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Package for housing sector likely today
Oil heading towards $30?
PSUs on hiring spree
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RBI: Govt’s finances to deteriorate further
Rlys to invest Rs 30,000 cr
Market Update
Tax Advice
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Package for housing sector likely today
New Delhi, December 14 "Bankers at a meeting convened by the Indian Banks' Association in Delhi couple of days ago had reached a consensus on disbursing home loans to the bottom of the pyramid. The government is assessing the suggestions received from bankers and is likely to announce the details tomorrow," sources said. A slew of measures, including reduction in interest rates and exemption from home processing fees up to Rs 5 lakh and also to those in the Rs 5-20 lakh bracket are on the cards, sources said. Banks may also bring down margin requirements and there could be some concession on pre-payment, they added. Sources said RBI may relax norms related to risk-weights and margin requirements for home loans, which would enable banks to lend more in these categories. At present, the risk weight for home loans up to Rs 20 lakh is 50 per cent. Bankers may also resort to a reduction in their deposit rates in order to reduce their cost of funds, sources said. "The cost of funds are high for banks given the current high interest rates they are giving for deposits. A reduction in deposit rates is essential to facilitate a lower lending rate regime" a senior banker said. The government last Sunday while announcing the multi-crore stimulus package to prop up the economy had mentioned about a special package for housing sector and small and medium enterprises. — PTI
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Oil heading towards $30?
New Delhi, December 14 After hitting a peak of over $147 in July this year, crude oil prices have declined sharply and are currently trading near $45 level. Goldman Sachs' commodity research team in its latest research note has predicted that the oil price might slip to $30 per barrel level in the next three months. Meanwhile, the firm's energy equity research team, led by Arjun Murti, said in another report it is cutting its forecast for 2009 to $45, from $80 previously, due to global economic slowdown. The latest report from Murti's team, however, said that there was a possibility of prices falling below $40 level shortly.
— PTI |
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Mumbai, December 14 LIC plans to strengthen its workforce by hiring 10,000 persons by March, LIC's managing director, A.K. Dasgupta said. "Slow down in the market will not pose any hurdles for LIC to strengthen our team as the corporation is on an ambitious expansion mode. Nearly 10,000 professionals will be recruited by the end of this fiscal," Dasgupta said here. The insurance major, which has a 78 per cent market share in terms of total premium, has already kicked off the recruitment process, to give more teeth to its marketing force. The corporation plans to induct around 5,000 professionals in its marketing, while the remaining will be placed in its administrative divisions, Gupta said. Similarly, the biggest lender in the country, State Bank has started head-hunt to support its fast expanding network by planning to hire about 20,000 clerical staff and around 5,000 supervisory staff by the fiscal-end, the bank said. Other major public sector banks, which have huge hiring plans include Union Bank of India, Bank of Baroda, Indian Overseas Bank and Bank of India. — PTI
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RBI: Govt’s finances to deteriorate further
New Delhi, December 14 "While expenditure is slated to increase in the coming months, growth of tax revenue is likely to decelerate with the expected moderation in real economic activities following the global financial meltdown," RBI said in its monthly bulletin. "Finances...in the first-half indicate deterioration in all key deficit indicators, both in the absolute term as well as percentage of GDP," it said, adding the "pressure" on deficit indicators would continue during the remaining part of 2008-09. The government has come out with a fiscal stimulus package of over Rs 30,000 crore which will have an adverse bearing on central finances. This will be an addition to over Rs 1 lakh crore the government has sought during the first batch of supplementary demands for grants raising the government expenditures. With the industrial production as well as exports recording a negative growth of 0.4 per cent and 12.1 per cent, respectively, in October, the government may come out with the second stimulus package increasing further pressure on finances.
— PTI |
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Rlys to invest Rs 30,000 cr
New Delhi, December 14 As a result, the Indian Railways has decided to invest as much as Rs 30,000 crore in upgrading the infrastructure, which will also boost the economy. In a statement, the Railways said the upgradation would include laying of new railway tracks over 2,941 km. This would require about 339,228 tonnes of steel providing a major boost to the sector, which is seeing a downtrend due to increase in prices. There would be a need for renewal of sleeper sheets along 2,382 km of railway lines, again requiring the use of steel. The Railways said the investment would shore up its infrastructural development and upkeep, and also "go a long way in boosting the Indian economy". It further added that work was in progress for developing 300 railway stations into model stations. The railways manufactured 3,000 coaches this year, an increase of about 12.5 percent over last year. It is also developing 23 world-class stations, for which construction work on four has already started. The statement added that Railways would set up a 1,000-MW thermal power plant as part of a joint venture deal with National Thermal Power Corp (NTPC) at Nabi Nagar, Bihar, at a combined cost of about $1.19 billion (Rs 5,352 crore). The ministry of railways has increased its target of electrification of railway lines to 3,500 km as part of the 11th Five Year plan, it added. The electrification target for the current year has been increased from 700 km to 1,000 km, while it has set a target of 1,200 km for next year.
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Market Update
A booster dose by the government, in the form of a fiscal stimulus package (though the package is not significant) for the economy and rate cut by the central bank, aided a recovery on the bourses last week.
The BSE Sensex gained over 8 per cent and NSE Nifty spiralled 7 per cent to close at 9,690 and 2,921, respectively. A sharp cut in the retail petrol and diesel prices also aided the sentiment.
The fuel price cut will bring down inflation further and will provide further room for the RBI to cut rates.
The market sentiment has also improved following resumption of buying by foreign funds this month. The policy rate cuts by the central bank are largely in line with expectations while the fiscal measures announced by government are below the street expectations. The measures are a step in the right direction. However, the quantum of fiscal stimulus at around 0.6 per cent of gross domestic product (GDP) is too little to make any significant impact on the economy. Moreover, the fiscal situation leaves little scope for any major expansionary measures in the coming months. Going forward, the market may extend
the gains on expectation of a second government fiscal stimulus package to shield the domestic economy from the global economic slowdown. According to the market, the second stimulus would be aimed at generating employment and ensuring that the credit needs of the industry were fully met. Tata Steel
Investors looking to add “steel” to their portfolio must accumulate Tata Steel on declines with a two to three-year perspective. The company’s stock is trading at a mammoth 78 per cent to its 52-week high of Rs 952. While concerns seem to be valid, they also seem to be far too exaggerated. On the leverage front, although the debt to equity ratio of the consolidated entity is poised at alarming levels, there is no short-term loan that remains outstanding for the company. The first repayment obligation is not due till December 2009, by which time the sector scenario should start looking good. The company has expansion plans and that too gargantuan. Tata Steel plans to achieve the growth objectives through various strategic initiatives such as retaining its pre-eminent position in Indian markets by significantly expanding capacities through both brownfield as well as greenfiled expansion routes, linking low-cost steel production facilities with the most favourable steel consuming markets and having a balance between the growing markets of the developing countries and the mature markets with high-end products and technology. Considering the company’s previous track record, it would not be out of place to think that it will be able to meet most of these objectives, thus significantly enhancing shareholder value in the process. |
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Tax Advice
Q. I filed my original income tax return on 18-09-2006 (assessment year: 2006-07) having refund of Rs 124. Then to rectify some mistake, I had to file the revised return on 24.12.2007, refund increased to Rs 15,000.
Now the Income-tax Officer refused to sign the refund voucher. He says that the return is belated as it should be revised within one year. I want to know how I can claim my refund, is there any case law on this. Please let me know. I shall be grateful to you.
My case is non audit other than companies. Also I want to know that if in any year due date of return filing is extended, then the period of one year of revising the return will be counted from that extended date or 31st
July. A. The revised return can be filed within one year of the end of the assessment year in case the original return has been filed on due date.
Accordingly, you had a right to file the revised return up to 31st March 2008 for the assessment year 2006-07. The revised return filed on 24.12.2007, therefore, was validly filed in case the original return was filed on due date. The provisions of Section 139(5) of the Income-tax Act 1961 (the Act) state that if any person, having furnished a return under sub-section (1), or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. In case the due date for filing return is extended, the time available for filing the revised return would remain same. This is because the time available is to be reckoned with reference to the end of assessment year. In case the Assessing Officer does not allow you the credit of the tax deducted at source, you can take up the matter in appeal with Commissioner of Income Tax (Appeals) or file a revision petition with the Commissioner of Income-tax under Section 264 of the Act. Interest income of minor
Q. I have a daughter aged five years. She received gifts on various occasions like her birthday, visits to relations and religious occasions. The amounts so received have been deposited in her bank account and thereafter converted into fixed deposit as and when the amount exceeds Rs 10,000. The interest income for the year in her case should be about Rs 15,000. I am advised by someone that this interest amount is taxable in my hand. Is it correct? A. The advice given to you is correct. The interest earned on fixed deposits of the minor is includible in the income of the parent in view of the provisions of Section 64(1A) of the Income-tax Act 1961 (the Act). The only exclusion from the clubbing provisions is in respect of income arising to a minor child on account of any (a) manual work done by a child or (b) activity involving application of his/her skilled talent or specified knowledge and experience. PAN card
Q. I had applied for my Permanent Account Number. However, the PAN card received by me does not indicate my date of birth and my name has not been correctly mentioned. What should I do for getting the rectification made? A. A specific form no. 49A (Request for new PAN Card or/and changes or correction in PAN data) has been prescribed for the purposes of getting correction done. You will have to submit this form specifying the correction required and attaching copy of the PAN card as issued to you. The due rectification should normally be done within a period of fortnight or so. Transferring asset to spouse
Q. I understand that income from any asset transferred to the spouse is clubbed in the income of the spouse transferring such asset. Please clarify whether income on income derived from such an asset is also treated in the similar manner? A. According to the provisions of Section 64 of the Act, in computing the total income of an assessee, there shall be included all such income as arises directly or indirectly to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connection with an agreement to live apart. These provisions being of deeming nature, the income on income is not required to be clubbed for the purpose of computing the income of the individual who has transferred such asset to a spouse for an inadequate consideration. Notice pay
Q. I have resigned from a job from a private sector firm. I am required to give three months notice for leaving the job. I have decided to make the payment in lieu of the requisite notice pay as the new employer has undertaken to reimburse the aforesaid payment. Is the amount paid in lieu of the notice pay is deductible against my salary income. However, will the amount reimbursed by my new employer be exempt from tax? A. The amount payable as Notice Pay recovery is not deductible against your salary income under any of the provisions of the Act. The amount paid by a new employer towards the reimbursement of notice pay on account of shortfall in notice period would be a perquisite and taxable as part of your salary income. |
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