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Uniform licence fee for telcos from April 2013
Over Rs 1,200 crore lying unclaimed in banks
Govt may take back part of spectrum from old firms
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Tax Advice
Aviation Notes
Govt may cut spending, raise NRI deposit rates
Wells Fargo to move jobs to India soon
Markets likely to remain range-bound
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Uniform licence fee for telcos from April 2013
New Delhi, June 24 At present, DoT is charging licence fee in the range of 6-10 per cent depending upon type of service and circle. "A uniform annual licence fee rate of 8 per cent of AGR (annual gross revenue) shall be adopted across all categories of service areas (metro A, B and C categories) of UAS/CMTS/Basic service licences in two steps starting from July 1, 2012," sources in DoT said. Starting July 1, DoT will impose a fee ranging from 7 to 9 per cent on operators depending on the category of the circle while from April 1, 2013 onwards, the uniform fee of 8 per cent will be charged. "From financial year 2013-2014 onwards, a uniform licence fee of 8 per cent will be charged," the sources said. The sources added that for the period from July 1, 2012 to March 31, 2013, the operators have to pay an annual licence fee at a rate of 9 per cent for Metro and Category A, 8 per cent for Category B and 7 per cent for Category C circles. Delhi, Mumbai and Kolkata service areas comprise Metro circle, while circles like Maharashtra, Gujarat and Tamil Nadu fall in Category A. The imposition of uniform licence fee was earlier slated to be implemented from April 1, 2012. In February, while releasing the draft of National Telecom Policy, Telecom Minister Kapil Sibal had announced that a uniform licence fee of 8 per cent of AGR across services and circles would be levied as compared to range of 6-10 per cent. In December last year, Telecom Commission, the highest decision making body of the Telecom Ministry, too had recommended a uniform licence fee of 8 per cent.
— PTI |
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Over Rs 1,200 crore lying unclaimed in banks
Chandigarh, June 24 Time and again, banks have been asked by the RBI to reduce their non-operative accounts. While some steps in this direction have been taken by the scheduled commercial banks, state and central cooperative banks/regional rural banks have not been active in tracing such customers of non-operative accounts. In its latest instructions, the RBI has asked these cooperative and regional rural banks to find the customers having unclaimed deposits, as it is closely linked to Know Your Customer (KYC) due diligence. All cooperative and regional rural banks have been advised that they should display the list of deposits/ inoperative accounts for 10 years or more on their respective websites by June 30. This list must contain only the names of the account holder and his address in respect of the unclaimed deposits. Banks have also been asked to strengthen the regulatory framework for inoperative accounts and deposits. They have been asked to frame and approve a policy on classification of unclaimed deposits, grievance redressal mechanism for quick complaints record keeping and periodic review of such accounts. The first periodic review of unclaimed deposits/inoperative accounts should be put up before the Boards of the banks It may be mentioned that if you have not used a bank account for three-four years, the bank blocks it. But it will not close or discontinue an account that is unclaimed or untouched for 10 years. If it is a savings bank account, the banks will block it, which means that withdrawals will not be allowed and deposits will be scrutinised and verified thoroughly. This is to prevent any fraudulent use of the account holder's identity. The balance continues to earn interest of 4 per cent. To claim the amount, the customer has to write to the branch with details such as name of the deposit holder, amount, date of maturity, account number and the reasons why the amount could not be claimed.
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Govt may take back part of spectrum from old firms
New Delhi, June 24 This proposal is learnt to be part of an amicable solution which the ministry is offering to the industry and is packaged around spectrum price policy, refarming and minimum price of airwaves that is to be paid in the auction due before August 31. The government has approved sector regulator TRAI's proposal of refarming under which old operators namely Bharti Airtel, Vodafone and Idea Cellular may have to surrender airwaves allocated to them in 900 Mhz band (premium frequency band used for 2G services) on expiry of their licences. These companies will have the option to repurchase these airwaves through auction proposed in first half of 2013. "One of the proposals made is to either refarm all spectrum held by old operators above 5 Mhz but then only one new player can enter in the 900 Mhz band. The other option is to refarm everything above 2.5 Mhz but that will not be liberalised," a senior government official said. According to this, a player will have to pay minimum of Rs 3,622 crore for a megahertz of airwaves frequency. In India, 900 Mhz band and 1,800 Mhz band are being used for providing 2G GSM services for mobile telephony, 800 Mhz band for 2G CDMA based services, 2100 Mhz band for 3G and 2300 Mhz band for 4G level wireless broadband services. Under the spectrum pricing policy, sources said, the ministry has proposed to charge for all airwaves currently held by telecom operators at new rates.
— PTI |
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Senior citizens exempt from advance tax
By S.C. Vasudeva Q. The Govt of India in the Budget for 2012-13 exempted Rs 10,000 interest income from income tax. Is it applicable to income accrued from savings bank account also or on fixed deposit account only? If one has a joint account, whether the amount exempted would be Rs 10,000 or Rs 20,000. — Manmohan Singh A. The Finance Act, 2012, has introduced a new Section 80TTA applicable for assessment year 2013-14 and onwards. The section provides that where an assessee (individual or HUF) receives interest on deposits (not being time deposits) with a bank or post office, such amount shall be eligible for deduction from the total income subject to a ceiling of Rs 10,000. You would, therefore, be able to claim such deduction to the extent of Rs 10,000 in respect of interest earned in a savings bank account for the year ended 31st March, 2013. The Finance Act, 2012, provides that in case of a senior citizen, advance tax provisions would not apply in case such a senior citizen does not have income from business or profession. A senior citizen assessee can, therefore, discharge his tax liability at the time of filing the tax return and pay the tax under self-assessment scheme. Q. As your know that Finance Minister Pranab Mukerjee had announced in his Budget speech in Parliament that all those who are 80 years old will be entitled for Rs 5 lakh income tax exemption during 2012-13 and onwards. I want to know whether the senior citizens who complete 80 years before 31.3.13 will be entitled to Rs 5 lakh exemption or not. I will complete 80 years on 18.3.13. Will I be entitled to Rs 5 lakh exemption for 2012-13? — Ram Sarup A. The exemption up to Rs 5 lakh to a person who is of the age of 80 years or more is applicable for the financial year 2012-13. Therefore, in case you attain the age of 80 years in March 2013, you would be entitled to claim such exemption. Q. I have been working as a lecturer in Govt. Sen. Sec. School, Khuian Sarwar, Tehsil Abohar, Fazilka. There are 56 teachers in this school. I have been assigned the duty of tax calculation of all the employees by the Principal. There is always confusion about the medical reimbursement cases. I have enquired from various advisers concerned but still the confusion is vague. Should medical reimbursement amount be added in our income. Please let me know up to how much amount medical reimbursement is tax-free. — Subhash Chhabra A. According to the provisions of Section 17 of the Income-tax Act, 1961 (The Act), any sum paid by an employee in respect of any expenditure actually incurred by the employee on his medial treatment or treatment of any member of his family as does not exceed Rs 15,000 in a financial year is not to be considered as a taxable perquisite. In view thereof, the reimbursement to the extent of Rs 15,000 would not be includible in the salary of your colleagues provided the amount has actually been incurred by them on the treatment of the members of their family or themselves and the expenditure so incurred is supported by an evidence in respect thereof. Q. Is it mandatory to give PAN number for renewal/opening of a fixed deposit in a registered company even when annual interest is below the threshold limit of Rs 5,000? — SS Bhatia A. Section 206AA of the Act applicable from assessment year 2010-11 and onwards provides that any person entitled to receive any sum or income or amount on which tax is deductible is required to furnish Permanent Account Number to the person responsible for deducting such tax. In case such Permanent Account Number is not provided, tax is required to be deducted @20%. It is evident from a bare reading of the said section that in case tax is not deductible on any amount of income, the necessity of furnishing Permanent Account Number should not arise. It may be added that in a recent decision, the Karnataka High Court has held that the above section should not be applicable to a person whose income is below taxable income.
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Domestic fares continue to remain unstable
By K.R. Wadhwaney The uncertainty in Indian civil aviation industry continues. The fares, particularly on domestic sectors, continue to be unstable despite warnings of the apex regulatory authority, Directorate-General of Civil Aviation (DGCA). The 50-day pilots’ strike in Air India shows no sign of ending, although there is a sharp division among striking pilots. A majority of them want to return to work, but some ‘ring-leaders’, misguided by some senior politicians, are holding on, causing further turmoil in the already gloomy situation existing in the national carrier. Shockingly, executive pilots, who had kept the airline’s curtailed international operations going for most days of the strike, have fallen in the web of a politician, who is calling the shots in the Indian Pilots Guild. As many as 27 out of 120 had reported sick, causing further uncertainty. One small politician from Mumbai is being accused for the continuation of illegal strike. The uncalled for strike has multiplied losses and also affected the turnaround plan. The Minister of State for Civil Aviation, Ajit Singh, has already gone on record saying that ‘the pilots are not interested in resuming duties and they are wholly responsible for the deteriorating situation in the national carrier’. In his words, they are a stumbling block in the business plan, including delivery of 27 Boeing 767 Dreamliner aircraft over the next two years. Analysts are of the view that judging from the existing goings-on, there is no light at the end of a long and painful tunnel of the national carrier. They are of the view that the mammoth equity of Rs 30,000 crore will not bring about a ‘permanent cure’ and Air India will not return to the road of profitability. The Dharmadhikari Panel, which is being aggressively followed, has recommended that unlimited free travel for employees of all grades should be curtailed. The panel also suggests that 7,000 of the 42,000 employees - 12,000 on contract and 30,000 regular -should be offered voluntary retirement scheme (VRS). There are several other far-reaching recommendations in the valuable document.
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Govt may cut spending, raise NRI deposit rates
New Delhi, June 24 Economic growth has fallen to a nine-year low of 6.5 per cent in 2011-12 and industrial output continues to be sluggish with a mere 0.1 per cent growth in April. Inflation too remained at an elevated level of 7.55 per cent in May. "Private investment in India is constrained by lack of availability of funds. Government might announce some measures for attracting investments and also steps to cut down wasteful expenditures," said Y K Alagh, Chairman, Institute of Rural Management. Hit by a weak global sentiment and subdued local macroeconomic performance, the rupee has lost over 25 per cent in the last one year. It also breached the 57 level against the dollar on June 22. Market analysts expect RBI to announce an increase in interest rates for deposits of non-resident Indians. They also expect government to announce a bond issue to attract inflows. “RBI may increase the interest rate on FCNR(B) deposit further and announce the issuance of bonds for NRIs to address the issues in the short-term” Crisil chief economist DK Joshi said. CNI Research Head Kishor Ostwal
said, "It might take steps to tame fiscal and current account deficits."
— PTI |
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Wells Fargo to move jobs to India soon
Mumbai, June 24 "Businesses and functional areas are investigating what markets are most economically attractive, with access to the best talent, both internationally (including India and the Philippines) and domestically," Wells Fargo & Company spokeswoman Bridget Braxton said from San Francisco. While refusing to reveal the number of jobs that would be moved to India and the Philippines, she, however, said, "The areas of business that would be impacted include the retirement, technology and other business lines." Already, the bank employs 3,000 people in
India. — PTI |
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Personal
finance You need to review your investment portfolio at least twice a year. Reviewing your portfolio helps you to get a clear view of your investment and goals. In case you find it cumbersome, you can take services of a certified financial planner to do so Usually you invest for your long-term financial goals, then forget and never look at those investments. This mistake can prove costly particularly in case of equity investments. You expect certain mutual fund scheme or equity shares to grow after certain years, which may or may not happen. What happens generally is that either it would have outperformed or would have underperformed. The time when you would have planned and invested, your financial situation would be different than what it is today. So, either your goal would have altered or your priority towards the goal would have changed. What have you done to know whether your investments and goals are not derailed? Have you ever seen and reviewed your investment portfolio and financial goals? If not, then it is important to do it now and after that at periodic intervals. Why should you review your financial plan and investments? Performance of investment Certain funds in which you have invested would have performed well in the past, but it is not necessary that they perform well in the future too. You should check the performance of the assets with its peers and the benchmark index. The fund manager of the mutual fund scheme you might have invested would have changed or may be the fund house itself would have merged with some other AMC. These kinds of changes can affect your investment. Therefore, it is very important to track the performance of your funds/ investments. Asset allocation It is very important to analyse your investment portfolio periodically. The asset allocation ratio changes on a day-to-day basis, depending on the performance and proportion of the assets in the portfolio. Certain assets outperform as compared to the expected returns while certain assets underperform. In this case you should rebalance the portfolio as per the proportion. You also need to change the asset allocation when your goal is closer. Suppose if you are only 2-3 years away from your retirement, you need to shift your portfolio from equity to debt systematically. Reprioritise and/or alteration of goal Sometimes your financial situation may take a diversion, which may be positive or may be negative too. You may have to alter and/or reprioritise your certain goals depending upon the situation. For example, if you and your spouse both are working and the regular investments are earmarked considering the income of both; and if spouse quits working to take care of the child, then you may have to reprioritise and alter your goal accordingly. Say you were planning to buy a house after 3 years, but suddenly you received lump sum amount through inheritance, in this case you can prepone your decision of buying your new house, assuming investments for other goals suffice. Insurance need You should not only review your investments, but also your insurance needs. Your life insurance need may change after a certain period depending upon your assets and liabilities. For example, if you take a personal loan, your life insurance needs increases to the extent of the amount of loan taken. You need to buy additional life insurance if any additional liability is added to your account. You also need to review the performance of your insurance policy if you have bought a unit linked insurance plan. Interest rates The interest rates change periodically and the best part is that you don't even come to know. Moreover, you also don't know the interest rate at which your loan is outstanding whether it is at par with the current lending rates in the market. Many a times we come to know that you are paying much higher interest on your loans as compared to the prevailing lending rates. Hence it is high time that you shift your loan to a cheaper rate. Maturities of fixed term securities Sometimes you fail to keep track that your fixed term securities like fixed deposits, NSCs and bonds, etc. have already matured and are decaying by lying idle in your files and folders. So, if you review your portfolio, you at least know that when they are due for maturity and how you can utilise the maturity proceeds or renew it further as per your situation and requirement. When do you need to review? You need to review your investment portfolio at least twice a year. It is just a matter of few hours to review your portfolio. You should fix a date which may be your birthday or anniversary or your child's birthday or any other memorable day of your life. Whenever you review your portfolio, you should make sure that you review it thoroughly. Whenever you review your portfolio for the first time, either it will surprise you or shock you in future. It will surprise you if your portfolio has grown extremely well, beyond your expectations and has multiplied. But, it might happen that, you may get a shock looking at your portfolio if it has given poor returns. So, in order to avoid shocks you need to review your portfolio periodically. Thus, reviewing your portfolio helps you to get a clear view of your portfolio and goals. In case you still find it cumbersome, you can take professional services of a Certified Financial Planner to do the job. The author is a research analyst,
Apnapaisa.com. The views expressed are his own
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Markets likely to remain range-bound The markets were very volatile last week and the movement on Monday caused a virtual reversal. The markets opened strong on news that Greece had voted for a pro-reform government. The Sensex made an intra-day high of 17,109 while the Nifty made a high of 5,190. RBI policy review saw no changes being made, and the markets crashed to make intra-day lows of 16,636 and 5,041, respectively. The intra-day swings were huge with 473 points on the Sensex and 149 points on the Nifty. The markets finally closed flat for the week with the BSE Sensex gaining 22.68 points or 0.13% to close at 16,972.51 points. The NSE Nifty gained 7 points or 0.14% to close at 5,146.05 points. The broader indices like the BSE100, BSE200 and BSE500 fared better gaining 0.24%, 0.38% and 0.41%, respectively. The BSE Midcap and BSE Smallcap gained almost identical at 0.87% and 0.88% respectively. The top sectoral gainer was BSE Cap up 2.21%. Other gainers included BSE Auto up 1.35%, BSE PSU up 1.33% and BSE Oil up 0.90%. The losers included BSE IT down 1.77%, BSE Metal down 0.48% and BSE Bankex down 0.22%. In individual stocks, the top gainers were HPCL and IOC, which gained 11.53% and 9.38% respectively. Other gainers were ONGC up 5.14%, Tata Motors up 2.9% and Larsen & Toubro up 2.71%. Losers included Hindalco down 4.98% and TCS down 2.97%. Reliance Industries lost 2.2% to close at Rs 711. Under the current buyback, Reliance has already bought back 300 lakh shares from the open market. One shudders to think what would have happened to the share price if this buyback was not done. FIIs were sellers during the week with net sales of Rs 611 crore while domestic institutions bought shares worth Rs 115 crore. The rupee depreciated further to close at Rs 57.12. It just seems that there is no respite from the weakening rupee. Pranab Mukherjee steps down as Finance Minister on Tuesday, June 26, and he plans along with the RBI to give a parting gift to the nation. An announcement to this effect is scheduled for Monday where it is widely believed that measures to steady the rupee would be announced. One hopes that some concrete measures are taken. RBI had earlier on Monday chosen not to change the rates as it was extremely worried about inflation which has again risen and refuses to come down. The week ahead would see June series expire on Thursday, the 28th of June. In the current series compared to May 2012, the Nifty is up 222 points as of Friday's close. This should keep markets in the current weak steady and less volatile compared to what we saw last week. Global markets have been quite volatile in recent times and reacting to news as they happen. The US Federal Reserve keeping rates and the stance at neutral and no announcement of the widely expected QE3 kept US markets weak. The BSE Sensex has support at 16,848 points, then at 16,702, then at 16,625, then at 16,495 and finally at 16,228 points. It has resistance at 17,056 points, then at 17,176 points, then at 17,264, then at 17,430 and finally at 17,650 points. The NSE Nifty has support at 5,106, then at 5,061, then at 4,995, then at 4,955 and finally at 4,913 points. It has resistance at 5,172, then at 5,215, then at 5,285, then at 5,328 and finally at 5,368 points. The markets are likely to remain range-bound and would become volatile only if the previous week's high or low levels are crossed. The author is founder of KRIS, an
investment advisory firm. The views expressed are his own. Key pointers
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