas acquisitions. "We can look at Gulf money whether it is equity, debt or a combination of both, or some other form in which we do a partnership," he said.
— PTI |
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The West's drive to save money has helped seven individuals in the world, including five Indians, make their billions by setting up shop to meet outsourcing needs.
Wipro chairman Azim Premji, Infosys' N R Narayana Murthy, Nandan Nilekani and Senapathy Gopalakrishnan and HCL Technologies' Shiv Nadar are among the world's top outsourcing billionaires named by Forbes magazine.
