B U S I N E S S

SBI profit up by 10.2 per cent
Mumbai, October 31
Bolstered by a healthy growth in net interest income and core fee income, India's largest lender State Bank of India today posted a 10.19 per cent jump in its standalone net profit at Rs 2,490 crore for the second quarter of current financial year.

Investor Guidance
No inheritance tax in India
Q I am a US citizen. I have inherited some property in India. If I sell it I will be paying any tax in India. If I become overseas citizen of India (OCI), will it make a difference?

Q2 Results
Unitech net down 50 pc
New Delhi, October 31
Real estate major Unitech today reported a fall of 50 per cent in its consolidated net profit at Rs 177.86 crore for the quarter ended September 30 due to lower property demand. The company had posted a net profit of Rs 358.92 crore in the corresponding period last fiscal, the country's second largest realty firm said .

The handout picture shows Mexican President Felipe Calderon during the Bravo 2009 ‘Leader of the Year’ Awards in Miami on Friday. Calderon and Chilean Finance Minister Andres Velasco were among the recipients of this year's Bravo Business Awards. — AFP

Hike in ATF prices
New Delhi, October 31
State-owned oil firms today hiked jet fuel prices by nine per cent to over Rs 39,000 per kl following a spurt in international oil rates. Aviation Turbine Fuel prices will be increased by an average of Rs 3,400 per kilolitre effective midnight tonight, an official of the IndianOil Corp (IOC) said.

RIL arm bags licence for diamond mining
Bhopal, October 31
Reliance Industries has won a licence for diamond mining in Madhya Pradesh and will invest Rs 1,000 crore in the mines measuring 1,800 sq km. The company will prospect over the area spread over the Rewa, Sidhi and Satna districts in the state, an official release said today.

SBI profit up by 10.2 per cent

Mumbai, October 31
Bolstered by a healthy growth in net interest income and core fee income, India's largest lender State Bank of India today posted a 10.19 per cent jump in its standalone net profit at Rs 2,490 crore for the second quarter of current financial year. The bank saw a credit growth of 16.39 per cent in the quarter and is optimistic about achieving a growth rate of 22 per cent for the full financial year, SBI chairman OP Bhatt said here.

“If the growth in credit picks up, we should achieve around 22 per cent growth by the end of this fiscal,” Bhatt said. The bank will have to raise Rs 36,000 crore in the next five years to maintain a capital adequacy ratio of 12 per cent, he said. CAR, at present, stands at 14.11 per cent.

The bank's core fee-income grew to Rs 2,103 crore in the second quarter, up 58 per cent compared to Rs 1,331 crore in the same period last year, while interest income jumped by 10.34 per cent.

SBI's standalone total income stood at Rs 21,301.04 crore in the second quarter against Rs 17,909.64 crore in the same period last fiscal. The net interest margin, during the quarter, improved to 2.43 per cent against 2.30 per cent in the same period in last year.

SBI's gross and net NPAs stood at 2.99 per cent (2.38 per cent) and 1.73 per cent (1.34 per cent) respectively for Q2.

On a consolidated basis, the net profit of the bank rose to Rs 3,133 crore in the second quarter. It had reported a net profit of Rs 2,458 crore in the same period previous fiscal.

Total income stood at Rs 33,101.65 crore in July- September this year. — PTI 

Investor Guidance
No inheritance tax in India
by A.N. Shanbhag

Q I am a US citizen. I have inherited some property in India. If I sell it I will be paying any tax in India. If I become overseas citizen of India (OCI), will it make a difference?
                                                                                                              — Kumudini Shah
A There is no inheritance tax in India, so when you inherited the property you were not liable to pay tax. However, when you sell such inherited property, capital gains tax will be payable by you. Your cost of acquisition will be the cost paid by the original owner who bequeathed the property to you and your holding period will also be the aggregate of the previous owners and your holding period. It makes no difference whatsoever so far as tax incidence is concerned whether you opt for the OCI status or not.

Direct Tax Code

Q a) In the sixth schedule of the new Direct Tax Code (DTC), it has been mentioned that “income from mutual fund is exempted”. Please confirm if this is true in case of equity mutual fund.

b) PF amount accumulated up to March 31, 2011, and interest in the coming years also is not taxable as per the new DTC. Please confirm if the same is for PPF also.
                                                                                                                — Vinod Thukral
A a) It is true in the case of all the schemes of MFs, including equity-based schemes. Since dividend distribution tax has not been dropped, the dividend income is not taxable in the hands of the recipient.

However, in our opinion, the provisions related with capital gains govern income earned through them. The securities transaction tax would be abolished. Therefore, all capital gains (losses) arising from the transfer of equity shares in a company or equity-based units of any MF scheme forms part of the computation process.

b) Unfortunately, PPF contributions as well as the interest earned (even on old balance) come under EET regime. Therefore, balance to the credit in PPF a/c as on March 31, 2011, will be exempt from tax. However, interest earned thereon and the fresh contributions made after the date along with interest thereon will be exigible to tax. In case of NSS 87, any withdrawal made by the investor is also taxable in his hands but it is not taxable if it is withdrawn by his nominee after his demise. That is not the case with PPF. In view of this, it may be advisable to avoid PPF unless rules are modified.

PPF a/c

Q I normally sail more than 183 days to get an NRI status. I have PPF account of my own and one for my child. Can I put NRE a/C money in my PPF a/c and that of my child’s whose is resident? Can I open an account for the new pension scheme (NPS) as my current status in this financial year is resident? Also, I have a flat that is given on rent. How much tax will I have to pay, as this is only income generated in India?
                                                                                                                           — Swapnil
A PPF is a 15-year investment instrument that offers a tax-free rate of 8% p.a. PPF is not open to NRIs. However, if one has already opened a PPF account prior to becoming NRI, the same may be continued till maturity. You may apply the above rule in the case of your PPF. You may certainly continue the investment in the name of your child since she would always be a resident Indian as you yourself have mentioned. NPS is open to NRIs and you can open an account for the same. On an income of Rs 15,000 per month or Rs 1,80,000 per year, you will have to pay a tax of Rs 3,000.

                                                                                      The authors may be contacted at
                                                                                   wonderlandconsultants@yahoo.com

Q2 Results
Unitech net down 50 pc

New Delhi, October 31
Real estate major Unitech today reported a fall of 50 per cent in its consolidated net profit at Rs 177.86 crore for the quarter ended September 30 due to lower property demand.

The company had posted a net profit of Rs 358.92 crore in the corresponding period last fiscal, the country's second largest realty firm said .

NHPC net dips

Hydro-power company NHPC has announced a net profit of Rs 616.64 crore in the second quarter ended September 30, 2009, down 2.63 per cent over the same period a year ago.

Total income of the company increased to Rs 1247.44 crore in the quarter under review from Rs 1038.67 crore during the same period previous year, it said.

Jindal Steel and Power has reported a 6.04 per cent rise in net profit for the second quarter at Rs 808.36 crore over the same period a year ago, mainly on account of improved performance of its power subsidiary, Jindal Power.

The company had a net profit of about Rs 762 crore in the quarter-ended September 30, 2008.

HUL had a net profit of Rs 546.61 crore in the second quarter ended September 30, 2008, the company said.

Hike in ATF prices

New Delhi, October 31
State-owned oil firms today hiked jet fuel prices by nine per cent to over Rs 39,000 per kl following a spurt in international oil rates.

Aviation Turbine Fuel prices will be increased by an average of Rs 3,400 per kilolitre effective midnight tonight, an official of the IndianOil Corp (IOC) said.

IOC, Bharat Petroleum and Hindustan Petroleum had for three consecutive fortnights reduced ATF rates mostly because international oil prices had eased and rupee strengthened against US dollar.

In three cuts, jet fuel prices in Delhi came down to Rs 36,188.27 per kl from Rs 39,188 at the beginning of September.

The hike announced today would negate all the cuts and ATF prices would be back to their September levels.

The official said the new rates at the four metros were being worked out and will be announced later.

The three oil firms revise jet fuel prices on the first and the 16th day of every month based on the average global oil price in the previous fortnight. — PTI

RIL arm bags licence for diamond mining

Bhopal, October 31
Reliance Industries has won a licence for diamond mining in Madhya Pradesh and will invest Rs 1,000 crore in the mines measuring 1,800 sq km. The company will prospect over the area spread over the Rewa, Sidhi and Satna districts in the state, an official release said today.

RIL plans to pump in about Rs 1,000 crore in the prospecting work and it is the second private sector company to venture into diamond prospecting in Madhya Pradesh after Australian mining major Rio Tinto.

Yesterday, Madhya Pradesh Director (Mining) RK Sharma handed over the prospecting licence for diamond to RIL CGM GK Mohapatra in Bhopal.

Besides diamond, the prospecting licence also includes permission to mine for other minerals like gold, copper, lead, zinc and silver.

The licences have been issued in two parts, one for an area of 1,084 square km and another for an area of 735 square km. — PTI