Tax-proofing
Moneylife has been getting many queries regarding the implications of investment in the name of spouse and children. In many families, the wife is a home-maker and the husband is in the highest tax bracket. There is a temptation to pass on assets and invest in the wife’s name, to save taxes. The subject is tricky as tax laws do not want you to evade taxes by transferring your assets. Income tax has, what are called, ‘clubbing’ provisions which add the income of the wife with that of the husband. 
 
Not many are aware of the details of these provisions. What happens to the interest or dividend generated from investments made in the name of the wife? Is it yours or it is now the spouse’s money? It gets even more complicated if re-investment of such income generates additional interest or dividend. Raj Pradhan explains it all after getting the feedback from various chartered accountants (CAs). Read the Cover Story to get a hang of this tricky issue.
 
The enormous corruption of the UPA government headed by a clean Dr Manmohan Singh is in the news, again, after the court has summed Dr Singh to give evidence. Sucheta, in her Different Strokes column, assesses Dr Singh’s role as prime minister from 2004 to 2014 and as finance minister from 1991 to 1996 and explains how he stood by and allowed the plunder of national resources, even if he did not touch a penny of the loot. In her Crosshairs column, Sucheta writes on how the Reserve Bank of India has created a level playing field for credit bureaus, at last; but more needs to be done at the consumers’ end to resolve several issues. 
 
Looking to buy bank stocks? R Balakrishnan outlines what you should look out for before investing in this sector. One more excellent practical guide to buying stocks by Bala.
 
It’s been a year already since we launched Moneylife Smart Savers (savers.moneylife.in), a one-stop source for your personal finance needs. We are updating the website adding more features. If you aren’t a member, you are missing out on being part of a community where you can, at last, be safe as well as prosperous. 

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2G Scam: Maran brothers challenge jurisdiction of the CBI court

Both Dayanidhi and Kalanidhi Maran filed separate petitions challenging the jurisdiction of special 2G Court to try the Aircel-Maxis deal case 

 

Former minister for telecom Dayanidhi Maran and his brother Kalanithi Maran on Monday filed separate petitions challenging the jurisdiction of special 2G court to try the Aircel-Maxis deal case in which they have been summoned as accused along with others.
 
Special Court judge OP Saini issued notice to the Central Bureau of Investigation (CBI) seeking the agency's response on the pleas field by the Maran brothers on 3rd August.
 
During the hearing, the CBI also filed their response on the bail pleas filed by the Maran brothers, which will be heard on 3 August 2015.
 
The court also issued fresh summons to the four other accused, Malaysian business tycoon T Ananda Krishnan, Augustus Ralph Marshall and two accused companies after the CBI said that the summons issued against them have not been served yet.
 
Senior public prosecutor KK Goel told the Court that summons to these four accused have not been served yet and they need at least three months’ time for it.
 
“We are helpless. We need time. This will be done through diplomatic channel,” the prosecutor said.
 
The court after hearing the submissions posted the matter for 3rd August for hearing arguments on the bail pleas of the Maran brothers, their plea challenging the jurisdiction of the court to try the case and the process of serving the summons to Malaysia-based accused.
 
Maran brothers and authorised representatives of the accused firm Sun Direct TV Pvt Ltd were present in the court during the hearing.
 
Besides the Maran brothers, T Ananda Krishnan and Augustus Ralph Marshall, the court had also summoned four companies — Sun Direct TV Pvt Ltd, Maxis Communication Berhad, South Asia Entertainment Holding Ltd and Astro All Asia Network PLC — as accused in the case.
 
The court, on 29 October 2014 had summoned all the eight as accused after taking cognisance of the CBI’s charge sheet filed in the case.
 
CBI has listed them in the charge sheet for the offences punishable under section 120-B (criminal conspiracy) of the IPC and under relevant provisions of the Prevention of Corruption Act.
 
The agency had earlier told the court that five of the eight accused were residing and based in different countries like Malaysia, Mauritius and the UK while the remaining three were based in Chennai.
 
On 29th August last year, the CBI had filed the charge sheet in the case containing the names of 151 prosecution witnesses and a set of 655 documents, on which it has relied upon during its probe.
 
CBI had alleged in the court that Dayanidhi Maran had “pressured” and “forced” Chennai-based telecom promoter C Sivasankaran to sell his stakes in Aircel and two subsidiary firms to Malaysian company Maxis Group in 2006.
 
It argued that the case involves investigation in foreign countries and there were sufficient grounds to proceed against the accused named in the charge sheet.
 

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COMMENTS

MOHAN

2 years ago

“If the facts are against you, argue the law. If the law is against you, argue the facts. If the law and the facts are against you, pound the table and yell like hell”

History Will Not Be Kind to Dr Manmohan Singh
He had two rare opportunities that any person could wish for, to change India; but history will remember that he presided over the most corrupt government in independent India
 
At his last press conference in January 2014, Dr Manmohan Singh had, almost wistfully, expressed the view that “history will judge me more kindly.” That hope seems completely dashed by two events. 
 
The first two rounds of e-auctions for the coal blocks, cancelled by a Supreme Court order, have fetched cumulative bids of over Rs2 lakh crore for 32 producing blocks. The bids vindicate and surpass the comptroller and auditor general’s (CAG’s) three-year-old report that estimated a ‘notional’ loss of Rs1.86 lakh crore to the exchequer due to arbitrary policies and the improper allocation of coal blocks. 
 
 
Vinod Rai, who was the then CAG, was severely maligned by the United Progressive Alliance (UPA) government, with former minister Kapil Sibal claiming that there was ‘zero’ loss. Today, the UPA government headed by Dr Manmohan Singh stands exposed and it is now an established fact that he stood by and allowed the plunder of national resources, even if he did not touch a penny of the loot. The loss was not merely ‘notional’. Most of the coal mine allottees quickly availed bank loans. Consequently, the banking system has a massive exposure of Rs5 lakh crore to entities connected with the coal sector and a chunk of them is already classified as bad loans or ‘non performing assets’. 
 
Dr Singh often attributed his inaction to the compulsions of coalition politics, which were clearly more important than  his oath of office as prime minister of India. It is hard to imagine that history will remember this kindly. 
 
A second blow to Dr Singh has been the embarrassment of being summoned by the special court under the Central Bureau of Investigation (CBI) this March. The case pertains to charges of corruption, breach of trust and criminal conspiracy in the award of a specific coal block to Hindalco, an Aditya Birla group company. Some commentators argue that this is the least controversial of the coal block allotments and that it will be difficult to make the charges stick. But, remember, court judgements are always about specific violations and not about the relative merits of a case in a milieu of exceptional corruption and arbitrariness. 
 
The Hindalco coal block allocation will be argued, decided and appealed, before a final conclusion is reached; but, even if the court verdict does not indict Dr Singh, history will have made up its mind long before then. 
 
As far as Dr Singh is concerned, the battle of public perception is already lost. This is evident in the stinging condemnation and lack of sympathy for the mild-mannered former prime minister on social media which is dominated by young Indians. In fact, simple demographics tell us why history will be particularly unkind to Dr Singh. Over 65% of Indians today are below the age of 35 which means that they were 10-year old or less when Dr Singh’s appointment as India’s finance minister in 1991 came like a breath of fresh air. They know Dr Singh only for his forgettable 10 years as prime minister and the repeated humiliation he has suffered from his ministers, bureaucrats and the Congress party. 
 
It is true that history will not be dictated by the views of 35-year olds; but let’s look at how history is already re-assessing the bouquets and brickbats for India’s economic liberalisation. 
To those of us who were already in the workforce in 1992, Dr Singh’s brilliant academic credentials and professional achievements held the promise of good governance, reform and development. India, then, was so much in awe of this mild-mannered, incorruptible man, who seemed set to deliver us from decades of humiliating shortages, low wages, high taxes, scarcity of basics like telephones, scooters and a cooking gas connection. 
 
India revelled in its new freedom. To Dr Singh went the entire credit for reforming capital markets, permitting foreign portfolio investment and unshackling business from the licence-permit-raj and restrictions on capacity expansion and foreign investment. 
 
Many scandals plagued the Narasimha Rao government too; but none of them ever stuck to Dr Manmohan Singh. We continue to face the consequences of some of those disastrous policies even today. Consider this. India was the first country where public outrage at the gold-plated Enron power project at Dabhol led to its cancellation and unfortunate resurrection. An atrocious power policy and sanctioning of expensive independent power projects (many were cancelled), without fixing distribution issues, has ensured that most of India still reels from acute power shortages. The finance ministry and Dr Singh’s chosen bureaucrats and aides were in charge of clearances. There was a telecom licensing scandal too even in those days. 
 
The Harshad Mehta scam of 1992 exposed the lawlessness in the capital market which was then controlled by a cabal of brokers. They had their tentacles in public sector companies which handed over crores of rupees for ‘portfolio management’ based on political contacts and kickbacks. 
 
A consequence of the scam was that the capital market was made ready for foreign investors with automated, single-screen, paperless trading but it shut out retail investors. Large-scale loot of gullible investors was permitted in, what is now called, the ‘vanishing companies scam’ between 1992 and 1995. Under Dr Singh’s liberalisation programme, the office of the controller of capital issues (CCI) was scrapped allowing fly-by-night companies to rip off investors with fake claims and projects without any checks. That the retail investor is nearly extinct is hurting the government’s disinvestment programme even today.
 
A series of independent regulators was set up under Dr Singh’s dispensation without any accountability towards investors, consumers or depositors who are their biggest stakeholders. This remains a problem too. 
 
None of this ever stuck to Dr Singh. Instead, the then prime minister, PV Narasimha Rao, took the blame for every scandal of that period, since he provided the political leadership. Indians of a certain vintage—mainly 50 years and above—continue to view Dr Singh with rose-tinted glasses and are saddened at his plight. 
 
Ironically, Dr Singh’s disastrous two-term stint as prime minister has led to a reassessment of PV Naramsimha Rao’s tenure, although he was reviled, humiliated and discredited by the Congress party itself. In fact, history is a lot kinder to Dr Narasimha Rao and has given him due credit as the reformer who ensured India avoided a sovereign default and gave a hard, if short-lived, push to economic liberalisation. 
 
Dr Manmohan Singh, on the other hand, had a God-given second opportunity to serve the nation as its prime minister for 10 long years. He sacrificed it all at the alter of coalition politics and presided over one of the most corrupt and draconian regimes that India has seen. 
 
The loot during his two terms extended from land grab (SEZs) to telecom spectrum, coal allocation, pricing of natural gas, the commonwealth games and the destruction of public sector undertakings in aviation and banking. Then there was the 2G scam, where it is clear that Dr Singh was fully informed about the dubious spectrum allocation at the cost of the national exchequer. He ignored written warnings by Union ministers like Kamal Nath.  In fact, the 2G-spectrum scandal unfolded in full public glare and was widely reported by the media, but Dr Singh did nothing.
 
Shady chit funds and ponzi schemes thrived due to political patronage gobbling the hard-earned savings of the gullible; but the government watched in silence. Dr Singh did little even when scams like e-stamping were brought to his personal attention nor did he protect whistleblowers from the vendetta of those involved.
 
Why would history be kinder to Dr Singh? Those of us, who still feel sorry for this weak but personally honest man, hope that his humiliation stops at a fair assessment of his tenure and he does not have to face the ignominy of a judicial indictment. 

 

(Sucheta Dalal is the managing editor of Moneylife. She was awarded the Padma Shri in 2006 for her outstanding contribution to journalism. She can be reached at [email protected])

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COMMENTS

Ramanath nakhate

2 years ago





All the good things Singh did during his tenure as the Governor of RBI, as the FM in the P.V.Narasimhsrao's ministry and as the PM in the UPA -I and all his personal virtues have been overshadowed by his deeds of commission and omission during UPA -II. What India could not achieve in the first fifty years of independence has been achieved during the fifteen years of Singh at the helm as FM and PM, technological advancements not withstanding during the same period. His contribution towards globalisation, economic reforms and financial liberalisation etc. in India cannot be undermined. He lifted the economy out of balance of payment crisis. He was able to ensure that our country was not affected by subprime crisis of the USA with the able assistance of his FM, P.Chidambaram and then Governor of RBI, Y.B. Reddy. India saw 8.5% robust GDP during his tenure as the PM. His extended second term to head UPA -II was degenerated by 2g Spectrum, CWG, Coal block allotments .
The law of the land will take its course. Sucheta Dalal could have been a bit kind to
Dr.Singh 's standing.
R.G.Nakhate

Mahesh S Bhatt

2 years ago

Man who got economic liberalization of 1991 which lifted 30 mill people from poverty.

Manmohan becomes Principal Architect of Indian recession in 2014 by creating great disparities across Infra/telecom/Airlines/Real Estate industries by coming Alibaba of 40 theives.Jobless growth in 10 years of UPA.

Architect of Congress's lowest 44 seats perfomance in able guidance of Sonia & Co.

Bhagwat Gita says being silent spectator to the crime is also part of Crime.

Our legal eagles detroyed million worth of Value of TELECOM/Infra/Mines/Real Estate/Airline Industry by one & only one way of CORRUPTION.

All are scot free legal blessings/manipulations.
Does Parliamentary immunity should be granted when Political parties create personal wealth.

Can state not confiscate the wealth??

I have heard corrupt politico's shake hands with wealth exchange.

Recent example Modi meeting Pawar why simple 21000 crore irrigation scam adjustments.

Carry on Indian Politicians

Mahesh

Ananth Swaminath

2 years ago

Very nicely written article.. brings out some serious truths.. much can and will be said on both sides to protect and maintain each others stance - but nothing can wipe away the sheer truth that India did face 2 full decades of barbaric corruption at the hands of the Congress Govt...

vnrao

2 years ago

He should be jailed to keep his position and toenjoy the luxury of PM he allowed his cabinet collegues and sonia family to indulge in corrpution knowingly pu people life to misery

Carlos De Souza

2 years ago

Do you think the two Gujarathis running the show today are any less corrupt than MMS and the UPA ?? Time will show who is right.

SAYED Thahir

2 years ago

KHUDA KARE ZORE QALAM AUR ZIYADA. (MAY GOD GIVE MORE POWER TO HER PEN). TAHIR SAYED.

Bhalchandrarao C. Patwardhan

2 years ago

MMS is already"history"! But notice how the word "coalition", on the basis of which he expressed his helplessness, also contains the word "COAL"!

SuchindranathAiyerS

2 years ago

He is a scamp. A typical Nehru-Gandhi acolyte and Khangresswalla masquerading under a blue turban, behind a beard and a whining wheedling voice heard, yet half heard, between two scams.

LALIT SHAH

2 years ago

Dear Ramesh
By any angal Rahul look's like sehjada ?
By any angal Modi look's like SEWAK ?
But A CHAIWALA NOW TURN SEHNSHAH E HINDUSTAN and look's like SEHNSHAH TO
LIVING LEGENDARY LIFE WEARING COSTLY SUITS ENJOINING PARTY SARTY EVERY WHERE
BAKKI
JYADDA YOU TUBE PE
MUJE JAB KOI NAHI PENCHANTA THA TAB SE ME ASHARAM BAPPUJI KE AASHIRWAD LENE AATA HU

Ramesh

2 years ago

'Cash for vote' engineered by him to win trust vote following the left pull-out from UPA-1 on the fallout of Nuclear deal is ample proof of his venality. History will only remember him as the shameless and servile PM who had no guts to stand up to the corrupt machinations of Sonia's coterie and the tantrums of the 'Shahzada' Rahul Gandhi.

LALIT SHAH

2 years ago

Kem
After 10 years people will say old government was better than this one as almost in 10 months of Chaiwala's rule common public who voted for this strong none transperant government like under Chinese wall serving to nation sorry serving to ADANI TATA AND SO ON.......
I AM CONFIDENT THAT
PEOPLE WILL COMPARE THIS GOVERNMENT WITH OLD ONE ONE WAS MUM OTHER IS LIAER
BHARAT MATA KI JAI

D Venkatesh

2 years ago

Dr. Singh as India's PM, was an embarrassment and an utter shame to all right minded Indians. He couldn't speak or present himself in any public forum and chose to remain mum on all critical issues. What kind of a PM goes through the motions in a self-abasing manner for ten whole years? Even Devegowda spoke several sentences when he managed to stay awake. Mum mohan Singh is now at the bottom of the country's PM list and pips Devegowda to that dubious distinction. Dr. Singh had an illustrious career and should have retired with dignity. I hope history roasts him. I hope he makes it to every text book in schools, in all languages, to teach our young students what not to be.

jaideep shirali

2 years ago

An accomplice to a crime can hardly be called innocent, this applies to MMS as well. For a PM to claim that he could do nothing about corruption due to compulsions of coalition politics, was an insult to the citizen. To add, the murky ISRO Antrix deal took place right under his direct control. MMS deserves what he got, the buck has to stop at the PM.

smohan

2 years ago

Monetary gain is not the only way of gauging a person's honesty/ dishonesty. Apart from the losses (notional and real) he has caused to the nation, MMS is also guilty of the following:
- he misrepresented that he was a resident of Assam for Rajya Sabha membership.
-he did not resign from PMship despite his admittedly sub-par performance due to "coalition compulsion".

He can be compared only to the profligate medieval potentates who misruled India.

REPLY

N.Paramasivam

In Reply to smohan 2 years ago

Mohd. Bin Tughlak?

K. M. Rao

In Reply to N.Paramasivam 2 years ago

Please don't insult Tuglaque. He had guts to do what he felt was right. Knowingly the enormous damage inflicted on the country, MMS allowed it to happen.

smohan

2 years ago

Monetary gain is not the only way of gauging a person's honesty/ dishonesty. Apart from the losses (notional and real) he has caused to the nation, MMS is also guilty of the following:
- he misrepresented that he was a resident of Assam for Rajya Sabha membership.
-he did not resign from PMship despite his admittedly sub-par performance due to "coalition compulsion".

He can be compared only to the profligate medieval potentates who misruled India.

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