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FinMin begins probe into HSBC India operations
Indian car market to touch 4m mark by 2015: Maruti
Toyota to begin engine production at B'lore plant
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tribune special
Rupee to hover around
Rs 53-55/$, says CII survey
Aviation Notes
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FinMin begins probe into HSBC India operations
New Delhi, July 22 The FIU, an enforcement agency, is empowered to undertake investigations under the provisions of the Prevention of Money Laundering Act (PMLA). "The FIU-India has begun a probe into the operations of the HSBC Bank. The output of the investigation will be shared with agencies like the Enforcement Directorate and the Income Tax Department," top sources in the Finance Ministry said. India has termed as "serious" the alleged violation of safety compliance by HSBC staff in the country against anti-money laundering and terrorist financing instances in its economic channels. Union Home Secretary RK Singh had said the government will "get to the bottom" of these reports which surfaced after a US Senate panel recently accused HSBC of exposing the American and Indian financial systems to various terror financing, money laundering and drug trafficking activities with transactions worth billions of dollars, due to poor risk control systems at the Bank. The FIU probe, according to sources, will go into HSBC's India operations from the year 2007. It will collect and analyse all the Suspicious Transaction Reports (STRs) and Cash Transaction Reports (CTRs) that the Bank has sent to it all these years as part of the mandatory requirement in the law. The FIU provides information to the country's various enforcement and intelligence agencies about suspicious financial transactions that are done through banks and other financial institutions. The FIU, as per sources privy to the development, will look into those specific instances where it was reported that deficiencies were found in the quality of the work done by HSBC's "offshore reviewers in India", who were deployed for clearing a major backlog of suspected transaction alerts at the Bank. It was reported that over one-third of the alerts already resolved by the Indian reviewers and others "had to be re-done" after an independent assessment by the OCC (the US Office of the Comptroller of the Currency, which is the Bank's primary federal regulator in the country). The probe report had said that an OCC visit to India in 2007 had revealed "weak monitoring procedures" in the Bank's internal control systems. "It is the responsibility of the bank to inform the FIU about suspect financial dealings. If it missed their scanner, it also missed the FIU scrutiny. This is what the FIU will now sift through and ascertain," the sources said. — PTI
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Indian car market to touch 4m mark by 2015: Maruti
Even as Maruti Suzuki India Ltd (MSIL) on Saturday announced a lockout at its Manesar plant which had increasingly become the focal point of the company, the management at the country’s largest car-making organisation is upbeat that normalcy would soon return to help it regain its market share. Mayank Pareek, company’s Chief Operating Officer, Marketing & Sales, refused to comment on the prevailing situation, but shares the vision at MSIL with Girja Shankar Kaura in an interview which was conducted just before the trouble erupted at the Manesar plant. How different has your approach been in India over the past few years to maintain the market leadership? It is believed that Maruti Suzuki began to focus on penetrating into smaller towns and rural parts of the country under your leadership. How has the strategy paid off when it comes to helping the company’s topline grow? The last few years have seen the Indian automobile industry and the market shift to a new paradigm. The emerging Indian market attracted almost all the global carmakers here. Today Indian market has cars that are available at every possible price point, from Rs 2 lakh to Rs 5 crore. This changed scenario has intensified competition for Maruti Suzuki manifold to proactively respond and continue our market leadership. We have worked on almost all fronts. A market leader’s role is to keep market excited. We introduced an all-new Swift and DZire at a time when both these models were leaders among cars in their category. Both these cars came as a great value for customer. Being a petrol car-maker primarily, we had two models with diesel engines. We decided to expand our diesel portfolio. Today, we have four cars - Swift, Ritz, DZire and SX4 - with diesel option. As a next step, we want to be a volume player in diesel segment in future. We are investing into a second diesel engine plant of 3 lakh units/annum capacity. This will progressively start production over next two years. Last fiscal, we sold a little over 2.40 lakh diesel cars. This fiscal, our target is to increase our diesel volumes to 4 lakh cars. Today, rural India contributes over 20% to our total sales. Four years ago, it was less than 5 per cent. What do you feel is the present state of the Indian market and how soon do you think it will revive? There is a heavy shift towards diesel cars in India now. Rising petrol price hikes have created huge gap between diesel and petrol prices. This has impacted the sale of petrol cars. While petrol car manufacturing capacity of manufacturers remains under-utilised, diesel capacity is over-utilised. In our case, our petrol car sales were down by 17% last fiscal. But in diesel segment, we have a long unmet demand of waiting customers. While we will address this by increasing our diesel engine availability, we will also focus on increasing our petrol car sales through various initiatives. As for the overall market, we expect in the forthcoming festive season, the market will see some revival. What do you feel is the future of the Indian market and how big it really will be by 2020? The Indian car market is estimated to be 4-million strong by 2015. But, India offers a huge potential as car penetration levels in the country are far behind than western world. The rising income levels, greater urbanisation and infrastructure development is expected to further go up in the coming years. That is why manufacturers are investing into production capacities. All these factors give hopes that years beyond 2015 will be quite exciting for the Indian automobile industry. More specifically, how big do you think the luxury car market could be by 2020? How do you compare it with China? It is difficult since no such projections can be made as of now. But, no parallel can be drawn with what China has. India is a small car market and it will continue to remain so in future too. A change in plans for global big names testifies it more clearly. Many global big names known as big or luxury car makers now have serious plans to make and sell small cars in India. You have been launching new models in India, how do you see yourself in India over the next few years? We will continue to launch new models. We have been proactive in this area and we will be present with the kind of models well before the customer actually asks for. In addition, we will enter new segments. Ertiga is an example of our intent in future. In terms of volumes, we wish to reach 2 million size when India becomes a 4 million market. Accordingly, we are investing into capacity building and R&D and technology advancement programmes.
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Toyota to begin engine production at B'lore plant
Chennai, July 22 "It will commence next month", Toyota Kirloskar Deputy Managing Director Shekar Viswanathan told PTI when asked about their plans for the manufacturing facility. Toyota plans to manufacture about one lakh engines and 2.40 lakh transmission units from the facility. Toyota Kirloskar is a joint venture between Toyota Motor Corporation, Japan, and Kirloskar Systems, Bangalore. Last year, Toyota Kirloskar had announced it would set up of an engine plant and expand its transmissions unit to cater to its latest sedan Etios and hatchback Etios Liva, with a combined investment of Rs 500 crore. On exports of Etios and Liva, he said 1,500 units had already been shipped to South Africa. "We have commenced exports to South Africa from Ennore Port (near Chennai)", he said. — PTI
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Mukesh Ambani’s aerospace venture ready to take off Man Mohan Our Roving Editor New Delhi, July 22 Ambani’s new aerospace company, a complete diversification from current business of energy and materials, has finally taken off. His vision is to make India a global hub of aerospace manufacturing. Ambani’s Rs76-billion Reliance Industries Limited (RIL) has formally incorporated a new firm to enter As per the memorandum of articles, the objective is “to design, develop, manufacture, equipment and components, including airframe, engines, radars, avionics and accessories for military and civilian aircraft, helicopters, unmanned airborne vehicles and aerostats.” The company will also undertake research and produce new aerospace technologies, materials, components and equipment and test and carry out their certification.” The company will also partner with global majors to bring in sophisticated civil and military aerospace technologies into the country. Research and development is part of its charter. Sources said huge funds were being earmarked for R&D purposes. Dr Vivek Lall (43), possibly the country’s most respected aerospace expert today, is heading Mukesh Ambani’s new ventures. Lall was honoured by Cambridge as one of the 2,000 outstanding scientists. Lall earlier worked with the NASA and defence majors Raytheon and Boeing. Although the newly created company has not identified the hub for its activities, it already has a major job in hand — waiting for a final go-ahead. It relates to manufacturing specific parts of the French Rafale fighter jet that was selected by the Defence Ministry six months ago. On January 31, 2012, Dassault Aviation’s Rafale emerged winner in the “dogfight”, beating the European consortium’s Eurofighter Typhoon in over $11-billion Indian Air Force deal for the 4.5 generation 126 medium multi-role combat aircraft (MMRCA). The Tribune in an exclusive report on January 11, 2011, had reported that Eurofighter and Rafale had been shortlisted for the final decision “but a political decision was awaited”. As per a Memorandum of Understanding (MoU) with Dassault Aviation, the RIL’s new aerospace company will assist in manufacturing major parts of Rafale in India. The MoU was signed a week after the government announced Rafale as the winner in the MMRCA fray. According to Dassault Aviation, the firm has entered into an MoU with the RIL “for pursuing strategic opportunities of collaboration in the area of complex manufacturing and support in India”. Dassault manufactures Rafale combat jets and Falcon business jets, and the proposed venture may be making a foray into both sectors. Sources said the two partners had informed the Defence Ministry. Any such venture has to be cleared by the government and several procedural and security clearances would be required in due course. As the Hindustan Aeronautics Limited is the lead integrator for the MMRCA project, the two companies will have to involve it also. Industry experts feel the RIL may emerge as the biggest Indian player in various defence projects like combat aircraft, military systems and homeland security in near future. Mukesh Ambani’s new ventures of defence, aerospace solutions and homeland security may overtake his existing businesses in years to come. The firm
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Rupee to hover around
Rs 53-55/$, says CII survey
New Delhi, July 22 Sixty per cent of economists surveyed believe that the rupee will remain at current levels of Rs 53-55 and that this level represents the medium-term trend. Forty per cent said the exchange rate could continue to slide. A majority of the respondents felt that the situation would remain volatile till the end of the second quarter of this fiscal year. Commenting on the issue, Chandrajit Banerjee, Director-General, CII said the rupee has declined more than the troubled Euro and Pound currencies, dropping as much as 25.58 per cent between June 2011 and 2012. The high volatility in the rupee has added to the complexity of business in the country, he added. The government and the RBI need to tackle the underlying macro-economic problems that lie at the root of the fall in the rupee in order to provide some stability in business conditions. The main factors pointed out by the respondents for the decline in the rupee are current account deficit, policy inaction and high fiscal deficit. Some of the suggestions put forward were to review FDI policy in critical sectors, pay oil companies directly from reserves, issuance of dollar-denominated bonds, and further increase in FII limits in the Indian debt market. Improving capital flows with consistent and transparent policies is urgently required, said the CII survey. FDI in multi-brand retail and aviation would go a long way to improve investor confidence. Taxation structures for FIIs, including reducing withholding tax on foreign investment, must be made clear and transparent. Deregulation of oil prices would reduce both fiscal deficit and current account deficit. A cap on gold imports may also help in reducing dollar demand. Other macro measures recommended were reducing fiscal deficit, pruning subsidy expenditures, and moving forward on reforms such as GST and passing pending legislation. |
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No tax on gift to father
By S.C. Vasudeva Q. A maturity amount of Rs 2.07 lakh is payable to my son from his life insurance policy issued by the LIC of India. I am an Indian citizen while my son is an NRI. If my son gifts the full maturity proceeds to me, his mother, by issuing a cheque from his bank account in India, what would be the tax liability applicable to both of us. I am a senior citizen. A. There will not be any tax liability in respect of amount gifted by your son to you and to his mother. Q. I am an 86-year-old senior citizen. I have some confusion regarding exemption limit of Rs 5 lakh and filing of IT return for senior citizens of 80 years and above. My total income for the financial year ending 31.3.2012 (Assessment Year 2012-13) is below Rs 5 lakh. Please clarify if I am entitled to exemption from tax up to Rs 5 lakh for the financial year 2011-2012 and not required to file income tax return for the assessment year 2012-13. — RS Sood A. The exemption in respect of income up to Rs 5 lakh is applicable for Assessment Year 2012-13 in respect of an individual being a resident in India who is of the age of 80 years and above. Q. I am a housewife and senior citizen. My total income from interest in the Financial Year 2011-12 was Rs 1,40,630 (Rs 63,284 from FD in a bank, Rs 37,145 from SCSS in post office, Rs 36,000 from MIS in post office and Rs 4,201 from SB accounts). I had given Form 15H to the bank and Post Office. So, the income tax was not deducted by the bank or Post Office. Please advise whether I am required to file an income tax return for the assessment year 2012-13. — Simla Devi A. Since you are a senior citizen and your income is below the limit on which tax is not chargeable, you are not required to file the return of income under the provisions of Section 139 of the Income-tax Act 1961 (The Act).
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Airport Development Fee uncalled for
By K.R. Wadhwaney The Supreme Court observes that collection of Airport Development Fee (ADF) of Rs 200 from every domestic passenger and Rs 300 from every international flyer is ‘unreasonable’. This is a very soft view. It is totally unfair and amounts to cheating. This is not the only levy that passengers have to pay at the Indira Gandhi International Airport (IGIA), run by the GMR’s Delhi International Airport Limited (DIAL). The already ‘inconvenienced’ passengers are being harassed by the DIAL, which is making money while providing negligible facilities. An in-depth study reveals that it was provided land at throwaway prices and many other facilities were provided to it by politicians for reasons other than professional functioning. The court has rightly suggested that instead of hurting the pocket of commoners, the DIAL should charge industrialists and high and mighty VIPs for making use of plush lounges at the airport. While making this important recommendation, the court A DIAL official, in response to the Supreme Court’s observation, has gone on record saying: “This is a statutory appeal and issuance of notice is normal. There is no stay on the levying of ADF by the DIAL; these are only observations made by the judges”. In fact, last year the high court had stayed the collection of the ADF. The ADF is imposed to bridge the gap between projected and actual cost of development of the airport. While applying for the contract, GMR had never referred to this possibility. Apart from the ADF, the DIAL charges User Development Fee (UDF), which is charged to bridge the difference between an airport’s revenue and its operational expenses. To charge these fee is totally illogical. While airport revenue can be ascertained, the operational expenses are difficult to determine. All this confusion and harassment to passengers have occurred because the Airports Economic Regulatory Authority (AERA) has not been as dispassionate and independent as it should be.
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Invest for long term in equity markets
Good returns come with risks attached and if your age and risk appetite permit, invest in companies which seem to have the highest growth potential in terms of opportunity and quality of management Jayant Manglik
Another important pillar of investing which gets diluted is the percentage of allocation to stock markets based on one's age, time horizon, investment objectives and risk appetite. This is fast converted into a market-driven decision and frequently leads to speculation and losses. Typically investors should have a higher allocation to the stock markets when they are younger and therefore in a position to assume more risk. Over a period of time, this should classically shift to more conservative assets like fixed-income products in later years. A thumb rule usually quoted is that 100 minus your age should be your percentage of disposable income invested in the stock markets. This is a reasonable rule but it has to be tempered with one's risk appetite because all 40 year olds will not have the same risk appetite, time horizon or investment objectives. In general, investors in the age group of 20-35 years would usually have the highest degree of risk tolerance and can take aggressive positions in the stock markets. If they have the ability and time to analyse data themselves, it is a great advantage and they can then invest directly in the stocks they feel will give them good return over the years. They can also bet on the India story and invest in mid-cap stocks likely to become large-cap stocks in high-growth areas like infrastructure, education and medical services. This would change for people in higher age groups who should get increasingly conservative in stock selection with a tilt towards more stable stocks at the cost of potential growth with people reaching their retirement age investing in fixed-income securities, which incidentally can now be done via NSE and BSE directly as these are now listed in stock markets. Your broker will be able to tell you about such opportunities and large brokers are typically backed by comprehensive research desks which can recommend portfolios suited to individual needs and the investor can then choose to follow the advice or reject it based on his assessment. One important point to keep in mind is that the stock markets generally give good returns over a relatively longer period of time and is not the place to make quick money through speculation. Many investors feel that it is better not to track prices every day and ignore short-term fluctuations. Investing for the long term remains the best way to expect good returns from equity markets. Another mantra is to invest in equity markets in fixed amounts every month. To be a successful long-term investor, one must have confidence in the future. So if you think India is a good bet, go ahead and invest in the best companies in the most high-growth sectors. Past data is just one of the indicators of the future but not necessarily the most important one. For example, one could argue that infrastructure, banking, education and pharma stocks should do well in the medium term if our growth story has to be maintained. Good returns come with risks attached and if your age and risk appetite permits, invest in companies which seem to have the highest growth potential in terms of opportunity and quality of management. And importantly, do not fall into the trap of selling out if the stock goes up suddenly. Be prepared to wait it out and get maximum returns over a longer period. In a story like India's, the biggest gains will come over the long term from small-caps which will become mid-caps in the next few years and from mid-caps which will become large-caps over the next 3 to 5 years. We should not forget that capital markets were invented to ensure efficient allocation of capital and the most proficient companies will give the highest returns. Therefore, investors with the right selection and patience will reap the maximum benefits from long-term investments in stock markets. The author is President, Retail Distribution, Religare Securities. The views expressed are his own
What are Options & Futures* An option gives you the right to buy or sell the underlying asset . A call option gives you right to buy the underlying asset while a put option gives you the right to sell. An option contract specifies the strike price, that is, the price at which you can buy or sell the underlying asset. In Futures, you buy a contract which will have a specific lot size of shares. When you buy a Futures contract, you don’t pay the entire value of the contract but just the margin. Open interest is the the total number of contracts not closed or delivered on a particular day.
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Checklist for filing IT return
Form 16
Please verify that your PAN number is correctly mentioned in the Form No. 16 issued by your company. In case it is not correctly mentioned, please ensure to get this mistake corrected since the credit for TDS paid will only be available on the basis of the PAN mentioned there. You must be aware that nowadays you are not allowed to attach any document while filing your income tax return whether you file it online or offline. In addition to the correct PAN, verify that the amount of exempt allowances like HRA, conveyance allowance etc is correctly mentioned in the form. Please verify that the amounts deducted in respect of provident fund, tax deducted at source have also been correctly mentioned in the form. Though Form no. 16 is a proof for tax deducted at source, it is still advisable to verify that the amounts of deduction under Section 80C and 80 D on the basis of documents submitted by you is correctly mentioned therein. Nothing stops you from claiming any amount under Section 80 C or 80 D which has not been considered by your employer while preparing the Form No. 16. However, since in case the return of income is prepared by your Chartered Accountant, Form No. 16 is the basis on which he will take the relevant figure and thus may not be able to claim additional deduction or exemption. It is good if you are able to get such mistakes rectified well in time, but even if your accounts department is not able to give you corrected Form No. 16 in time then at least make sure to bring these mistakes to the notice of your Chartered Accountant so that he takes correct figures while preparing your tax return. In case higher tax has been deducted by your employer due to any error, it is not possible for you to get any refund from your employer but you can always file claim for refund of excess tax deducted by your employer while filing your income tax return. TDS credit
Since you cannot attach any document, including any TDS certificate with your return, it is important to verify that whatever tax has been deducted from your income is being correctly reflected in the records of the department. Since the credit for all the TDS is available on the basis of TDS reported by the deductor, it is advisable to verify the amount of TDS credit reflected in the Income Tax Department. The I-T Department also sends the Form no 26AS showing the amounts of TDS lying to your credit. Please verify the same against the TDS certificates received by you. In case any TDS amount is not reflected or incorrectly reflected, then approach the deductor to ensure credit for such TDS. In case you have not received this form, you can always access the same through your Internet banking login. Capital gains account
Another factor which is linked to the due date of filing the income tax return and which is often forgotten is opening of capital gains accounts if you are not able to invest the capital gains under Section 54 and sale consideration under 54 F for purchase or construction of a property. Please ensure to put non-utilised portion of capital gains on the sale of your house in the bank account before the due date of filing of your return. In case the capital gains had arisen on sale of a property other than residential house, you are required to invest the net sale consideration within specified time for purchase or construction of a house. Please put the money remaining non-utilised in the capital gains account by the due date of filing of your return. Please ensure to put the non-utilised portion of money in that account even if you feel that you will not be able to file your income tax return by due date. The author is CFO, Apnapaisa.com. The views expressed are his own |
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The Financial Intelligence Unit (FIU) of the Finance Ministry has begun a probe into the HSBC's India operations after it was alleged that the country was exposed to terror funding and money laundering.
Even as Maruti Suzuki India Ltd (MSIL) on Saturday announced a lockout at its Manesar plant which had increasingly become the focal point of the company, the management at the country’s largest car-making organisation is upbeat that normalcy would soon return to help it regain its market share. Mayank Pareek, company’s Chief Operating Officer, Marketing & Sales, refused to comment on the prevailing situation, but shares the vision at MSIL with Girja Shankar Kaura in an interview which was conducted just before the trouble erupted at the Manesar plant.
Tax Advice
Most investors come to the markets with good intention after reading articles like these and are intent on staying invested for the long term. Soon, one hears about opportunities of instant gain and all time-tested and empirical data is thrown out of the window.
As the deadline for filing income tax return is fast approaching and most of you are spending your weekends in preparing and collecting details for the same, I have listed some preliminary details which you need to have handy for smooth filing of your tax return so that you don't get held up at the last moment. Verify the details provided in the following documents: