The Tribune, Chandigarh, India

	Cairn turns on oil tap in India Barmer, August 29 Prime Minister Manmohan Singh today inaugurated production from the country's biggest oil find in more than two decades and said India offered "a very good" climate for foreign investment in the sector. Speaking at the beginning of oil production from Cairn India's on-land Mangala oilfield, he said the historic event reflected that a “very good climate has been created for foreign investment.” “ I invite investors from all over the world (to invest in the oil and gas sector) ...The investment climate is positive. We are committed to facilitating (such investment) and providing all assistance,” he said. India has offered 70 oil and gas exploration areas and 10 coal bed methane (CBM) blocks - the largest ever auction of oil and gas exploration areas in the country - in the eighth edition of New Exploration Licensing Policy. Singh described the beginning of oil production as the “beginning of a new era” for India and Rajasthan. The oilfield will facilitate a more prosperous state and economic development. Cairn India has started production from the Mangala field - the largest of 25 discoveries made by Cairn in the Barmer Basin. First oil was evacuated via trucking to the Gujarat coast for onward transport to MRPL, one of the government-nominated buyers. The oil production will gradually ramp up to a peak output of 1,75,000 barrels per day over the next two years. At this point, oil production from Rajasthan oil fields will account for over 20 per cent of India’s domestic oil output. Petroleum Minister Murli Deora said the gas discovery in the Krishna Godavari basin by Reliance Industries and the oil find in Barmer demonstrated that India was a hydrocarbon rich. Oil production from Mangala would save around 7 per cent in crude oil import bill, he said. “Cairn has invested about Rs 10,000 crore in the area. The total investment in this project will be more than Rs 20,000 crore. The Central government would get Rs 46,000 crore as its profit petroleum revenue over the life of the project. The government of Rajasthan would get Rs 12,000 crore as royalty for the first five years of the project,” he said. Cairn India chairman Bill Gammell said development of the oil field in five years from discovery was reflective of the investor friendly environment in the country. — PTI
	Investor Guidance Not much difference in NRI, PIO status by A.N. Shanbhag Q I am an NRI living in the US. My interview for taking US citizenship is coming up in a short while. I want to know what will be the restrictions imposed upon me as far as taxes, regulations and investment options in India are concerned once I give up my Indian citizenship. — Sanghmitra A As far as Indian law is concerned, an NRI is a person situated abroad who retains his Indian citizenship and passport. On the other hand, an Indian person who is abroad and has given up his Indian citizenship in favour of a foreign citizenship is termed as a PIO or Person of Indian Origin. Now, the rights, obligations and liabilities of NRIs and PIOs are largely similar as far as India is concerned. Which means you can continue to invest in the same instruments that you used to as an NRI. The tax liability is also no different between NRIs and PIOs. Home loan Q I have a query relating to housing loan. If the property is purchased in the name of husband and wife on loan that has been applied to by both, will the wife's loan instalment paid by her husband claimed by him as deduction both for interest as well as Section 80C for principal component and up to what limit? — Dhara Mistry A From the information provided, it seems that the house property is purchased in joint names and the loan too is being applied for jointly. It is not clear whether the equity portion (most loans are available up to 75% to 80% of the property value, the balance being contributed by the owners) is also being contributed equally or only the husband is putting in that amount. In any case, deduction will be available in proportion to each person’s stake in the property taking into account own equity as well as the loan component. However, if the husband pays the wife’s share of EMI, the wife will not be entitled to the deduction. Assuming that this is your only self-occupied property, the maximum deduction for interest that may be claimed by each individual is Rs 1.50 lakh. Sale of property Q A family member wants to sell off a property, which he has owned for more than 10 years, for about 50 lakh. Will the proceeds of the sale be taxed for capital gains (if yes, on what basis) and if he needs to avoid that, can he re-invest in some other property or bonds or such? What are other options for investment to avoid this tax? — Saurabh Doshi A Yes, long-term capital gains tax will be payable. The cost of acquisition will be indexed to adjust for inflation. Inflation indices for capital gain calculation purposes are released by CBDT each year. Such indexed cost will be reduced from the sale value to arrive at the capital gain figure. The tax is 20% of the capital gain. This tax can be saved by either investing capital gain amount (and not the tax amount) within two years in another property or capital gains tax saving bonds within six months of sale u/s 54EC. There is no other investment that can save tax on capital gains. Tax return Q My grandfather’s estimated income from all sources (pension, interest from FDs, interest from post office savings and LIC) is Rs 2,90,000 for 2009-2010. He is investing Rs 5,000 per month through SIP to SBI Magnum tax gain scheme. His is 80-years-old and has been filing tax returns every year. He feels that he does not need to file tax returns as his income, after deducting Rs 60,000 investment, is less than the exemptions limit of Rs 2.35 lakh. Is this true? — Anoop A It is the gross income that needs to be considered for filing tax return before availing of any deductions. In your grandfather's case, the same is Rs 2,90,000 and since this is more than the basic exemption of Rs 2.40 lakh (and not Rs 2.35 lakh), he needs to file a tax return. It will be a nil tax return on account of the Section 80C exemption. Nevertheless, it needs to be filed. The authors may be contacted at wonderlandconsultants@yahoo.com
	Govt reviews AI’s turnaround plan New Delhi, August 29 The Civil Aviation Ministry would soon move a proposal for financial assistance to and restructuring of cash-strapped Air India. This was decided at the high-level meeting of Committee of Secretaries (CoS), headed by Cabinet Secretary KM Chandrasekhar, which met here today to review the turnaround plan of the national air carrier. Official sources said the CoS directed the Civil Aviation Ministry to move a proposal for consideration of the Cabinet in consultation with the Finance Ministry. While Air India made a presentation on its turnaround plan to the CoS, the Finance Ministry also made projections on how the ailing national carrier could be helped by the government to enable it come out of the financial crisis. The committee felt that Air India needed to adopt more aggressive cost reduction measures and “examine its strategic position with respect to its shareholders objectives,” sources said. While the government may make only a partial contribution as equity infusion to the airline, a major part of resource mobilisation is likely to be through options like partial divestment of government equity, issuance of initial public offer or infrastructure bonds, sources said. At the first meeting of the CoS last month, Air India had sought an equity infusion of about Rs 2,500-3,000 crore and a loan of Rs 10,000 crore at 5-7 per cent interest for repayment over five years. The carrier's losses have gone up to Rs 7,200 crore in 2008-2009, while it has a debt of Rs 16,000 crore. The CoS maintained the airline company now needed to "examine its strategic position with respect to its shareholders' (government) objectives". — PTI
	Aviation Notes Changes come a cropper by K.R. Wadhwaney The more infrastructure changes are brought about, the more Indira Gandhi International Airport (IGIA) remains the same. This is mainly because government is “soft” on the new public-private developer, Delhi International Airport Limited - an outfit of the GMR - that gets every thing from every agency, including relief from the Delhi High Court, but provides nothing in return. When it is summer, there is fire problem at the Rs 50-crore 1D terminal building. When it rains, the roof gets blown away and when it is winter's foggy month, the flights come to standstill. This is the situation when the building is brand new! Senior AAI (Airports Authority of India) officials share the same feeling - they rae receiving a step-motherly treatment from the government that was showing “partiality” to the DIAL. Recently, Civil Aviation Minister Praful Patel had gone on record as saying the new third runway (4,430 metres - one of the longest in Asia) will be “fully utilised”. The commanders dispute this claim. They maintain that the full length of the runway cannot be used because there is a temple in the line of the runway. “We cannot use the final 200-300 feet while taking-off. Similarly, we have to forego a part of the runway while landing.” According to fire officials, there are loop-holes in the 1D building. “We have pointed out problems to the authorities who have assured us that they will have the loop-holes plugged,” a fire official said. Recently, there was a heavy downpour and part of the roof blew away. Similarly, another embarrassing situation arose on August 26 when rain water seeped inside the building causing loss to valuable property. Though the Delhi High Court, in its judgment dated August 26, considered development fee as legitimate, the passengers scream that the levy is “uncalled for” in view of an apathetic attitude of the authorities in providing basic facilities to commuters. According to DIAL, the development fee is levied for a limited period.
	MTN wants to finalise merger soon: Report Durban, August 29 South Africa's leading telecom services provider MTN wants to finalise merger talks with India's telecom giant Bharti Airtel as soon as possible, a media report has said. MTN chief executive officer Phutuma Nhleko told the Johannesburg-based Business Report newspaper that they wanted to finalise the talks with Bharti Airtel as quickly as possible in order to remove shareholder uncertainty. The companies aimed to benefit from "economies of scale" that might come from the merger, the newspaper quoted Nhleko as saying. MTN and Bharti entered into merger talks in May this year but has been dragging on over the finer financial details. Last week, MTN said exclusive talks for a possible deal with Bharti Airtel would be extended for a second time till September 30. — PTI