price of crude helps India contain its fuel subsidy by Rs 9
billion ($141 million) and its import bill by Rs 65 billion
Dr Reddy’s ties up with Purdue
for drug research
Purdue University has signed a Memorandum of
Understanding with Dr Reddy’s Laboratories Limited to
strengthen pharmaceutical research and development.
According to a statement issued by the university, the
intent of the MoU is to forge a strong strategic partnership in a range of research areas and novel technologies in
the field of pharmaceutical processes and product development.
Suresh Garimella, Purdue executive vice president for
research and partnerships, and his counterpart at Dr
Reddy’s Amit Biswas, executive vice president and global
head of integrated product development, signed the MoU
The MoU will advance the ‘Purdue Moves’ drug discovery initiative to translate basic research into life-changing
‘Purdue has tremendous strength in pharmaceutical
drug discovery and development research, but we need
additional partners to help translate our discoveries
through the delivery of a medicine or technology,’
‘The partnership with the Indian drug maker,’ he added,
‘combines strengths that could lead to world-changing
From Bengaluru to Switzerland
Bengaluru-based Rajesh Exports snapped Swiss gold
refiner Valcambi for Rs 25 billion ($400 million), a deal
that will be funded 65 per cent by internal accruals from
the Indian company and the rest by tying up for a $140
million loan from the Swiss bank Credit Suisse.
The seller is the S&P 500-listed Newmont Mining
‘The recent fall in gold prices did not play any role in the
valuation of Valcambi as it does not hold any gold as
inventory,’ Rajesh Mehta, Chairman, Rajesh Exports, said.
‘In fact, the fall in gold prices is a positive for Valcambi as
it would generate more sales volumes and thus will be
able to produce more gold.’
SpiceJet to buy 100 airplanes
Low-cost Indian airline SpiceJet, after posting good
quarterly profits twice in a row, has embarked on an
ambitious plan to increase its fleet by buying 100 new
‘We need to have some long-term aircraft order so that
we can put a business plan around it,’ SpiceJet Chief
‘We are talking to all the manufacturers... Airbus,
Boeing and others on smaller aircraft such as Bombardier,
ATR and Embarer. We have just started work on it and
formally it takes 3, 6 months (for placing an order),’
Currently, SpiceJet operates 18 Boeing 737s, two Airbus
A319 (on wet-lease) and 14 Bombardier Q400.
My wife and I are Non-resident
Indians. Before my wife became
an NRI, her father bought a piece
of land in India in her name. He
wants to sell this land. I decided
to buy this land from my father-in-law and I would like this purchase to be on a repatriable basis.
Since the land is already in my
wife’s name, I am not sure how I
should buy this land from my
father-in-law so that in future if I
decide to sell it I would be able to
repatriate the money.
I have a Non-resident External
account through which I can fund
This is a complicated situation,
to say the least! When he bought the land in the name of
his daughter, by applying his own funds, your father-in-law
effectively gifted the land to your wife (his daughter). Now,
it is your wife and not he who has a right to sell the land.
Yes, your wife can sell the land to you since you desire to
own it — though we do not quite see what this is going to
achieve. If you are comfortable with the title continuing to
remain with your wife, you may give him a gift, the amount
being equivalent to the current market value of the land.
I am an NRI living in Singapore. Over the years, I have
invested in some Indian initial public offers as well as shares
in the secondary market. Now, I would like to sell some of
Can I transfer the sale proceeds of the shares bought as
IPOs to my NRE account?
Do I have to pay long term capital gains?
If the tax is erroneously deducted from the sale proceeds
will I be able to get refund from the tax authorities? (I sub-
mit my tax returns in India and have a Permanent Account
The sale proceeds of shares bought in primary market or
secondary market through application of forex, either
through direct remittances or through NRE account are
repatriable and therefore, can be credited to the NRE
account. If such shares have been sold on a recognized
stock exchange and Securities Transaction Tax has been
paid thereon, the LTCG would be tax-free. Short-term cap-
ital gains rate would be 15 per-
cent plus applicable surcharge
and cess. If tax has been deduct-
ed at source (TDS) on the short-
term gains, you can claim the
refund by filing the tax returns.
I am retired, but have been living the United Arab Emirates
for the last 2 years by way of contract employment. I have a Non-resident Ordinary account in
India. I have been filing returns
for 30 years.
For this year, I filed returns as
an NRI. Since I have an NRO
account the interest earned on
the same is taxable. But in my
returns for all income from
India from pension, annuity, interest etc, I am not liable to
any tax. Can I claim refund for the TDS done on the NRO
account after showing this interest from NRO account as
Of course, yes. When the tax payable is less than the TDS
(or advance tax paid + TDS), you are eligible to a refund.
This can be claimed only by filing a return.
I am an NRI. I have invested funds in several mutual
funds in India. I recently redeemed some units of an equity
fund and found that 30 percent tax has been deducted at
source. I do not have a PAN number and do not file tax
return in India. The Indian government requires me to pay
only 15 percent tax as the gains were short-term gains.
Since, I do not file tax returns in India, I will not be able to
recover the extra amount taken by MF. Will you tell me any
reason for doing so? Incidentally, other MF companies are
deducting only 10 percent as short-term gains tax.
As per the law the tax on STCG is at 15 percent but the
TDS is required to be applied at 30 percent. The MF has
acted as per the provisions of the law.
If you file the tax returns, it will enable you to claim the
refund of TDS already applied.
Incidentally, there are some MFs, either based on opin-
ions from tax counsels or specific orders in this regard from
the Income Tax office, are deducting tax at 15 percent. For
future, it would be advisable to check with the MF first
regarding their policy on this issue before investing.
I am an NRI and recently in India I completed the application forms for post office National Savings Certificate
investments and passed them along with the check to the
agent for the issue of the certificate. For some strange reason he got Kisan Vikas Patra issued to me. Is it okay to invest
in KVP? If not, what should I do?
Had you informed the agent that you are an NRI? NRIs
are not allowed to invest either in NSC or KVP. If and when
the irregularity comes to the notice of the account office,
the capital will be returned to you without any interest. You
may also have some problems with the income tax department.
You will do well by bringing the irregularity to the post
office yourself and requesting a refund. There are many
avenues where you can legally invest and be better off.
A N SHANBHAG SANDEEP SHANBHAG
Readers who wish to ask A N Shanbhag a question can fill in the following details and mail the coupon to: The Business Editor, India Abroad, 42 Broadway, 18th Floor, New York, NY 10004 Or fax it to 212-727 9730
A N Shanbhag is an investment consultant and author of In the Wonderland of Investment; How to Convert a Taxpayer into a Taxsaver; NRI Investment Guide. This article does not constitute tax or legal advice. Consult your tax or legal advisor before making any tax- or legally-related investment decisions. The authors may be contacted at email@example.com
When are the sales proceeds of your shares repatriable?
the week that was