Taxation of Income from House Property

Direct tax code recently has set out many provisions which would modify the provisions in respect to ‘income from house property’ which will ease the problem of determination of income from house property along with reducing any chances of litigation in such respect to nil.

Some important points are following:

1. House property shall be charged to its owner irrespective of whether the property is let out for business purpose or any other matter. In other words, irrespective of the purpose of the house property, it will be charged under the same head, that is, income from house property.
2. If present condition is taken into consideration then, if a inseparable building is let out with the facility of plant and machinery, it will be charged under the head business income or other income, but, according to the provisions of the new tax code, it will be charged under the head, income from house property.
3. If a property is having multiple owners and the property of each individual can be determined and is ascertainable, then such shall be computed separately for each co-owner. But it should be taken into consideration that when a property is used for business or profession it would not chargeable under this head of income from house property.

ONGC disqualifies Bidding for 2 Russian Oilfields

Russia’s subsoil agency Rosnedra late last month rejected the bid of Nord Imperial for the giant Trebs and Titov fields on the given ground:

• It lacked the financial capability to develop the Arctic fields.
• Failed to present the approval of the company’s board or shareholders for the bid

Trebs and Titov is Russia’s largest undistributed fields, may hold more than 200 million tonnes of recoverable reserves. Nord Imperial, a unit of ONGC’s Russian firm Imperial Energy last month submitted an application for qualification to bid for rights to develop the 1.02-billion-barrel Trebs and Titov fields in Timan-Pechora in northwest Russia.

Though on the other hand Indian executive said these are nothing but flimsy grounds to keep competition away. Rosnedra not only disqualified Nord Imperial , but also rejected the bid of other six contenders which include Russian firms Lukoil and Gazpromneft and BP’s Russian joint venture TNK-BP for unspecified errors in their applications. As per the sources TNKBP and Lukoil are planning to challenge their disqualification in court.

Coal India Limited -IPO Issue Date, Price Band

Coal India Limited (CIL) - a Schedule 'A"Navratna' Public Sector Undertaking under Ministry of Coal, Government of India is going to come up with its IPO, which is going to be 2nd Largest IPO in 2010.

Coal India Limited has its Headquarters in Kolkata. West Bengal. It produce non-coking coal and coking coal of various grades for diverse applications.

As of March 31, 2010, it operated 471 mines in 21 major coalfields across eight states in India, including 163 open cast mines, 273 underground mines and 35 mixed mines (includes both open cast and underground mines). It also operated 17 coal beneficiation facilities with an aggregate designed feedstock capacity of 39.40 million tons per annum. It intend to develop an additional 20 coal beneficiation facilities with an aggregate additional proposed feedstock capacity of 111.10 million tons per annum. Besides this, it provides 85 hospitals and 424 dispensaries.

The date of Coal India Limited IPO is not confirmed. There is speculation that it would be priced at a 20-30% discount to its global peers, price band, is expected to be anywhere between Rs 220 and Rs 270.

However, still the final decision on Coal India price band has to come by eGoM, most probably on October 12. Continuing with its previous tendency, the government is likely to offer retail investors a concession of 5%.