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Forex reserves dip by $5.4 billion
ORG Informatics bags orders from
IAF, TCIL Oil falls below $114 on global concerns |
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Ford to sell $500 m in shares
Argentum Motors buys French automaker
Investor Guidance
Aviation Notes
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Forex reserves dip by $5.4 billion
Mumbai, August 16 The country registered fall in its foreign reserves for the fourth consecutive week. During the week, the foreign currency assets (FCA) fell by $5.456 billion to $289.760 billion compared to $295.216 billion in the previous week, the Reserve Bank of India (RBI) said in its weekly report yesterday. The FCAs expressed in US dollar terms include effect of appreciation/depreciation of non-US currencies such as Euro, Sterling and Yen held in reserves, it said. The gold reserves and special drawing rights, during the period under review, remained static at $9.735 billion and $11 million respectively, the central bank said. India’s reserve position in the International Monetary Fund declined by $8 million to $504 million from $512 million in the previous week, the RBI said. — PTI
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ORG Informatics bags orders from
IAF, TCIL
New Delhi, August 16 The company has also bagged an order of a transformational engagement from Telecommunication Consultants India Ltd (TCIL) to supply, install and commission telemedicine application in pan African e-network project. The proposed e-network will be used for delivering state-of-art distance telemedicine application to 53 African member countries into one network through satellite, fiber optic, wireless links and electronic data connectivity. For
BSNL, ORG will build a dedicated satellite communications infrastructure This SATCOM network will be established on turnkey basis for more than
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Oil falls below $114 on global concerns New York, August 16 US crude settled down $1.24 at $113.77 a barrel after dipping to $111.34, the lowest level since May 2. London Brent lost $1.13 to settle at $112.55 a barrel. Crude has fallen sharply since reaching an all-time high of $147.27 a barrel on July 11 as growing global economic problems and high fuel prices have cut demand in top consumer the US as well as Europe. “We might get to $110. How quickly we get there would depend on the demand outlook,” said Simon Wardell, an oil analyst at Global Insight. “If next week’s US inventory data shows an increase in stocks, we could go lower.” The Organisation of Petroleum Exporting Countries cut its 2008 demand forecast on Friday and added that ample supplies were paving the way to building inventories. Output by the producer group rose 145,000 barrels per day in July to 32.8 million bpd, the International Energy Agency said this week. A poll of analysts, banks and industry groups shows demand growth should rise in 2009, however, as demand from emerging economies like China outpaces losses from industrial nations. The euro hit a six-month low against the dollar on Friday following further proof that the US economic slowdown is spreading. The economy of the 15-nation euro zone contracted 0.2 per cent in the second quarter, data showed on Thursday. Surging demand in China, India and other emerging economies sent commodities on a six-year rally that sent oil prices up seven-fold at their peak. Earlier this year, a rush of cash from investors seeking to hedge against inflation and the weak dollar also pushed up crude prices. — Reuters
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New Delhi, August 16 Market participants expect the metal to test further lows.
The market, which “The metal is losing its social value and more dependent on the foreign exchange,” All-India Sarafa Bazaar president Sheel Chand Jain said, adding that every rise in dollar against leading currencies would reduce the appeal of the metal. He said easing crude oil prices had also eroded the demand for the gold as a hedge against inflation. Meanwhile, the rupee sharply depreciated by 85 paise to 43.00/01 against US dollar on strong buying by large corporates and dollar strengthened against other overseas currency on the week ended August 14. The Indian currency fluctuated between a wide gap of over 110 paise against the greenback on sustained volatility during the week as dollar surged to a six-month high against a host of currencies overseas. The rupee traded at a wide range band 41.90 and 43.03 per dollar, dealers
said.
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Ford to sell $500 m in shares
New York, August 16 The Dearborn, Michigan-based automaker said in a filing with the Securities and Exchange Commission (SEC) that it would sell the shares from time to time, then use the proceeds to buy Ford Motor Credit LLC outstanding debt securities in the open market or privately negotiated deals. Ford Motor Credit has struggled in recent months, taking a $2.1-billion charge during the second quarter related to the drop in used vehicle prices. The move also further dilutes Ford stock at a time when its price is already near As of July 29, the company had roughly 2.19 billion common shares outstanding, according to a filing with the SEC. Ford shares have dropped 24 per cent in the Goldman, Sachs & Co will handle the sale, Ford said.
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Argentum Motors buys French automaker
New Delhi, August 16 The commercial court of Bressuire has approved the “safeguard plan” proposed by Argentum and Groupe Henri Heuliez and Heuliez. As part of its proposal, Argentum Motors will invest up to 25 million Euros for an initial stake of 60 per cent in the French company. CDC (Caisse des Dépôts et Consignations) has also committed an investment of five million Euros into Heuliez. The company is known for its cutting-edge auto design and for designing and building vehicles and automotive components for leading companies such as Peugeot, Renault, Citroen, General Motors, EADS and Daimler Benz. As part of the re-structuring, Heuliez will be spun-off into three companies - Heuliez Electric, Heuliez Engineering & Design and Heuliez Manufacturing. Heuliez Electric will build electric vehicles under the Heuliez brand. The company will also engage in international programs with global players to develop cutting-edge electric vehicle technology and vehicles. Heuliez Engineering & Design will work closely with Argentum Engineering and Design to integrate Heuliez expertise with Argentum delivery capability to build a global automotive design company. Heuliez Manufacturing will utilise its facilities in Cerizay, India, Spain and Slovakia to build cars and automotive parts for the global market. The company will support Argentum by distributing Argentum products in Europe, leverage Heuliez’s patents in retractable hard top technology and support Heuliez Electric in the manufacture of electric vehicles.
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Investor Guidance
Q: I have been employed by a company in India since November 2006. During the period, April 2007 to March 31, 2008, I spent less than the stipulated 182 days in India, so I am qualifying as an NRI as per the law as stated in your columns.
My salary was being given from Mumbai office in rupees for which I shall now have to file income tax return. As the tax was deducted at source, can I claim for the entire tax refund?
Please advice as I have been told by one of my friends that due to my salary payable in Rupees and tax being deducted at source, I do not qualify as NRI even if I spent less than 182 days in India. A: The salary that you earn in India is your Indian income. Indian income is taxable for NRIs in all cases whether it is salary or capital gains or interest….Indian income is always taxable. Therefore, you do qualify as an NRI (thereby exempting your foreign income from Indian tax), however, still, the salary that you earn here in India will be taxable. Registration of plot
Q: I have purchased a residential plot in Bangalore. Its registration was done three years ago. However, I was out of the country and it was only after a period of two years that I realised the plot was taken away by the developer and used to build a party hall. When I objected, he gave me an alternate plot. Now, the re-registration was done for the new plot. However, there was no financial transaction. Now I wish to sell my plot. For capital gain determination, which date of registration will be applicable? If I take the first one then I will earn long-term capital gain, but the second one A: The registration is asset specific. You own the plot that is to be sold since the registration thereof in your name. Hence, the term of three years is calculated from the date of the second registration. Also, note that the term ‘transfer’ also includes exchange. Therefore, even for the first transaction, even though no money changed hands, the exchange of one plot for another would entail capital gains or loss as the case may be. The market value of the second plot will be deemed to be the sale value of the first plot in order to calculate the capital gains. IT return
Q: One of my friend’s (filing the return for the first time) has a very small professional income, from the movie as an actor, say Rs 40,000 on which TDS has been deducted under Section 194J. Besides, he has his salary income on which the TDS has already been deducted by his employer. Due to his professional income plus salary income , he has to file ITR-4,which demands the details regarding balance sheet, income and expenditure account. But my friend doesn’t maintain books of accounts. Can this information be kept blank? A: Even with a small amount of professional income, ITR-4 has to be used. However, it is not necessary to maintain books of account. In the P&L, on the revenue side Rs 40,000 may be mentioned. If there are any expenses that your friend incurred to earn the income may be deducted. The balance has to be brought to tax. Of course, the TDS that is like advance tax paid has to be reduced to arrive at the final tax liability. So, in effect, large parts of the form will be blank. However, it is ITR 4 that will have to be filled. Home loan
Q: My family comprises my wife, who is working, my dad, who is a retiree and gets nominal pension of Rs. 1,534 pm. We are planning to buy a house jointly with my wife, who will be availing a housing loan from a
HDFC. As per her salary and my savings, we are not able to meet the budget, so I am taking loan from my dad. My question is can my wife and myself claim housing loan rebate on the same property which we are jointly purchasing - by way of loan from HDFC and by way of loan from my dad. A: On the portion of the loan taken from your father, if you pay interest, the same will be deductible under Section 24, however, Section 80C rebate on principal repayment will not be available. Note that this pertains only to the part of the loan taken from your father. RNOR status
Q: My friend needs some help. He is taking TR “transfer of residence” to join an MNC India after 17 years working in Dubai. What is the advantage of RNOR status? Where can we get info on income tax laws applicable to ex-NRIs? Is 182 NRI status applicable? Will his income brought from abroad be taxed? How long will it not be taxed? Which assets will escape being taxed? He also has some investments with international mutual funds. Is it advisable to liquidate it now or when he requires it, i.e. slowly encash. What is the basis of taxes applicable at that time? Is it advisable to buy a residential premises with loan or rent premises and get HRA exempted or buy one outright? A: As an NRI for the past 17 years, your friend will be an RNOR for a minimum of the next two years. Under certain circumstances related with the number of days spent in India in the past and the date of coming to India, he may qualify for the RNOR status even for three years. However, space constraints preclude a detailed explanation of the same. The advantage of the RNOR status is that despite being a resident, your friend’s foreign income will continue to be non-taxable in India. Income from all foreign assets without any exception would be exempted during such time that your friend maintains the RNOR status. There are several factors that one needs to consider before deciding upon liquidating investments, international or otherwise. However, considering only the tax point of view, liquidating during the RNOR status would be advantageous so far as India tax incidence is concerned. If liquidated later, full India tax will be applicable. It would be advisable to buy a property outright if one can afford to. HRA exemption should not even be a consideration for this decision (anyway, the full amount of HRA is never exempted). The house buying decision should be more to do with future plans, other financial goals as well as the future expectations of interest rates in the economy. The authors may be contacted at
wonderlandconsultants@yahoo.com. |
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Aviation Notes
The runway is the heart of the airport. Flights have their own rhythm. They dictate the pulse of the airport.
The third runway at the Indira Gandhi International Airport, Delhi, will shortly be used for commercial operations.
It is the first aviation project that has been built for “tomorrow” instead of “yesterday”.
It is a superb production, which should serve the country for at least half-a-century without any problem. One of the longest in Asia, the airport is magnificently equipped to handle all types of aircraft, including Airbus A-380. It will be fitted with ultra-modern gadgets, including latest instruments landing system, to render taking-off and landing possible in difficult weather conditions. The carpet of the runway, as always, is concrete with a formidable base to bear the enormous weight of the aircraft and passengers. The runway is grooved so that tyres will bite it and not skid in rain. It is provided with a bath with detergent and machine-scrubbed to wash away the oil. While scrubbing, a concerted effort is made to remove every piece of tyre on the runway. These tiny pieces, if left on the runway, can cause innumerable problems to even an experienced commander. Men and vehicle will be on patrol while early mornings will be reserved for exercises to scare away birds. All involved players of the Delhi International Airport Limited (DIAL), Airports Authority of India and the directorate-general of civil aviation need to be complimented for providing the runway that portrays true potential and knowledge of people associated with Indian civil aviation for decades. According to authorities, trial runs will start from August 21. The first aircraft to land will be of national carrier Air India. It is learnt the flight will be without passengers. According to officials of the DIAL, the runway has been completed seven months before the scheduled time. The runway will be 4,430 metres long and 75 metres wide. It has full-length parallel taxiway and a cross taxiway to connect the existing runway. Much of the success of the runway will depend how authorities build rapport with the air traffic controllers, who are the nerve-centre of all operations. The strength of ATCs, who are experienced and knowledgeable, is much below the required need. The congestion from skies will reduce only when ATCs, commanders and other connected players work in unison. A brand new third runway, renovated terminal for international passengers and increased facilities should reduce irritants. Things will look rosier than they do if DIAL and AAI bury their problems and work hand-in-hand. |
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Mumbai, August 16
