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Eurozone debt crisis not over yet: ECB chief
Aviation Notes
Rajaratnam paid $63 m fine: Lawyer
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Eurozone debt crisis not over yet: ECB chief
In an interview to appear in Sunday's Bild am Sonntag newspaper, Trichet said that he was, however, confident that euro zone governments would be able to restore financial stability provided the bloc's Stability Pact rules are comprehensively and more aggressively enforced. Trichet said the agreements reached by European Union leaders this week need to be enacted in a very precise and quick manner. He called it "absolutely decisive" that those decisions are quickly and completely enacted. He said the ECB will carefully track the progress of governments' reform measures and said the time had now come to "see some action." "The crisis isn't over," Trichet told the German newspaper, according to an advance text released early on Saturday. "But after the decisions made this week, I'm nevertheless confident that the governments will succeed in restoring financial stability," said Trichet in one of the final interviews of his term leading the ECB. He said the precondition for that was "that the rules of the Stability and Growth Pact are more thoroughly and more aggressively implemented." "The decisions reached at the summit need a very precise and timely implementation. The eurozone's government leaders have a program, now hard work awaits the governments and European Commission. — Reuters
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Aviation Notes
AIR India is expected to purchase less than half the number of the 27 Boeing 787 Dreamliner planes for which the initial order was placed in 2005. The airline's board of directors, at its recent meeting, made this recommendation. The first aircraft is scheduled for delivery in December 2001.
According to the AI board, the airline cannot afford to buy such a huge compliment of Dreamliner planes without adequate utilization of the fleet. The group of ministers, headed by Finance Minister Pranab Mukherjee, is reported to have endorsed the board's recommendation. Civil Aviation Minister Vayalar Ravi has already gone on record saying the national carrier, which is reeling under enormous losses, is not in a position to buy even two aircraft valued at about Rs 20,000 crore. The government has agreed to advance a high quantum of equity to the ailing carrier on the express condition that it would exercise stringent measures for cost control on overhead expenses, particularly in the areas of cockpit and cabin crews and effective route deployment of national and international routes. In the open sky environment, discipline in the airline industry has taken a beating. Every month, on one pretext or the other, the indisciplined carriers continue to raise fares on domestic sectors, as and when they please. During the Diwali festival many airlines, adopting a "take it or leave it" attitude, hiked fares up to three times on important sectors. This vexed situation has arisen largely because regulatory bodies like the International Air Transport Association (IATA) and India's Directorate-General of Civil Aviation have become virtually toothless. According to a recent survey most of the profit-making routes have already been handed over to private operators and AI is unable to take back those routes. The lowest fares on the "golden sectors" were more than double. Passengers who had booked in advance were beneficiaries but not to the extent they should have been. According to travel agents and frequent flyers, a "jungle raj" prevails in the fare structure on domestic routes. Private airlines, including scheduled carriers, say they are forced to raise fares because fuel prices are hiked periodically and airport agencies threaten to raise landing and parking charges. "If we've to shell out more we've to raise fares to survive", said an airline official. |
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Rajaratnam paid $63 m fine: Lawyer
New York, October 29 Rajaratnam, 54, is going to prison for 11 years — the longest sentence recorded for an insider-trading case — as the central figure in a broad government crackdown using FBI phone taps. He was convicted by a jury in May. The lawyer, William White, was arguing before a different Manhattan federal court judge on Friday over what civil penalties the Galleon Group founder should now pay to the US Securities and Exchange Commission (SEC), the government's market regulator. Without disclosing Rajaratnam's net worth, White said that since the October 13 criminal sentencing proceeding, his client had forfeited more than $53 million to the government and paid a $10 million fine in addition. The SEC is now seeking an additional $96.4 million in civil penalties, an SEC lawyer told US District Judge Jed Rakoff on Friday. Rakoff said he would consider Rajaratnam's ability to pay in making his decision about the dollar amount of civil penalties. — Reuters
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Investor Guidance
Long-term capital gains on property sale taxable Q: I want your advice on long term capital gains. I have a plot measuring 444 square yards in Patiala, which was gifted to my father by his father (my grandfather) in 1972. After my father expired in 1983 my mother and I inherited the plot in equal share. Although my father and later myself secured a residential construction permit from the municipal authority concerned in 1972 and 1994, respectively, we couldn't begin construction of a building on the plot and it remained vacant throughout. I now want to sell this property, which now falls within commercial limits. I want to know whether under the facts explained above sale of this property is taxable or not. If not, could you mention the relevant section of the Income Tax Act? — Sukhdeep Singh A: The capital gains that will be earned from the sale of this property are taxable. For computing long-term capital gains arising out of the subsequent sale by the donee or legatee, the cost of the property is the cost incurred by the donor when he or she originally acquired it, or — if the property was acquired by the donor prior to April 1, 1981— the fair market value as on that date as assessed by an official chartered valuer, whichever is higher. Explanation iii to Section 48 defines "indexed cost of acquisition to mean an amount that bears to the cost of acquisition the same proportion as the cost inflation index for the year in which the asset is transferred bears to the cost inflation index for the first year in which the asset was held by the assessee or for the year beginning on April 1, 1981, whichever is later". This means in the case of an inherited or gifted property the cost of acquisition is the cost to the original holder (or fair market value as on April 1, 1981), but the date of acquisition for indexing should be taken as the date of the inheritance or the gift. (Here it must be noted that in the case of DCIT v Manjula J Shah - 318 ITR (AT) 417 (Bombay Special Bench), it was held if the cost and date of an acquisition had to be taken to be that applicable to the previous owner, indexation should also be available from the same date when the previous owner acquired the property. However, this is what was decided in a judgment and the relevant laws have not been amended. Therefore, the taxpayer will have to defend his stand if the income tax department were to raise an objection). The character of long or short-term of the property would also depend upon the date of acquisition of the original holder. In case this original holder has also acquired the property by way of gift or inheritance, then it will be the date on which the very first holder purchased or constructed the property. HUF PPF accounts
Q: A Public Provident Fund (PPF) account in the name of my Hindu Undivided Family (HUF) was opened on September 17, 1988. The bank closed it on March 28, 2011 and gave the full amount to me. When I enquired about the case the bank stated there was an amendment in the PPF regulations due to which the account had to be closed. Is this right and could you throw some light on the matter? — Raja Marwaha A: According to the notification GSR 291(E) dated May 13, 2005, opening (or opting for post-maturity continuation) of accounts on behalf of HUF, Association of Persons (AOP) or Body of Individuals (BOI) have been discontinued. Such accounts opened or continued by mistake after the respective dates of notifications shall be treated as void ab initio. As and when the error comes to light, the accounts shall be closed and the funds refunded to the depositor without any interest. The existing accounts can continue up to their maturity with full benefits. Additionally, the notification GSR 956(E) dated Dec 7, 2010 requires those HUF accounts that are in extended mode to be closed on March 31, 2011. Interest would be paid on those accounts that had attained maturity between May 13, 2005 to Dec 7, 2010 but closed before the latter date, if these had not been extended thereafter and the deposits were retained therein without further subscriptions. |
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Berlin, October 29