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Bankers expect Rupee to rise this week
Khullar is TRAI chairman
SBI unveils ‘Yuva’ branch to cater to youth
Infosys top management’s salary bill crosses $10 m
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Tax Advice
Aviation Notes
personal finance
Volatile week ahead, trade
cautiously
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Bankers expect Rupee to rise this week
Mumbai, May 13 According to IDBI Bank treasury head NS Venkatesh, the rupee will be in the range of 52.80-53.50 to the dollar in the coming week. "After the measures relating to the exchange earners' foreign currency account (EEFC), the rupee is likely to appreciate in the near-term though there is no change in the fundamentals," Venkatesh said. However, he warned that a lot will depend on the developments in the troubled eurozone area and its impact on euro, saying "the euro will be a key factor to watch out for". Another bank official also echoed similar sentiment, saying the rupee will stabilise for a while, beginning next week. "I think, the rupee will gain this week due to the recent RBI measures on the EEFC front, which will add around $2.5 billion into the system in the next fortnight," Dena Bank treasury general manager Sudhir Kumar Jain said. Last Thursday, RBI ordered exporters to convert half of their dollar holdings in their EEFC account into the rupee forthwith, as a desperate measure to stem the falling local unit, which the previous day had hit its life-time low of 53.83 to the greenback. On the impact of the faltering rupee on the yields on the 10-year benchmark, treasury officers said the treasury bills are likely to be in the range of 8.55-8.60 per cent this week. "The 10-year benchmark yield should be in the range of 8.55-8.60 per cent this week," IDBI Bank's Venkatesh said. Benchmark government bond closed at 8.56 per cent on Friday. "As new bonds issuances happen in the near future, the old benchmark yield will be range-bound and is not likely to breach 8.60 level this week," he said. Dena Bank's Jain also said the yields are likely to soften in the coming week. — PTI
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Khullar is TRAI chairman
New Delhi, May 13 Khullar, who was personal secretary to Manmohan Singh, when he was the Finance Minister in the early 1990s, will have the first onerous task on hand of balancing the telecom sector which is presently embroiled in worst crisis ever. On the one hand, the government is facing arbitration from foreign operators in international courts for cancellation of licences by the SC, on the other it is facing the ire of domestic operators for fixing the base price of vacated 2G spectrum too high. — TNS |
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SBI unveils ‘Yuva’ branch to cater to youth
Hyderabad, May 13 The State Bank of India (SBI), the country’s leading public sector bank, has unveiled a theme branch to exclusively cater to the requirements of the youth. The bank has opened an exclusive ‘Yuva’ branch in the posh Jubilee Hills area of Hyderabad to attract the young customers. It is a bank with a difference. Complete with an unconventional and snazzy decor, a round-the-clock coffee shop, snack bar, book shop, wi-fi environment and scintillating music, the “Yuva Branch” will offer a never-before banking experience for the customers. The relaxed environment and friendly and young staff will further enhance the experience. Inaugurated by the SBI Chief General Manager Rakesh Sharma, it is billed as the first-of-its-kind branch in the country. The working hours, too, are unlike the regular SBI branches. It opens at 1 pm and closes at 7 pm for the convenience of working professionals. A coffee bar, gaming console and a self-service kiosk for cash deposits, passbook updates and other services greet the customers at the entrance, bringing a welcome change to the staid image of a conventional bank. The branch has been set up at a cost of Rs 80 lakh and the concept would soon be replicated in Ahmedabad, Sharma said. The special services offered include 50 per cent concessions on processing charges on loans. “While we introduced Net banking and online transactions a long time ago to keep up with times, there are certain transactions that need to be done face-to-face such as loans and insurance. These are the interactions that we want to ease for youngsters,” explained the Regional Manager P Satyanarayana. The Yuva’ branch is aimed at catering to the sensibilities and requirements of young adults below the age of 35. "The welcome ambience of the bank is about the fun aspects that the youth can enjoy if they bank here. We have incorporated technology that suits their style with a self-banking kiosk which is an ATM that can also print passbooks and generate statements. Soon, we will also be installing a bunch note accepter machine to make depositing cash easier," the CGM said. The average age of the staff at the Yuva branch is around 25 and Sunday banking facility is also available. Apart from the coffee bar, book corner, gaming console and music store, the bank is offering add-on services and benefits targeting young professionals working in MNCs in the surrounding areas.
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Infosys top management’s salary bill crosses $10 m
New York, May 13 The remuneration paid to its key management personnel, which includes directors and executive council members, had remained almost unchanged at about $7 million for fiscals 2009-10 and 2010-11, as per an annual regulatory filing by the US-listed Infosys with the US market regulator SEC. But it rose sharply in 2011-12 despite a fall in the individual pay packages of some top executives, including its Executive Co-Chairman S Gopalakrishnan, CEO SD Shibulal and Chief Financial Officer V Balakrishnan. During the year 2011-12, the top paid executive, as per Infosys' filing, was Stephen R Pratt, an Executive Council member, with a total package of about $2 million. Among others, BG Srinivas was paid $1.19 million, while Ashok Vemuri got $1.18 million. Both of them have held various leadership positions at Infosys in the past and joined its board last year. The total package of Shibulal was $162,990 in 2011-12, down by about $80,000 from the previous year, while that of Gopalakrishnan fell by about $85,000 to $164,543. On the other hand, compensation paid to its independent Chairman KV Kamath rose from $125,600 to $205,000. Kamath took charge as Chairman of the Board in August 2011, but has served as an independent director since May 2009. NR Narayana Murthy, who retired from the board in August last year, was paid $67,100, down from $137,500 in the previous fiscal. Infosys said a committee determines and recommends the compensation payable to the directors, and all board-level compensation is approved by shareholders. In the last fiscal, non-executive directors were paid an aggregate $1.47 million, including reimbursement towards their attendance at board and committee meetings. Those whose total payout increased during 2011-12 also included Deepak M Satwalekar, Omkar Goswami, Sridar Iyengar, David Boyles, Jeffrey Lehman and R Seshasayee. — PTI
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Harley-Davidson eyes 25% growth; targets small cities
Kolkata, May 13
"The next step will be the tier-II and tier-III cities and towns. We need to expand there as there is a lot of demand in places like Bhubaneswar, Raipur, etc," Harley Davidson India Managing Director Anoop Prakash told reporters here. As part of its strategic dealership expansion drive across the country, the company today opened its dealership in Kolkata, the first in eastern India. Besides other metros, the company already has dealerships in Ahmedabad, Bangalore, Hyderabad and Chandigarh. "By the end of this year, we will be in Kochi and Goa too. Later on, we might go to Jaipur and Bhubaneswar as well," Prakash said. With more than a 1,000 Harley-Davidson bikes on Indian roads now after the company started their India operations in 2010, he said the company has a 40 per cent market share in the premium bike segment in the country. "In the next five years, a year-on-year growth of 25-30 per cent looks sustainable," he said. Famed for its distinctive designs the world over, Davidson produces premium heavyweight custom, cruiser, and touring motorcycles. The base model starts at Rs 5.60 lakh. The company offers 16 models, including the popular Dyna-frame motorcycles. — PTI
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No rebate on maintenance charges of house property By S.C. Vasudeva Q. a) Please clarify as to where the “rent of an ATM” is to be classified in the I-T return. Whether it is to be classified in ITR-I or ITR-II and under which head of account? b) It may be elucidated whether the “maintenance charges” for common facilities provided and “rent” for installation of “V-SAT antennae” for ATM on the roof of the booth is to be deducted from the rent paid by the bank or not. c) Please clarify whether the amount on account of “annual repairs” is to be deducted from the annual value in case of commercial property and at what percentage of the annual value? d) It may be clarified whether the interest earned on FDR & paid by the bank on maturity is to be included in the total taxable income or the interest accrued on the FDR but not paid by the bank is to be included in the “total taxable income” in the ITR. What is the correct procedure? e) What are “Infrastructure Bonds”? From where these can be bought & what is the maximum limit? — LN Mitra A. Your queries are replied hereunder:- a) Rent received for the hiring part of the building for the installation of an ATM shall be treated as income from house property in case you are owner of such building. You can file return of income in ITR-I in case you own only one house property otherwise you will have to file the return in ITR-II. b) You will be entitled to claim a statutory deduction of 30% from the annual value computed in the manner laid down by Section 23 of the Income Tax Act 1961 (The Act). No separate deduction would be allowable in respect of maintenance charges etc. for the antenna installed by the HUF. c) In case of commercial property also, you are entitled to a statutory deduction of 30% from the annual value which would cover the amount for annual repairs. d) You have an option to declare the interest income in respect of FDR on accrual basis or on receipt basis. This option can be exercised only once and therefore in case this is for the first time that you are declaring your interest income, you can choose to adopt either the cash system or accrual system. e) Infrastructure Bonds could have been purchased by 31st March, 2012. At present, such bonds are not covered for the purposes of allowing deduction to the extent of Rs 20,000 from the total income. Q. This refers to a query by Baldev Raj and your reply thereof (April 9). After exhausting the income tax exemption limit and deduction u/s 80C, he is left with a taxable income of Rs 98,684. He has also stated that he has a 37-year-old mentally challenged son. As per my information, one can avail a deduction u/s 80DD of Rs 1,00,000 for severe mental retardation (80% disability) of a dependent or Rs 50,000 for non-severe retardation (40% disability). Baldev Raj can accordingly avail the deduction under Section 80DD also. Please clarify. — Wg Cdr CL Sehgal A. Deduction under Section 80DD is allowable in case a person has incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of dependent being a person with disability or paid or deposited any amount under a scheme framed in this behalf by an insurance company or a specified company and subject to such conditions as specified and approved by the Board in this behalf for the maintenance of a dependent being a person with disability. The query of Baldev Raj does not mention that he has incurred any expenditure for the aforesaid purpose. I could not have advised him to claim deduction for an amount which has not been incurred towards such maintenance. The query raised by him was specific with regard to the gift of an amount. He had sought advice for saving the tax on the amount mentioned in his query. Therefore, there was no occasion for me to advise him with regard to the deduction available under Section 80DD of the Act. Q. The particulars of my income for the financial year 2010-11(Assessment Year 2011-12) is as below:- Pension : Rs 2,51,948 Interest income: Rs 1,63,652 Agricultural income: Rs 31,125 Contribution under 80C: Rs 1,00,000 + 20,000 = 1,20,000 TDS: Rs 6,636 I am a senior citizen above 80 years of age. Please calculate my tax liability. — (Gurmel Singh) A. A person who is above 80 years of age is not taxable up to an income of Rs 5 lakh for the assessment year 2012-13 (financial year 2011-12). The entire amount of TDS (Rs 6,636) is, therefore, refundable to you as your total income does not exceed Rs 5 lakh on the basis of figures given in the query.
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Demerge AI, Indian Airlines to cut losses
By K.R. Wadhwaney The miraculous escape of Jharkhand Chief Minister Arjun Munda and five others at Birsa Munda airport (Ranchi) once again highlights that helicopter and general aviation are passing through more critical phase than civil aviation. Apart from ‘close shave’ of the VIP and five others, an enormous hike in airport levy from May 15, withdrawal of high-flying plan to build a commercial airport in Greater Noida to ease congestion at Delhi airport and Air India pilots’ arm-twisting and ugly tactics and subsequent ‘sack’ of more than 50 pilots are other disturbing developments in the aviation sector during the week. The trouble brewing in the National Aviation Company (NAC-AI) is the handiwork of At the time of merger of the two national carriers, it was time and again reiterated that Indian Airlines and Air India staff are two arms of the NAC and that there would be no discrimination between the employees of the two What happened was totally different from what was assured. Indian Airlines was virtually liquidated from the skies and all the eggs of national and international skies were cramped into the belly of Air India. Unsettled, uncared and un-sheltered Indian Airlines staff lodged several protests and complaints but sadly the politicians showed no sympathy towards them. Several changes came about on the top. In this complex situation, the present management chose some commanders and senior pilots from the family of Indian Airlines for training on the new Airbus Industrie’s aircraft. This decision hurt the team of Air India pilots, who protested against the inclusion of the Indian Airlines pilots. Disturbed at the management's decision, the Air India pilots, supported by their union, went on 'mass leave'. The ministry warned the pilots, the court declared their action illegal and the Minister of State for Civil Aviation chose to sack pilots. In the run-up, more than 50 pilots have been sacked. The existing situation is murkier than before. Regardless of how much equity is given to Air India, there is no chance whatsoever to rescue it from 'bankruptcy and death' unless the government eats a humble pie and announce 'de-merger' of the two national carriers. There is a plenty of room on ground and space in skies for Indian Airlines to fly on domestic sectors, as before, and Air India to operate in international skies. Without this, there is no other 'medicine' available to save the ailing national airlines.
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Plan pension with NPS
Anil Chopra The New Pension System (NPS) is a scheme introduced by the Government of India (in effect from April 1, 2009) to give pension benefits to the common man, especially those who are self- employed such as shopkeepers and professionals and those in the unorganised sector. One can regularly invest in this scheme and can get a lump sum amount at the time of retirement, while also being assured of a fixed monthly income for the lifetime. Being a voluntary product, NPS is open to all Indian citizens between the age group of 18 and 55 years and is directly regulated by the Pension Fund Regulatory and Development Authority (PFRDA), with transparent investment norms and regular monitoring and performance review. Investment done in NPS in Tier 1 A/c is covered u/s 80CCD of the Income Tax Act and a tax will be levied on withdrawal. However, one can avoid paying tax by transferring the entire corpus to the annuity service provider. The PFRDA is, however, vying for the removal of tax on withdrawal too in the Direct Taxes Code. The elderly population of India is estimated to be around 80 million, which is growing at a rapid rate of 3.8% per annum. In the absence of a formal and defined old age income scheme, this segment of population in India has to rely on savings accumulated during their employment or on other informal sources of income. In order to plug the loophole, NPS was devised as a viable social security measure for the benefit. Thus, it promotes income security for its investors in their old age. Based on a unique individual Permanent Retirement Account Number (PRAN), where a subscriber can periodically contribute savings while he/she is working, the accumulations of NPS can be used at the time of one's retirement to procure a pension for the rest of one's life. Also, in case of unfortunate events like death of the NPS account holder, option will be available to the nominee to receive 100% of the NPS pension wealth in lump sum. However, if the nominee wishes to continue with the NPS, he/ she shall have to subscribe to NPS individually after following the due Know Your Customer (KYC) procedure. Under NPS, how your money is invested will depend on your own choice. NPS offers you a number of fund managers (six) and multiple investment options (three) to choose from. In case you do not want to exercise a choice as regards asset allocation, your money will be invested as per the “Auto Choice” option. You can open an NPS account with authorised branches of service providers called ‘Points of Presence’ (POPs). You have the option to shift from one branch to another branch of a POP at your convenience. Earlier, at least four contributions had to be made during one financial year. But now as per the latest updates from the PFRDA, a subscriber can invest the entire amount in one go. The minimum investment amount in Tier 1 A/c is Rs 6,000 and in Tier 2, the average balance at the year end should be Rs 2,000. The tax benefits under NPS will be as per the provisions of the Income Tax Act, 1961, as amended from time to time. Talking about other benefits, besides being a low-cost investment proposition for any individual's retirement planning, there are other benefits of NPS like nationwide access over a period of time, freedom to switch between Pension Funds and service providers, portability across jobs and locations etc. Under the newly introduced Section 80CCD (2), up to 10% of an employee’s basic salary put in the New Pension System is tax deductible. If you fall in the 30% tax bracket, the NPS investment under Section 80CCD (2) will reduce your tax liability by almost Rs 15,000. Now onwards, NPS will be more beneficial from the tax angle. From the next financial year, contributions by employers to the NPS accounts of their employees can be deducted as a business expense which was not allowed till now. As such contributions will not be part of the Rs 1 lakh tax deduction limit under Section 80C, your employer's contribution on your behalf will be a tax-free benefit for you. Therefore, it is advisable for every individual to have NPS as a component in his/her portfolio. The author is Group CEO, Bajaj Capital. The views expressed are his own.
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Volatile week ahead, trade
cautiously
The markets opened on a positive note on the first day of the week and it appears that was the only piece of good news in the entire week. The markets lost ground on every subsequent day and the BSE Sensex closed the week with a loss of 538.10 points or 3.20%. The NSE Nifty lost 157.95 points or 3.11%. The broader markets saw the BSE500, BSE200 and BSE100 lose 3.02%, 3.06% and 3.18%, respectively. The BSE Midcap and BSE Smallcap lost a little less than the broader indices with losses of 2.49% and 2.93%.
The sectoral indices saw losses across the board with the big losers being BSE IT down 4.38%, BSE Metal down 4.31% and BSE Realty down 4.07%. The individual losers were IRB Infra losing 18.29%, IVRCL Infra losing 10.97%, State Bank of India losing 7.12%, Hero Motocorp down 6.97%. IT major Infosys lost 5.28% while TCS lost 5.65%. BHEL was an isolated gainer up 3.29%. The Finance Bill for 2012-13 was passed and there is finally clarity on ‘GAAR’ which has been postponed by one year and would now be effective from 1st April 2013. FIIs continued their selling and sold shares worth Rs 818 crore during the week. Domestic institutions were neutral with sales of an insignificant Rs 7 crore. Results from corporates continue to show the input cost pressure on companies. Net margins have been under pressure and companies have been talking of a cautious outlook going forward. The stress in industry can be gauged from the way stressed and restructured assets in the banking industry have been rising quite steeply. The quality of assets has taken a beating and stocks in the banking sector have been hammered in the past few days. Almost all PSU banks are available at book value or at a discount to book value. The IIP (Industrial Index of production) numbers were a disappointment for the month of March, which contracted by 3.5%. Monday would see inflation data for April 2012. The markets have been in a tizzy for quite some time and have lost ground in four of the last five weeks. The BSE Sensex had gained over 2,800 points in the first two months of the calendar year, but have lost almost 2,000 of those and is just about 800 points higher for the current year. The week ahead is likely to see some amount of pullback. This would at best be a technical correction because the markets look oversold currently. Expect some recovery but the markets would continue to be choppy and any adverse news from Europe, particularly Greece, could abort any recovery that we see in India. The rupee and RBI’s stand on the same would also determine the direction of the market. The BSE Sensex has support at 16,202 points, then at 16,036, then at 15,871 and finally at 15,664 points. There is resistance at 16,415 points, then at 16,629, then at 16,746 and finally at 16,944 points. The NSE Nifty has support at 4,897 points, then at 4,848, then at 4,827 and finally at 4,755 points. The resistance is at 4,968 points, then at 5,038, then at 5,067 and finally at 5,122 points. An extremely volatile week ahead, hence trade cautiously. The writer is founder of KRIS,
an investment advisory firm. The views expressed are his own. market pointers
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Benchmark indices slipped on macroeconomic worries and weak global stocks hurt investor sentiments. The market fell in four out of five trading sessions in the week n
The BSE Sensex declined by 538.10 points or 3.20% for the week ended May 11 to settle at 16,293, its lowest closing level since January 16, 2012. Of the 30 Sensex stocks, 27 declined and only three rose during the week. The Nifty fell below the psychological 5,000 mark to close at 4,928.90, down 157.95 points. n
In the coming week, markets may remain range-bound although stock-specific activity could be witnessed based on Q4 FY12 earnings. On the macro front, the government will announce inflation data for the month of April on Monday. n
Also, in the coming week L&T will announce FY2012 results on Monday, Bajaj Auto on Thursday while SBI, Tata Steel and Coal India will unveil FY2012 results on Friday. |
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The New Pension System (NPS) is a scheme introduced by the Government of India (in effect from April 1, 2009) to give pension benefits to the common man, especially those who are self- employed such as shopkeepers and professionals and those in the unorganised sector. One can regularly invest in this scheme and can get a lump sum amount at the time of retirement, while also being assured of a fixed monthly income for the lifetime.
