B U S I N E S S

G20 doubles IMF’s war chest amid Europe fears
Washington, D.C., April 21
Leading world economies on Friday pledged $430 billion in new funding for the International Monetary Fund, more than doubling its lending power in a bid to protect the global economy from the eurozone debt crisis.

The rupee slid to a 3-week low against the US dollar , hitting an intraday low of 52.18 before ending at 51.99 on April 20. — PTI

Bharti adds 2.5 m cell users in March
New Delhi, April 21
The country’s largest telecom operator, Bharti Airtel, led the charge of GSM cellular service providers as they added 6.87 million subscribers in March, taking the total user base to 664.08 million. The GSM subscriber base stood at 657.21 million at the end of February.

Investor Guidance
Capital gains tax saving on property sale
Q: In 2001 I purchased a house for which I took out a bank loan. Six months ago I bought another house for which also I secured a bank loan that I'm still repaying in EMIs. Now I want to sell the first house and move into the other one.

Kingfisher engineers strike work over dues
Mumbai, April 21
Vijay Mallya's promises to pay the dues of Kingfisher Airlines employees seem to have fallen flat with around 200 engineers of the carrier going on strike to protest nonpayment of salaries.

A US Airways airplane rolls along the tarmac at Sky Harbor International Airport in Phoenix, Arizona. As American Airlines continues through bankruptcy US Airways is working on a possible deal to take over the troubled airline. The latter’s three main unions have reached a tentative deal with US Airways Group intended to put pressure on a reluctant American to start merger talks with its rival, the unions and US Airways said Friday. — AFP

G20 doubles IMF’s war chest amid Europe fears

Washington, D.C., April 21
Leading world economies on Friday pledged $430 billion in new funding for the International Monetary Fund, more than doubling its lending power in a bid to protect the global economy from the eurozone debt crisis.

The promised funds from the Group of 20 advanced and emerging economies aim to ensure the IMF can respond decisively should the debt problems that have engulfed three eurozone countries spread and threaten a fragile global recovery.

"This is extremely important, necessary, an expression of collective resolve," IMF managing director Christine Lagarde said. "Given the increase that has just taken place, we are north of a trillion dollars actually. So I was a bit mesmerized by the amount." The $1 trillion figure includes both the IMF's existing and newly won resources, as well as loans already committed.

The IMF would be able to use its increased firepower to help any country or region in need. But Europe's crisis was the driving force behind the push for more funds, though officials and investors alike said it merely buys time for Europe to undertake more economic reforms.

Greece, Ireland and Portugal have already received bailouts. Investors now are worried that Italy and Spain, the euro zone's third and fourth biggest economies, will fail to bring down their debt burdens quickly enough to satisfy financial markets and be forced to follow the same path.

EMERGING MARKETS: Emerging markets won assurances from their G20 partners that their growing economic clout would be rewarded over time with greater voting power in the IMF, known as quotas — an issue that was central to winning their support.

While the BRICS group of leading emerging nations - which also includes Russia, India, China and South Africa — have agreed to provide more money, the exact amount each country will chip in was not announced. The issue now goes to the G20 leaders' summit in Los Cabos, Mexico, in June. — Reuters

Bharti adds 2.5 m cell users in March
TNS & Agencies

New Delhi, April 21
The country’s largest telecom operator, Bharti Airtel, led the charge of GSM cellular service providers as they added 6.87 million subscribers in March, taking the total user base to 664.08 million. The GSM subscriber base stood at 657.21 million at the end of February.

Data released by the Cellular Operators Association of India (COAI), the umbrella body of GSM operators in India, said Bharti Airtel added 2.5 million users in March, taking its total subscriber base to 181.28 million with a market share of 27.3 per cent by March-end.

Vodafone's India unit, which is the no. 3 carrier by users, signed up 1 million mobile subscribers in March to take its total to 150.5 million.

Aditya Birla group firm Idea Cellular added 2.01 million subscribers during the month to take its total user base to 112.72 million.

Carriers including Telenor and Sistema's India units, Idea Cellular and Tata Teleservices are set to lose some or all of their zonal telecom permits after the Supreme Court in February ordered cancellation of all licences awarded in a scandal-tainted 2008 sale.

Analysts expect older and established firms such as Bharti to benefit if some players exit the ferociously-competitive 15-player market. The affected carriers have the option of bidding in a state auction to win back the permits, but not all are expected to bid.

The industry association does not release data on monthly additions by no.2 mobile carrier Reliance Communications and sixth-ranked Tata Teleservices.

Investor Guidance
Capital gains tax saving on property sale
by A.N. Shanbhag

Q: In 2001 I purchased a house for which I took out a bank loan. Six months ago I bought another house for which also I secured a bank loan that I'm still repaying in EMIs. Now I want to sell the first house and move into the other one. By selling the first house I will repay partially the loan on the other house. Will the sale of the first house attract capital gains tax?

— Saikat Paul

A: Without knowing the amounts involved (purchase costs of the houses, sale value, etc) it’s difficult to answer your query precisely. However, conceptually, you would be saving long-term capital gains tax that you would earn by selling the house you bought in 2001. This is because long-term capital gains tax from sale of residential property may be saved by investing the capital gain amount into another residential property, either one year before or two years (three years for construction) from the date of sale. If a lesser amount than the amount of capital gains is invested, the deduction is available up to the extent of the amount invested.

In your case, since you have purchased the second house six months ago, if you sell the first property within the next six months (ensuring that the date of purchase of the second property doesn't fall earlier than one year from the date of sale of the first property), then you can save on long-term capital gains tax. Repaying the loan on the second house is immaterial as far as capital gains tax liability is concerned.

Q: Is capital gains tax applicable if I buy real estate and sell the same property within three years from the date of purchase? If so, how can I save the tax?

— Suraj

A: Capital gains tax is part of income tax. In other words, when you earn income (interest, salary, rent, etc) income tax is applicable whereas if you sell a capital asset (property, bonds, gold, etc) capital gains tax is payable. If you sell real estate within 3 years of buying it, short-term capital gains tax is payable. Tax on such short-term gains can’t be saved. The amount of gain has to be added to your other income and taxed at the slab rates applicable.

Kingfisher engineers strike work over dues
Tribune News Service

Mumbai, April 21
Vijay Mallya's promises to pay the dues of Kingfisher Airlines employees seem to have fallen flat with around 200 engineers of the carrier going on strike to protest nonpayment of salaries.

The engineers from Mumbai said they are on a tool-down strike over nonpayment of dues. Only last month Mallya had a meeting with pilots and engineers over payment of their dues.

The airline had also issued statements earlier this month that dues of lower-rung employees were in the process of being cleared while the pilots and engineers would be paid around Easter Sunday.

Kingfisher Airlines officials said no flights in the airline's truncated schedule had been cancelled so far.