The Tribune, Chandigarh, India

	Credit flow to Punjab farmers declines Only 19 pc of the farmers who were beneficiaries of the debt waiver scheme have been granted fresh loans Ruchika M. Khanna Tribune News Service Chandigarh, May 15 Bogged down by the writing off of agriculture loans under the ambitious Agriculture Debt Waiver and Debt Relief Scheme, 2008, most banks in Punjab are still not ready to disburse fresh loans to beneficiary farmers under this scheme. While public sector banks have started fresh lending to farmers who had benefited under the waiver scheme across Punjab, the private sector banks, regional rural banks and cooperative banks are still slow in extending fresh loans to these farmers. Interestingly, the cooperative banks have justified their slow lending to beneficiary farmers under this scheme, saying that most of the farmers under this scheme were chronic defaulters and they had stopped making transactions with Primary Agriculture Credit Societies (PACS), and may have shifted to other banks to avail fresh loans. The recently held state level bankers committee for Punjab has revealed that just 19 per cent of the farmer accounts who were beneficiaries of the debt waiver scheme, have been granted fresh loans. However, the amount of loan provided to these farmers is almost 80.23 per cent of the total waiver and relief provided. It may be mentioned that the Agriculture Debt Waiver and Debt Relief scheme was announced in 2008, wherein the government had written off loans for small farmers and partially written off loans for the medium farmers. As many as 3.52 lakh farmers in Punjab had benefited from this scheme and agriculture loans worth Rs 936.84 crore had been waived off. The ultimate objective of the scheme was to provide fresh loans to distressed farmers so that they can restart their farming activities. Data available with The Tribune shows that while public sector banks have been extending fresh loans to these farmers, the cooperative banks have given fresh loans to just 12 per cent of farmers who benefited under the scheme. Banks in the state have provided fresh credit to the extent of Rs 751.65 crore, covering 69,082 farmer accounts. Of this, Rs 563.71 crore has been advanced to the beneficiary farmers by the public sector banks. Regional rural banks have extended loans to just 3,605 beneficiary farmers (Rs 49.35 crore), and private sector banks have disbursed loans to just eight farmers worth Rs 58 lakh. Data also shows that cooperative banks in Punjab have given fresh loans to 24,919 farmers, involving Rs 138.01 crore. Looking at the poor performance of banks, the bankers committee has now asked the controlling heads of all banks to ensure that fresh loans are disbursed to all farmers who had received benefit under the debt waiver scheme.
	Decision on hiking diesel, LPG prices next week Kolkata, May 15 A day after oil firms hiked petrol rates by a steep Rs 5 per litre, Finance Minister Pranab Mukherjee today said a ministerial panel will decide on raising diesel, LPG and kerosene prices next week. An Empowered Group of Ministers (EGoM) headed by Finance Minister is likely to deliberate on Oil Ministry's demand for a minimum Rs 4 a litre hike in diesel price and Rs 25 per cylinder increase in LPG rates to partly bridge the gap between domestic prices and their international cost. "A decision will be taken on raising prices of these items when the EGoM meets next week," Mukherjee told reporters here after meeting Congress MLAs elected in the West Bengal Assembly elections. He, however, neither gave the date of the EGoM meeting nor the quantum of hike the panel may consider. — PTI
	Investors slam Microsoft’s deal to buy Skype New York, May 15 Microsoft Corp's move to buy money-losing Internet phone service Skype for $8.5 billion was immediately skewered by critics and investors, who questioned the logic of the deal and suggested the software giant is paying far too much. The price is about double the expected value of Skype if it had gone ahead with its planned initial public offering, leaving investors puzzled over how Microsoft will make the deal pay for itself. "I wish they had not done it," said Whitney Tilson , founder and managing partner of T2 Partners LLC, which owns Microsoft shares. "Initially when I first read about it, I hated the deal. Now, I don't like it," said Tilson, who is a long-term buyer of Microsoft shares and still sees them as a great cash-generating business and an undervalued stock. Shares of the world's largest software company fell 1.4 per cent, anchored at the same level they have been for 10 years. The latest deal was a fresh reminder that Microsoft has no record of making acquisitions pay off. Its 2007 deal to buy online ad firm aQuantive for $6 billion was a flat-out failure. Skype made a net loss of $7 million last year on revenue of $860 million, even as its user base grew nearly 40 per cent to 145 million. Microsoft CEO Steve Ballmer said the deal would add to the company's profits from the first year, preferring to focus on the $264 million Skype made last year, excluding interest, tax, depreciation and amortization. — PTI
	Suzlon targets Rs 26k-cr revenue Mumbai, May 15 Wind turbine maker Suzlon Energy, which returned to the black in Q4 FY 11, is targeting to increase its total revenues by around 44 per cent to up to Rs 26,000 crore in FY 12, a senior executive has said. "Our revenues were around Rs 18,000 crore in FY 11 and we are targeting them to grow to the Rs 24,000 to Rs 26,000 range in the next financial year," Suzlon CFO Robin Banerjee said. For FY 12, the firm is targeting an earnings before interest and taxes to be in 7-8 per cent of the total sales, he added. Banerjee said the company, which had an order book of Rs 30,100 crore as of May 13, will be concentrating on its established business areas in India, China, Brazil, South Africa and Latin American countries for achieving growth. Though the company does not have any immediate plan of foraying into any newer market beyond the 32 countries it is already present in, it is looking at having a presence in the Uruguay and Peru, he said. — PTI
	Hyundai bets big on small car Hyderabad, May 15 Hyundai Motor India (HMIL) is betting heavily on its yet-to-be-launched small car to penetrate into the rural market, a top executive of the company said. According to Y K Koo, senior director (sales and marketing) HMIL, the small car will be launched in the first half of next year and the company has no immediate plans to export the car.The car will be manufactured in Indian plant. — PTI
	HDFC ups lending rate Mumbai, May 15 In keeping with the rate hikes by the RBI earlier this month, HDFC has announced hike in lending rate by 50 basis points, a development that will make home loans expensive. The revised retail prime lending rate (RPLR) will be applicable from May 16, the bank said. HDFC said home loans up to Rs 30 lakh will attract 10.25 per cent (floating rate) and 10.5 per cent on loans on Rs 30.01 lakh to Rs 75 lakh. Loans above Rs 75 lakh will attract interest rate of 11 per cent, it said. — PTI
	Tax Advice No tax on gratuity up to Rs 10 lakh by SC Vasudeva Q. This is with reference to your clarification “whether income tax is deductible from the enhanced amount of DCRG (death-cum- retirement gratuity) i.e. in excess of Rs 3.50 lakh to Rs 10 lakh from the retirees of Punjab State Electricity Board, Patiala, who retired between the periods 01.01.2006 to 23.05.2010?” published in The Tribune dated 27.12.2010. Kindly give your opinion/advice on the matter referred above on the basis of the following points. 1. All pensionary benefits, including DCRG, are being given to the pensioners of the Punjab State Electricity Board, Patiala, as per the Punjab Govt. Civil Service Rules in toto, which are covered under the Income Tax Rule 10(10)(i) being its employees are holders of Civil Posts under the State Govt. on earlier occasions, whenever amount of DCRG was enhanced w.e.f. 01.01.1986 to 31.03.1988 (from Rs 50,000 to Rs 1,00,000) and 01.01.1996 to 23.09.1997 (from Rs 2.50 lakh to Rs 3.50 lakh) no income tax was deducted from the increased amount of DCRG of its retirees. 2. The Gratuity Act 1972 is not applicable to the employees of the Punjab State Electricity Board as it has been exempted by a notification of the Punjab State Government. 3. Amount of DCRG, including all pensionary benefits, of the retirees of Punjab State Electricity Board Patiala are being calculated as per Punjab Govt. Civil Service Rules which are covered under Income-tax Act, 1961 Rule 10(10)(i). 4. Amount of DCRG, including all pensionary benefits, are not calculated as per Rule of Income-tax Act, 1961 Rule 10(100)(iii). — H.S. Gupta A. I have gone through the clarification given by you. In view of the above clarification, the amount of gratuity computed in accordance with the provisions of Section 10(10) (i) of the Income-tax Act 1961 (The Act) would be exempt subject to a maximum of Rs 10,00,000. The above limit of Rs 10,00,000 is applicable to employees retiring on or after 24th May 2010 (Refer Notification No. S.O. 1217(E), dated 24.05.2010) (324 ITR st. 29) NRI’s taxability Q. I am an NRI employed in Australia. I get living away from home allowance once a year for coming to India. Such an allowance is exempt in Australia. Will it be taxable as I have some taxable income in India for which a regular tax return is being filed in the status of a non-resident. — Sudhir A. The taxability of income in India arises on the basis of the residential status of an assessee. It is evident from the query that your status is that of a non-resident. In such a case, an assessee would be taxable in respect of income arising in India. Living away from home allowance cannot be termed as income arising in India and therefore should not be taxable in India. FDs u/s 80C Q. I want clarification on following two points: 1. Whether an FDR in a bank under Section 80C can be prematurely withdrawn? 2. One of my relatives has taken premature retirement on medical grounds from a bank under total incapacitation & got ex gratia of Rs 10 lakh at source. Please advise whether any rebate is allowed on this ex gratia & under which section. — Ram Parshad A. The fixed deposits made in a bank in accordance with the requirements of Section 80C of the Act cannot be prematurely withdrawn. This is in accordance with the clause 11(2) of the Bank Term Deposit Scheme 2006, which provides that no term deposit shall be encashed before the expiry of 5 years from the date of its receipt. 1. In my opinion there is no section which provides for any relief or rebate for the ex gratia amount received by an employee on termination of his employment. The only exemption provided by Section 10C of the Act is in respect of amount received on the voluntary retirement or termination of the services of an employee in accordance with any scheme or scheme of voluntary retirement or in the case of public sector company, scheme of voluntary separation to the extent such amount does not exceeds Rs 5 lakh. If your friend is covered within the aforesaid scheme an amount to the extent of Rs 5 lakh would be exempt from tax. Medical expenses Q. I am a university employee. After an accident, I had to undergo orthopaedic surgery on my right arm for which a sum of approx. Rs 20,000 was incurred at a private nursing home. My employer has given me a total sum of Rs 15,000 as medical reimbursement. I have come to know that medical reimbursement up to Rs 15,000 is tax-free. Sir, in this connection, I want to know what will be my tax liability? — Raghunath A. Section 17(2) of the Act defines perquisites which are includible in the term salary for the purpose of taxability thereof. However, proviso to Section 17(2)(vi) exempts any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment so however that such sum does not exceed Rs 15,000 in the previous year. In view thereof, the reimbursement of Rs 15,000 would not be taxable in case the total reimbursement for the relevant previous year does not exceed Rs 15,000. Gift tax Q. I have a daughter aged two years. She receives cash gifts (shagun) on various occasions like on her b’day, religious ceremonies, visits to our relatives. Though individually small in amount, the collective sum becomes considerable per annum. I want to ask: 1. What are its tax implications, whether the amount has to be reflected in parent’s income or not? If not, where it has to be shown in tax return? 2. Can a PPF account be opened in her name and this amount be deposited in that. 3. If we invest the amount in bank FD/KVP what will be the tax implications. — Rajendra Gupta A. The cash gifts received by your daughter are not includible in your income. However, if these are invested anywhere, the income arising on such investment would be includible in your income. In case the amount has been deposited in her bank account the interest earned on such deposit will be includible in your income. a) The Public Provident Fund Scheme provides for opening of an account by an individual on his behalf or on behalf of a minor of whom he is a guardian. You can deposit this amount in her PPF account if such an account has been opened by you on her behalf. b) The income arising on the fixed deposit or from Kisan Vikas Patras would be includible in your income in view of the provisions of Section 64(1A) of the Act.