The Tribune, Chandigarh, India

	Airtel secures $8.3 bn for Zain New Delhi, March 21 Bharti Airtel today said it had arranged $8.3 billion from a clutch of foreign banks and the State Bank of India to fund the acquisition of Zain telecom's African assets, for which both companies were in exclusive talks till March 25. "Bharti Airtel is pleased to announce that the entire financing requirement of $8.3 billion for the proposed acquisition of Zain's African unit (Zain Africa BV) has been successfully tied up," the company said in a statement. "Financing was oversubscribed with major international banks committing to underwrite the total amount," the statement added. Bharti's lead arranger and lead adviser Standard Chartered Bank has committed the highest amount at $1.3 billion followed by $0.9 billion by Barclays, sources close to the development said, adding that both had more capacity to underwrite, if required. While rest of the co-advisers -- ANZ, BNP, Bank of America-Merrill Lynch, Credit Agricole CIB, DBS, HSBC, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation -- have allocated $600 million each, the company added. Airtel and Zain are into exclusive discussions until March 25 for the acquisition of Zain's African unit, based on an enterprise value of $10.7 billion. This proposed transaction does not include Zain's operations in Morocco and Sudan and remains subject to due diligence, customary regulatory approvals and signing of the final transaction documentation. In all, $7.5 billion debt will be dollar-denominated and the remaining about $1 billion will be in rupee loan. In addition to the dollar financing, the SBI group had committed up to $1 billion equivalent rupee loan to Bharti which would also cover any associated transaction costs, the company said. Global Investment House KSCC was serving as the regional financial adviser on this transaction, Bharti said. Bharti has over 125 million subscriber in India and if the deal goes through, the company will have a major footprint in the African market and will get access to over 40 million customers of Zain in the continent. Sources said the Bharti board, which met here yesterday, was understood to have discussed the progress on the Zain acquisition, including the funding requirements. — PTI
	Stronger steps if inflation worsens: Pronab New Delhi, March 21 The Reserve Bank is likely to take tougher action than Friday's revision in its key policy rates if headline inflation aggravates, says chief statistician Pronab Sen. "If the non-agricultural inflation goes up, the RBI is likely to take much stronger action (in its forthcoming annual monetary policy announcement next month)," Sen told PTI. In a surprise move late Friday, the RBI raised its short-term lending and borrowing rates-- the repo rate (rate at which it lends to banks) and reverse repo rate (rate at which banks park their surplus funds with it)--by 0.25 per cent each to 5 and 3.75 per cent, respectively, to cool off runaway inflation, which has already crossed the central bank's forecast for March at 8.5 per cent, signalling interest rake increase. The central bank is slated to review its monetary policy on April 20, when further hikes in the policy rates are feared. "Agriculture inflation has started to come off. But non-agricultural inflation has actually risen and that's the one which is of more concern now," Sen said. Though food inflation has started to moderate, the WPI-based headline inflation has been on the rise since last October, when it was in the negative territory. Food inflation fell from the near-20 per cent high in December to 16.3 per cent in the week ending March 6. Overall inflation, however, has risen to 9.89 per cent in February from 8.56 per cent in January, driven by the spike in fuel prices in the Budget and food articles. For March, Sen fears a worse inflation figure. He said the current inflation was alarming as prices of the non-farm group had gone up and there was real fear of food inflation spilling over to the other sectors of the economy, primarily into the manufacturing sector. "March will have a very high inflation because of the base effect and the fuel price hike...surely it will be in the double-digit. And hike in the rates in April will depend on the inflation figure for March," Sen pointed out. On Friday's policy action, Sen, who is the secretary in the Ministry of Statistics and Programme Implementation, said it was pretty much expected due to rising inflation. However, he said the hike was merely a signal. — PTI
	FII inflow nears Rs 15,500-cr level New Delhi, March 21 Overseas investors have infused a net Rs 14,732 crore or $3.2 billion in Indian stock markets in March, taking their total inflow so far in 2010 to nearly Rs 15,500 crore. With this renewed shopping in the local market, the total net inflow by foreign institutional investors (FIIs) has crossed the Rs 15,000 crore ($3.4 billion) level so far this year, as per data available with Sebi. An analysis of the FII flow in the Indian stock markets shows that till March 19, 2010, they are the gross buyer of shares worth Rs 1,41,283 crore, while they offloaded equities valued worth Rs 1,25,834.4 crore, resulting in a net investment of Rs 15,448 crore. In this foreign investment, a major chunk of funds came in through the primary market route, which saw the divestment in big ticket NMDC. The $2 billion follow-on public offer of the NMDC was subscribed 1.23 times. "FIIs will continue to put in money in the Indian shares. But the flow will somewhat be lessened till the end of March as it is the corporate year ending. This will also limit the gains in the market," said an analyst at a broking house. Sensex has gained 6.5 per cent so far in March. On Friday, the BSE's 30-shares index Sensex closed at 17,578.23 points, higher by 0.34 per cent, or 58.97 points - its best close in eight weeks. Buoyed by the FII inflow during last year, the Sensex gained over 80 per cent and was one of the best performers among the leading global bourses. In 2009, foreign fund houses had made a net investment of about Rs 88,000 crore. The selling trend of FIIs was reversed in February, when they invested a net Rs 1,216 crore in the domestic equities. — PTI
	Tax Advice Rs 5 lakh ex gratia on VRS tax-free by SC Vasudeva Q. I want a clarification on following two points. Whether the FDR deposited in the bank under section 80C can be prematurely withdrawn? One of my relatives has taken premature retirement on medical grounds from a bank under total incapacitation and got ex gratia amount of Rs 10 lakh. Please advise whether any rebate is allowed on this ex gratia under any section of the Income-tax Act. — Dharam Pal A. The FDs made in a bank in accordance with the requirements of section 80C of the Act cannot be prematurely withdrawn. This is in accordance with the clause 11(2) of the Bank Term Deposit Scheme 2006, which provides that no term deposit will be encashed before the expiry of 5 years from the date of its receipt. In my opinion there is no section which provides for any relief or rebate for the ex gratia amount received by an employee on termination of his employment. The only exemption provided by section 10(10C) of the Act is in respect of amount received by an employee of a company on his voluntary retirement or schemes of a voluntary retirement to the extent such an amount does not exceed Rs.5 lakh. ‘Company’ for the purposes of Act will include a bank since public sector banks are assessed as a ‘Company’ under the Act. If your relative is covered within the scheme, an amount to the extent of Rs 5 lakh will be exempt from tax. Account maintenance Q. What happens to business where the profit margins are in excess of 8 per cent of 60 lakh of receipts? Can they go in for the presumptive taxation option? Do they have to maintain books of accounts? — Jyothi A. The provisions dealing with the presumptive taxation as contained in the Income-tax Act 1961 (the Act) clearly specify that a sum equal to 8 per cent of the gross receipts on account of the nature of business covered under presumptive tax provisions or, as the case may be, a sum higher than the aforesaid sum, as declared by the assessee in his return of income, shall be deemed to be the profits and gains of such business chargeable to tax under the head “profits and gains of business”. It is advisable to maintain books of account so that the accumulation in the capital account can be proved. Gratuity limit Q. Kindly refer to your reply dated March 1, 2010, on the subject “Exemption for enhanced gratuity to public sector employees”. In this connection I want further advice in view of the govt. having approved the enhanced Lt of gratuity for private sector employees. Kindly see news in The Tribune dated March 5, 2010, (Front page) and a clipping of the news enclosed in file. Will this automatically enhance the exemption for PSU employees? — Prem Nath Gupta A. The exemption in respect of gratuity received by an employee on his retirement or his becoming incapacitated prior to such retirement or on termination of his employment is exempt to the extent provided in section 10(10)(iii) of the Act. In case the gratuity is payable under the provisions of the Payment of Gratuity Act, 1972, the amount of gratuity is exempt to the extent it does not exceed the amount calculated in accordance with the provisions of subsection 2 and 3 of section 4 of the Payment of Gratuity Act, 1972. The decision of the Cabinet, a copy of which has been enclosed with your query, does suggest that higher limit will be applicable in both cases. However, the position will be clear as and when the notification in this regard is issued. Limit for senior citizen Q. For the financial year 2009-10 i.e. assessment year 2010-11, I have income from pension, interest and rent from a residential house owned by me which is also partly self-occupied. I am also a senior citizen. Please let me know the maximum amount up to which tax is not chargeable for the assessment year, the applicable form in which the return is to be filed and the last date for filing such return. — Nirmal Singh A. The maximum amount on which tax is not chargeable in case of a senior citizen for the assessment year 2010-11 is Rs 2,40,000. The applicable form in your case will be ITR-2. The last date of filing the tax return in your case will be July 31, 2010. Share buyback Q. I have sold certain shares of a company which I bought through stock exchange. A buyback offer of Rs 520 per share is being made which I have accepted. Will the amount received on the sale of such shares be taxable and if so what rate will be applicable for assessment year 2010-11. — Sant Prakash A. The shares having been sold in an off-market transaction (i.e. not through stock exchange) and on which no security transaction tax has been paid, the profit arising on the sale of such shares will be chargeable to tax. I presume that these shares were held by you for more than a period of one year. The long-term capital gain arising on sale of such shares will be taxable @10 per cent without indexation or @20 per cent with indexation whichever of the two is lower.