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Jet fuel prices cut by over 16 pc
Keep money with PSU banks: FinMin to oil Cos
Singur stir unfortunate, says Narayana Murthy
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IDBI Fortis Life Insurance eyes Rs 400 cr as premium
World’s power women prefer short-hair look
GDP to hover around 7.5 pc: Citigroup
UTI MF public issue may get delayed
Tax Advice
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Jet fuel prices cut by over 16 pc
New Delhi, August 31 The cut of Rs 11,784 per kilolitre (kl) is the single biggest reduction in the fuel price. The oil marketing companies have done their bit by passing on every penny of the reduction in prices of jet fuel in international market, an IndianOil official said. Jet fuel prices in Delhi have been cut by Rs 11,378.19 per kl to Rs 59,650.07 kl with effect from midnight tonight. The cut in ATF prices would put pressure on airlines to reduce airfares. Most of the airlines had raised airfares after the June 1 hike by over 18 per cent. But they did not cut fares when oil In subsequent two revisions, prices went up and have now been cut drastically. ATF prices in Mumbai have been cut by Rs 11,838.75 per kl to Rs 61,834.81 per kl. “The sharp fall in ATF price is on account of fall in prices of jet fuel in international market,” the official said. State retailers IndianOil, Bharat Petroleum and Hindustan Petroleum revise ATF
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Keep money with PSU banks: FinMin to oil Cos
New Delhi, August 31 The demand for retaining bidding process for bulk deposits has also been rejected. According to the guidelines, the policy of the Central Public Sector Enterprises (CPSE) is to park surplus funds in term deposits with any scheduled commercial bank with a paid-up capital of at least Rs 100 crore. But lately, it was noticed by the government that certain entities have transferred their entire or substantial part of business to private sector banks, prompting the north block to order that at least 60 per cent of their funds should be placed with the public sector banks. The finance ministry has also pointed out that there has been an emerging trend of inviting competitive bids from public sector banks that should be discontinued as it led to arbitrary hikes in interest rates by the banks. The CPSEs park their bulk deposits through competitive bidding process by inviting bids from eligible banks. These funds are invested with the bank quoting the highest rate of interest. However, sometimes part of the funds are also allocated to second or even third highest bidders, in case the highest bidder does not quote for the full amount to be invested or bidder’s exposure limit is exhausted. These investment transactions are subsequently reported to the Board. ONGC has rejected the directive and stated that it followed a scientific approach as its bank-wise exposure limits were approved based on a study done by CRISIL, considering factors like credit rating, liquidity, net worth and capital adequacy ratio of each bank. Last such revision was done by ONGC in July, where it increased sum of individual bank-wise exposure limit to Rs 50,000 crore from the earlier Rs 35,250 crore. Prior to that, the Board had approved an open limit for the State Bank of India (SBI) - ONGC’s principal banker. Other PSUs, including ONGC and MRPL, have expressed their reservations on doing away with competitive bidding process. The reason for objection is that if the funds are parked with PSU bank then these banks would pay prevailing card rates that are lower by 200 basis points as against rates obtained through competitive bidding. In a situation like this, ONGC could lose Rs 400 crore annually on interest income. But clearly, ONGC’s appeal has fallen on deaf ears. The finance ministry did not agree with the company’s point of view and stuck to its decision of doing away with the bidding process.
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Singur stir unfortunate, says Narayana Murthy
Bangalore, August
31 In a statement here today, Narayana Murthy said what was happening in Singur was unfortunate for West Bengal, India and all progressive Indians. The event would unleash fear and uncertainty in the minds of all investors - Indian and foreign - and would hamper the excellent GDP growth India demonstrated in the last decade, Murthy said. “It is also a setback for the job opportunities for the youngsters in West Bengal”, |
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IDBI Fortis Life Insurance eyes Rs 400 cr as premium
Chandigarh, August 31 Having launched its operations in March, the company also plans to open 100 branches across the country during this fiscal. This was stated by Filip Coremans, chief financial officer, IDBI Fortis Life Insurance, here today. In town to inaugurate the company’s branch in the city and Ludhiana, he said: “We have the fastest start up that any private insurer has ever had in India and by September we will cross the Rs 120-crore mark for premium collections.” The company, which is a tie- up between IDBI Bank and Fortis, claims that it was because of its unique unit-linked policy - Wealthsurance - and product design that they received a good response from the market. “We have created a value preposition for the client wherein he grows with the company. Most of the insurance companies are not transparent in their dealings with customers, delivery of product is a problem and unfair distribution of benefits of insurance market is a big let down for the customers. We propose to change all this and our products offer a uniform profit for each stakeholder. Since our products are cheaper, we are also able to offer higher returns to customers,” he said. He said in spite of an economic slowdown, the insurance sector was expecting a growth this year. “This is mainly because the insurance penetration in the country is just four per cent of the GDP. Even though the savings would have come down because of the high inflation, we are expecting a steady 12 per cent growth this year,” he added. Coremans stated that they were planning to increase their workforce in India by 200 per cent and increase the agent network from the present 3,000 to 25,000 by the end of the financial year. “Though, presently we are concentrating on increasing our footprint in the major cities across India, we will be targeting the rural market in a big way,” he said.
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World’s power women prefer short-hair look
New Delhi, August 31 In the latest list of the 100 most powerful women in the world, compiled by US business magazine Forbes, close to two-third of them have short hair, including the Indian débutante Mayawati - Bahujan Samaj Party president and Chief Minister of Uttar Pradesh. Among those with short hair, Mayawati has company in names like German chancellor Angela Merkel, US Federal Deposit Insurance Corp’s head Sheila Blair and PepsiCo’s Indian-origin chief Indra Nooyi - three most powerful women in the world. Other such famous personalities, who are short on hair but long on power list, include American senator Hillary Rodham Clinton, US First Lady Laura Bush and 82-year Queen Elizabeth II of the UK. In addition, the likes of health insurance major WellPoint chief Angela Braly and Cynthia Carroll of mining giant Anglo-American have also opted for cropped-hair look. In the top-10 of the 100 most powerful list itself, as many as nine have short hair, while as many as 75 of the total have their tresses falling up to or above shoulders. However, presence of such a large number of short hair women on the list might just be coincidental, as the measure of power has noting to do with tresses for this list. The US magazine has measured “power” as a composite of public profile, calculated using press mentions and financial heft. Those with long hair in the Forbes list include Argentina President Cristina Fernandez, Areva CEO Anne Lauvergeon, Australian mining firm Hancock Prospecting’s chairman Georgina Rinehart, Rite Aid CEO May Sammons and Casablanca Stock Exchange director general Hynd Bouhia. US secretary of state Condoleezza Rice, India’s Congress chief Sonia Gandhi and Biocon CEO Kiran Mazumdar Shaw have hair touching their shoulders. — PTI
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GDP to hover around 7.5 pc: Citigroup
New Delhi, August 31 The investment banking giant Goldman Sachs has, however, projected that the economy would register a growth rate of 7.8 per cent in the current fiscal year, a shade lower than GDP rate posted in the first quarter. Rising interest rates pulled the economic growth rate down to 7.9 per cent in the first quarter of this fiscal, lowest in any quarter in three-and-a-half years. Citigroup in its latest report - Indian Eco Flash - stated that it has revised FY09 estimates from 7.7 per cent to 7.5 per cent. “Investments have faced a double whammy with rising input costs on the one hand and more stringent borrowing constraints on the other,” Citigroup analyst Rohini Malkani said in the report. Besides, Goldman Sachs in its latest report stated: “In FY’09, slowing investment demand will likely be offset by a large fiscal stimulus through greater spending on rural employment scheme, debt waiver to farmers and wage hikes to civil servants.” Further, a near-normal monsoon is expected to support food grain production this fiscal, it added. The Indian economy expanded by a slower 7.9 per cent in the first quarter of current fiscal as rising interest rates hit manufacturing and other key growth engines of the economy. Interestingly, Goldman Sachs expects growth to slow further to 7.2 per cent in FY 2010, due to a weaker investment outlook caused by much higher interest rates, continued moderation in consumer demand and a partial reduction in fiscal stimulus post-election. — PTI
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UTI MF public issue may get delayed
Mumbai, August 31 Besides, the fund house intends to tap the capital market only at a time when it feels that market conditions are favourable for an IPO. “The license we had for the IPO has lapsed. We have to apply fresh. We will wait till market conditions improve both domestically and internationally, prior to entering the capital market,” UTI MF chairman and managing director U.K Sinha said after a meeting with finance minister P. Chidambaram, here on Friday. The company would rather prefer to induct a strategic investor to raise funds and enhance its competency in the domestic mutual funds industry, he said. UTI MF had filed its draft red herring prospectus with SEBI in January to sell around 4.8 crore-equity shares. Now, following its decision to defer the IPO, the company has also put on hold its pre-IPO placement plans through which it was planning to off-load 11 per cent to strategic investors. The government is now considering the induction of a strategic investor into UTI MF without diluting the majority stake of its for sponsors - State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India. — PTI
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Tax Advice Q. My father held shares in various blue-chip companies, which he had acquired at least 10 years prior to his death, with his own resources. On the basis of his will such shares have devolved upon me. My father died in January, 2008. I am interested in selling these shares as share prices have improved considerably as compared to the cost which my father had paid at the time of their acquisition of these shares. The shares are of listed companies. I have been advised that the sale of such shares will entail short-term capital gain as my holding in respect of these shares is less than one year. Is such presumption correct? A. According to the provisions of Section 2(42A) of the Act, a capital asset in the nature of shares in a company is deemed to be a short-term capital gain if the same is held by an assessee for not more than one year immediately preceding the date of its transfer. The said section also provides that in case the shares so held have become the property of the assessee on account of succession, inheritance or devolution, the period for which the shares were held by the previous owner will be included in the period for which the asset has been held by the assessee. In view of the above legal position, the shares received by you by inheritance from your father would be deemed to be a long-term capital asset as these have been held for a period of more than one year. In case the shares so held are sold through stock exchange and securities transaction tax is paid on such a sale, the long-term capital gain earned on such shares would be exempt from tax under Section 10(38) of the Act. Residential status
Q. I am a foreign citizen (not being a person of Indian origin). I have been visiting India for the last eight years every year in the months of October to December for about 80 days. What would be my residential status for assessment year 2008-09? A. The Act provides that an individual may be (a) resident and ordinary resident (b) resident but not ordinary resident or (c) non-resident. To ascertain whether a person is resident in India in any previous year he has to satisfy at least one of the following conditions: The above referred period of 60 days gets extended in case of an Indian citizen subject to fulfillment of certain conditions. On the basis of the facts given in the query you do not satisfy conditions at (a) or (b) above. Your status in my opinion should be that of non-resident for assessment year 2008-09. IT exemption
Q. I retired from active service with an Indian company after a period of almost 40 years and have received an amount of gratuity about Rs 15 lakh as well as a sum of Rs 4 lakh as cash equivalent to the leave salary to my credit at the time of retirement. I have retired recently and, therefore, the return of income for this year would be due by July 31, 2009. However, I would like to be on the right side of law by payment of taxes on time and, therefore, would be obliged if you could let me know whether the aforesaid amount is exempt from tax or is taxable under the Income-tax Act? A. The gratuity received by an employee on his retirement to the extent it does not exceed ½ month's salary for each year of completed service, calculated on the basis of the average salary for 10 months immediately preceding the period in which any such event occurs subject to a maximum of Rs 3,50,000 is exempt from tax in accordance with the provisions of Section 10(10) of the Act. The amount received by you in respect of the leave encashment at the time of your retirement is also exempt from tax if the same does not exceed 10 months calculated on the basis of the average salary drawn during the period of 10 months immediately preceding the date of retirement subject however to a maximum amount of Rs 3
lakh. In case you satisfy the conditions, above gratuity to the extent of Rs 3,50,000 and leave encashment to the extent of Rs 3 lakh would be exempt from tax. The balance amount would be taxable. Fee reimbursement
Q. I am an MNC employee and entitled to free use of gas, electricity and water in respect of the residence provided to me by the company. I am also allowed the reimbursement of school fee being paid by me for my two children — a son and a daughter. Are these amounts taxable in my hand and if so what amount would be included in my salary for the tax purpose? A. The answer to your queries is as under: In case gas, electricity or water is supplied by the employer out of its own sources, the manufacturing cost incurred by the employer less recovery if any from you would be added to your salary. Similarly, the amount of reimbursement of expenditure made for the education of your children is taxable as perquisite and, thus, will be included in your salary for the purpose of taxability. |
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