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BSNL joins tariff war
Offers calls to US, Canada at 6 paise/sec

Chandigarh, September 4
“Punjab videsh vich vasda hai”, says an advertisement of a cellular company, offering cheap calls to Canada and the US. With the ISD call rates to certain destinations falling to as low as one paisa per second, a virtual price war is on among major telcos to cash in on calls to Punjabis settled abroad. The latest to jump into this bandwagon is the state-owned BSNL, albeit with a higher tariff of six paise a minute, to select destinations.

Aviation Notes
IGIA’s security under ‘threat’
Haste has been an evil that haunts most operators — government and private — in the complex civil aviation sector. The third longest runway and Terminal-3 have been created without adequately tackling multiple problems, particularly security and safety of men and property at the airport.


EARLIER STORIES



Andhra, L&T in pact for Metro project
Hyderabad, September 4
The Andhra Pradesh government today signed an agreement with engineering major Larsen and Toubro (L&T) for development of Hyderabad Metro Rail project, billed as the country’s largest such venture.

Investor Guidance
Interest on tax-saving FD taxable
Q: I will be obliged to know whether interest paid on tax saving fixed deposit of banks are exempted from tax.

 





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BSNL joins tariff war
Offers calls to US, Canada at 6 paise/sec
Anuja Jaiswal/tns

Chandigarh, September 4
“Punjab videsh vich vasda hai”, says an advertisement of a cellular company, offering cheap calls to Canada and the US. With the ISD call rates to certain destinations falling to as low as one paisa per second, a virtual price war is on among major telcos to cash in on calls to Punjabis settled abroad. The latest to jump into this bandwagon is the state-owned BSNL, albeit with a higher tariff of six paise a minute, to select destinations.

While most wars have unhappy endings, this one is destined to leave the subscribers smiling all the way as gone are the days when making international calls used to dig a hole in one’s pocket. "I remember I used to pay over Rs 150 per minute in the 70s and 80s for making a call to the US and it was really painful to wait for the line to get through. And in just over a decade, the entire communication system has revolutionised and today I talk to my grandchildren in Canada at one rupee a minute," said RS Gupta, a septuagenarian, in Sector 8, Chandigarh.

Making calls through VOIP (voice over Internet protocol) on the Internet was always a cheaper option but now with the telecom companies using the same technology for their mobile phones, one doesn't have to depend on computers and Internet connections.

The price war on international calls from Punjab is a two-month old phenomena. It started with Tata Docomo slashing its prices by a whopping 83 per cent, bringing it down to one paisa a minute.

Vodafone, the second largest GSM operator, followed suit with similar rates to the US and Canada.

While both these companies have Punjab-specific plans for their subscribers, BSNL plans to launch its Universal India Telephone Card (ITC) at a slightly higher rate of six paise per second. With fierce competition from private players, the success of this card remains questionable in Punjab, but officials expect a "good" response from other parts of the country.

According to BSNL officials, this card will be applicable for pre-paid, post-paid and landline users at the same tariff of six paise per second. “The call charges will follow the per-second tariff plan in the price band of 6p/sec pulse to 45p/sec for all ISD calls while all STD and local calls (anywhere in India) will be charged at 1p/second,” the official said. The pre-paid ITC card, also known as Virtual Calling Card, enables the user to make STD, ISD or local calls from any GSM phone or BSNL landline phone.

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Aviation Notes
IGIA’s security under ‘threat’
by KR Wadhwaney

Haste has been an evil that haunts most operators — government and private — in the complex civil aviation sector. The third longest runway and Terminal-3 have been created without adequately tackling multiple problems, particularly security and safety of men and property at the airport.

The government is now fully aware as the Minister of State for Civil Aviation, Praful Patel, told the Lok Sabha that Indira Gandhi International Airport’s (IGIA) security was under ‘threat’ from east and west colony called Mehram Nagar.

The Delhi International Airport Limited (DIAL) has been busy raising Perimeter Intrusion Detection System (PIDS). But the work is progressing at a snail’s pace for several technical and non-technical reasons. The red-tapism is also in operation. The entire project will not be completed until the end of the year.

Analysts, however, say erection of the boundary on a very long area will not eliminate ‘risk’ factor because thickly populated Mehram Nagar has been a hub of ‘undesirables’. Worldwide, it is said, criminals, despite intense business rivalries, live together under the protection of each other; they also grow and prosper under the protection of each other.

In the Mehram Nagar, there are certain sensitive establishments like Research Analysis Wing (RAW). The government will have to employ additional forces to maintain befitting security during Commonwealth Games and subsequently. The authorities, according to the analysts, should have taken adequate measures before Mehram Nagar turned a hub for criminals instead of waking up now. The evacuation or segregation of ‘undesirables’ is not free from hinderances.

According to a study, East Mehram lies within 50 yards from the boundary. There are clusters within clusters, as is routine in such colonies. People, including many working at the IGIA and nearby offices, move about freely. The main runway is around. There are similar weak zones here, as they existed around the old cargo complex.

The resumption of operations on the new runway, undergoing repair at present, will be possible at the nick of the time just before the rush of the teams start arriving. Rain has been villain, it is said. But rain or no rain, the civil aviation operation units have tendency to ‘wake up’ late.

As Frankfurt has not been a successful hub for Air India, there is every possibility of the national carrier use Terminal-3 as its hub. In the existing scenario, it is judicious to secure home advantage instead of depending on a foreign hub, which is very expensive exercise.

The national carrier’s financial health continues to cause concern and therefore switching to home environment will not only be economical but will also be judicious.

According to the analysts, Delhi is the best option. It is much better than having a hub in Frankfurt or Dublin or any other foreign country. The marketing and operation units are in favour of base in India, but politicians want a hub in foreign country. Why? The politicians refuse to answer.

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Andhra, L&T in pact for Metro project
Tribune News Service

Hyderabad, September 4
The Andhra Pradesh government today signed an agreement with engineering major Larsen and Toubro (L&T) for development of Hyderabad Metro Rail project, billed as the country’s largest such venture.

The Rs 12,132-crore project, covering three traffic corridors stretching over 71 km and construction of 66 stations, would be a role model for the country, Chief Minister K Rosaiah said after agreement-signing ceremony.

Being taken up in public-private partnership on design, build, finance, operate and transfer (DBFOT) basis, the ambitious project is expected to be completed in five years.

The agreement was signed by Urban Development Secretary TS Appa Rao and Managing Director of the newly formed Special Purpose Vehicle L&T Hyderabad Metro Rail Pvt. Ltd, VB Gadgil, in the presence of Chief Minister.

L&T has sought a viability gap funding of Rs 1,458 crore for the project which will be entirely borne by the central government, Rosaiah said.

The ambitious metro project had faced several hurdles ever since it was announced three years ago. It was initially handed over to Maytas Infra, a sister concern of the erstwhile Satyam Computer Services. Following a major scam in the parent company, Maytas failed to achieve financial closure.

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Investor Guidance
Interest on tax-saving FD taxable
by AN Shanbhag

Q: I will be obliged to know whether interest paid on tax saving fixed deposit of banks are exempted from tax.

— M. P. Dhakras

A: No, the interest paid by tax saving fixed deposits is fully taxable. It is the amount invested (ceiling of Rs 1 lakh u/s 80C) that is exempted.

Rebate u/s 35AD

Q: I am a regular reader of your Tax Tips in the "Tribune". Sir, I would feel highly obliged if my queries as under are addressed under your expert guidance.

1. At present, I am in the business of sale and purchase of real estate.

I am interested in building and operating a new hotel of 3 star category u/s 35AD.

Kindly guide if I can avail of the deduction of Capital Expenditure incurred on this hotel against the taxable income from real estate business or for that matter from any other business.

If such deduction is not allowed, then, under what clause will the deduction of capital expenditure be available? Is it against the profits of the new hotel business only?

2. I and my brother are having 2 HUFs, one as RK Gupta HUF and the other as PK Gupta HUF.

A residential house for Rs 4 lakh was purchased about 15 years back in the name of these two HUFs jointly. We want to transfer the house in our names i.e. myself and in the name of my brother, as the house is divisible into two parts and separate sale deeds can be executed.

Will there be any tax liability, and if so, on what amount? Present market value of the house is not less than Rs 40 lakh.

— R.K. Gupta

A: 1. Under Sec. 35AD, no deduction is available for the kind of business you propose to undertake. You will do well by approaching a consultant for guidance since the stake is large.

2. HUF is a distinct and separate person for tax purposes and therefore, the sale of any property owned by an HUF to anyone, including any of its members, will attract capital gains tax.

However, note that any person cannot earn any income from himself. Therefore, where the property is sold to any of its members, the share of the individual as a member of HUF can be deducted from the amount of capital gains and tax be paid on the rest of the capital gains.

The authors may be contacted at wonderlandconsultants@yahoo.com

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