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G20 finance chiefs to begin talks to tackle eurozone crisis
Biz talk |
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Cadbury India under lens for alleged excise evasion
No case for lowering India's credit rating: PMEAC chief
Growth to revive from FY14 on reforms impact: Morgan Stanley
Punjab to develop area specific industrial clusters
Personal
finance
Family budget planning tools
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G20 finance chiefs to begin talks to tackle eurozone crisis
Mexico City, November 4 Finance ministers and central bank governors from the Group of 20 top economies will gather in Mexico City as debt-riddled Greece continues to trouble Europe while Spain fights off pressure to seek a bailout. While Madrid avoids the bailout route, the problems in Greece are still haunting Europe's single currency, more than two years after Athens received its first multibillion euro rescue. Greek officials are locked in tough negotiations with European Union and IMF auditors over austerity measures Greece must take in return for a bailout payment it needs to avoid defaulting on its debt. While the fiscal situation in the United States is also a major concern, officials do not expect any movement on that front until after Tuesday's US presidential election. The White House and Congress need to find a compromise by the end of the year to avoid a "fiscal cliff" of automatic spending cuts and tax hikes, which experts say could hurt the US economy and curb global growth. The meeting is a follow-up to a June summit, when G20 leaders vowed to coordinate "fiscal actions" to boost domestic demand if economic conditions deteriorated. Since then, the IMF slashed its 2012 global growth forecast to 3.3%, eurozone unemployment rose to a record 11.6% in September and growth decelerated in emerging nations.
— AFP |
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Hero MotoCorp aims to retain top slot post Honda break-up
Hero Honda was a household name in India and the joint venture with its offerings also went on to become the world’s largest manufacturer of two-wheelers. However, the separation from its Japanese automobile giant Honda has had the Hero group to look for alliances with others to hang onto their market leadership. Anil Dua, senior vice president (marketing & sales), Hero MotoCorp Ltd (HMCL), talks to Girja Shankar Kaura about the future plans of the company. Q: The festive season seems to have given the much required impetus to the auto sector. How has the festive response been for Hero MotoCorp?
Q: Overall scooters seem to be doing better than motorcycles. How has been your performance and do you plan to launch any new scooter models? A: Yes, scooters have been doing better than motorcycles for the industry in general. The scooter industry is growing at healthy double digit while motorcycles have been growing at single digit. For us, it has indeed been a success story. We are now the second-largest scooter manufacturer in the industry, with an average sales of over 50,000 units a month. Q: The overall sentiment for the two-wheeler industry has been low. What are the reasons behind this and by when do you expect to see an upswing? A: Well, the two-wheeler industry in the country has been experiencing sluggish growth for past few months. A number of factors such as delayed monsoon, rising petrol prices and high interest rates, are some of the key factors that have affected customer sentiment. However, with the encouraging start to this festive season, we expect the domestic market sentiment to improve in the coming months. Q: What is happening on the R&D front? Because, now after the separation from your partner Honda, you will have to have R&D of your own, right? A: Yes, that’s right. We have been moving with great speed to pursue our vision of being a global leader in the two-wheeler arena. We have recently tied up with a third international partner — the renowned Italian two-wheeler design firm Engines Engineering to partner with us in bringing HMCL’s next-generation product lineup. The Bologna-based firm will impart technological know-how in terms of superior designing for the future products to be launched by us. The tieup comes close on the heels of HMCL’s two strategic alliances forged earlier this year – one with the US-based Erik Buell Racing (EBR) for cutting-edge technological knowhow and the other with Austria-based AVL to build our internal capabilities for engine development. We will also be soon setting up an integrated state-of-the-art technology/rearch & development centre in Rajasthan, which is going to be the largest two-wheeler R&D centre in the country. Q: When will we see Hero’s indigenous product in the market? A: We are working aggressively on this front and we plan to bring out Hero MotoCorp-developed products sometime in the 2013-14 financial year. Q: You have recently launched the “Hero” brand in Sri Lanka and Nepal. How has the response been so far in these markets? A: Very recently in September this year, we embarked on a new global journey by launching the Hero brand and our range of two-wheelers in Sri Lanka and Nepal. The ABANS Group and NGM have been appointed to market our two-wheelers in Sri Lanka and Nepal, respectively. These have been our existing markets even in our earlier avatar, so we have been well entrenched in these markets. Indian brands in these countries have traditionally been quite strong and we now expect to take our business even higher. Q: Which are the other international markets that Hero MotoCorp will tap within this fiscal? A: We are geared-up to give shape to our global business plans and will be foraying into new international markets, starting with Central America and a few countries in Africa this financial year itself. As we go forward, we will also look at assembly lines in some of these markets depending upon the market need and business requirement.
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Cadbury India under lens for alleged excise evasion
A Cadbury India spokesperson confirmed that a probe was on but declined to discuss details about it. "A compliant and ethical corporate culture, which includes adhering to laws and regulations in the countries in which we operate, is integral to our success. To that end, we are fully cooperating with the authorities on this inquiry. "Since the investigation currently is underway, it will be inappropriate on our part to discuss the details at this time," the spokesperson said. According to central government norms, the area based exemption for new industrial units of firms in Himachal Pradesh provide full exemption from excise duties for specified goods for a period of 10 years. However, for availing this the unit should have been established before March 2010 to claim such exemption. Acting on intelligence inputs, the officers of Directorate General of Central Excise Intelligence (DGCEI) found that the company claimed excise duty exemption for its new unit in Sandoli village in Baddi, relating to a period even before it came into existence, the sources said. According to a certificate of commercial production by the Himachal industries department, the unit was established sometime in January, 2011, they added. "By way of wrong availing of the area based exemption for which they are not entitled, the new unit of Cadbury India Ltd in Himachal Pradesh has evaded the central excise duty to the tune of Rs 100 crore approximately on the clearances of the goods manufactured by them," a senior official said. It was further found during the course of investigation that mandatory licences or permissions from local bodies concerned for setting up the unit were not obtained before the last date of March 31, 2010, the sources claimed. Armed with intelligence inputs and certain documents claiming wrong doings, the DGCEI, which began its preliminary probe last year, also conducted searches at various premises of the firm and other suspected people. During the investigations, the statements of various persons, including the Cadbury India MD, have been recorded.
— Agencies |
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Tax returns filing for pensioners
By S.C. Vasudeva Q: I am a senior citizen retired on April 30, 1999 and received pension that was never taxable in the previous years. Following a high court order, my pension has been revised with effect from May 1, 1999. I shall be receiving arrears of Rs 260,000 this year. The amount will be between Rs 12,000-36,000 for the period 1999-2000 to 2012-2013. My pension for FY2012-13 will come to Rs 204,000. What can I do to save on taxes? — L.R. Devgan
Q: My wife is a senior citizen. Her income from pension (Rs 1.6 lakh) and interest on deposits is Rs 2.3 lakh. Is it necessary for her to file a tax return? Will the interest received on deposits (not being time deposits) be eligible for deduction to tune of Rs 10,000 under Section 80TTA of the Income Tax Act, 1961, keeping in view that the interest accrued on the post office savings is already exempted under Section 10(15) of the Income Tax Act. — Surinder Nath A: Your wife being a senior citizen is not required to file an income tax return in case her total income does not exceed Rs 250,000. Income tax deduction in respect of interest from savings accounts (bank and post office) is restricted to Rs 10,000 for the financial year 2012-13. Interest from post office savings accounts is exempt under Section 10 of the Income Tax Act to the extent of Rs 3,500 only.
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No case for lowering India's credit rating: PMEAC chief
Mumbai, November 4 "The rating agencies also need to recognize the fact, we have taken some strong actions in the recent period ... therefore I believe the rating agencies don’t have a strong basis for reducing the rating of India," PM’s Economic Advisory Council (PMEAC) chairman C. Rangarajan told PTI. "The rating agencies need to judge the performance of India's economy in context of what is happening in whole world ... I believe attitude of rating agencies will undergo a change," Rangarajan added. Credit rating agencies like Standard & Poor's have threatened to lower India's credit rating in 24 months to 'junk' grade, if it failed to carry out requisite economic reforms. Besides, the rating agencies have lowered the growth projections for the current fiscal and reduced the outlook to negative. Even the Reserve Bank has cut its growth outlook for the current fiscal to 5.8 per cent, from the% projection of 6.5 per cent in view of worsening global economy and poor investment and subdued demand. he government is now targeting to rein in fiscal deficit to around 5.3 per cent of GDP.
— PTI |
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Stock-specific action to dictate markets this week
Mumbai, November 4 Major corporate result announcements this week include Cipla, Tata Power, Reliance Infrastructure, Hindalco, Bharti Airtel, Tata Motors, Sun Pharmaceuticals Industries, ONGC, Ranbaxy, Tata Steel, Jindal Steel & Power, Coal India and SBI. The BSE benchmark Sensex bounced back by 130 points to settle last week at 18,755.45 in view of fresh buying in mainly in consumer durables, auto, pharma, IT and metal packaging. "The markets may open lower on Monday as US stocks closed lower on Friday. Also after a spectacular rally on Dalal Street on Friday, some correction will be seen," CNI Research CMD Kishor Ostwal said. Investors will also track the US presidential elections on Tuesday, experts said. “Post that, reforms may take the centre-stage again with developments on several important bills, for which parliamentary approval is needed, expected to be taken up in the winter session”, said Sanjeev Zarbade, vice president at Kotak Securities. Analysts also said that market may see listless trading amid bouts of volatility this week. According to Nischal Maheshwari of Edelweiss Research, “The RBI's failure to complement government's reform measures via rate action has partly eroded the positive momentum that had been building over recent months.
— PTI |
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Growth to revive from FY14 on reforms impact: Morgan Stanley
New Delhi, November 4 "We expect a gradual recovery in GDP in FY 2014 to 6.1 per cent, driven by some impact from positive policy actions by the government and acceleration in farm output growth on base impact," the Morgan Stanley report said. India's GDP growth has been on a steady decline since June 2011, when it stood at 8 per cent. For the quarter ended June 30, 2012, Indian economy grew by 5.5 per cent. Inflation levels have also remained higher than the Reserve Bank's comfort level for quite some time now with wholesale price index (WPI)-based inflation touching a 10-month high level of 7.81 per cent in September. In a research note Morgan Stanley said: "Policy reforms, not monetary or fiscal easing, will be effective to revive growth in a sustainable manner."
— PTI |
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Punjab to develop area specific industrial clusters
Gurgaon, November 4 Rajasthan Industries Minister Rajendra Pareek stated two auto zones are planned to be set up in Alwar district to develop the state as an automotive manufacturing hub. The state already has a special auto engineering zone at Pathredi.
— TNS |
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The ins and outs of LTA benefits
There are two circumstances in which income tax exemption for leave travel assistance can be claimed - when you are continuing in your current job and proceed on leave to any place in India and when you travel to any place after you retire or are fired The whole objective of travel is not to set foot on foreign land - it is finally to set the foot on one's own country as a foreign land. - G.K. Chesterton This quote sums up the importance and enjoyment of exploring your own country as a foreign land. The Indian government also wants to give impetus to inland tourism. Accordingly it has provided for tax benefits in the form of leave travel assistance (LTA) received from your employers. Let us understand what the LTA provisions under the income tax laws are. Section 10(5) of the Income Tax Act, 1961 treats the amount of LTA received from your employer, be it present or past, as tax exempt subject to fulfillment of certain conditions. To begin with, this tax benefit is available only to persons who are in employment and are in receipt of LTA from their employers. It is not available to self-employed taxpayers. Tax exemption in respect of LTA can be claimed in two circumstances: Firstly, when you are continuing in your present employment and proceed on leave to any place in India and, secondly, when you travel to any place after your retirement or termination from service. This benefit on retirement can be claimed every time you leave one employment and move to another location. So the retirement for this purpose not only includes the mandatory retirement on reaching the age of superannuation but also includes leaving one employment to take up another at a different location. For whom can you spend the LTA funds? You can either travel alone or with your family. However, if your family travels without you, no LTA benefit can be claimed. Moreover, you need to be on leave on the days of travel. You cannot claim the benefits of LTA in respect of your spouse or child if you take them along with you on your business trip as you are not on leave on those days but going for official visit. Family for the purpose of claiming LTA exemption includes spouse, children, your parents and siblings. However in respect of your closer family, i.e., wife and children, financial dependence is not required but for claiming the LTA benefits in respect of your extended family, i.e., parents and siblings who should be financially dependent on you. Moreover, the income tax laws provide that you can claim this LTA exemption benefit in respect of two children only. How frequently can you claim exemption? You can claim the LTA exemption twice in a block of four calendar years. This block is not calculated with reference to commencement of your employment but is predefined by the law. The current block has begun from January 1, 2010 and will end on December 31, 2013. The next block will be from 2014 to 2017, and so on. It is not necessary that you claim the LTA exemption in alternate years; what is required is that you cannot claim it more than two times in the defined block of four years. In case both you and your spouse are working, your family can travel every year and claim the LTA tax benefit every year for two different calendar years in the case of both of you. Since you can claim the LTA on expenses actually incurred, both of you can not claim LTA exemption in respect of the same expenditure incurred. Carry forward of LTA/LTC benefits Like benefits of carrying forward certain losses in your income tax returns, the law also lets you carry forward LTA not claimed in a particular block. So what happens if you could not fully claim LTA exemption for some reason during any block of four years? It can be carried forward to the first year of the next block of four years. Thus, in respect of the current block of 2010 to 2013, you can carry forward and claim the benefits of your arrear of LTA during the calendar year 2014 without affecting your right to claim two LTA exemptions in the block of four years 2014-2017. What is the amount you can claim? The tax benefit is available only in respect of cost of transportation incurred by you on traveling within India. It is not available for expenses of stay in hotel or for local conveyance for sight seeing, etc. In case you are going on a foreign trip, you can claim the expense of travel from your place to the point of departure from India for undertaking the foreign travel and back since the law allows you only the exemption in respect of expenses in respect of journey undertaken in India. The exemption is restricted to actual expenses incurred by you in undertaking the journey from the starting point to farthest destination. There are restrictions up to which you can claim your LTA exemption and is dependent on the mode of transport chosen by you. The restriction based on the mode of transport is as under: Mode of transport Maximum Limit on Expenses
Others
The exemption is available for the farthest place by shortest route when a circular journey is undertaken. Documents to be preserved
You need to preserve the tickets to claim this income tax benefit. If you hire a car, the receipt/invoice from the travel agency or car rental agency is considered valid proof. After the recent Supreme Court decision in the L&T Ltd case, your employer may not verify and collect the proof of the expenses in respect of LTA still you are under an obligation to preserve and produce it before the assessing office at the time of your income tax assessment. Since we are entering the holiday season once again, and the calendar year is also coming to an end, you can plan your holidays keeping in view the above beneficial provisions of the LTA
exemption. The author is CFO at Apnapaisa.com. The views expressed in this article are his own |
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Family budget planning tools
We all are aware that on the last day of every February the finance minister presents budget in Parliament. The exercise is done months before and, on the budget day, minister makes it public, where the money has come from and how it is spent in the current year. The budget also tells us what the estimates are for the next financial year. This is very important for all of us, whether it is an individual, corporate or institution, to know the steps taken by the government to take economic growth on the fast track. The same way every businessman prepares profit and loss account and balance sheet at the end of the financial year to know how healthy his business is. One cannot imagine any country or business running without proper budgeting.
Likewise an individual's family budget is most important and is the basic foundation of an individual's financial plan. Actually, it is knowing how much you earn month on month and how it is spent in day-to-day living expenses. A good budget can help you in keeping your expenses as required and keep it on the right track. One should write it down on a daily basis and know where the money is spent. Unless you write it down, you will never be able to formulate an investment plan, as a surplus is not known to you. If you don't know how much money is coming in and where it is going, your road to financial success will be a difficult one. Budget allocation guidelines for
middle-class families
Fixed expense: Your fixed expenses should be in the range of 35 to 50%. Fixed expenses include household expenses, education, medical, utility bills, fuel, conveyance, repairs & maintenance. Insurance commitment:
Your total commitment towards life insurance should be around 7%, health insurance including disability insurance around another 7%, household property another 1%. Insurance expenses for the year should be around 15% of your annual income. Retirement corpus:
One must save minimum 10% to 15% of total income for retirement. Living longer is also a big problem and has to be addressed at the earliest. Long-term investment:
Money set aside for education and marriage of children, home purchase or major renovation. One must keep aside 15% to 20 % for future goals. Vacation & lifestyle expenses:
Your annual vacation and lifestyle expenses should also be restricted to 10% of your total income. EMIs:
Borrowing has become very common nowadays for home purchase, car and education. EMIs can spoil your financial plan if your calculations go wrong. One must be very careful before taking any loan and EMIs should not be more than 35% of your income. It is important to write down monthly income and expenses year after year to know the exact surplus available month on month for investment for future goals. You have to be very careful if you servicing any EMIs for the loans you have taken. The author is head of financial planning at Apnapaisa.com. The views expressed in this
article are his own |
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There are two circumstances in which income tax exemption for leave travel assistance can be claimed - when you are continuing in your current job and proceed on leave to any place in India and when you travel to any place after you retire or are fired.
A:
We have received an overwhelming response in the festive season so far. In retail sales, which is a real barometer of customer response, we have sold over 350,000 units of two-wheelers in the first 15 days of the festival period, starting from the first day of the Navratra festival on October 16 onwards. In fact, October has been a month of new milestones for us. In despatch sales, we sold over 529,000 units of two-wheelers in the month – our highest-ever October sales. Similarly, in scooters, we sold over 50,000 units during October – our highest-ever scooter sales in a month. So yes, the festive season has so far been quite encouraging. With Diwali around the corner, we are certainly poised to do better retails in November. 
New Delhi, November 4
A: On the basis of the facts provided by you, your total income for fiscal 2012-13 will be Rs 284,000 (Rs 260,000 plus Rs 24,000). It would be advisable for you to buy National Saving Certificates for an amount of Rs 34,000 that will bring your total income to Rs 250,000, being the limit up to which tax is not payable by a senior citizen. You will however have to file your tax return for FY2012-13 for which you can seek the help of a tax return preparer, who have been authorized by the department to assist persons furnishing the return. You need an income tax Permanent Account Number before filing the return.
