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UP does a U-turn
‘RPL set to create world record’
Gold surges by Rs 290
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Aviation Notes
Investor Guidance
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UP does a U-turn
Lucknow, June 7 Expressing dissatisfaction with RBI's action on SIFCL, including a ban on the company from accepting fresh deposits, the state government had said the central bank had not even "prohibited SIFCL from alienating its assets. "In the absence of such a prohibition, depositors will have serious apprehension about the possible alienation of the assets, jeorpardising the security of their deposits," chief secretary Atul Kumar Gupta had written on June 4. The Uttar Pradesh government's decision to rescind comes on the heels of a meeting between Samajwadi Party chief Mulayam Singh Yadav and Chief Minister Mayawati at her residence here. The Mayawati-Mulayam meeting taking place after a gap of 13 years triggered speculation ahead of general elections. In the fresh letter dated June 6, the government said: "On reconsideration of the matter, the state government is of the view that RBI is the competent authority to take a final decision in the matter..." "In view of the above, my earlier letter... be treated as withdrawn. The bank may take all further necessary actions as it may deem fit and proper," Gupta wrote. The state government had earlier also feared that a law and order problem may arise from the ban. While Sahara secured a stay on the RBI order from the Allahabad High Court, the central bank has moved the Supreme Court challenging the high court injunction. Sahara India Financial Corporation, a residuary non-banking financial company, has deposits of over Rs 18,000 crore and 1,508 service centres. RBI had banned the company from taking fresh deposits citing violation of norms. The RBI had earlier directed the company to discontinue deposit-taking operations from March 31,
2010.— PTI |
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‘RPL set to create world record’
Mumbai, June 7 According to RIL sources, Ambani told the company's shareholders that the refinery will be completed in less than 36 months, thereby ensuring that it enters the record books. Projects of this size take longer to complete. It will be the world's sixth largest refinery. The refinery complex at Jamnagar in Gujarat has been given an SEZ status thereby allowing it to earn substantial savings in taxes. "The refinery will start generating revenues from this year itself," Ambani said. "Both the new and existing refinery at Jamnagar will have a total processing capacity of 1.24 million barrels per day. This will make Jamnagar the refining capital of the whole world," Ambani said. He added that the new refinery would be able to process heavy and sour crude and also produce value-added products meeting the highest quality specifications in the world.
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New Delhi, June 7 Weakening dollar and record rise in crude oil prices also boosted the demand for gold as a safe investment and jacked up its prices to over $889 an ounce, they added. Gold futures for August delivery rose $23.50, or 2.7 per cent, to $899 an ounce on the Comex division of the New York Mercantile Exchange. Standard gold and ornaments remained in hectic demand and spurted by Rs 290 each at Rs 12,700 and Rs 12,500 per 10 grams, respectively. Sovereign followed suit and gained Rs 25 at Rs,10,025 per piece of eight gram. Silver ready rose further by Rs 455 at Rs 24,655 and its weekly-based delivery by Rs 590 at Rs 24,640 per kg, respectively. Silver coins also gained Rs 100 at Rs 27,100 for buying and Rs 27,200 for selling of 100 coins in line with general trend. — PTI
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Aviation Notes
An unprecedented hike in fuel prices has played havoc with already crippled, loss-sustaining no-frills airlines. The curtailment of operations on domestic and international routes is on the cards. Many of the private carriers are left with no option except to close their shops. The merger is no remedy in the existing insurmountable situation.
This is not all. Even scheduled carriers have been badly affected because most of them owe huge chunk of money to the Airports Authority of India (AAI) for non-payment of parking and landing charges, oil companies and other operating agencies. Amidst this complex scenario, the passengers on national and international circuit are the worst hit. They have to pay higher fares, as also bear payment of increased taxes, as levied by corporates for constructing and renovating airports at several centres, like Delhi, Mumbai, Hyderabad and Bangalore. The over-all situation for passengers is grim. As slogan of ‘money is money’ gained currency, many middle-class people had switched from trains to air travel. With enormous rise in fares, they are now seriously contemplating to return to trains because they no longer can afford the ‘aircraft luxury’. The return of passengers from air to trains means twin-sectors of aviation and tourism will be badly hurt. The situation gets further complicated as there are only limited hotels and motels meant for middle class people. Most of the hotels are beyond the affordable means of common travellers. In simple words, the much- hyped boom in these two vital sectors has taken a hasty retreat. The air passengers’ woes do not end at paying hefty fares and heftier taxes. They are made to report at airports like Delhi and Mumbai three hours in advance for the flight of one hour. This is again not all. There are frequent occasions when private airlines club their two flights together or delay their flights or even cancel their operations. The passengers are left high and dry at airports to fend for themselves. They have started asking: "Is it boom of airlines or curse of flying"? As aircraft are sturdy, the flying may be safe, but airports are not. The passengers are made to suffer nightmares while embarking and disembarking. At Indira Gandhi International Airport, for example, people are crushed under wheels or injured with impunity. Recently, a foreign passenger was killed and some other injured because of negligent driving on the tarmac. During the past one year, many such shocking accidents have taken place and most of the culprits have not been apprehended. A lady staffer said: "This was not the first nor it would be last judging from the jungle raj that exists at the Delhi airport". The calm at the Delhi or Mumbai or at other international airports is unlikely to descend because private construction companies have been provided too much of latitude. They keep floating from airport modernisation to participating in the events like IPL (Indian Premium League). |
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Investor Guidance
Q: I plan to invest in equity mutual funds. Can I invest in two or three funds at a time and then shuffle the money from existing funds to other, after a period of one year? Is this option viable to increase the value of money as there is no tax on the transactions as long-term gains are tax-free?
— Sandesh Dhuri A: Yes, though long-term gains are tax-free, this method is in fact liable to decrease the value of your money. The only thing you will achieve by shuffling the funds within one year is to pay the agent his commission and the new funds their loads. Moreover, what value will the new funds give you that the old funds cannot? The only way to make money in mutual funds is to stay invested over the long-term. Choosing of the fund is important but once chosen, stay with it. Investment in PF/PPF
Q: I put Rs 10,000 in my PF account every month which compounds at 8%. My friends tell me that banks and post offices pay more than a PF account. I am attracted to PF because of the power of compounding over the long term. In your opinion, am I doing the right thing? —Nilkanth A: Your friends are wrong. banks and post offices do pay more, but the interest is taxable whereas in PF or PPF, the interest is tax-free. So on a post tax basis, PF or PPF is a very good fixed income investment. Yes, you are doing the right thing. Transferring HUF assets
Q: SBI has returned deposit balance in my HUF account. Is it a right thing? Further, now can I convert my HUF assets with my individual assets and stop filing IT returns for HUF. — Vinod Sarakar A: It is not clear if what you are referring to is a PPF or Post office account or normal savings bank account. In any case, transferring HUF assets without tax consequences is only possible if you dissolve the HUF fully. PPF rules
Q: I have some questions regarding PPF rules. 1) With regard to opening an account in the name of children, whether the term ‘children’ is inclusive of ‘Minor children’, 2) Would like to confirm whether the RBI notification GSR 291(E) dated 13-5-05 has discontinued opening of accounts on behalf of “Association of persons” (AOPs) and 3) Whether contributions to the existing PPF accounts in the name of HUF could be made till maturity of the account. — Shankar Patil A: 1. Contributions by the assessee to PPF accounts of the spouse and children, major or minor, married or otherwise, male or female, dependent or not, are eligible for the rebate. As a matter of fact, a parent may contribute even in the name of a married daughter and still claim rebate. Such contributions are construed as a gift. At its maturity, if the account is closed and the funds are reinvested, clubbing provisions becomes applicable in the case of spouse and minor children. If the child is major at that stage, there is no clubbing. As per Notification GSR 908(E) dt 6.12.00, the ceiling on the aggregate contributions to accounts of self and all minor children of whom the individual is a guardian is Rs 70,000. 2. Notification GSR 291(E) dt 13.5.05 has discontinued opening of the accounts on behalf of HUF, AOP or BOI. Such accounts opened by mistake after 13.5.05 shall be treated as void ab initio. As and when (and if) the error comes to light, the account shall be closed and the amount refunded to the depositor without any interest. 3. The existing accounts can continue up to their maturity without the privilege of post-maturity continuation. The authors may be contacted at wonderlandconsultants@yahoo.com |
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