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No need for Tatas to shift, says Buddha Investor Guidance
Aviation Notes |
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Govt to boost supplies to contain inflation
Eicher, Volvo finalise JV deal
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No need for Tatas to shift, says Buddha
Kolkata, August 23 The Chief Minister also said Nano cars would be available in the market in October and hoped the Singur crisis would be resolved amicably. He said there was no need for Ratan Tata to shift his project from Singur to any other state, though he was aware Chief Ministers of Orissa, Maharashtra, Andhra Pradesh and Haryana had invited him to their states. Meanwhile, Punjab industries minister Manoranjan Kalia said on Saturday he would soon write an offer letter to Tatas to formally invite them for setting up project in Punjab. Bhattacharjee today spent the whole day meeting state officials and the police for supervising the arrangements made for maintaining peace and normalcy at Singur during the indefinite sit-in demonstrations by the Trinamool Congress and other political parties. He also met external affairs minister Pranab Mukherjee, who was in the city today, before attending an urgent meeting of the Left Front committee in connection with the Singur problem at the Alimuddin Street party office in the evening. The Left Front committee urged the Chief Minister and Mamata Banerjee to hold talks and resolve the problem. The Chief Minister said he was still ready to negotiate with Mamata, but he ruled out any possibility of return of 400 acres given to Tata Motors to farmers at this stage. He said instead the farmers could be given better compensation and alternative lands elsewhere. But Mamata said the return of 400 acres was possible and she could provide the solution if the Chief Minister agreed to their demand in principle. She alleged they had waited for over two years for an amicable solution, but the Chief Minister had ignored them and instead tried to forcefully execute his plan. The Trinamool chief said she would remain at Singur to participate in the demonstrations till the farmers’ demand were met. She said Samjawadi Party leader Amar Singh, former state Congress president Somen Mitra and leaders of several other national parties would attend the protests. Social activist Medha Patkar and Anuradha Talwar were already in the city and novelist Arundhati Roy would be arriving tomorrow. |
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Investment in capital gains bond has a ceiling of Rs 50 lakh
by A.N. Shanbhag Q: I am given to understand that if one wants to avoid taxes on the sale of a immovable property, the proceeds can be invested in capital gains bond for three years before repatriating the money. I have two questions on this: 1) Is there a limit on how much of the sale proceeds can be invested? I heard it is Rs 50 lakh, is this true? 2) One of the issuers of these bonds is National Highways Authority of India (NHAI). Are there any other institutions? — Prabhat A: Yes, the limit is Rs 50 lakh. Note that this limit is applicable per financial year (Apr-Mar). So if you sell the property between December of any year but before March, since the six month period overlaps two financial years, potentially you can invest Rs 100 lakh (Rs 1 crore). The other institution that offers these bonds is Rural Electrification Corp. The government decides who should be allowed to issue these bonds, considering the capital-raising requirement of a particular organisation. Earlier, five companies were being allowed to offer these bonds but now there are only the abovementioned two. Capital gains tax
Q: I understand that I can save capital gains tax on sale of property by investing the capital gains in property either one year before or two years after the date of sale. My question is in the first case, when the new property is being bought before the date of sale, how can anyone invest the capital gain amount since at the time of buying the new property, the sale hasn’t yet taken place. — Shrushti A: The law (Sec. 54) only states that an amount equal to or more than the capital gains amount be invested in the new property. It is not necessary that the exact same amount realised from the sale has to be invested. As you yourself have pointed out, this is an impossibility as the new house is being bought before the sale of the old house. Therefore, as long as an amount equivalent to the capital gain that is going to be incurred is invested in the new property, the provision of Sec. 54 are satisfied. You may even take a loan to buy the new property, it will still satisfy the provisions of Sec. 54.
Loan to wife
Q: My wife is a home maker and has taken some general training on stocks from her friend (who is a sub-broker). As she feels idle at home, she has a wish to start stock trading to augment our income on ICICI
Direct. com. Her friend advised her that she can take an interest-free loan from me (instead of a bank) for the purpose. This will not be clubbed with my income and she will be filing her own IT-return for this income. Is it true? If yes, what precautions/documents we need to step into. She has her PAN card." — M.P. Varshney A:
The risk behind extending an interest-free loan to your wife is that it can be assumed as a gift by you to her by the income tax officer. In such a case , clubbing provisions will apply and all her income from such funds will be taxable in your hands. Instead, we suggest you extend her a loan at a very nominal rate of interest, say what your funds earn in the savings bank. This 3.5% p.a. paid to you by your wife will be taxable for you, however, this would prove beyond any doubt that this is indeed a loan transaction at arms length between husband and wife and hence free from clubbing provisions. HRA deduction
Q: Can husband and wife both claim HRA deductions if they are paying monthly rent for the rented accommodation. Or it is by law, not allowed? — Rutuja A: The HRA deduction is available only upon payment of rent by the taxpayer. If husband and wife are both paying the rent individually from their account, the HRA deduction would be available to the extent of the rent paid. However, if one pays the entire amount of rent, then the other one cannot avail of the deduction. NRO interest
Q: I want to invest in fixed deposits (FDs) from the foreign transfers accumulated in my NRO (Rupee) Account. My earnings in India are only dividends from mutual funds which are less than Rs 25,000 per year. Will my interest from FDs be taxable in India? Can I submit form 15 G (my age is 34), as my income in India, including the expected FD returns of 8.5 %, will be less than my taxable threshold ? — Magesh A: As per the law, final taxability and TDS are two separate issues. Since your total Indian income will be less than the tax threshold of Rs 1,50,000, you will not be liable to tax in India. However, as per the provisions of Sec. 195, your NRO interest will be subject to a TDS of 30.9% irrespective of the amount thereof. In other words, the TDS is applicable on the NRO interest without any basic threshold. The facility of filing Form 15G is not available to NRIs. Your only recourse is to file a tax return and claim refund of the tax deducted. Sale of land by NRI
Q: I have a query as under: A friend of mine is at present holding an inherited ancestral agricultural land and houses and has the land records in his name. However, he may soon become a citizen of foreign country and then proceed to acquire a PIO/OCI card. My query is whether he can continue to hold his ancestral agricultural land and houses after he becomes a citizen of foreign country and holds PIO/OCI card? What are the legal provisions he has to observe if he opts to dispose of the same after a few years? — Rajas Mudholkar A:
Your friend may continue to own and hold inherited agricultural land and/or houses even after acquiring foreign citizenship. Though he would not be allowed to buy any agricultural land, there is no restriction on holding inherited land. This principle will not change even if he were to acquire a PIO/OCI card. Eventually when he sells the land, he will have to sell it to a Resident Indian only and not to an NRI or a PIO. However, this is as per the law as it stands today. Since he intends to sell the land after a few years, FEMA provisions existing at that point in time will be applicable. The authors may be contacted at
wonderlandconsultants@yahoo.com |
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Unrest amongst DGCA officials
by K.R. Wadhwaney Indian civil aviation has hit an unprecedented turmoil. There is intense unrest in the country's top safety office, directorate general of civil aviation, for ministry's strange rules, which prohibit department officers from applying for top post. Senior officers, who have toiled for decades, are of the firm view that both joint director-generals, A.K.Chopra and R.P.Sahi, are technically competent and professionally sound and one of them should be promoted. Buoyed by the support of the staff and in view of arbitrary rules, one JDG made a representation to the Central Administrative Tribunal. After examining all facts and figures, CAT quashed the appointment of Naseem Zaidi, an IAS officer, now on deputation in the International Civil Aviation Organisation (ICAO) in Geneva. The CAT also issued an order that all candidates - IAS, defence and department should be treated on par. This man-made row has arisen when current DG Kanu Gohain's third extension ends on August 31. Actually, Gohain was scheduled to retire on June 30, 2007. He got an extension for six months; he got another for another six months and then for two months. Many commanders and co-pilots have been asking whether he is indispensable and DGCA cannot function without his being at the helm of affairs. Gohain's two-month extension ends on August 31. Only a week remains, but no one knows whether he will hand over the charge to his deputy or he will get further extension. The analysts feel that civil aviation is very complex subject and should be dealt with by thorough professionals who have intimate knowledge of intricate flying matters. The government is said to have sought the opinion of legal luminaries but it will be highly unfair if deserving departmental officers are barred from holding this high office. The Kingfisher-Deccan has been granted permission to fly on international routes. Come September, the airline will commence operations from Bangalore to London and also to some cities in the US. The competition now between two private airlines, Jet and Kingfisher, becomes all the more intense. Kingfisher has chosen Bangalore because it has comparatively lesser traffic. Jet is already an experienced player on international routes. Between these two aggressive players, Air India will be considerably affected. Its traffic will be further hard hit. The aviation analysts are of the firm view that the rivalry between Jet and Kingfisher will be as intense as between Coca Cola and Pepsi.
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Reliance imposes anti-dumping duty
Chandigarh, August 23 The industry here is also lobbying to get sanctions imposed against China for the undervaluation of their currency (yuan). This was revealed by the president, Reliance Industries, and chairman of CII Steering Committee on Technical Textiles, Dr C.S. Gokhale, during an interaction with The Tribune, on the sidelines of a seminar on investment opportunities for Indian technical textiles industry organised by CII here yesterday. “Reliance Industries has already imposed anti-dumping duty of 40 per cent on all textile goods coming from China, Vietnam and Taiwan,” he said. Gokhale said a number of yarn, fabric and garment manufacturers were now thinking of imposing high anti-dumping duty on goods being imported from China. “Though there is hesitation on part of many industrialists on filing anti-dumping duty by putting their accounts in the public domain (a requirement for filing an anti-dumping case), there is a growing awareness that this is the only way to deal with the onslaught of the Chinese textile industry,” he added. Reliance Industries president said the Indian textile sector was at its lowest ebb, and it would take at least three years for the sector to be back on the rails. “One of the major factors is the slow growth in exports, vis-à-vis China. Because the Yuan is undervalued by 17 per cent, the Chinese have a big advantage. As against the actual value of 5.1 yuan to a dollar, the rate is 6.2 yuan to a dollar,” he said. Gokhale said the government would have to take proactive steps to help the domestic textile sector, as the ‘zero-for-zero’ concept takes shape in the Doha round of WTO talks. “The Chinese government had earlier notified 82 subsidies for the textile sector, while not declaring 25 other subsidies. Though a number of these subsidies have been subsequently withdrawn, the Indian government has failed to provide much immunity to the domestic textile industry. With the zero-for-zero concept, which means globally there would be a zero import duty on textile imports, the domestic industry would get a severe blow. A forward path for the domestic textile sector has to be initiated by the government,” he added.
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Govt to boost supplies to contain inflation
New Delhi, August 23 The finance ministry statement, which was released yesterday, said the supply side problem of fruits, vegetables, milk, tea, and other items were largely governed by localised supply demand factors and other disruptions like rain etc. Hence, the disruption caused locally was leading to the rising prices. It was the movement of prices of these items that were impacting the prices of primary articles, it added. The government is examining a scheme for supply of four lakh tonnes of pulses with a subsidy of Rs 10 per kg. The scheme will be brought in public domain soon. Meanwhile, the government has approved open market sales of up to 60 lakh tonnes of wheat. The government has also decided to release an additional quantity of five lakh tonnes of non-levy sugar during festival months. The government has introduced a scheme for the release of edible oil with a subsidy of Rs 15 per kg. Public sector undertakings will import 10 lakh tonnes of edible oils. Of this, 2.8 lakh tonnes have already been contracted for and 1.6 lakh tonnes have been actually imported and distributed to the states. |
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Eicher, Volvo finalise JV deal
New Delhi, August 23 Eicher Motors (EML), which has transferred its commercial vehicle business to the new JV company V E Commercial Vehicles Ltd, said the operations of the new JV company would be considered effective from July 1 this year. "EML has transferred its commercial vehicles business along with its related components and engineering design services businesses to its joint venture company with Volvo, V E Commercial Vehicles Ltd (VECV)," EML said in a statement. In addition to the businesses being transferred from EML, the JV will also contain Volvo Group's Indian truck sales operations and the truck and bus service operations, the company added.
— PTI |
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