The Tribune, Chandigarh, India

	Rabi harvest to bring down food prices: FM Shillong, April 3 Attributing inflation to supply bottlenecks, Union Finance Minister Pranab Mukherjee today said prices of foodgrains should come down after the rabi harvest. "The inflation is due to non-availability of certain commodities. The supply bottleneck is one of the reasons," Mukherjee told PTI. Referring to the shortfall in domestic production of pulses and edible oil, he said despite allowing duty-free import adequate supply of the commodities was not available. "We are doing whatever is possible. Private sector undertakings are also importing. We hope, the rabi harvest should have a moderating effect on the prices of foodgrains," Mukherjee said. He said the country needed 18 million tonnes of pulses while production was only 14 million tonnes. "There is a shortfall of 4 million tonnes and we have to import it." "Very few countries produce pulses and the international prices are also high. The same is the case with sugar. There is a shortfall of about 90 lakh tonnes," Mukherjee said, adding that the country has to import about 20 lakh tonnes of edible oil. He said prices of sugar internationally have come down of late because of supply from Brazil, and hoped it would fall further. On the monetary steps taken to control inflation, Mukherjee said the RBI has been told to take necessary steps. On oil prices, Mukherjee said the global prices of energy were on the higher side and so there was a 'tendency of inflationary pressure'. Mukherjee is here on a two-day visit to attend the first convocation of Shillong IIM. — PTI
	Ficci seeks Rs 1,500 cr for capital goods sector New Delhi, April 3 The government should earmark Rs 1,500 crore for modernisation of the capital goods sector and development of industrial parks for them to reduce India's dependence on imports, Ficci said yesterday. A Rs 500-crore fund should be set up for technology modernisation, including R&D and Rs 1,000 crore should go towards developing capital goods parks, the industry chamber said. "The development of capital goods parks is required to overcome infrastructure deficiencies faced by Indian capital goods sector," it said, adding that the demand comes in the wake of increasing competition from rising imports. India's capital good imports have increased by about five times in the last six years to $30 billion in 2008-09 from $6.5 billion in 2003-04. Ficci said the parks would ensure timely delivery of components and standardisation of manufacturing processes. They would also improve productivity and thereby help the sector become cost effective and competitive. The proposed fund should be used for productivity enhancement through technology transfer, support to research and development projects, climate change, common facility centres and market development support, it added. "The primary reason for lower productivity of capital goods sector in India is lack of availability of latest technology," it said adding that assistance could be provided to Small and Medium Enterprises (SMEs) to cover their expenses for various aspects of technology transfer like licence and legal fees associated with technology transfer and training expenses. Ficci further said there was also a need for setting up common facility centres in public-private-partnership mode for segments of capital goods sector, which do not have major R&D, testing and other common infrastructure facilities. — PTI
	RILmay not renew Iran crude deal Dubai, April 3 Reliance Industries may not renew a contract to import Iranian crude oil from this financial year, a media report has said. According to the report, India's top privately-run refiner did not purchase any Iranian crude in February and March in line with a trend that has seen its purchases from Iran shrink rapidly over the past year. It is not immediately clear why Reliance is not renewing its annual deal, but it could be due to a price disagreement when the refiner has easy access to competing grades, the report quoted sources as saying. "For 2010 as of now, we don't have a term contract," a National Iranian Oil Company (NIOC) source told Bahrain's Gulf Daily News. "It has nothing to do with the US," he said, adding, the deal had not been renewed due to differences over pricing of Soroush and Nowruz crudes. While the 90,000-100,000 barrels per day (bpd) of Iranian crude Reliance bought last year made up only eight per cent of its purchases and 2.4 per cent of Iran's sales, the move underscores a drift in Asia away from Iranian crude, the report said. Japan's imports in 2010 are set to fall by 11 per cent on year to the lowest in 17 years, the report said, citing high prices for Iranian grades, while China's purchases fell nearly 40 per cent in the first two months of the year. Reliance did not respond to enquiries and Iranian officials declined to comment, the report said. Reliance's sophisticated complex in Jamnagar in western Gujarat state can refine 1.24m bpd of crude as varied as light West African to heavy sour Middle East grades, allowing it to switch to whatever crude is cheapest, it said. "It could be they are not happy with the NIOC's reluctance to drop its prices, especially with more attractive competing grades like Russia's ESPO coming onto the market," a trader told the newspaper. — PTI
	Union Bank ups deposit rates Mumbai, April 3 Public sector lender Union Bank of India today announced hiking deposit rates by up to 0.50 per cent across various maturities with effect from April 5. The rate hike, which has come only a few days ahead of the Reserve Bank's annual monetary policy scheduled for April 20, makes retail deposits above one year tenure and up to Rs 1 crore more attractive for the bank's customers. With this, retail deposits of one year will now attract a rate of 6.5 per cent per annum against the earlier 6 per cent. For deposits of tenure 2 years, 3 years and 5 years, rates offered are 7 per cent, 7.25 per cent and 7.50 per cent, respectively. The new rates are up by 0.25 per cent over the currently offered rates, the bank said. — PTI
	BHEL to augment capacity Bangalore, April 3 Bangalore-based divisions of BHEL plan to augment annual manufacturing capacity from 15,000 MW to 20,000 MW by 2011-12, keeping in line with the corporate growth plans, according to G Ganapathiraman, executive director (EDN and ISG), Bharat Heavy Electricals Limited. Investment for augmentation would be around Rs 150 crore spread over three years, he told reporters here today, while announcing the performance of these units. Of this, Rs 40 crore had been pumped in last year, another Rs 40 crore this year and Rs 75 crore would be pumped in next year. "BHEL-Bangalore Divisions, as part of future growth plans are introducing new technologies in control and instrumentation (C and I), gas turbine controls,transportation and non-conventional energy sectors," he added. — PTI
	Investor Guidance by AN Shanbhag NRI’s foreign income non-taxable in India Q. I am a bit confused about the taxation laws in India and just want to clarify some points. I am currently working in Australia and paying relevant taxes as per Australian norms. I periodically send money back to India for my family maintenance. Is that amount taxable in India as well? I have all relevant taxation documents that I have paid taxes in Australia against my income. — P. Somesh A. We assume that you have either immigrated to Australia or are working there on a work permit. The financial year in India ranges from April to March. Therefore, if from April 2009 till March 2010 you have not been in India for 182 days or more, you would be an NRI. An NRI does not have to pay tax in India on his or her foreign income. Consequently, your earning in Australia will be free from Indian taxes if the aforementioned conditions are met. Also, taxation is determined at the point the income is earned. It is immaterial whether you retain the income abroad or remit it to India, the tax incidence will not change. Hence, if the income is not taxable in India on the lines of the above para, any remittance of the same to India will also be non-taxable. Rent to wife Q. My question is regarding the rebate on housing loan paid. If house property purchased is registered in my wife’s name and I am paying rent to my wife actually, who is showing that in her income, can I get rebate for housing rent (HRA) if I pay to my wife or not. — Vishav Singla A. We are afraid this isn’t possible. Whereas it is true that the only conditions which lay down an embargo on claiming exemption u/s 10(13A) related with HRA are - an employee living in his own house or where he does not pay any rent is not eligible for this exemption. So first of all, rent has to be paid in order to claim the exemption. However, also note that a husband and wife cannot have a commercial relationship. Paying rent to your wife to claim HRA exemption can be viewed as an arrangement to evade tax. It would be advisable not to engage in such transactions to reduce the tax outgo. PPF account Q. I request your advice on my PPF a/c which I opened in 89-90 in a post office at Delhi and operated it for three years. Thereafter in continuity, I opened a PPF a/c in SBI Delhi after change of residence and have been continuing it for the past 17 years. After 15 years (3+12), I requested another 5 years of continuity at SBI. I withdrew part of PPF as authorised in rules in 96-97 from Post Office after advising them amounts deposited subsequently in SBI Delhi. Interest payments have been duly entered in post office and SBI passbooks. I wish to know if this constitutes two PPF accounts and have I done anything wrong. If so, what would be the remedy as I wish to withdraw PPF money now. — Air Marshal BS Bedi A. DG Posts letter No. 1-23/75-SB dt 8.2.79 states that “An individual can open only one account in his name either in the post office or in the bank and he has to declare this in application form for opening the account. Persons having a PPF account in the bank cannot open other account in the post office and vice-versa.” If two accounts are opened by the subscriber in his name by mistake, the second account will be treated as irregular account and will not carry any interest unless the two accounts are amalgamated with the approval of the Ministry of Finance (DEA). For this purpose the subscriber will have to write to the Under Secretary (Budget) MOF (DEA), New Delhi-1 through the Accounts Office giving detail of each account. A subscriber may apply for transfer of his account from one accounts office to another. If the investor fails to subscribe even the minimum Rs 500, the account is considered as discontinued. Loans and withdrawals are not available on such accounts. At the end of the term, the investor will be paid the balance with accrued interest for the full term. It is possible to revive the old account by contributing Rs 500 with a penalty of Rs 50 per year. A new account cannot be opened, even if the existing one gets discontinued since it can be revived, irrespective of the years of default. It appears that the officers handling your PPF accounts are not aware of the rules. The best you can do in this case is to close your first PPF account which has overshot the term of 15 years. Since you have not made any contributions, you will be able to close it anytime. Similarly, close the second account at its maturity and open a new PPF account. Advance tax Q. I work in the payroll department of our company. For FY 09-10, we have paid advance tax in respect of fringe benefits granted to employees. However, now FBT has been discontinued and perquisite tax has been introduced. In such a situation, how is the advance fringe benefit tax to be treated? Can we ask for a refund or adjust it in any other manner? — Mehta A. CBDT circular No 2/2010, dated 29-1-2010 addresses precisely this issue. The circular specifies that any instalment of advance tax paid in respect of fringe benefits for AY 2010-11 (FY 2009-10) shall be treated as advance tax paid by assessee concerned. In other words, the assessee can adjust such sum against its advance tax obligation in respect of income for AY 2010-11 or in case of loss to claim such payment as refund. Repatriation of funds Q. I am in receipt of rupee income from inherited bonds in India. Can I transfer that money to the USA? If so, how? — Reddy A. Indian assets are non-repatriable but the current income there from like interest, dividend, rent, capital gains, pension, etc., can be. Before effecting repatriation of income of the account holder, the banks are required to ensure that the NRI has paid or made provisions to pay income tax thereon, if any. For this purpose, an undertaking (in duplicate) addressed to the Assessing Officer and signed by the person making the remittance has to be submitted. This should be accompanied by a certificate of a chartered account who is not in employment of the NRI, stating that the amount proposed to be remitted is eligible for remittance and tax has been deducted at the rates in force, or is provided for or is not payable [AP (DIR) 45 dt 14.5.02]. Education allowance Q. My query is regarding education allowance for children and tuition fees deduction u/s 80C. If an employee gets education allowance of Rs 750 p.m. (Rs 9,000 per annum) from his employer, and such employee incurs Rs 24,000 per annum for two schoolgoing children towards school's tuition fees, then the exemption under Section 10 (14) would be limited to Rs 2,400 (Rs 100 per month or Rs 1,200 per annum per child or Rs 2,400 yearly for two children maximum). This means that even after overpaying Rs 15,000, he will have to pay tax on Rs 6,600 (Rs. 9,000 minus Rs 2,400). Is this correct? — Dilip Divekar A. Apart from the education allowance deduction of Rs 1,200 per child, you may also examine if the facts of the case can be covered by Sec. 10(16) that exempts scholarship granted to meet the cost of education. Here there is no limit. Once it is proved that the amount received is “scholarship”, it will be fully exempt from tax irrespective of its terms of award. The position will remain so even if the scholarship is received for pursuing a course of education not leading to a degree. Sec. 80C(xvii) offers deduction of tuition fees paid, whether at the time of admission or thereafter, to any university, college, school or other educational institution situated within India for full-time education of any 2 children of the individual. However, the eligible amount shall not include any payment towards any development fees or donation or payment of similar nature. If you pay Rs 24,000 as school fees you can claim deduction u/s 80C. Here also there is no limit, other than the limit of Rs 1 lakh overall under Sec. 80C. The concession is available to each of the parents, if eligible, even in respect of the same child. The authors may be contacted at wonderlandconsultants@yahoo.com
	Aviation Notes by KR Wadhwaney Tardy security brings down IGIA’s rating Worldwide, cargo movement yields more income than passenger traffic despite receiving less than one-third of the budget earmarked for the airline. Yet, cargo section is considered much inferior to passenger division because consignments cannot scream but passengers can shout. Similarly, importance of the airport is assessed on the basis of how new or how good is the construction of the terminal building, and how efficient and meticulous is the staff in catering to the needs of passengers and their safety and security. Keeping in view tardy security by the Central Industrial Security Force (CISF) and other crude happenings, the rating of the Indira Gandhi International Airport (IGIA) has dipped low. Regardless of busy schedule of Vijay Mallya, an industrialist, the CISF should have stuck to its laid-down rules and subject him to undergo the required drills. There was no urgency to compromise the rules as he was only rushing to watch his team play in the IPL jamboree. What holds CISF in a poor light is that instead of probing the breach at the IGIA, it has thrown the ball into the court of the Bureau of Civil Aviation Security (BCAS) to institute an inquiry. What the BCAS has to do when CISF is the sole authority for security at the IGIA? The CISF's opinion that 'it is the responsibility of the captain of the aircraft to ensure that the passenger boarding his aircraft has the mandatory pre-embarkation checks' is totally unfounded. The captain is commander of the ship and its passengers and property on board the aircraft and not what happens on the ground. Is captain of the airline 'boss' of the security at the airport? The matter got further complicated when it was said that Mallya's check-in was done at the Hindon air base (Ghaziabad), which is under the control of Air Force. Even if the check was done at Hindon, how could it be valid for Delhi airport? The BCAS, however, has clarified that 'the rule is explicit and transit of any passenger, even a VIP, is not allowed without security check-in'. As a drunk man was sleeping in standing aircraft and two other persons breached security, the CISF promptly suspended two junior officials for dereliction of duties. The action against erring officials may be timely, but what is cause for concern is that there are several weak zones at sprawling airport, which has been developed without much planning and vision. The security agencies claim that security at the IGIA is a nightmare. This may be a valid reason, but what is cause for serious concern is that too much 'unwanted' agents and touts have been issued passes for even 'prohibited' areas. They are seen loitering about inside terminal buildings. Often they are seen around 'entrance and exit' gates causing inconvenience to passengers. If there are thefts, they and taxi touts are the culprits. The CISF and all other agencies responsible for the upkeep of the renovated terminal buildings have to work in unison and reduce issuance of 'passes' to representatives of travel agencies. They may be useful to their clients but they pose problems to other passengers.