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

Saturday, 19 November 2016

A Dark Cloud With Gold Lining ?


For the women of India , can the dark cloud of Demonetization , turn out to be one with a " Golden Lining " ?


Could the drive to eliminate BLACK MONEY , result into " Women Empowerment " ?


If you cannot see the connection , please consider the following :


#   Value of withdrawn notes of Rs 500 / 1000 =  Approx Rs 15 lakh*crore


#   Of the above ,(approx ) Rs 10 lakh*crore worth notes are with public ( rest with banks )


#   Of Rs 10 lakh*crore, may be 50% gets returned to RBI ( Approx Rs 5 lakh*crore  )


#   Remaining 50 % may get burnt / destroyed ( Rs 5 lakh*crore )


#   But , at 23 % of GDP , India's BLACK ECONOMY is valued at Rs 39 lakh*crore


#  Which means , Rs 34 lakh*crore ( Rs 39 Lakh*cr - Rs 5 Lakh*cr of Black Cash which got
     burnt ) are in the form of either GOLD or PROPERTY


#  Let us assume that 50 % of that Rs 34 lakh*crore is in the form of GOLD BISCUITS


#  There is no way , RBI can withdraw those GOLD BISCUITS . No demonetization possible !


So , what will the holders of those GOLD BISCUITS do to escape the raids of IT / ED ?


Simple !


Give these ( of course , gradually over a period of few years ) as GIFTS to ladies of the family as " Stri-Dhan ", where Income Tax provisions are as follows :


#  " Gold / Jewellery " are WEALTH and subject to WEALTH TAX


#   If a lady declares in her Wealth Tax return , wealth in excess of Rs 30 lakh, she has to
     pay 1 % Wealth Tax ( even if she has no regular income tax liability ? )



#   During a RAID by IT dept , there can be no seizure of GOLD as follows :

     *  500 gms ( approx 50 tolas , worth Rs 15 lakh ) , in case of " married " women

     *  250 gms ( approx 25 tolas , worth Rs 7.5 lakh ) , in case of " unmarried " women



#  There can be no seizure of ornaments which are already declared in Wealth Tax returns


#  " Stri-Dhan " ( including all Gold Ornaments ) given by parents on occasion of the
    marriage of a girl , is  NON TAXABLE


#   Of India's 810 million adults , approx 405 million are WOMEN


#   Of India's 30 million persons who file Income Tax returns , maybe 5 million are
     women , leaving out 400 million women who do not file Income Tax returns


#   Assume that , 200 million are " Married " and 200 million are " Unmarried " women


#   At the permissible limits of Rs 15 lakh ( 500 gms ) and Rs 7.5 lakh ( 250 gms ),
     between them , they can hold " Stri-Dhan " ( valued at Rs 45 lakh*crores ) , without
     any wealth tax liability !


When 2015-16 year tax returns get filed, expect a large number of women coming forward to file their Wealth Tax returns !


Especially those , who got married during current tax-year !


And what about those ladies whose parents expired , without a formal / legal " Will " ?  Can they say , " Before her death , my mom gave me her jewellery of 500 grams " ?


Could these women, possibly declare their " Stri-Dhan " gifts , in excess of Rs 30 lakh ?


As long as the evil of Personal Income Tax / Wealth Tax continues , expect people to come up with innovative ideas to avoid tax legally


Some will even try to " Evade " tax illegally , like that businessman from Surat who was nabbed at the Airport yesterday , with 2.5 kg of Gold Biscuits , which he had purchased for Rs 90 lakhs ( using OLD notes ), which would have cost him only Rs 60 lakhs in NEW notes !


His idea was to sell this gold abroad in foreign currency - then find a way back through hawala transaction !


What does this portend for some Rs 35 lakh*crore worth of BLACK MONEY , squirreled away by Indians into foreign banks , during past 10 years ?


Will that return to India in GOLD , as " Stri-Dhan " ?  Anybody's guess  !



But if abolition of Personal Income Tax, is considered " too risky " , what stops the NDA government from embedding RFID micro-sensors in Rs 500 / 1000 / 2000 notes ?


That simple / cheap / fast , step could also put a permanent STOP to future generation of BLACK MONEY !

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19  Nov  2016

www.hemenparekh.in / blogs






   

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