The Tribune, Chandigarh, India

	Five banks to get Rs 6,211 cr New Delhi, June 12 The government today approved infusing Rs 6,211 crore into five public sector banks, a move which will help in lending an additional Rs 77,637 crore to various sectors of the economy. The banks which will get capital infusion include Union Bank of India, Bank of Maharashtra, IDBI Bank, UCO Bank and Central Bank of India. "The five banks would be able to leverage this capital and lend an additional approximate amount of Rs 77,637 crore to the productive sectors of the economy giving a push to all round economic activity besides paying additional dividends and tax revenues to the government," an official release said. According to the release, IDBI Bank will get Rs 3,119 crore, followed by Central Bank of India Rs 2,016 crore, Bank of Maharashtra Rs 590 crore, UCO Bank Rs 375 crore and Union Bank of India Rs 111 crore. With today's decision, the government's total capital support during the current financial year will go up to Rs 8,911 crore, the highest in the recent times, it said. The capital infusion in IDBI Bank will be through the preferential placement of equity, while in Central Bank of India it will be through participation in rights issue. Three other banks namely, Union Bank of India, Bank of Maharashtra and UCO Bank would get capital by way of perpetual non-cumulative preference shares (PNCPS). These banks will undertake the necessary regulatory formalities to obtain clearances from concerned agencies for infusion of this capital, it said. The government has stipulated certain conditions as part of this capital infusion and would be closely watching the performance of these banks so that they continue to maintain the desired capital adequacy and achieve those conditions, it said. Finance Minister Pranab Mukherjee in the Budget speech this year had said, "For the year 2010-11, it is proposed to provide a sum of Rs 16,500 crore to ensure that the public sector banks are able to attain a minimum 8 per cent tier-I capital by March 31, 2011." It may be recalled that the government had infused Rs 1,500 crore in four banks in May, 2010. Of the total, Vijaya Bank got Rs 700 crore, UCO Bank got Rs 300 crore, Central Bank of India and United Bank of India received Rs 250 crore each. Earlier, capital infusion to the tune of Rs 1,200 crore was done in three public sector banks in March, 2010. During 2008-09, four banks namely Central Bank of India, Vijaya Bank, UCO Bank and United Bank of India together got Rs 1,900 crore to augment capital base. — PTI
	Investor Guidance NRIs not eligible for senior-citizen benefit by AN Shanbhag Q: I shall be obliged if you could enlighten me on the following: i) Is the senior-citizen benefit on income tax base deduction available to an NRI? ii) Is Section 80C applicable to NRIs too? — Gurdarshan Singh A: As per Indian tax laws, a person of 65 years and above is termed as a senior citizen. While the general basic exemption limit is Rs 160,000 the same is a higher at Rs 240,000 for resident senior citizens. In other words, resident senior citizens need not pay income tax up to an income of Rs 240,000. However, this enhanced limit is not applicable to NRIs. For NRIs, whether over 65 or not, the same basic exemption of Rs 160,000 continues to apply. Sec. 80C on the other hand is the section that offers tax deduction up to Rs 100,000 for investment in certain instruments such as tax-saving mutual funds, insurance etc. This is indeed applicable to NRIs and Resident Indians alike. Setting off losses Q: Please provide guidance on the following: 1) If one has a carried over long-term loss as per the IT Act for say two years, can it be carried further for more years under the proposed new Direct Tax Code (DTC) up to 8 years? Will it be allowed to be set off against long-term gains arising under DTC regime? 2) If we do not have the time and cost of purchase how one has to calculate long-term gains/loss? This is often the case when the breadwinner of the family suddenly passes away and the widow is left to hold the financial baby! 3) If one invests during February of FY2009-2010, and sells in January of FY 2010-2011 i.e after 11 months is he entitled to LTCG as the sale falls in the FY after the year of purchase. If he sells in (a) March of the FY 2010-2011 under IIT and (b) April of FY 2011 under DTC how the calculations are effected for LTCG/L? — RC Press A: There are many question marks related to the DTC. You have pinpointed such areas, which require clarification from the authors of the legislation. However, if no change is made in the DTC in this regard, we strongly feel that 1. The amount of loss incurred has to be recomputed on the basis of the new norms. In many cases it may not continue to be a loss and where it continues to be a loss, the amount will surely differ. This amount can be carried forward indefinitely until it is wiped out. 2. As per the current IT Act, this hardly makes any difference in the case of equities and equity-based MF instruments. As long as the legatee was able to prove that the holding period of the deceased person and that of the legatee was over one year, the LTCG was tax-free. In the case of other assets, the holding period of the legatee is material in both the regimes. 3. The ITA requires the holding period to be over one year for equities and equity-based MFs, irrespective of the FY. In the example that you have presented, the assessee would be earning Short-Term Capital Gains if the sale occurs during the regime of the Code since the clock starts from the end of the FY during which the transaction takes place. Short-term capital gains Q: I have some questions regarding buyback of shares. 1) In case of buyback of shares, the LTCG (Long-Term Capital Gains) tax is either 10% without indexation or 20% with indexation. a) Is this option of 10% or 20% tax available even in case of LTCG from house property? b) If I am in tax slab of 10%, can I index my cost & after thus arriving at LTCG can I pay only 10% tax. Since my tax slab is only 10% which is less than LTCG tax of 20% with indexation. Will this tax slab of 10% be applicable for both shares (buy back or sale without payment of STT) & house property? 2) At present STCG tax in case of shares (with payment of STT) is 15%. If I am in tax slab of only 10%, can I pay tax on sale of shares (with payment of STT) within 12 months from date of purchase at the rate of 10%. — MR Chainani A: The option of 10% or 20% is not available in the case of property. This facility is only for shares, debt-based MF schemes and securities. Also, the tax rate is either 10% without indexation of cost or 20% after indexation of cost. You cannot pay 10% after indexation, irrespective of your tax slab. The STCG earned by selling shares (with STT paid) is taxable @ 15%. This does not change even if you pay the tax within 12 months etc. However, note that if your income including the STCG is below the tax threshold applicable to you, the STCG will be tax-free. The authors may be contacted at wonderlandconsultants@yahoo.com
	Aviation Notes Delay in flights routine at IGIA by KR Wadhwaney In total disregard to country’s vex security concerns, a private operator, a construction consortium, has been granted a licence to issue unlimited entry passes to its ‘favourites’ for the duration not exceeding three days. The holders of these passes are allowed to stroll freely even in sensitive areas of the Mumbai’s international airport. According to reports, the building operator is free to issue such passes without consulting the Bureau of Civil Aviation Security (BCAS) and Central Industrial Security Force (CISF). The move is contrary to the norms set by the International Civil Aviation Organisation (ICAO). The security agencies at the Indira Gandhi International Airport (IGIA) are mighty upset at the move of the Ministry of Civil Aviation. “Today, it is Mumbai, tomorrow GMR’s outfit will be granted similar facility at Delhi leading to confusion and chaos at two international airports” said security officials, adding: “Who will be responsible if some untoward incident takes place?” Why has the private operator at Mumbai been authorised to issue passes? How will it ease matters at the airport? Whose gain will it be? Will holders pay for these passes? If yes, why should a private operator make money? Why should country’s security and safety be compromised? There are several other questions that arise out of this move which can be very dangerous to safety and security of the passengers and properties at two international airports. The investigation reveals that there were spate of protests against second runway at the Mangalore airport, where lives of 158 passengers and crew members were lost owing to crash of Air India plane. It is learnt that several litigations filed by environmental groups are pending in courts. There were objections against unsuitable location and faulty designs not in keeping with the international standards. According to civil aviation circles, the truth will emerge only if there is a judicial probe, as done in other countries. In judicial probe the real causes of accident emerge as those deposing are expected to speak truth. In the inquiries, undertaken by the Directorate-General of Civil Aviation (DGCA), pressures and pulls come into play and reality of the accident stays buried in the minds of witnesses. The study reveals that the National Aviation Company of India Limited (NACIL) continues to pass through difficult phase as it is flying against the flow. The decisions taken are usually ad hoc instead of institutional. This is sadly because the Civil Aviation Ministry in particular and DGCA in general do not possess the officials who have expertise to take decisions in matters pertaining to operations. The recent inordinate delays of flights at the IGIA have become routine not because of VVIP operations but because of malfunctioning of the Delhi International Airport Limited (DIAL) authorities. The main runway has been closed for re-carpeting the runway 28. Another runway stays closed partially owing to temple. This leaves only subsidiary runway in operation. It is too insufficient to cater to the needs of the ever-increasing operations, Indian and foreign.
	Maran buys 37.7 pc stake in SpiceJet New Delhi, June 12 Media magnate Kalanithi Maran today entered into an agreement to acquire 37.7 per cent equity in low-cost airline SpiceJet for an estimated Rs 750 crore, thus becoming its single largest stakeholder. The stake has been acquired by Maran, Chairman and MD of Chennai-based Sun TV Network, in his individual capacity and through his aviation company KAL Airways, The shares have been acquired from current SpiceJet promoters, American investor Wilbur Ross and his investment companies, and Kansagara family-promoted Royal Holding Services Ltd. The deal is said to have been reached after several rounds of intense negotiations. While it could not be ascertained the price at which the deal was struck, sources said Maran bought the 37.7 per cent stake at a price of around Rs 48 per share, entailing a total payout of about Rs 750 crore. According to sources, the mandatory open offer to acquire an additional 20 per cent stake in Spicejet will be around Rs 58 per share. As on March 31, 2010, public shareholding in SpiceJet stood at 87.15 per cent, including 34.28 per cent held by institutional investors from India and abroad. SpiceJet’s share closed yesterday at Rs 56.05 a share on the BSE. For some time, SpiceJet has been in the process of raising $75 million (about Rs 350 crore) through placement of shares. The airline, India’s second largest low-cost carrier, has a market share of about 13 per cent and has a fleet size of 20 aircraft serving 19 destinations across the country. — PTI