The Hindu Business Line : Is there any safety net for small investors?

I got allotment of shares of a company recently at Rs 1,100 per share. To my dismay, today the quotation for this share is only Rs 850. Can I hold the board of directors of this company responsible, by asking it to buy my shares at least at Rs 1,100 each?

A. S. Nambirajan, Kanyakumari

I am afraid you can't. I do understand how you feel but people like you who have been led the garden path by company managements and merchant bankers have no remedy. You will have to bide your time if you are convinced that the fundamentals of the company are good and in the long run the share would bounce back.

The share market is indeed a long haul. But this does not absolve the company concerned, its merchant bankers and, indeed, our policymakers of the responsibility of maintaining a modicum of balance while fixing the share price. The price discovered by institutional investors in book building is often found to be exaggerated.

There is a view that some sort of safety net should be made available to small investors at least for some length of time following the public issue during which the management and merchant banker should be obliged to buy from small investors the shares allotted in case the market price therefor falls below the issue price.

Paying rent, but no HRA

I don't get any house rent allowance, but I pay rent for my house. What tax benefit is available for me?

Vishalakshi Sukumar, Chennai

Under Section 80GG, you are eligible to deduct from your gross total income the least of the following three amounts: (a) rent paid in excess of 10 per cent of your total income; (b) 25 per cent of your total income; and (c) Rs 2,000 per month.

This deduction is available subject to the condition, amongst others, that neither you nor your husband or your minor child owns a house in the same place where you are working or carrying on business.

Post office FD

Is interest earned on post office fixed deposits exempt from income-tax under Section 10(15) of the I-T Act?

N. G. Pillai, email

Interest from fixed deposits governed by the Post Office (Fixed Deposits) Rules 1968 is completely tax-free under Section 10(15).

Final tax calc

I am salaried person, and the TDS form issued by my employer mentions that tax refund to me is Rs 10. However, when I calculated my income from short-term capital gains, I found that there is in fact loss of Rs 996 from this source. So, how to calculate the final tax?

Ashwin, email

Neither the employer can lessen the TDS amount on salary by considering the loss from capital gains nor can you yourself set off such loss while filing the income-tax return because it is simply not possible to set off capital losses, short-term or long-term, from income under other heads of income.

In the event, you will get the return of Rs 10 from the Department.

The loss under capital gains can be carried forward to be set off against capital gains within the next eight assessment years.

This was done by none other than the incumbent Prime Minister who, in his avatar as Finance Minister, found that people were cooking up capital losses with a view to avoiding their tax liability on other counts.

(ASK! Send in your querieson accounting, auditing, corporate law and taxation to ask@thehindu.co.in.)

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