Dalal Street

Larsen & Toubro (L&T) has informed us that the engineering and construction division of the company has been awarded two major contracts for the construction of civil works and the consolidated construction works for the Northern area development project located near Barmer in Rajasthan as Cairn India and its joint venture partners ONGC get ready for first oil production in 2009.

The order was secured by L&T against both domestic and international competition, and the project completion schedule is estimated to be 18 months.The size of the order is more than Rs 1,300 crore.

The scope of work covers the development of infrastructure facilities, the construction of 18 well pad structures, detailed engineering and construction of all civil and electromechanical works at the Mangala and Raageshwari Fields, Offsite infrastructure facilities, supply, installation and commissioning of 33 KVA high voltage power line system and the telecom network.

A friend of mine was subjected to Income Tax Scrutiny. The assessing officer treated my
friend’s profession as “Trader” and subjected him to 30% tax [Short Term].

Strategy: What we advice our clients is choose one family member who doesn’t TRADE or have any other business income in their name. Do all long term investments in this family member’s name and you will not be liable for 30% tax [even if you had to SELL the stock in SHORT TERM] and be just liable for short term gains of 10%. Long Term will be exempt.

Remember it is the discretionary of the Income Tax officer scrutinizing your case. Some people said they maintain a different TRADING Account and INVESTMENT account but if both are in the same name, the IT Officer can still make you liable for 30% tax on short term. So use the strategy we have suggested or whatever your Chartered Accountant / Tax Consultant suggests.