 |
|
|
Sale of premium fuel down 10 pc
AI to rationalise global operations
Returns from mutual funds likely to decline
|
|
Tax Advice
Market Update
|
|
Sale of premium fuel down 10 pc
Chandigarh, August 10 According to the Punjab Petroleum Dealers Association, sale of premium petrol and diesel has come down by over 10 per cent during the past two months. The main reason for this decline in sale is the difference of Rs 3.50 per litre between the price of normal and premium (branded) fuel. After the price hike announced by the government in June, a number of consumers now prefer to use the normal fuel. While the price of normal petrol and diesel had gone up by Rs 5 and Rs 3 a litre, respectively, price of premium petrol had gone up by Rs 6 a litre and that of premium diesel by Rs 4 a litre. J.P. Khanna, president of Punjab Petroleum Dealers Association, said: “The dealers in Punjab are facing a slowdown in sale of premium fuels. This is not just because of the high price, but also because of a number of consumers getting their fuel supplies from Haryana or Chandigarh. Fuel in the UT and Haryana is cheaper because of a reduced VAT structure (22 per cent in UT and 20 per cent in Haryana, as compared to 27 per cent in Punjab),” while adding that the natural annual increase of 10 per cent in fuel sales is also not being reported in the state. The premium fuels (in which high value additives are mixed) have been the growth drivers for the three oil marketing companies — IndianOil, Bharat Petroleum and Hindustan Petroleum. The sale of these fuels had seen a jump of 89 per cent in the last financial year. But the price differential between the premium petrol and the normal petrol was Rs 1.50 per litre then. Since these fuels are out of the administrative price mechanism, the oil companies fix their prices at their own will. This year, price of premium fuels have been hiked twice, by Re 1 per litre each time. Khanna says that because the sale volumes have gone down, and their margins are based on the volumes rather than a percentage commission, the dealers in Punjab are making losses. “We get Rs 124 per 1,000 litres as commission, which also include the 0.6 per cent rate of evaporation (in petrol) and 0.2 per cent handling charges (in diesel). With volumes sold coming down, our investment has gone up and profits have decreased. The government should either increase the dealers’ margin with change in fuel prices, or give us a percentage margin as in other countries,” he says. |
|
AI to rationalise global operations
New Delhi, August 10 The airline management is considering even withdrawing services on certain destinations for "a temporary period" so that bookings already made are not affected, sources in the airline said. The destinations to which these curtailments would be effected are yet to be firmed up, the sources said, adding that the issue came up for in-depth discussion at a meeting of Air India's senior executives in Mumbai last week. The destinations which are likely to see curtailment in services include Osaka, Seoul and Los Angeles. Air India was also contemplating to rationalise its flights to London. The changes in schedule are likely to come into effect in September, they said. The national carrier, which is among several major airlines in India and abroad that have curtailed or canceled their frequencies on international destinations, has already reduced its domestic services by about 10 per cent. As part of the cost-cutting measures, Air India is also rationalising the usage of its fleet on several foreign routes. There are also plans to terminate the Delhi-London-New York in Britain itself and operate a Boeing 777 on the Ahmedabad-Mumbai-London route. Air India is considering not to operate A-330s on the India-UK route, as part of the changes it was considering. —
PTI |
|
Returns from mutual funds likely to decline
New Delhi, August 10 According to a study conducted by PHDCCI, the assets under management (AUM) with mutual funds could expect a moderate slowdown by the end of this fiscal and may drop below Rs 5 lakh crore. However, the AUM of Indian mutual funds have the potential to grow by three times to Rs 15.6 lakh crore by 2012-13, powered by strong economic growth and better distribution. The analysis shows that industry’s AUM has consistently dropped - from Rs 5.95 lakh crore in April to Rs 5.88 lakh crore in May and Rs 5.6 lakh crore in June this year. The month of July has yet again witnessed a further drop in AUM to Rs 5.29 lakh crore, which is more than 6 per cent lower than the previous month. One of the reasons attributed to the declining performance in the mutual funds industry is lack of investor support in equity-based funds, which has shrunk by nearly a third riding on the back of uncertainty and steep decline in Sensex. The revival of mutual fund industry is crucial for wealth creation in the economy. What is more, this industry has the potential to benefit multitudes of small investors who are willing to bear a little risk to make a higher inflation/tax-adjusted return as compared to fixed deposits. Yet, to translate this potential into reality, it is important to implement pro-people reforms, particularly in the financial sector which would restore stock market to its previous bull phase and bring back the confidence of investors to put their investible surplus in mutual funds, says Dr L.K. Malhotra, president, PHDCCI. A market rebound could turn the situation around for the mutual fund industry. But, resumption in the bull run this year seems far from certain, given the tight monetary policy stance of the RBI and ongoing worries about the global economic slowdown and credit crunch. Investors, who are risk averse or those who are not too keen on making investments, are usually investors in a mutual fund, but, they will face losses in the coming year due to the downfall of the markets, says P.K. Agarwal, president, research, Bonanza Portfolio Limited . According to Agarwal, there is no way that the mutual funds can perform in the current market situation as there are too many uncertainties over how far the current downturn will be. Most of the mutual funds are sitting on a pile of cash but have not invested, and hence will not be able to give returns. |
|
Tax Advice
Q. I am filing income tax return for the past 15 years. After retirement, I have taken to agriculture on my own land, which I got as ancestral share. This is the first time I have agriculture income. Please help me in calculating my tax liability for F.Y.2007-08, A.Y. 2008-09. My income detail with savings is as under:
Income Rs (a) Pension 1,31,168 (b) Accrued interest 89,538 (c) Saving account interest 1,500 (d) Agriculture income 1,00,000 Total 3,22,206 Savings under Section 80C (a) PPF 70,000 (b) Insurance Premium 20,000 (c) Housing loan repaid (i) Principal 79,100 (ii) Interest 1,878 I am told that there is no tax on agriculture income. It would be appreciated if small sample is given, how to compute agriculture income in the return. — B.S. Sandhu, Zirakpur A. The agricultural income for the assessment year 2008-09 will have to be computed in accordance with the provisions of Part IV of the First Schedule to Finance Act 2007. The said schedule lays down detailed rules for computing net agricultural income. Rule 1 provides that the agricultural income shall be computed as if it were income chargeable to tax under the head "income from other sources" and the provisions of Section 57 to 59 of that Act, shall, so far as may be applied accordingly. The agricultural income, though not taxable, is included in the total income for the purpose of working out the average rate of tax chargeable from an assessee. In case an assessee has an agricultural income, the tax is computed in the following manner: Tax on total income including net agricultural income = Rs X Tax on net agricultural income plus the exemption limit applicable to the assessee = Rs Y Net tax payable by the assessee = X–Y. On the basis of the facts and figures given in the query, your total income, including agricultural income (presuming it to be net agricultural income) after giving deduction to the extent of Rs1 lakh under Section 80C of the Income tax Act 1961 (the Act), works out at Rs 2,22,206. The tax thereon works out at Rs 2,522 after giving relief for the net agricultural income in accordance with the method of computation given hereinabove. The tax payable after adding education cees @ 3% would work out at Rs 2,598 only. Tax liability
Q. I retired from a Govt. job on 31.08.2007. My pay allowances/pension investment/saving etc. are as below. DDO & Pension Bank intimated me in 5/2008 that no tax has been deducted. Pay allowances 2007-08 1,52,686 Pension 2007-08 41,414 40% G.P.F. deducted 62,535 GIS 54 LIC 9,772 Aviva insurance (Myself) 1,00,000 Aviva insurance (wife) 1,00,000 I received Rs 16.50 lakh on account of retiral benefits. I invested Rs 1 lakh in respect of myself and Rs 1 lakh in respect of my wife. Rs 14.50 lakh was invested in FDRs for 400 days in respect to which interest shall be paid by the two banks in 9/2008 and 11/2008. No interest in 2007-08 has been received and Form 15H has been filled up/handed over to bank regarding non-charging of income tax on interest (being above 60 years in 2008). Kindly intimate me the Income tax I have to pay in 2007-08 return. My D.D.O. has not deducted income tax for period (6 months I remained in service). Pension disbursing bank also did not deduct income tax on pension payment of Rs 41,414. Kindly intimate (as the matter has become complicated) the income tax I have/had to pay for the year 2007-08. — Rajesh Kumar, Ludhiana A. It seems the tax has not been deducted by the employer because the deduction to the extent of Rs 1 lakh is available under Section 80C of the Act on account of the amount invested in saving schemes. In your case, the amount invested being more than Rs 1 lakh, the deduction allowable against your total income of Rs 1,94,100 (1,52,686 + 41,414) would bring the figure of your total income to Rs 94,100 which is below the taxable limit of Rs 1,10,000 applicable for assessment year 2008-09. Interest on NSCs
Q. For the purposes of income tax return relating the assessment year (2008-09) read with financial year 2007-08, I have collected the following data from various sources: 1. Income under the head 'salaries': 1,39,386 2. (i) Interest on SB accounts: 911 (ii) Interest on FD with bank 26,923 (iii) Interest on PO Recurring Deposits 7,620 Sub total 2 (i to iii): 35,454 (A) Gross income (1+2 (i to iii) 1,74,840 3. Saving under Section 80C (a) Investment in banks for a fixed period not less than 5 years: 74,000 (b) Interest on NSCs bought in previous years: 13,294 (B) Deductions under Chapter VI 87,294 (C) Total income (A–B) 87,546 It may kindly be advised whether cumulative interest on National Savings Certificates has to be added back to the head 'Salaries' in the corresponding income tax return as and when the National Savings Certificates mature for repayment. — J.P. Joshi, Panchkula A. The amount of accrued interest earned on National Saving Certificates which has been claimed as deduction under Section 80C of the Act will have to be added to the total income under head "income from other sources". Your total income would thus be Rs 1,88,134 as against the figure of Rs 1,74,840 reflected in your computations. The amount of taxable income after deducting the amount allowable under Section 80C of the Act would work out at Rs 1,00,840 (1,88,134 - 87,546). |
|
Market Update
Fall in crude oil prices, recovery in rainfall and buying by foreign institutional investors (FII’s) helped Sensex close above crucial 15,000 mark last week.
This week, the market is expected to take a cue from the industrial production figures likely to be released on this Tuesday, though rising inflation remains a major worry for the markets in the medium term.
The Sensex has recovered after touching a low of 12,676 in mid-July. More than anything else, the recovery stems largely from the recent correction in commodities (especially crude oil) globally and the easing out of political uncertainties at home. With the anti-reformist Left parties out of the way, the UPA government is also expected to pursue more vigorously its reform agenda and it has already given the right kind of signals in that direction. Though market sentiment has improved considerably, this improvement in sentiment is unlikely to translate into a runaway rally due to the lingering concerns, such as monetary tightening, moderation in economic growth, risk to corporate earnings, erratic monsoon and worsening credit squeeze globally. However, the situation is expected to improve from third quarter onwards as the base effect shall turn positive for inflation as well as industrial production by then. Moreover, the monetary tightening cycle would have peaked out by the third quarter. The effect of the recent monetary tightening measures of the central bank, too, would have played out by that time, in terms of moderation of credit growth and easing out of the momentum in the aggregate demand. Finally, by the end of the third quarter, markets would roll over the market’s valuation on the 2009-10 earnings estimates with the better part of 2008-09 already behind us. Surya Pharma
Surya Pharmaceuticals reported an impressive 52 per cent increase in the revenues to Rs 158.1 crore in quarter ending June. This was driven by an increase in the active pharmaceutical ingredient (API) business and growing contributions from the recently commenced menthol business. The net profit grew by an impressive 38 per cent to Rs 14.1 crore. With the commissioning of the Jammu facility, Surya Pharma will enter the high-margin injectable business. This is expected to improve the margin going forward. The strong traction in the top line along with margin expansion due to operating leverage will result buoyant (higher than industry average) growth at the net profit level for the next couple of years, making the stock an attractive investment at the current levels. |
|
| HOME PAGE | |
Punjab | Haryana | Jammu & Kashmir |
Himachal Pradesh | Regional Briefs |
Nation | Opinions | | Business | Sports | World | Letters | Chandigarh | Ludhiana | Delhi | | Calendar | Weather | Archive | Subscribe | Suggestion | E-mail | |
