Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Thursday 7 April 2016

Short-Circuiting of Round-Tripping !


What is Round Tripping ?

Black Money sent to tax havens ( eg: Panama ) for laundering and which returns to the country of origin as White Money , in the form of investments

What is the Global Amount  ?

Approx $ 23 Trillion ( China's GDP is about $ 17 Trillion )

What is the mechanism ?

In India , it is LRS ( Liberalized Remittance Scheme ), under which any Indian ( including minors ! ) can remit abroad officially / legally , EVERY YEAR , $ 250,000 for any of the following reasons (and without prior RBI permission ! ) :

*  Under Current Account

   #  Medical Treatment
   #   Education

*  Under Capital Account

   #  Buying Property overseas
   #  Holding shares in an overseas company
   #  Combination of these two


What is the safeguard  ?

Details of foreign assets have to be declared in the Income Tax Returns

How black money gets sent to tax havens ?

Some amount by Hawala route but most by legitimate banking channels !
You don't see plane-loads of cash landing in Panama !

Does that mean Indian Banks are party to these ?

Without doubt ! They will advise you how to do this ! Of course, legally !

If these remittances are legal, will 500 Indians get jail ?

Forget it !

Most legal experts say , they will be let off with some fines , if they have failed to declare these assets in IT returns


Are laws designed so as to prevent Round Tripping ?

Far from that ! Here is what President Obama said yesterday :

" There is no doubt that the problem of global tax avoidance generally is a huge problem

The problem is that a lot of this stuff is legal , not illegal

We shouldn't make it legal to engage in transactions just to avoid taxes

A lot of these loopholes come at the expense of middle class families

Alternatively , it means that we are not investing as much as we should in schools , in making college more affordable, in putting people back to work rebuilding roads, our bridges, our infrastructure , creating more opportunities for our children  "


What  is  the  best  SOLUTION ?

*  Make it unnecessary for our Black Money to first travel abroad ( to tax havens ) , before returning ( as White Money ) and getting invested in capital market

*  Short-circuit the Round Trip by enabling our Black Money to become White Money , HERE  itself ( no need for help from Mossack Fonseca ! )

*  As suggested in my recent blog ( Make India a Tax Haven ? ), abolish Personal Income Tax ( remove incentive for tax evasion )

*  Enable direct investment of " Black-turned-White " money into government approved INFRASTRUCTURE BONDS , thru creation of designated bank accounts where Black Money can be deposited , without any questions asked

*  Obviously , interest / dividend earned from such investments will be tax
free , being Personal Income  !


Is this a practical solution ?

Not if you ask the Economists / Bankers etc

Just ask the man on the street  !

This is too serious matter to be left to the Experts !


Will such a bill pass the legislative muster ?

Rahul Gandhi promised to pass the GST bill in 15 minutes if amendments proposed by Congress get incorporated

" Short-circuiting of Round-Tripping Bill " will get passed in 5 minutes - and unanimously too !  You know why !

---------------------------------------------------------------------------------

www.hemenparekh.in / blogs

08  April  2016

-----------------------------------------------------------------------------

Make    Yourself    Heard

Dear Visitor :

It is time for YOU to speak up - and demand that YOU are heard

By emailing this suggestion - incorporating your OWN improvements - to the following Policy Makers

(  Just multiple copy all the following Email IDs into the Recipient column of your Outlook and Copy / paste this suggestion in the Message Box ) :


    narendramodi1234@gmail.com; 38ashokroad@gmail.com;ajaitley@del5.vsnl.net.in; jayant.sinha19@sansad.nic.in;piyush.goyal@gov.in;nitin.gadkari@nic.in; spprabhu1@rediffmail.com;bandaru@sansad.nic.in;smritizirani@nic.in;nsitharaman@nic.in; ravis@sansad.nic.in;sureshprabhu@irctc.co.in;prakash.j@sansad.nic.in;secy-ipp@nic.in; amitabh.kant@nic.in; shaktikanta.das@nic.in; rsecy@nic.in; adhia1981@gmail.com; ceo-niti@nic.in; atul-chaturvedi@nic.in; uma.bharati@sansad.nic.in; d.pradhan@sansad.nic.in; rprudy.office@gmail.com; rudypr@rediffmail.com; eam@mea.gov.in; mosvks@mea.gov.in; mvnaidu@sansad.nic.in; mnaqvi@sansad.nic.in; rao.inderjit@sansad.nic.in; mljoffice@gov.in; sadananda.gowda@sansad.nic.in; ministerminority@gov.in; najmah@sansad.nic.in; minister-ca@nic.in; ramvilas.paswan@sansad.nic.in; gandhim@sansad.nic.in; akumar-alpha@sansad.nic.in; jpnadda@sansad.nic.in; hm.moca@nic.in; geete@sansad.nic.in; simratbadal@yahoo.com; ns.tomar@nic.in; rmsingh@sansad.nic.in; tc.gehlot@sansad.nic.in; dr.harshvardhan@sansad.nic.in   





No comments:

Post a Comment