The Tribune, Chandigarh, India

	Continue stimulus packages: IMF Istanbul/New Delhi, October 4 The International Monetary Fund (IMF) today asked most Asian countries to continue with monetary and fiscal stimuli till signs of economic recovery are clear. The advice by a key IMF official came even as he said global economy is beginning to pull out of recession and Asian giants, India and China, are leading the recovery of developing nations. "Real GDP in the second quarter surprised mostly on the upside, with an expansion in France, Germany and Japan and a slower pace of contraction esewhere, including in the United States," IMF Director (Asia and Pacific Department) Anoop Singh said at a press conference in Istanbul ahead of Fund-Bank meeting from October 6. "Emerging economies, led by China and India, are turning around even more strongly," he said. Region-wise, Asia appears set to pull out of the global downturn faster and stronger than any other region, he said, but asked bulk of the nations in the region to continue with stimuli. "Fiscal and monetary policies (in Asia) should, therefore, continue to provide stimulus," Singh said. He said the region's central banks generally have the room to maintain an accommodative monetary conditions until there are clear signs of a sustained growth in private demand as pressures from inflation are muted. However, Singh also pointed out that there is considerable hetergeneity within Asia as there are cases where inflation has now started to turn upwards. Singh did not mention India in this regard, but inflationary pressures in the country are mounting and RBI is slated to come out with its monetary review on October 27. He, however, said some countries, notably China, have been experiencing rapid credit growth and may need to gradually unwind loose financial conditions to avoid a build-up of future problems for banking systems. On fiscal stimulus, Singh said public support in many countries should be withdrawn only when there are clear signs that the recovery is self-sustaining and "firmly anchored in renewed strength in private domestic demand". But some countries, where debt levels are high, may have to start raising taxes and tighten spending at an early stage, he added. "Regardless of the pace of withdrawal of fiscal stimulus, it will be important for the region's governments to lay out a clear path by which fiscal soundness will be restored," Singh said. This will guide expectations and clarify the temporary nature of the fiscal stimulus, potentially increasing its effectiveness and limiting pressure on long term interest rates, he said. IMF has scaled up its projection for the global economic growth by 0.3 percentage points for this calendar year, but even then the global economy would contract 1.1 per cent. India is projected to grow by 5.4 per cent in 2009, which is likely to be bettered only by China, pegged to clock 8.5 per cent growth. — PTI
	Credit card holders seek uniform policy Shubhadeep Choudhury Tribune News Service Bangalore, October 4 The Credit Card Holders Association of India (CCHAI) has protested against the deployment of hoodlums by banks for recovering loans advanced by them to customers. “The old methods of engaging anti-social elements and harassment are still continuing unabated. If we start filing cases against such instances, we may have to file at least 100 to 200 cases per day. Moreover, banks resort to filing false criminal cases against customers,” the CCHAI said. In a memorandum submitted to the Governor, Reserve Bank of India, Finance Minister and chairman of the Indian Banks Association, the CCHAI said though the RBI has repeatedly advised the banks to reduce the rate of interest on credit cards and other loans, yet some banks were charging interest ranging from 36 per cent to 42 per cent per annum, which was highest in the world. It demanded immediate intervention of the RBI to fix ceiling at 18 per cent per annum as the maximum rate of interest. It added that despite the RBI coming out openly against the levy of hidden charges and penalties by the bank, the practice was still going on. It was pointed out that often even if an account holder remitted the cash on the date of ECS, there were instances of ECS return. “Different banks adopt different procedures and sometime ECS debits happen before the bank opens, thereby depriving customers of the legitimate right to deposit ECS to their accounts on the day of ECS debit,” the memo said. It added that uniformity must be brought in terms and conditions stipulated for credit card holders by banks.
	Uncertainty to prevail Mumbai, October 4 Dalal Street is likely to witness some uncertainty this week, as investors are expected to trade cautiously at higher levels and take guidance from IT major Infosys Technologies, which is scheduled to announce its second quarter results this Friday. Analysts believe the market sentiment would remain positive but investors may exercise caution ahead of the second quarter results of corporate India, starting with Infosys Technologies. "The market is expected to trade cautiously ahead of the earnings season and the second quarter results of IT giant Infosys Technologies on October 9, may decide the market movement," SMC Global vice-president Rajesh Jain said. Stock market across the world are trading under pressure at higher levels and at this point of time some consolidation is expected coupled with selling pressure. During the last week, foreign institutional investors have put in over Rs 4,820.8 crore into Indian equities. — PTI
	Indian ADRs gain $3.56 bn in a week New York, October 4 Indian stocks trading on American bourses gained nearly $4 billion last week, with IT major Wipro and private sector lender ICICI Bank pocketing most of the gains. For the week ended October 2, Indian entities listed on the New York Stock Exchange and Nasdaq added $3.56 billion to their market-cap, with Wipro and ICICI Bank together contributing $3.15 billion. The valuation of Wipro grew by $1.66 billion, while that of ICICI Bank rose by $1.49 billion. However, total gain was offset by loss of handful of companies, including auto maker Tata Motors and pharma major Dr Reddy's Laboratories. Among the 16 companies trading as American Depository Receipts (ADRs), another major gainers was IT bellwether Infosys Technologies whose market capitalisation jumped by $692 million. During the week, Tata Motors was the biggest loser. The company witnessed a value erosion of $583 million. ADRs are bought and sold on American bourses just like stocks and are issued by banks or brokerage firms. — PTI
	Eight of top 10 cos add Rs 53,000 cr in m-cap Mumbai, October 4 Country's eight of the top 10 firms together added over Rs 53,000 crore to their market capitalisation last week, while two state-run firms, NTPC and NMDC, saw an erosion in their valuation. State-run trading firm MMTC gained the most and climbed to third slot from fourth. The firm added Rs 10,971.25 crore taking its total market valuation to Rs 1,79,822.5 crore. Shares of the company surged 6.67 per cent on the Bombay Stock Exchange to close at Rs 35,964.50 on Thursday. There were only three trading sessions last as Monday was a holiday on account of Dusshera and Friday on Gandhi Jayanti. The market cap of country's most- valued firm, Reliance Industries, swelled by Rs 6,397.78 crore taking the total to Rs 3,41,600.61 crore. Mukesh Ambani Group company RIL had a market cap of Rs 3,35,202.83 crore as of September 26. — PTI
	Satyam Saga CBI to file additional chargesheet New Delhi, October 4 The CBI will soon file an additional chargesheet against B Ramalinga Raju, former chairman of Satyam Computers, in the multi-crore accounting scam that rocked the nation early this year. "Siphoning of money, parking it elsewhere or tracing it into other assets, lot of that has little to do with criminal culpability of the kind that is already being put in the chargesheet of the CBI and they perhaps require an additional chargesheet for which the permission has been granted," Corporate Affairs Minister Salman Khurshid told PTI. The minister said the chargesheet was needed to know "if and where the money was siphoned off to, whether it can be traced to other properties, whether it is violation of tax laws or violation of foreign exchange laws... "The Enforcement Directorate and internal revenue are pursuing this and as and when they have come to conclusions they will file their respective chargesheets," he said. Official sources said the Mutli-Disciplinary Team is also probing other charges of serious violations of foreign exchange and securities laws and the CBI is likely to file a secondary chargesheet in the case other than criminal culpability on the former chairman in the scam. — PTI
	Tax Advice No penalty for non-payment of advance tax by S.C. Vasudeva Q. Is there a penalty for not making advance tax payment. What are the consequences of a short payment of advance tax? — BK Datta A. Presently there is no penalty leviable for non-payment or short payment of advance tax. However, in case an assessee, who is liable to pay advance tax in any financial year, fails to make such payments or where the advance tax paid by such assessee is less than 90% of the assessed tax, the assessee is liable to pay simple interest @ 1% for every month or part of a month comprised in the period from the first day of April next following such financial year to the date of determination of total income under the provisions of Section 143(1) of the Act or where a regular assessment is made to the date of such regular assessment. The interest is payable on the amount of assessed tax or as the case may be, on the amount by which the advance tax paid falls short of the assessed tax. For example, if the advance tax for the financial year 2009-10 is not paid or falls short of the 90% assessed tax, interest @ 1% per month would be payable from April 2010 till the date of completion of assessment under section 143 of the Act. The assessed tax means the tax on the total income determined under the provisions of section 143 of the Act as reduced by the amount of tax deducted or collected at source, any relief of tax allowable under section 90, 90A or 90(1) of the Act in respect of the tax paid in a country outside India, and any tax credit allowed to be set off in accordance with the provisions of section 115JAA of the Act. In case before the determination of tax on the completion of regular assessment, tax is paid on self assessment or otherwise, the interest under the aforesaid section shall be charged after taking into consideration the payment so made. The Act also provides for the levy of interest for deferment of advance tax under section 234C of the Act. Such an interest is payable in case the installments of advance tax are not paid in accordance with the percentages of tax specified in Section 210 of the Act. Advance tax Q. How is the advance tax computed and who is obliged to pay such tax? Would you please explain the complete details with regard to the leviability of the advance tax? — BK Datta A. The Act provides for the payment of advance payment of tax in respect of every income, including the amount of capital gains. It is obligatory to pay the advance tax in every case where the advance tax payable exceeds Rs 10,000. In accordance with the provisions of Section 210 of the Income Tax Act 1961, an assessee who is liable to pay advance tax is required to estimate his current income and pay advance tax thereon. The current income for the purposes of this section means the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial year. For example, total income on which advance tax payable for the assessment year 2010-11 would be the total income which would be chargeable to tax for the previous year ended 31st March 2010. The due dates and applicable percentage of the total advance tax payable by an assessee other than a company are as under: In the case of a non-corporate assessee: On or before September 15 of the previous year — Up to 30 per cent of advance tax payable On or before December 15 of the previous year — Up to 60 per cent of advance tax payable On or before March 15 of the previous year — Up to 100 per cent of advance tax payable Any payment of advance tax made before 31st March is also treated as advance tax paid during the financial year. The advance tax liability on the current income is calculated by taking the rate applicable for the assessment year for which the advance tax is being paid. The tax deducted and/or collected at source is deductible from the amount of tax so computed. The calculations can be made on the similar lines when the assessee wants to make upward/downward revision of the current income. New tax code and LTCG Q. I am having “equity shares” of various companies which have been held for the past 25-30 years as long- term investment. At present, long-term capital gain is tax free. It is given to understand that as per the new Tax Code LTCG is going to be taxed. Please clarify whether it shall be applicable to LTCG earned after new Tax Code comes into effect or whether to the existing share holders also. I want to give a loan to my son who wants to buy a flat in his name. The loan will be given on 5% interest per annum. Will he be allowed benefit of payment of interest on the loan taken and also principal amount given back? — R Khanna A. Your queries are replied hereunder: The provisions contained in the Direct Taxes Code are sought to be made applicable from 01.04.2011. Accordingly, the long-term capital gain arising during the financial year 2011-12 would be exigible to tax in accordance with the provisions of the Code. The provisions as contained do not make any distinction between the existing and the new shareholdings. Your son would be entitled to claim a deduction in respect of the interest paid/payable against the income from house property. However, he would not be able to claim deduction in respect of the repayments made to you as the provisions contained in Section 80C of the Act are applicable to repayment made in respect of amount borrowed for the construction of a house from the following sources: Bank, including co-operative bank, or central government or state government, or Life Insurance Corporation, or National Housing Bank, or assessee’s employer where such employer is an authority or a board or a corporation or any other body established or constituted under the Central or State Act, or assessee’s employer where such employer is a public or a private sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society, or any company in which public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing construction of houses, or any public company formed and registered in India with the main object of carrying on the business of providing long term finance for construction or purchase of residential houses in India. Change in partnership agreement Q. We are receiving income from godown rent in firm M/s (having four partners). We are giving 35% tax on income taken from a government agency. How can we change this firm into co-owners or any way to reduce the tax as we are paying tax on firms basis. We have no other income in this firm. — RK Sansi A. The Partnership Act 1932 defines partnership as a relation between the partners who have agreed to share the profits of business carried on by all or any of them acting for all. The basic test for the existence of a partnership is the carrying on of business. Since no business is being carried on by the firm, it can be assessed as an association of person by tax authorities. I would suggest that immediate steps should be taken to dissolve the partnership and by virtue of the dissolution deed the partners can be given ¼ of the property in lieu of their share in the partnership. The partners would thus become joint owners. I may add that this would attract the provisions of Section 45(4) of the Act and the firm shall be liable to pay capital gains tax with reference to the fair value of the godown. This may also involve the payment of stamp duty. It would be therefore advisable to consult a civil lawyer on this issue. LTCG exempted Q. I am a small investor in equities. What would be my tax liability on the profit, if any, on such transactions. In case it will be treated as a capital gain, how will it be computed. I may be purchasing and selling different shares at different times during the course of a year. Do I calculate individually on every scrip? Is long-term capital gains (LTCG) on shares sold within 12 months payable? — Balram A. Since you are an investor and not a dealer, the profit on sale of shares should be taxable as capital gain. The capital gain shall have to be computed by taking into account the cost of each share which has been sold and deducting such cost from the sale price thereof. In case the shares are held for more than 12 months, the capital gain arising on sale of such shares would be a long-term capital gain. In case such a transaction is in respect of the listed shares and has been subjected to the Securities Transaction Tax, the long-term capital gain would be exempt from tax. The capital gain arising on sale of shares held within 12 months would be treated as a short-term capital gain. Such gain would be taxable at the rate of 15% plus applicable education cess provided the transaction has been subjected to the Securities Transaction Tax.