New Delhi, August 10
Top finance ministry officials worked overtime on the weekend to firm up additional steps to arrest the sliding value of the rupee and contain the current account deficit (CAD).

Continuing the discussions initiated by Finance Minister P Chidambaram yesterday, Economic Affairs Secretary Arvind Mayaram held a meeting of senior officials, including Additional Secretary (Capital Markets) KP Krishnan and top tax officials.

Some announcements are likely to be made by the ministry on Monday, either in Parliament or outside, sources said.

The steps being contemplated by the ministry to check the rupee fall and boost forex flows include further relaxation of external commercial borrowing (ECB) norms for state-owned companies, curbs on import of non-essential goods and encouragement to exports.

Mayaram, after a meeting of the Financial Stability and Development Council in Mumbai earlier this week, had said, “You should wait till weekend. The Finance Minister will be talking about this (outcome of the meeting) later.” Chidambaram held meetings on Friday with senior officials, including Commerce Secretary SR Rao, and is believed to have discussed measures to check the import of non-essential goods.

The minister had earlier said the government would be looking at some compression in non-oil and non-gold imports, especially of non-essential goods. He had cited the examples of coal and electronic hardware, adding that the officials would be working out a list of imported items that could be reduced.

Chidambaram had also said blue chip public sector undertakings (PSUs) could be encouraged to raise funds overseas.

After the announcement, heads of several PSUs met Finance Ministry officials, pleading for relaxation of ECB norms.

The new measures being considered by the ministry are in addition to steps taken recently by the Reserve Bank of India (RBI) to tighten liquidity and curb volatility in the rupee, which touched a record intra-day low of 61.80 to the dollar on August 6.

The RBI recently announced it would auction Rs 22,000 crore of bonds every Monday to suck out liquidity and check speculation in the forex market.

The central bank had earlier raised the marginal standing facility rate to make borrowing from the RBI expensive for banks. The RBI and the government have also taken steps to curb imports of gold.

The current account deficit, which occurs when the total imports of goods, services and transfers exceed exports, had hit a record high of 4.8 per cent of GDP in fiscal 2012-13 as rising purchases of oil and gold from overseas widened the trade gap.

A widening CAD also weighs heavily on the local currency. — PTI

rupee Rescue Further relaxation of external commercial borrowing norms for state-owned companies Curbs on import of non-essential goods and encouragement to exports Blue chip public sector undertakings could be encouraged to raise funds overseas

Washington, August 10
The US International Trade Commission (ITC) has blocked imports of some Samsung electronic devices following complaints by Apple that the South Korean company had violated its patents.

The ruling by the Washington-based US trade body was the latest in a long-running global legal battle over alleged patent infringement between the two smartphone and tablet giants.

The International Trade Commission ruled yesterday that Samsung had infringed two Apple patents — numbers 949 and 501— dealing with touchscreen actions and headphone jack plug-ins, but cleared the South Korean company of charges that it had violated four more.

The import block is subject to a review by the White House and less than a week ago the Obama administration overturned an ITC ruling in a patent suit brought by Samsung that would have banned the sale of certain iPads and iPhones in the United States.

Samsung expressed disappointment with the latest ITC ruling.

“We are disappointed that the ITC has issued an exclusion order based on two of Apple’s patents,” the company said in a statement. “However, Apple has been stopped from trying to use its overbroad design patents to achieve a monopoly on rectangles and rounded corners.

“The proper focus for the smartphone industry is not a global war in the courts, but fair competition in the marketplace,” Samsung said.

“Samsung will continue to launch many innovative products and we have already taken measures to ensure that our products will continue to be available in the United States.” — AFP

The Ruling The ITC ruled that Samsung had infringed two Apple patents — numbers 949 and 501— on digital mobile devices, covering the detection of headphone jacks and operation of touchscreens All exclusion orders are sent to President Barack Obama, who has 60 days to review them. If he does not veto the order, it will go into effect Four other patent infringements asserted by Apple were turned down by the ITC, which declared its investigation closed

New Delhi, August 10
The life insurance industry, the biggest retail financial service providers in India, with around 36 crore in-force policies, is carrying out a nationwide campaign focusing on customer centricity.

To implement the customer centricity initiatives, industry body Life Insurance Council plans to carry out a nationwide campaign. As a part of the campaign, the Life Insurance Council is asking members to provide training to its employees and effective customer service at all levels.

V Manickam, secretary-general, Life Insurance Council, said, “The life insurance industry would reinforce customer centricity at every step, be it creating awareness by improving financial literacy, need-based service and redressing customer grievances. As a matter of fact, there has been an improvement in death claims settled by life insurers in terms of number of policies as also by amount in the past three years. There has been improvement in the time taken to settle death claims and the number of claims repudiated too has seen a significant drop.”

“At present, life insurance penetration is 3.2 per cent (2012-13) and life insurance density is $43 (2012-13). By implementing the customer centricity initiatives, we are confident these would help in increasing life insurance penetration to 5 per cent and density to $100 by 2020”, Manickam said.

The assets under management (AUM) of life insurers has risen to Rs 17.41 lakh crore as on March 2013 as compared to Rs 1.94 lakh crore in 2000-01 with a phenomenal growth of around 900 per cent.

Even during the challenging period of last two years, there has been a healthy increase in renewal premium to Rs 1.79 lakh crore as on March 2013, compared to Rs 1.65 lakh crore in March 2011. The in-force policies have also increased to 35.87 crore as on March 2013, compared to 32.54 crore two years ago and registered a rapid growth of 350 per cent compared to 1999-2000, when the sector was opened up for private sector participation.

The total benefits paid to customers by the life insurance industry in the most challenging period has increased to Rs 1.91 lakh crore as on March 31, 2013 as compared to Rs 1.41 lakh crore as on March 2011.

Q: I am planning to move to the UK for a job. I have been investing in Indian mutual funds. If I wish to continue to invest in these funds through my NRE account, can redemption at later date be in the same NRE account? Is the amount fully repatriable or not? What about laws i.e. applicable taxes in case of short-term, long-term capital gain and losses?

— Mihir Vasani

Yes, any redemption of an equity mutual fund originally having been invested from funds in the NRE account may be credited back to the NRE account. Money in the NRE account is fully repatriable, so once you receive the credit into your NRE account, you may repatriate the funds anytime, no questions asked.

The taxes are no different from what is applicable to an Indian resident in as much as long-term gains from equity and equity mutual funds are tax-free, short-term gains are taxable @15% and dividends too are fully exempted from tax. On the other hand, long-term gains from non-equity mutuals are taxed at 10% without indexing benefit or @ 20% after indexation. Short-term gains are added to the other general income (like interest, rentals etc.) dividends continue to remain tax-free.

Q: I have gifted my retirement benefits to my wife (housewife) who has invested the gifted amount in FDRs. Under clubbing provisions, I am including the interest in my income for computing tax. Can TDS on interest accruing from the FDRs in the name of my wife be setoff against my total income, including the clubbed income?

— Kirit

There is a possibility that the I-T Department may reject the setoff because the related TDS certificates bear the name of your wife. However, the law is on your side since such an action would result in double taxation.

You may be guided by the decision of the Allahabad High Court in CIT v Lalit Agarwal (1993) 153CTR500 where the wife was a director of the company in which her husband was the managing director. Her salary was clubbed in the hands of the husband without allowing the then existing standard deduction on salary income. The learned judge had observed, "If the wife herself had been the assessee, there would not have been any doubt as to her right to compute her net income. She is entitled to standard deductions and other expenses. If that is so, we fail to see any good reason why gross income be clubbed under Section 64.”

This is a case where the husband had also claimed standard deduction on his own salary income. This resulted in the husband claiming standard deduction twice, once on his own income and once again on the clubbed income. Your case is much stronger.

Q: I am a salaried person and I have two houses. Is it mandatory to show the second house as business income and file ITR -IV? ing the clubbed income?

— Prashant Rukmangad

The basis of calculating income from house property is the rental value. This is the inherent capacity of the property to earn income. Property income is perhaps the only income that is charged to tax on a notional basis. This charge is not because of the receipt of any income per se, but is on the inherent potential of the house property to generate income.

So first and foremost, the first property that one buys is exempt from income tax. However, the second property onwards, even if it's kept under lock and key, a notional rent value based on the market rental value will be adopted as taxable income from the second property.

To put it differently, even if a taxpayer earns no income whatsoever from the second property, it will be taxable as if he has put it out on rent. Therefore, it would be advisable to actually rent the second property since anyway the owner will have to pay tax on an assumed rental value.

Note that this above discussion applies only in respect of house property; it does not cover a plot of land. Also, the first property is tax-free only if not let out. In other words, if you earn rent, whether from one property or more, all the rent is taxable. However, in cases where the property is not let out (or is self occupied) then one property is exempted from tax.

BRIEFLY

NEW DELHI
Gold, silver maintain an upward march
The prices gold and silver maintained an upward march for the third straight day on Saturday on increased buying by stockists and jewellers to meet the festive season demand. Gold zoomed up by Rs 335 to Rs 28,855 per 10 grams, after gaining Rs 180 in the last two trading sessions, silver rose by Rs 365 to Rs 42,750 per kg after climbing Rs 975 in the previous two sessions. — PTI

MUMBAI
Forex reserves plunge by $3 bn to $277.16 bn
The foreign exchange reserves dived by a hefty $2.995 billion to $277.167 billion, the RBI said on Saturday. The total reserves had increased $960.2 million to $280.162 billion last week. Foreign currency assets, a major component of the forex reserves, dropped $2.155 billion to $249.895 billion for the week ended August 2, the RBI said.— PTI

NEW DElhi
India’s largest blast furnace starts at SAIL plant
Steel Authority of India (SAIL) on Saturday said India’s largest blast furnace has become operational at its Rourkela Steel Plant (RSP). “With the start of the new state-of-the-art furnace, hot metal capacity at the RSP will increase to 4.5 million tonnes per annum (MTPA) from its present capacity of 2 MTPA,” SAIL said. — PTI

NEW DElhi
Neyveli Lignite Q1 net down 3% to Rs 278 crore
Neyveli Lignite Corporation (NLC) on Saturday reported a 3.4% dip in net profit to Rs 278.4 crore for the quarter ended June 30, 2013, owing to higher expenses. Its net profit during the same period of the last fiscal was at Rs 288.4 crore. NLC’s total expenses went up by 17% to Rs 1,157 crore, against Rs 990 crore in the year-ago period, it said. — PTI