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ADAG thrashes RIL’s claim of Right of first refusal
Himachal banks gear up for loan waiver
BSE shuffles benchmark index
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Tax Advice
Market Update
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ADAG thrashes RIL’s claim of Right of first refusal
New Delhi, June 15 An ADAG spokesperson asserted that RIL’s claim was not even incorporated in the Articles of the Association of Reliance Communications. He added that based on the legal opinion the Union Cabinet had taken the view that there could be no restriction on transfer of of a listed company. The battle between the two flared up on Friday after RIL wrote to MTN and ADAG, copies of which were sent to the bankers, cautioning that the amalgamation deal through reverse swap would tantamount to breach of RIL's first right of refusal to acquire a controlling stake in Reliance Communications (RCom). The spokesperson said RIL's reference to an agreement dated January 12, 2006, is misleading, as RCom had written to RIL the very same day, and rejected the unilateral procedure adopted for finalising such agreements as being illegal. The Bombay High Court had upheld this stand by a judgment delivered on October 15, 2007, he said. Further, the spokesperson said, the Union Cabinet of ministers, based on an opinion by the Attorney General of India, and various Supreme Court decisions, has firmly taken the view that any restrictions on the free transfer of shares in an Indian public limited company, even if present in its Articles of Association, are illegal and unenforceable, as per Section 111A of the Companies Act, 1956. While the two Ambani siblings continued to trade charges, a team of MTN officials quietly landed in Mumbai for talks on the deal. "The MTN team is in India and talks for the deal with Reliance Communications are progressing," sources close to the development said.
RIL deplores RCom’s double speak
Hitting back for "twisting facts" on the demerger agreements signed by group companies of Ambani siblings, elder brother Mukesh's side accused Anil Ambani group of "double standard and double speak".
Charging the Anil Ambani group of "taking things out of context and misrepresent agreements between two groups", sources close to Reliance Industries dared RCom and South African telecom giant MTN to make their legal position clear on RIL's claim on Right of first refusal. "It is surprising that even after receiving a legal written letter from RIL, both RCom and MTN have not replied back stating their legal position," the sources said. RIL spokesperson declined to comment over the negotiations between RCom and MTN for a possible merger deal, while an RCom’s spokesperson said a reply was sent to RIL on Saturday. —
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Himachal banks gear up for loan waiver
Shimla, June 15 He informed that all short-term product loans given by the banks were to be provided the complete waiver of the loan or relief as per the scheme. He said all short-term loans disbursed between March 31, 1997 and March 31, 2007, which were overdue as on December 31, 2007, and were not paid till February 29, 2008, along with all other loans restructured and rescheduled as per RBI guidelines on account of natural calamities will be covered under the scheme. He further said marginal farmers owning more than one and up to two hectares land will be given complete waiver while those owning more than two hectares would get rebate of 25 per cent of the amount, provided he pays the balance 75 per cent in three instalments. Murgai said all banks will display list of small and marginal farmers before June 30 with the eligible amount and the amount of debt waiver. “All small and marginal farmers would be eligible for fresh agriculture loans, other farmers for fresh short term production loan,” he said. He further stated that all banks would issue certificates of debt waiver or debt relief to the farmers.
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BSE shuffles benchmark index
Mumbai, June 15 The index committee of the BSE in its meeting held on June 13 decided to revise the composition of Sensex, BSE-100, BSE-200 and BSE-500 indices. The revision in the Sensex will be effective from July 28, while revisions in the BSE-100, BSE-200 and BSE-500 will become effective from June 23, BSE said in a statement. This would be Tata Power's re-introduction into the most popular index of the BSE. Earlier, it was replaced by Anil Ambani-controlled Reliance Communications and last traded as a Sensex stock on June 9, 2006. —
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Tax Advice
Q. Please advise regarding my following queries:
(a) If we make an investment under Senior Citizen Savings Scheme (SCSS) under Section 80C of the Act, please advise how the payment on maturity would be treated for income-tax purpose. (b) In case of an investment under Senior Citizen Scheme, where we have not avail of the tax benefit under Section 80C of the Act. How the premature/maturity payment would be treated for tax purpose. (c) In joint account, after the death of 1st A/c holder before maturity, how the payment would be treated for tax purpose where tax benefit under Section 80C is availed of. (d) I took a premature payment on 02.10.2007 under Senior Citizen Scheme, the P.O. deducted Rs 1,000 from the principal amount for taking premature payment. Can we deduct this amount of Rs 1,000 from the interest earned under Senior Citizen Scheme to be shown in the income tax return. (e) Whether the withdrawal on pre-maturity/maturity is to be shown in the Income Tax Return even where we have not avail of the benefit under Section 80C of the Act. — Inder Pal, Chandigarh A. (a) The amount received on maturity (i.e. after the completion of the term up to which the deposit is required to be kept under the scheme) of the deposit made under Senior Citizen Scheme for which a deduction under Section 80C of the Act has been claimed is not taxable. However the interest earned on such deposit will have to be declared as income of the year for which such interest has been earned. (b) In case the amount is received by the nominee or legal heir of the assessee on the death of such assessee who was holding a deposit under Senior Citizen Deposit Scheme for which a deduction under section 80C has been claimed, the principal amount would not be taxable. The interest earned on such deposit would be taxable to the extent the same has not been included earlier in the total income of the deceased. (c) In case an investment is made under a Senior Citizen Scheme without claiming the deduction under section 80C of the Act, the amount received on maturity would not be taxable. The interest earned on such deposit would, however, be taxable. (d) The deduction made by the Post Office for premature payment is not deductible from the interest income. (e) There is presently no column in the Income-tax return where the premature amount or amount received on maturity is to be shown in Income-tax return. Tax liability
Q. I am a senior citizen of 67 years of age. Following incomes will accrue me in 2007-08 (Assessment Year 2008-09): Rs 1. Annual pension 1,42,356 2. Interest on NSCs after maturity 33,534 3. Interest on savings account 3,829 4. Bank interest 2,76,252 5. Agricultural 5,58,000 Kindly compute my total income-tax for 2007-08 (Assessment Year 2008-09). I have invested Rs 1,00,000 in Reliance Life Insurance during 2007-08. — Harmail Singh, Sangrur A. The total income in your case (excluding the agricultural income) works out at Rs 3,55,971 for the year 2007-08. After taking into account agricultural income (presuming that the same is net agricultural income i.e. after deduction of expenses incurred for earning the above income) your tax liability would work out at Rs 49,740 without the interest leviable under Section 234B and 234C of the Income-tax Act 1961 (the Act) for non payment of advance tax. Service Tax
Q. I have read in the newspaper that the money changer has been included in area of service tax and the rate applicable is .25 per cent on the gross purchase & sale w.e.f. 16.05.2008. I have also learnt that we can take a particular amount, say Rs 10, as a service charge on each bill and collect the service tax on it and deposit to the deptt. The above clause is applicable only where the service charges are shown separately in the bill. Please clarify. — Inderjit A. Your information is correct that service-tax is now leviable on money changers w.e.f. 16.05.2008. In case the applicable service charge is not separately indicated in the relevant document prepared for the sale/purchase of currency, the service-tax would be leviable on the gross amount of currency exchanged @ .25% plus the applicable surcharge and education cess. If the service charge is reflected separately in the bill, the applicable rate of service-tax plus surcharge and cess, would be leviable on the amount of service charge reflected in the bill. IT return
Q. I have income from pension and interest only. Pension includes Rs 350 p.m. as fixed medical allowance. I spend about Rs 1,000 every month regularly on medicines and tests for myself. How can I exclude Rs 4,200 paid to me as F.M.A. from my annual income. Form 16A issued by my D.D.O. shows no details, only one figure of pension is given in Form 16A. No document showing self computation of Income Tax can be attached with ITR-1. Similar is the position of LTC paid once in two years equal to one month’s basic pension and actually spent on travelling to any place in India. Kindly advise as how to fill and submit the I.T. return for 2007-08 (F.Y.). — J.P. Makol, Patiala A. The amounts of fixed medical allowance and the LTC received by you need not be shown in the ITR-1 as there is no column in this regard. These amounts are in any case not includible in total income as the amount received in respect of medical allowance and leave travel have actually been spent for the purpose for which these were granted to you. You can go through the instructions which are given at the back of the ITR-1 and in case you have any query on any of the action points, you may send the same query for the purposes of seeking clarification. |
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Market Update
Intense selling by Foreign Institutional Investors (FIIs) on the back of soaring crude oil prices, spiralling inflation and weak global cues made the markets tumble last week. Markets tumbled for the fourth straight week. Sensex lost 382 points to close at 15,189 and Nifty fell 110 points to close the week at 4,517.
FIIs have dumped Indian equities since the start of the year and have now sold stocks worth more than $ 4.5 billion till date out of which $1 billion have been sold in June alone. The market is likely to move in sync with global markets in the coming week. Markets across the globe suffered severe setback in the past few days triggered by spiralling global commodity prices led by crude oil. Fears of RBI further hiking interest rates to check soaring multi-year high inflation, which could choke overall growth of the economy, will continue to haunt investors. The RBI, it may be recalled, hiked repo rate by 25 basis points last week to rein in money supply with the banks. A further hike in rates would impact bottomline of Indian companies. Also, high interest rates may delay expansion plans of corporates, which in turn may impact future earnings growth. The Indian Meteorological Department (IMD)’s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this month, which may indicate spatial rainfall distribution in the main sowing month of July 2008, will be keenly awaited by investors. A well distributed monsoon, which will bolster food production, may help rein in inflation. Investors will also keep a close watch on the corporates’ advance tax payments for the first installment that falls due on June 15, which will give a cue on expected first quarter numbers from top Indian corporates. The income tax law requires a company to make payment of 15 per cent estimated tax liability for the year as advance tax in the first installment. Ranbaxy
In the largest global partnership between an innovative pharmaceutical company and a generic player, the Singh family, the promoters of India’s largest pharmaceutical company, Ranbaxy, have sold their entire shareholding of 35 per cent in the company to Japan’s second largest pharmaceutical company, Daiichi Sankyo, at a price of Rs 737 per share and further seek to increase its stake to the level of 50.1 per cent at the same price. According to SEBI takeover norms, the acquisition of a 34 per cent stake in Ranbaxy would trigger a mandatory open offer to the existing shareholders of Ranbaxy for the acquisition of an additional 20 per cent stake in the company. The price for the open offer has also been fixed at Rs 737. On the other hand, if the market rumours are to be believed, then Pfizer may put in a counter bid for buying Ranbaxy. Though the possibility of counter bid seems remote, but, nevertheless, counter bid cannot be ruled out. It may be recalled that Ranbaxy and Pfizer are battling the Lipitor patent, Pfizer’s blockbuster’s drug, in the US courts. In our view, if Pfizer does not anticipate any action from Federal Trade Commission (FTC), then Pfizer will, for sure, put in a hostile bid for Ranbaxy and if that happens, all shareholders of Ranbaxy may be laughing all the way to the bank. |
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