The Tribune, Chandigarh, India

Car sales in top gear
Tribune News Service

New Delhi, May 1
After ending the last financial year on a high car sales in the country continued to be on the upswing in April also with all the car makers posting higher sales in the month over the same period last year.

Leading the way as always were the country’s largest and the second largest car makers, Maruti Suzuki India Ltd (MSIL) and Hyundai Motors India Ltd (HMIL), both of which posted over 25 per cent more sales in April than the previous year.

MSIL reported a jump of 29.70 per cent in its sales at 93,058 units over the same month last year. The company had sold 71,748 units during the same month last year.

In the domestic market, Maruti sold 80,034 units from 64,857 units in April 2009, an increase of 23.40 per cent. Exports surged by 89 per cent to 13,024 units from 6,891 units in the year-ago period.

However, the sales of M800 fell by 3.71 per cent at 2,258 units compared to 2,345 units in April 2009. The A2 segment (comprising Alto, WagonR, Estilo, Swift, A-Star and Ritz) witnessed 20.50 per cent growth at 56,416 units compared to 46,817 units in the same month a year ago.

A3 segment sales (consisting of SX4 and DZiRE) increased by 41.44 per cent to 9,994 units compared to 7,066 units in the corresponding period a year ago, the company said.

Similar was the case with HMIL, which reported a jump of 28.11 per cent in its domestic sales for April at 28,501 units. The company had sold 22,247 units in the domestic market in April 2009, Hyundai said.

The company's total sales soared by 17.24 per cent at 52,020 units as against 44,370 units in the year-ago period. Exports of the company grew 6.31 per cent to 23,519 units from 22,123 units in the year-ago period.

In its A2 segment (Santro, i10, i20 and Getz Prime), the company sold 46,059 units, while in the A3 segment (Accent and Verna) sales were at 5,944 units.

Toyota Kirloskar Motor reported 77.23 per cent jump in its sales at 6,001 units during April. The company had sold 3,386 units in the corresponding month last year.

General Motors India also saw its sales climbing over two-fold to 10,601 units in the month compared to 4,823 units in the same month last year.

"The growth was primarily driven by the overwhelming response to the much sought-after Chevrolet Beat, Cruze and Spark," General Motors India said.

The company sold 3,507 units of the hatchback Spark, 692 units of Cruze and 3,852 units of Beat in April.

Ford India reported an over three-fold jump in its April sales at 7,509 units on the back of its latest small car Figo getting a good response.

Figo already has over 15,000 bookings in the last seven weeks. The company now plans to start the second shift of production at its Chennai facility from June to meet the demand of the hatchback. The company had sold a total of 2,034 units in April, 2009, it added.

Andhra Bank to expand network
Ruchika M. Khanna
Tribune News Service

Chandigarh, May 1
Having achieved a growth of Rs 1,200 crore in business from North India in the past one year, Andhra Bank is now targeting small growth centres in Punjab and Haryana for its retail segment and loans to MSMEs.

The bank is set to open new branches at Zirakpur, Moga, Bathinda, Jhajjar, Kaithal, Jind, Faridabad, Gurgaon and Yamunanagar, besides opening a second branch at Jalandhar. The bank is hoping to get good business in retail segment and from MSMEs from these centres. The focus will also be on opening more current and savings bank accounts in these areas.

“In the last fiscal, we have grown by over 100 per cent in MSME and retail loan segments. In retail credit, we grew from Rs 59.53 crore in 2008-09 to Rs 128.73 crore in 2009-10, while in MSME credit, we grew from Rs 84 crore to Rs 169 crore during the same period,” said VS Sarma, DGM, Andhra Bank.

He said business in the region (comprising Punjab, Haryana, Uttarakhand and J&K) had grown rapidly after the zonal office was set up and 17 new branches were added last fiscal. “With the total branches in the region having gone up to 40 in the past one year, we have managed to increase our business from Rs 1,400 crore in 2008-09 to Rs 2,600 crore in 2009-10,” he said.

HDFC, UAE bank in pact

Dubai, May 1
Emirates NBD, a leading bank in the region, today launched as part of its NRI services, a special online remittance facility for its Indian clients in association with HDFC Bank.

Indian nationals residing overseas can avail this facility to remit funds directly into their HDFC Bank accounts through Emirates NBD's online banking service.

The special remittance service will process all transactions and credit funds into the beneficiary's HDFC Bank account, provided they have been requested before 12 noon on working days common to the UAE and India (Monday-Thursday).

For transactions requested post noon, the funds will be credited by the next working day at the same value, a statement here said. — PTI

Investor Guidance
No rebate on insurance premium of parents
by AN Shanbhag

Q: Can I claim premium paid towards LIC policy of dependent pensioner parents under Section 80C for tax saving?

— Ashish

A: We are afraid this isn’t possible. This is because, in the case of Section 80C, contributions in the name of spouse and all children, major or minor, married or otherwise, (including married daughters) to i) any life insurance company for life cover ii) LIC deferred annuity iii) PPF iv) ULIP and Dhanaraksha are also eligible for the deduction.

You will find that parents, dependents or otherwise, pensioners or not, do not feature in this list. Hence, the premium paid towards the insurance policy of parents does not qualify for the Sec. 80C deduction.

Disability relief

Q: I want to know if a woman government employee having a physically handicapped certificate due to an amputated left arm (85%) can avail of the tax deduction of Rs 75,000 offered by the Income Tax Act.

— DV Gupta

A: The disability is classified into two parts as defined under the Persons with Disability (Equal Opportunities, Protection of Rights and Full Participation) Act, 1996. A person with disability means a person suffering from not less than 40% of any disability as certified by a medical authority; disability of 80% or more is severe disability. The deduction allowed will be Rs 50,000 for non-severe and Rs 1,00,000 for severe disability.

The person concerned is required to get a certificate from a medical authority indicating the extent of the disability. Incidentally, FA09 has hiked the deduction for severe disability from Rs 75,000 to Rs 1,00,000.

Section 24

Q: I am being assessed under HUF category in respect of rental income from commercial property in Delhi. I am also filing a separate return in my personal name for my pension income. Now, our group housing society has been allotted land in Mohali for construction of flats. I will get one flat in the society. For payment to the society I will raise a loan in my personal name from some bank. You are requested to advise me, whether I will be able to set off rebate of interest on loan from my HUF income account.

— Jagteshwar Singh

A: The benefit of Sec. 24 is available to all assessees, including HUFs. However, note that if the tax deduction is required for the HUF, the HUF should be the owner of the property and the loan should also be in the name of the HUF.

Vehicle as gift

Q: I want to know if I get a vehicle as gift from my friend, is it taxable? Secondly, according to Budget 2010, is the immovable property purchased for inadequate consideration free from tax? I have purchased a property for Rs 5 lakh and the market value or stamp duty value is Rs 6 lakh. Is the difference of Rs 1 lakh taxable? Or according to the Budget 2010, I need not pay the tax.

— S Katre

A: 1. The provision of taxing gifts as income of donee was applicable only to cash gifts. FA09 extended the provision w.e.f. 1.10.09 to the following assets: 1. land and building 2. shares and securities 3. jewellery 4. archaeological collections 5. drawings, paintings, sculptures or any work of art received without consideration or for inadequate consideration. Therefore, vehicles received as gifts are not taxable.

Immovable property was considered at its stamp duty value as per amended provisions of Sec. 50C and Sec. 155(15) related with capital gains. Movable property will be considered at its fair market value. If property is received with inadequate consideration, the difference between the fair market value or stamp value of such property and such consideration was to be taxed as the income of the recipient, if the difference exceeded Rs 50,000.

Recent FA10 has introduced a few more changes:

1. If you have purchased the immovable property, there is no income tax on the transaction since it is a capital transaction. However, if you have received it as a gift or having purchased it you are contemplating to give it as a gift, note the change contemplated by the Budget: In several cases of immovable property transactions, there is a time gap between the booking of a property and the receipt of such property on registration, which results in a taxable differential. It is, therefore, proposed to amend clause (vii) of section 56(2) so as to provide that it would apply only if the immovable property is received without any consideration and to remove the stipulation regarding transactions involving cases of inadequate consideration in respect of immovable property.

This means, even if you have purchased the property at a value less than the stamp duty value, there would be no tax liability for you. However, this in no way alters the seller’s obligation to pay capital gains tax based on the stamp duty value as the same is higher than the sale value. This stipulation existed even before the budget and will continue to apply as before.

Gift to relative

Q: I am an NRI living in the USA. I want to send my father-in- law some money in the form of gift. Can my father-in-law buy agriculture land in India with that money?

— Manjit

A: Yes, you can gift your father-in-law any amount of money. India does not impose tax on such a transaction either on the donor or the recipient. Basically, gifts given by a close relative are fully exempted on both parties concerned without any monetary limit. Tax wise, it is immaterial for what purpose your father-in-law applies the gifted funds. However, since he is an Indian resident he can most certainly use the funds for the purposes of buying the agricultural land.

The authors may be contacted at wonderlandconsultants@yahoo.com

Aviation Notes
NACIL owes over Rs 1,200 cr to oil firms
by KR Wadhwaney

The government was misled into believing that the twice-failed merger of two national carriers, Indian Airlines (IA) and Air India (AI), would help improve physical health of the National Aviation Company of India Limited (NACIL). The oft-repeated assurances of the Minister of State for Civil Aviation, Praful Patel, did not only prove to be 'empty words' but the single-entity company slipped into the state of near bankruptcy.

Before the merger two years ago, the losses of two airlines were manageable. IA's losses were at Rs 59 crore and AI's Rs 750 crore. Now the losses have tripled; they continue to mount as overhead expenses are increasing and no concrete measures are being taken to earn profit.

Capt SS Panser, secretary of the All-India Airlines Retired Personnel Association, says that despite government's patronage of showering equity to the NACIL, the 'death' is imminent because powers that-be are hell-bent on promoting private carriers instead of airline wearing 'maharaja' posture of olden days.

What has caused further unrest in the already disturbed staff is that the authorities have appointed a foreign outfit to monitor and suggest revision of route structure. According to Capt Panser, who retired as chief of operations of the IA, 'there are horde of professionals in the airline competent to suggest ways and means for turnaround of the airline instead of throwing away tons of money on foreign companies'.

According to him, the way things are going on, maybe NACIL will be flying on domestic routes while private operators like Kingfisher and Jet Airways will be operating on lucrative foreign routes.

He says, “more than two double aircraft, including 17 AB-320s are lying on ground collecting dust.” Whatever may be the compulsions, technical or non-technical, statistics reveal that expenses on sitting aircraft are much more than the 'bird' in the air.

In the Rajya Sabha recently, the minister admitted that the NACIL owes more than Rs 1,200 crore to three public sector oil companies. He also said that the company was expected to incur a loss of Rs 5,400 crore in the last fiscal. He made some other disclosures, which portrayed a poor picture of the national carrier that was a pride and joy of the country.

According to reports, minister's siblings also have a big say in the affairs of the NACIL. One translated a scheduled flight into a chartered one to transport stars of the IPL, while another one had a small aircraft changed into a larger one so that all her favourites could travel together in style in business class.