The Tribune, Chandigarh, India

Essar eyes London listing: Report

London, March 7
Ruia brothers-led Essar group is working towards a $8-billion listing of its oil and power businesses in London, according to The Telegraph. "Billionaire Ruia brothers have begun preparations for a $8 billion (5.3 billion pounds) London listing of their oil and power businesses...," the British daily has reported.

The Ruia brothers - Ravi and Shashi - are ranked fifth among India's billionaires with a fortune of $13.6 billion by Forbes magazine.

The Telegraph said the listing could make it the first Indian company to enter London's main market since Vedanta Resources seven years ago.

"Essar is looking at a London listing of a holding company which will have it refinery, power, exploration and production businesses," The Telegraph has reported quoting a source.

Attributing to another source, the daily said the Essar group had already contacted the London Stock Exchange authorities to begin discussions on potential obstacles to a float.

"Group chairman Ravi Ruia has been based in the group's London offices in Berkeley Square for nearly four months, developing the group's international plans, and his nephew, Prashant, the group chief executive, has been shuttling back and forth from Mumbai," the report noted.

According to the daily, Essar has also launched an advertising campaign to raise its profile.

Quoting an Essar spokesman, the report said it was premature to discuss the London listing and stressed that no final decision had been made.

The group appointed JP Morgan Cazenove as its adviser two months ago, The Telegraph said, attributing to a source close to the process.

"London investors will have to weigh Essar's strong growth prospects against its often fraught relationship with its minority share and debenture holders," The Telegraph said. — PTI

Adani Power shortlisted for Kosovo plant

Ahmedabad, March 7
Adani Power (APL) has been shortlisted along with three other international bidders to build a 1,000 MW coal-fired power plant in European nation Kosovo, a top executive of the company said.

"We are one of the four bidders shortlisted for the 1,000-MW power plant in Kosovo," Gautam Adani, CMD Adani Group, told PTI.

The government of Kosovo has asked the shortlisted bidders to submit detailed project proposals. Tenders would be published in April this year and final bidder be selected in July, he said.

The other three bidders are US-based AES with Turkey’s Demir Export, Turkey’s Park Holding and a consortium of US-UK Contour Global with Greece’s public power company. The plant will be based near Pristina, the capital city of the young nation having population of two million people.

Kosovo, which suffers from chronic electricity shortages, holds Europe's third largest reserves of lignite, estimated at more than 10 billion tonnes.

APL has been active on various power projects in Gujarat, Maharashtra, Rajasthan and Madhya Pradesh with more than 11,000 MW of total capacity, which are at different stages of planning and implementation.

APL is setting up two power plants in Gujarat -- one in Mundra with 4,620 MW capacity and another in Dahej with 2,640 MW capacity. It is also building one 3,300-MW plant at Tiroda in Maharashtra and 1,320-MW plant at Kawai in Rajasthan. Last month, it had announced to set up another 1,320 MW coal fired power plant at Chaunsara village in Chhindwara district in MP. — PTI

VAT e-filing must for small traders
Manav Mander
Tribune News Service

Ludhiana, March 7
The Excise and Taxation Department has made e-filing of the VAT returns mandatory for all. The order will come to effect in the January-March quarter this year. The returns will be e-filed from April 1 to 30, according to a notification.

Only commission agents, dhaba owner and brick-kiln owners have been exempted.

Earlier, VAT e-filing was compulsory for those who were claiming refund under the VAT Act or who were conducting inter-state sale and purchase or persons making exports out of India and traders whose turnover is more than 5 crore. While now every trader, be it small or big, will have to e-file his return.

The shortage of staff and huge paper work is the reasons behind this move. While the department has made the e-filing compulsory, small tax payers will feel the heat.

Though the VAT numbers are being given to the traders by the department, it has failed to provide the passwords to them. Many traders were seen making a beeline for getting their passwords even on the last day of filing of the VAT returns.

Sanjeev Grover, a businessman, said, "Now that e-filing has been made mandatory to all, I will have to buy software and other basic infrastructure for e-filing the return. Only the software costs around Rs 5,000," he added.

Jatinder Khurana, president of the Taxation Young Lawyers Association said the department had made e-filing mandatory for all but at the same side the department also need to upgradate its server. The server of the department was very slow and it took nearly 2 hours to upload one VAT return form," he added.

Prampal Singh, DETC, said the whole system would be streamlined with the compulsory e-filing of the VAT returns. "Everybody is required to e-file his return from April. The slow server problem will also be solved at the earliest," he said.

In the last quarter, the number of e-filed returns was 1.23 lakh.

Tax only when interest credited to FDs: CBDT

New Delhi, March 7
No income tax at source will be deducted if banks have only made a provision for interest on fixed deposits and not actually paid it to the depositor, the Finance Ministry has clarified. Until now, tax was supposed to be deducted by banks even if only provisioning was made for interest payment.

However, this was creating problems for banks using Core-Branch Banking Solutions (CBS), which enables customers to access their accounts from any branch.

The Indian Banks' Association in a representation to the Income Tax Department had said for banks using the CBS software, interest payable on fixed deposits was calculated generally on a daily or a monthly basis but was parked in the provisioning account for monitoring only.

The interest is actually credited to the depositor's account either at the end of the financial year or at periodic intervals or on maturity of the deposits.

The matter was considered by the Central Board of Direct Taxes to plug this loophole.

According to a Finance Ministry official, the CBDT clarified that since no credit was given to the depositors while calculating interest on fixed deposits on daily or monthly basis in the CBS software used by banks, tax need not be deducted at source on such provisioning of interest. — PTI

Tax Advice
HRA exempt from tax
by SC Vasudeva

Q. I am a Punjab govt. servant. I reside in govt quarter. My office deducts HRA + city allowance from my gross salary. My question is HRA can be exempted in income tax. — Murshid Imam

A. The HRA received by an employee is exempt in accordance with the guidelines laid down under Rule 2A of the Income-tax Rules 1962. The amount which is not to be included in the total income of an assessee is least of the following: The actual amount of such allowance received by the assessee in respect of the relevant period, or the amount by which the expenditure actually incurred by the assessee for payment of rent in respect of residential accommodation occupied by him exceeds one-tenth of the amount of salary due to him in respect of the relevant period, or an amount equal to one-half of the amount of salary due to him in respect of the relevant period in case the residential accommodation is situated in Mumbai, Kolkata, Delhi or Chennai and where such accommodation is situated at any other place, two-fifth of the amount of salary due to him in respect of the relevant period.

You may, therefore, check up the computations of amount granted to you on the basis of the guidelines for the purposes of ascertaining the exempt amount of house rent allowance.

Admission institutes

Q: We are working as admission agents and arrange student admissions in Australia and New Zealand. We do not take any service charges from students, but institutes in which we arrange admission, pay us some percentage of commission from the tuition fee. We incur some expenditure, such as Internet bill, electricity charges and some percentage of commission to our sub agent. We receive this amount from foreign institutes in our bank account and our income crosses the permissible exemption limit. Kindly Intimate our income tax liability. — Jagdish Singh

A. The tax liability will depend on the status of the agency which is carrying on the business as admission agents for arranging the admission of students in Australia and New Zealand. Since the particulars as to the status and the net income on which tax is to be computed are not indicated in the query, it is not possible to compute the tax liability. However, in case the agency is being run as a sole proprietor, the maximum amount up to which Income-tax in not chargeable to tax is Rs.1,60,000 for the assessment year 2010-11 (financial year ended March 31, 2010). You will have to, therefore, calculate the tax on the basis of the net income which will be computed by deducting from the commission income, such expenditure as has been incurred wholly and necessarily for carrying on such business. The net income so arrived at will be taxable on the basis of the above slab rates. The applicable slab rate is as under for the assessment year:

Up to 1.6 lakh-Nil; 1.6 lakh to 3 lakh-10 pc; 3 lakh to 5 lakh- 20 pc; 5 lakh and above- 30 pc. There is no surcharge. Education cess and secondary higher education cess at 3 pc is, however, chargeable on the Income-tax computed on the basis of slab rates.

Senior citizen status

Q. My date of birth is August 12, 1946. Kindly advise from which financial year/assessment year I am entitled to claim tax exemption allowed for senior citizens as per the Income Tax Act and under which Rule(s). — SK Verma

A. You should be entitled to claim the status of senior citizen in the year ended March 31, 2012, in accordance with the provisions of Income-tax Act 1961. The term senior citizen is not defined in the Act but according to various provisions contained in the Act, the benefit available to a senior citizen are applicable to a person resident in India who is of the age of 65 years or more at any time during the previous year.

Donation

Q. Can a person donate for the repair and renovation of historic gurdwara/temple and claim deduction under section 80G of the Act. — AK Walia

A. `Section 80G(2)(b) of the Act provides for the deduction to the extent of 50 per cent of any sum paid by the assessee in the previous year as donation for the renovation of any such temple, mosque, gurdwara, church or other places as is notified by the Central Government in the official gazette to be of historic archeological or artistic importance or to be a place of public worship of renown throughout any state or states.

I may add that in case the amount of specified donations exceed 10 per cent of the gross total income (as reduced by any portion thereof on which income tax is not payable under any provisions of this Act and by any amount in respect of which the assessee is entitled to a deduction under sections 80C to 80U of the Act excluding section 80G) then the amount in excess of 10 per cent of the gross total income will be ignored for the purposes of computing the aggregate amount in respect of which deduction is to be allowed. The gross total income for this purpose means the total income computed in accordance with the provisions of this Act before making any deductions under section 80C to 80U of the Act.