B U S I N E S S

D-Street may remain volatile

New Delhi, April 4 The Dalal Street is likely to trade in an range this week as absence of any major trigger would keep markets volatile after posting a long stretch of weekly gains, analysts said.   Marketmen say firm global cues and higher capital inflow from the overseas investors on the back of strong rupee will keep the market somewhat in the green, though profit booking might emerge at higher level

India ‘interesting place’ for ArcelorMittal
London, April 4
Describing India as one of the “most interesting places” for ArcelorMittal, its chief LN Mittal has said the steel behemoth would focus on developing economies, mainly India, for its new factory plans.

WiMAX may not work effectively in India: Ericsson
New Delhi, April 4
Ahead of the auction of spectrum for mobile broadband or WiMAX, Swedish equipment company Ericsson has advised operators against adopting the technology saying it cannot be deployed with just 20 MHz of frequency and recommended Long-Term Evolution as a better alternate.

Labour union members from the Korean Confederation of Trade Unions (KCTU) rally against the government seeking to destroy trade unions. Some members of the KCTU and its less hardline rival have announced that they had quit the umbrella groups to launch a “third way” union alliance. — AFP

Tatas renew Singur lease
Kolkata, April 4
Tata Motors has paid the lease rent of Rs 1 crore till March next year for its land at Singur, where the company's small car Nano was initially scheduled to roll out from. Officials of the West Bengal Industrial Development Corporation said today that the company paid the advance annual lease rent of Rs 1 crore last month for 2010-11.

Reliance Infra commissions Hisar power plant
New Delhi, April 4
Anil Ambani group firm Reliance Infrastructure (RelInfra) today said it had commissioned a 600 MW power unit at the Rajiv Gandhi Khedar Thermal Power Plant in Haryana. After completion, it will provide 15,000 jobs.

Foreign investors prefer smaller cities
New Delhi, April 4
Small Indian towns score over metros and big cities when it comes to being the destination of choice of foreign investors. Foreign investors prefer smaller Indian towns to big cities for setting up manufacturing facilities, thus, establishing linkages with suburban and rural regions of the country, a government-sponsored study has found.

Tax Advice
Accrued NSC interest is taxable income
Q Is interest on NSCs taxable? I have been advised by the post office that interest on such certificate is not taxable. However, my tax adviser says the opposite. Please let me know the correct position.

D-Street may remain volatile

New Delhi, April 4
The Dalal Street is likely to trade in an range this week as absence of any major trigger would keep markets volatile after posting a long stretch of weekly gains, analysts said.

“We expect the Monday market opening to be on a positive note. However, the market would remain choppy for the rest of the week as it needs a breather after eight weeks of gains,” Bonanza Portfolio assistant vice-president, Research Equity, Avinash Gupta said.

Marketmen said firm global cues and higher capital inflow from the overseas investors on the back of strong rupee would keep the market somewhat in the green, though profit booking might emerge at higher level.

“The markets would be volatile during the week. FIIs are bullish about the Indian markets and the inflow will continue in the stock market,” Geojit BNP Paribas Financial Services research head Alex Mathews said.

Over the week, the Sensex gained 0.27 per cent to settle at 17,692.62 points, stretching the weekly gaining streak to eight on the back of sustained buying by FIIs since early February.

"Risk appetite is coming back in the Indian stock markets as FIIs are gradually investing in equities. If the buying spree continues, the market will move ahead in coming trades," Gupta added.

Foreign funds have put in over Rs 20,600 crore ($4.54 billion) in the stock market so far this year, with a majority of the chunk coming in the last month.

Analysts cautioned that markets may witness some selling pressure during the coming period and in absence of domestic trigger, shares would follow global cues.

Over the week, Indian currency has further strengthened against the greenback and touched a near 19-month high of Rs 44.89/90 against a dollar.

Sectors such as banking and metals will be in demand, analysts said. Although IT stocks are expected to trade in range ahead of the bellwether Infosys' result due next week.

"The markets have been range bound for past few trades. It is expected to be in a range with a downward bias," SMC Capitals equity head Jagannathan Thunuguntla said.

Over the weekend, the global markets closed firm with Dow Jones Industrial Average settling higher by 0.65 per cent to 10,927.07 and S&P 500 ending up by 0.74 per cent to 1,178.10.

In Asia, China's Shanghai closed with a gain of 0.33 per cent, Japan's Nikkei rose 0.37 per cent and Hong Kong's Hang Seng jumped 1.40 per cent. — PTI

India ‘interesting place’ for ArcelorMittal

London, April 4
Describing India as one of the “most interesting places” for ArcelorMittal, its chief LN Mittal has said the steel behemoth would focus on developing economies, mainly India, for its new factory plans.

“We do not plan to move our operations from Europe but clearly ArcelorMittal's ratio of businesses will move more towards developing economies.”

“We will build new plants there and we will grow those businesses faster than those in Europe and North America. For us, the most interesting places to be will be India and Brazil,” Mittal told British newspaper The Telegraph.

While expressing concern over the sluggish growth prospects for Europe, Mittal said India and China had caught up very fast from the crisis.

In this backdrop, the steel tycoon noted that ArcelorMittal's response would be to direct all new factory plans at developing economies, particularly India and Brazil. He said the company was hopeful of starting construction at one of the sites it has identified in India to set up steel plants.

“In India, we plan to build green field projects... We hope that soon we will be able to commence construction at one of the sites. We have identified sites but the approval and mining concessions processes are still under way," he said.

Mittal told the British daily that India was poised to "emerge as one of the world's most important economies." "India is emerging as a very important place... We have seen the role it is playing in the G20 group of the world's most advanced and emerging economies and in the WTO...”

"I think India will have a very important role going forward. There's a lot of domestic potential to grow and it is much more liberal and open for foreign investors," he said. — PTI

WiMAX may not work effectively in India: Ericsson

Tatas renew Singur lease

Kolkata, April 4
Tata Motors has paid the lease rent of Rs 1 crore till March next year for its land at Singur, where the company's small car Nano was initially scheduled to roll out from. Officials of the West Bengal Industrial Development Corporation said today that the company paid the advance annual lease rent of Rs 1 crore last month for 2010-11.

Tata Motors had withdrawn the Nano project from Singur in West Bengal in October 2008 and shifted it to Sanand in Gujarat as it faced opposition from displaced farmers.

When asked whether Tata Motors was willing to retain the land, a company spokesman said: “Paying the rent indicates that the land is with us on lease”.

The West Bengal government had sought return of the Singur land from the Tatas for the purpose of having an alternate project as proposed by the Railway Ministry.

However, Tata Group chairman Ratan Tata had categorically stated that the land would be returned only if the company was adequately compensated for the lost investment it had made at Singur. — PTI

Reliance Infra commissions Hisar power plant

New Delhi, April 4
Anil Ambani group firm Reliance Infrastructure (RelInfra) today said it had commissioned a 600 MW power unit at the Rajiv Gandhi Khedar Thermal Power Plant in Haryana. After completion, it will provide 15,000 jobs.

The company's engineering, procurement and construction division has commissioned 600 MW unit at the Rajiv Gandhi Khedar Thermal Power Plant (RGKTPP) in Hisar, Haryana, the company said in a statement.

“This project will not only benefit the state by adding 288 lakh units of energy per day but will also create 15,000 job opportunities in the field of construction, operations and maintenance,” Reliance Infrastructure director (operations), SC Gupta said.

RGKTPP, with a total capacity of 1,200 MW of two units of 600 MW each, built at a cost of Rs 3,800 crore, is being set by Haryana Power Generation Corporation Limited and executed by RelInfra.

The project was awarded to the company in January 2007. — PTI

Foreign investors prefer smaller cities

New Delhi, April 4
Small Indian towns score over metros and big cities when it comes to being the destination of choice of foreign investors. Foreign investors prefer smaller Indian towns to big cities for setting up manufacturing facilities, thus, establishing linkages with suburban and rural regions of the country, a government-sponsored study has found.

"A significant proportion of FDI-enabled manufacturing plants are located in Class-III cities," a study done by National Council of Applied Economic Research said.

The study covered 1,273 plants of 401 Foreign Direct Investment-enabled manufacturing companies located in 294 cities of which 54 per cent were in small cities.

According to classification by Population Census-2001, Class-III cities are towns with a population of less than five lakhs.

"It is assumed that these cities and towns are sub-urban and closer to the rural areas of the country," it said.

The study, sponsored by the Department of Industrial Policy and Promotion found that about half of the total output, value addition and wages paid in the FDI manufacturing firms originate in small towns.

These investments are in sectors like non-metallic mineral products, building and construction parts, mining of iron ores, textiles and growing and processing of crops.

When it comes to value-added products, sectors like minerals, tobacco products and footwear are predominant.

"Sectors providing a relatively high share of employment in Class-III cities include transport equipment, growing and processing of crops, construction parts, textiles and non-metallic mineral products," the study said.

The NCAER study was based on data between 2001 and 2006 and for some parameters between 2006 and 2008.

India received a cumulative FDI of $127.46 billion since 1991, according to the official data. — PTI

Tax Advice
Accrued NSC interest is taxable income
by SC Vasudeva

A Yes, interest accrued on NSC for a particular year is includible in the total income and is taxable. However, such an interest is deemed to have been reinvested and, therefore, the interest so earned is includible for the deduction allowable under Section 80C of the Income-tax Act, 1961. The amount of interest so earned would become part of the maximum deduction of Rs 1 lakh allowable under the aforesaid section.

Investment in MFs

Q I have been investing in mutual funds (MFs). The investments so made have reduced considerably. If I sell the MFs, will I be entitled to treat the loss as a business loss adjustable against my business profit?

— KK Sharma

A Generally it should not be possible unless you are able to prove that investing in MFs is your business. Normally, there is no regular trading in the MF investments like in case of shares. Therefore, treating such a loss as a business loss may not be possible.

I-T return

Q I am a housewife. I have never filed I-T return because my income from interest on fixed deposits is below the chargeable limit. I also do not have PAN. The bank has deducted TDS in financial year 2007-07 (April 1, 2007- March 31, 2008). Please guide me how can I get this TDS refunded? Also, do I have to file return in future? The bank told me that my Form 15G was filed late.

— Kamini

A Refund in respect of tax deducted at source can be obtained only by filing the return. For this purpose you will have to apply and obtain the Permanent Account Number (PAN). The applicable form in your case would be ITR-1.

Legal heirs

Q If an unmarried girl dies without making any will, who are the legal heirs of her self-acquired property and in what proportion?

— Narinder Nath Sharma

A The general rules of succession in case of a female Hindu dying intestate are contained in Section 15 of the Hindu Succession Act, 1956. These are as under:

(1) Upon the sons and daughters (including children of any pre-deceased son or daughter) and the husband;

(2) Upon the heirs of the husband;

(3) Upon the mother and father;

(4) Upon the heirs of the father; and

(5) Upon the heirs of the mother.

It has been clarified in Section 16 of the aforesaid Act that amongst the heirs specified herein above those in one entry shall be preferred to those in any succeeding entry and those included in the same entry shall be taken simultaneously. In view of the above provisions, self-acquired property of an unmarried girl, who has died without making a will, would be inherited by her father and mother in equal proportion.

Gift of shares

Q My wife’s brother desires to gift to my daughter some shares of an Indian company. My daughter is an NRI living in the UK for more than 10 years. She holds demat accounts in an Indian DP that were opened in December 2004. These accounts are called NRI-Non Repatriable and NRI-Repatriable. She also holds a PAN card. My queries are:

To which of the two Demat accounts such gifted shares can be credited?

If she sells the shares, can she transfer the proceeds to her existing usual NRO/NRE bank accounts? Can she transfer the funds equivalent to the capital gains on the sale of these shares to the UK?

— Piyush Jain

A The answer to your queries is as under:

The gifted shares would be credited to NRI - Non-Repatrible Demat account.

The sale proceeds will have to be deposited in Non-Resident Ordinary rupee account.

Capital gain on sale proceeds of shares would be chargeable to tax and tax thereon will have to be paid in accordance with the provisions of the Act.

An NRI is allowed to remit an amount up to $1 million per financial year out of the balance held in NRO account for any bonafide purposes.

Pension scheme

Q In the new pension scheme, should the share for post 2004 employees form part of the gross salary for tax purpose or not?

What is the treatment in salary and what is the treatment in Section 80c for the contributory pension scheme?

— Moudgil

A Your queries are replied hereunder:

The employee’s share of the contributory pension scheme will form part of your salary.

You would be entitled to a deduction from the total income for the amount paid or deposited under the scheme to the extent of 10% of your salary received in the previous year.