The Tribune, Chandigarh, India

‘Selection panel will find right successor’

Mumbai, July 2
Tata Group chairman Rata Tata yesterday said the selection committee will find the "right person" to succeed him to head the $-72 billion salt-to-software group. He, however, did not elaborate on succession plans.

"I don't have anything to say about my succession. There is a committee in place and it will find the right person. I faced the same kind of thing when I took over from JRD.

Obviously, nobody can do the job forever and we all have to move on," he said at the Annual General Meeting of the group company TCS.

In May, the group had said that the selection committee had interviewed several candidates, both internal and external, but no final decision had been taken.

Tata Sons had set up a panel to search a successor to Group Chairman Ratan Tata who is due to retire in December, 2012, when he turns 75 - the retirement age fixed by the group.

The Tata group has over 90 companies, of which 28 are listed, including the country's largest software exporter TCS, India's largest auto maker Tata Motors and Tata Steel, which is the world's fifth largest steel maker.

Although the group is over 100 years old - founded by Jamsetji Tata in 1868 when he set up a private trading firm - it was only in 2006 that it earned major global recognition when Ratan Tata spearheaded the buyout of Anglo-Dutch steel maker Corus for about $12 billion.

Rata Tata followed this up with another big ticket purchase of Jaguar Land Rover, the luxury British auto brands, from Ford in 2008 for $2.3 billion.

Tata, who took over as Chairman in 1991 from JRD Tata, had said: "I do not want to go out on a wheelchair." Tata Sons had said while forming the committee to find successor that the group would require someone with experience and exposure to direct its growth amidst the challenges of the global economy. — PTI

Aviation Note
Delhi Flying Club needs to be revived
by KR Wadhwaney

Flying, a very intricate and sophisticated profession, cannot blend with politics. If done in haste, its outcome will be the same as the merger of the two national carriers, Indian Airlines (IA) and Air India (AI), which are on the verge of bankruptcy.

The Indira Gandhi Rashtriya Uran Academy (IGRUA), initiated at the behest of Captain-Prime Minister Rajiv Gandhi in the late 1980s, was country's pride and joy for about half-a-dozen years when it produced highly competent and devoted pilots. It, then functioned professionally, training was vigorous, tests were impartial and utilisation of airport at Fursatgunj airport in Rae Bareli and use of infrastructure were undertaken on scientific and systematic line.

As tenure of Gandhi came to an abrupt end, the executive pilots made a beeline to IGRUA for their own benefits - keeping commercial flying licence intact and also making additional perks and allowances. With the passage of time, it turned a 'political adda' and the standards of flying and training further deteriorated.

The need of the hour is not upgradation of the academy to university but to restore professionalism in selection, qualifications and training. The location chosen by the former Prime Minister, who cared and respected flying, was ideal. It still remains ideal in the vicinity of Lucknow. But, it has fallen on lean days because it is being conducted rather haphazardly.

The academy or university, the emphasis should be on training and producing pilots of high vintage and not counting political gains and losses. The country needs competent pilots. This has become necessary because most of the training institutions have been sub-standard and lack infrastructure and professionalism.

During Rajiv Gandhi's time, the Safdurjung airport hummed with flying activities. The Delhi Flying Club (DFC) was one of the sought-after institutions. The DFC has died a natural death with the closure of the Safdurjung airport for reasons other than flying and flying training. It needs to be revived for the welfare of the civil and general aviation.

The best part of the IGRUA is that it is under the wing of the Civil Aviation Ministry and not under the directorate, which has been deteriorating systematically after the exit of M.R.Sivaraman, a bureaucrat-cum-flyer. When he was at the helm of affairs of the Directorate-General of Civil Aviation (DGCA), there was all 'aman and chaman' in and out of the corridors of the office. Then flying faculty was given the importance it deserved. Now, a very high percentage of pilots are holding command of aircraft on the basis of fudged qualifications and documents. The regulatory body needs to be regulated. According to reports, the government will be investing sufficient funds for improving fleet and infrastructure. The chopper may also be added in the academy or university. It is a cause for satisfaction that the IGRUA will be upgraded.

Investor Guidance
Partial rebate on loan if house sold within 5 years
by AN Shanbhag

Q: My son had taken a housing loan in July 2008. Subsequently when the interest rates started rising he prepaid substantial amount, keeping a low EMI to enable him to terminate the loan by July 2013. He was told that if he closes the housing loan account before 5 years, he will lose the tax benefit already claimed by him in the previous years. He does not mind closing the account immediately, if it does not affect his IT for previous years. He is in the highest tax bracket. Could you please clarify? — Vasantha B

A: The restriction is not on closing the housing loan but on selling the property. If the owner transfers the property before the completion of five years from the end of the financial year in which the possession of such property has been obtained, the earlier deductions claimed in respect of the Sec. 80C (on the principal portion of the EMI) shall be added back as income earned in the year of transfer. Also, it is our opinion that such adding back of the deduction of earlier years is limited to the above mentioned Sec. 80C deduction and does not include the deductions on interest element of the EMI paid.

Loan for two houses

Q: I purchased a house in Rajasthan in 2005, with a loan of Rs. 8 lakh from bank. I am availing of the rebate on the interest and the principal paid as per income tax rules from my DDO. The house is self-occupied as my parents reside there in. Since this house is a small one, I want to buy a second house at the same place, with another housing loan. I will of course be retaining the older one. What would be the tax rebate (in terms of principal & the interest amount paid) on both the loans? Is it compulsory to consider one house as rented out property? — FPS Malhi

A: The tax concessions on home loans do not depend upon the number of housing loans you have taken or the location of the home.

If an assessee has two or more residential houses, only one of these of his choice shall be treated as self-occupied. Others will be considered as deemed let out. In the case of interest on loan related with a let-out (or deemed let-out) house and commercial property the entire interest is deductible.

Therefore, you may choose the property that you wish to submit as deemed let out. In other words, just because you have already represented the first property as self-occupied, it does not mean that you have to continue to do so. If you find that representing the second property as self-occupied and the original one as deemed let out is more beneficial, you may certainly change the classification while filing the return for FY 10-11.

Tax on MFs

Q: As per AIR Rules, investment in mutual funds over Rs 2 lakh per year are reported. Does the limit of Rs 2 lakh apply to total investments done per year in a mutual fund house (e.g. Reliance Mutual Fund) or does it apply to total investments done per scheme (eg- Reliance Equity Fund). For e.g. If I invest Rs 1.5 lakh in Reliance Vision Fund and Rs 1.5 Lakh in Reliance Equity Fund in a year, would it account for AIR? — Rudina

A: The limit is applicable to the amount invested in a scheme of a mutual fund. Incidentally, AIR is not required for individuals any longer. Moreover, you need not worry about crossing this limit as long as you have proof of the source of the funds applied for the purchase of the units.

Form 15G

Q: I am an NRI since last three years. I am maintaining a fixed deposit in the Indian banks. My total income in India is less than Rs 75,000, which is the interest earned on fixed deposit in banks. Am I eligible to submit Form-15G certificate to the said banks to avoid the TDS? — Jijo Jacob

A: Note that as an NRI you cannot have resident fixed deposits. All your fixed deposits have to be either NRO deposits or NRE deposits. Also, the facility of providing Form 15G is not available to NRIs. You may file a tax return and claim the tax deducted as a refund.

The authors may be contacted at wonderlandconsultants@yahoo.com