The Tribune, Chandigarh, India

	India may have to wait for black money details New Delhi, January 23 India may have to wait till at least next year for information from Switzerland on possible black money trail to Swiss banks, as a treaty for the same might come into force only by the end of 2011. The treaty needs to be ratified by various authorities in India as also in Switzerland, including the Parliament of the European nation, and it might come into force by the end of 2011 depending on these approvals, a spokesperson for the Switzerland's Federal Department of Finance told PTI. If all these ratifications are achieved by 2011-end, the provisions of the treaty, which includes information exchange about suspected tax evaders and other financial offenders, would come into effect in India from the fiscal year beginning on or after first day of April 2012, the official said. This means that India would be able to seek information on tax evasion and other financial offenses on incomes for the fiscal year 2012-13 beginning April 1, 2012, onwards and not for the past periods, experts said here. Still, it is unlikely that the names of Indians having money in Swiss banks would be made public, as being demanded by the opposition parties, because such a step would not only be in breach of the bilateral treaty, but could also hinder the process of investigations, they added. In Switzerland, the provisions would come into effect for fiscal year beginning on or after January 1 of the year following the one when treaty comes into force, the Swiss Finance Department official said. Indian government is facing intense pressure from the opposition parties, as also the Supreme Court, on issue of black money allegedly stashed away by some Indians in Swiss banks and other tax havens. The issue of Indians having secret Swiss bank accounts has become a political hot potato, amid reports of Indians having billions of dollars in banks in Switzerland. But, there are no official figures as such and experts believe that it was not necessary that all the funds deposited by Indians in Swiss banks were black money. Finance Minister Pranab Mukherjee and Swiss Federal Councillor Micheline Calmy-Rey signed a ‘protocol’ on August 30, 2010 to amend the double taxation agreement (DTA) in the area of taxes on income. The revised tax treaty was expected to facilitate the Indian government seeking details about illicit wealth allegedly stashed away by Indians in Swiss banks. However, this Protocol has not entered into force yet and needs to be ratified by the authorities in two countries. Asked about the status, the Swiss Federal Department of Finance official said that one of the parliament commissions in charge of the DTAs last week decided to approve the DTA with India and the parliamentarial approval process was expected to come to an end by September 2011. — PTI
	Vodafone OK with Essar IPO of Indian JV stake Mumbai, January 23 British telecom firm Vodafone said on Sunday it had not blocked Essar from conducting an initial public offer (IPO) of the latter’s stake in Vodafone Essar, India’s third-largest telecoms company by subscribers. “We have no objection if Essar wishes to go for an IPO of its stake in Vodafone Essar,” the British company said in a statement. Vodafone and Essar have locked horns in recent days over the Indian group’s move to merge a firm that owns an indirect 11 per cent in their mobile joint venture with another Essar group firm, India Securities Ltd (ISL). Essar has said that last year it wanted to list Vodafone Essar by offering its shares through an initial public offer but Vodafone ‘ensured that the IPO did not go through and no market value could be established’. Essar group also accused the British telecoms giant of trying to force it out of their joint venture. Shares in ISL, which is Essar group’s financial arm, have risen more than tenfold in the past 12 months. Vodafone had objected to the merger between the two Essar group firms on January 18, saying ISL’s value may be inaccurately used to calculate the value of its Indian telecom joint venture Vodafone Essar. Vodafone continues to believe that material information has not been provided to the market regarding the merger scheme and it has raised objections with the Madras High Court, the Bombay Stock Exchange and stock exchange regulator Sebi, it said in a statement. Vodafone paid $11.1 billion in 2007 for a 67 per cent stake in the firm. The deal gave Essar the option to sell its entire 33 per cent stake for $5 billion by May 2011, or part of it at a market-determined price. Vodafone has an agreement with Essar that gives it first option to buy out the latter’s stake if some or all of the holding is put up for sale. The decision to exercise either put option on or before May 8, 2011, is entirely the choice of Essar, Vodafone said in a statement. Shares of India Securities Ltd closed at Rs 63.35 on Friday, down 3.58 per cent in a weak Mumbai market. — Reuters
	Maruti tax payment increases over 20% Tribune News Service New Delhi, January 23 The country’s largest carmaker Maruti Suzuki India Ltd (MSIL’s) tax payment to the government increased 20.34 per cent during 2009-10 to Rs 5,461.3 crore. “Driven by large volume growth during the year 2009-10, the company’s gross contribution to the National Exchequer (via taxes and duties) stood at Rs 5,461.3 crore in 2009-10, as compared to Rs 4,538.2 crore in 2008-09,” the company has said in a report. The company had sold 10,18,365 units, including exports, registering sales of more than a million vehicles for the first time in its history. “Last fiscal was a landmark year for Maruti Suzuki and the Indian passenger vehicle industry. Maruti Suzuki became the first company in India to make and sell a million cars in a year,” MSI Managing Director S Nakanishi said. Net sales in the fiscal stood at Rs 28,958.5 crore, a 42.2 per cent jump over the previous year. MSI's profit after tax rose 105 per cent to Rs 2,497.6 crore. Payment towards employees' wages rose 15.8 per cent to Rs 545.6 crore in 2009-10 from Rs 471.1 crore in 2008-09. MSIL’s contribution for various social schemes went up 47.3 per cent to Rs 11.3 crore from Rs 7.67 crore in 2008-09, it added. “The CSR spend of 2009-10 includes expenditure of Rs 1.32 crore on infrastructure projects implemented for public benefit,” the report added. The company said that during the year, it undertook several steps towards environmental sustainability through various measures, such as reducing CO2 emission in manufacturing by energy efficient technologies, plantation of 20,000 trees and starting natural gas supply to Manesar plant for captive power generation.
	Tax Advice IRDA responsible for defaulting cos in insurance sector by SC Vasudeva Q: Max New York Life Insurance Co. (an American MNC) has been working in India for the last 5 years only. It offers policies like ‘Life Partner Plus’ to the public, which lasts 48 years showing very good results on maturity. For a person of age 27 years paying a premium of Rs 50,000 per annum for only 10 years (Total Rs 5 lakh) shall get a sum of more than Rs 1 crore (1,09,34,840). The company also claims that Section 80C and 10 DD is allowed to the policies issued by them My query is:- (a) In case the Max New York Life Insurance Co. winds up its business, say after 20 years from now, for whatsoever reason, who is responsible for the payment of the policies issued by them? (b) Are we to correspond with the parent company in USA or is there any other agency which shall look to our interest in future. (c) Do you encourage us to deal with such like companies or not. (d) I think LIC of India is fully safe in this regard. — Nripander Parkash Khanna A: (a) The responsibility to make payment in respect of the claim arising against the policy would be that of the insurance company i.e. Max New York Life Insurance Co. Ltd. In case the company is wound up, the Insurance Regulatory Authority of India (IRDA) would, in my opinion, look after the interest of the policy holders and ensure that policy holders are not made to suffer. (b) You will have to correspond with the Insurance Regulatory Authority of India. The decision to deal with the private insurance companies rests with the individual and it is not possible to express an opinion in this regard. (c) Insurance companies including Life Insurance Corporation of India have their own schemes. A person has to select which scheme gives the maximum benefit to him. That LIC of India is a safe bet is a matter of opinion and you are entitled to hold on to such an opinion. I-T exemption Q: I and my wife both are both employees. I pay annually Rs 50,000 as premium on my insurance policies, which are on my name. I do not claim any exemption on income tax on this premium. Now my query is that whether my wife can claim exemption on income tax on the premium paid on my insurance policies. — Sudhir Gautam, Jawali, HP A: Section 80C of the Income-tax Act 1961 (The Act) provides for the deduction to be allowed in respect of payment/deposit made by an assessee towards various specified schemes/investments. Your wife can claim deduction in respect of premium paid for a policy taken in your name provided such payment has been made by her. Short term capital losses Q: I will be very grateful if you could kindly clarify whether ‘Short term capital losses’ arising out of dealings in stock markets can be offset against the salary or pension income of the same year for working out the taxable income of that very year. If so, under which section of the Income-tax Act.If not, has it to be carried forward up to the next eight years to be adjusted against the similar Short term capital gains?" — ML Ahuja A: A short term capital loss arising out of dealings in securities listed on a recognised stock exchange where such transactions are chargeable to Securities Transaction Tax under Chapter VII of Finance (No.2) Act 2004 cannot be set off against income from salary or pension. This has been clarified in section 71 (3) of the Act. The loss arising on such transaction can be carried forward for a period of eight years for being set off against income under head capital gains assessable for that assessment year. Such carry forward is allowed for eight assessment years immediately succeeding the assessment year for which the loss was first computed.
	RIL hits bureaucratic wall; complains to Oil Secretary New Delhi, January 23 With bureaucratic red tape threatening to derail its multi-billion dollar oil and gas hunt campaign, Reliance Industries has complained to Oil Secretary saying that even routine matters are stuck for review/approval for months. Reliance ED PMS Prasad wrote to Oil Secretary S Sundareshan listing out a long list of operational issues at its oil and gas producing and exploration sites that have not been given approval for months. "Of late, we have been facing major difficulties in getting even routine proposals reviewed / approved," he wrote. "You will appreciate that such delays impact Production Sharing Contract schedules for exploration, appraisal and development programmes." He said the Management Committee (MC), which comprises of representatives of oil ministry, sector regulator DGH and the oil company, has not approved the work programme of KG-D6 block, for the current fiscal. "The major issues that are still awaiting MC review / approval (include) the Work Programme and Budget (WP&B) for 2009-10 (revised estimate) and 2010-11 (budget estimate) for KG-D6,” he wrote. — PTI
	Sebi, RBI increase vigil New Delhi, January 23 Financial regulator Securities & Exchange Board of India (Sebi) and RBI have increased vigil on Indian entities routing their funds from secretly-held Swiss bank accounts to India through Dubai and other locations. The stepped-up vigil for money laundering activities comes in the midst of suspicion that there could be some Indian entities in the list of over 2,000 Swiss bank accounts that are expected to be disclosed soon by whistle-blower website Wikileaks. Banks in West Asia have seen a sudden spurt in deposits in past few months. Queries mailed to Swiss Bankers Association remained unanswered on whether the banks there have seen a rise in withdrawals. It is feared that Indian entities with accounts in Swiss banks might move their funds to West Asia and other locations and then route them back to India, either into the stock market through FIIs or the FDI route. While Sebi is responsible for oversight on funds flowing into or out of capital markets, RBI approval is needed for FDI inflows for many sectors. RBI also monitors flow of overseas funds into stock market through foreign or overseas banks.
	TCS is country’s 2nd largest firm in terms of market cap Mumbai, January 23 Driven by smart December quarter earnings, IT major Tata Consultancy Services has become the country’s second largest firm in terms of market valuation, lagging behind corporate leader Reliance Industries. TCS, which was the top gainer among the country's 10 most valuable companies in the last week, saw its valuation surging Rs 18,378.11 crore to Rs 2,37,330 crore in the week. State-run ONGC slipped to the third position after its valuation dipped by Rs 15,763.47 crore -- the most among top 10 companies -- to Rs 2,36,355.83 crore during the week. Mukesh Ambani-led RIL, the country's most valuable firm, lost Rs 4,794.78 crore in mcap in the week. The country's largest software firm, TCS, last week posted 29.93 per cent growth in consolidated net profit at Rs 2,369.83 crore for the October-December quarter. — PTI