Context :
Finance ministry mulls gold amnesty scheme
to check hoarding / 31 July 2020
Extract :
The finance ministry is
working on an amnesty scheme for people with unaccounted holdings of gold
in order to cut down tax evasion and lower the
dependence on imports.
"The modalities have not
been finalised yet but a proposal for the disclosure of
and penalty on undisclosed amount of gold stock has been forwarded to the
prime minister's office," a senior government official said.
Something that's being
considered is that in order to declare gold holdings, people would have to deposit some of the legalised
gold with the government for a few years, the official said.
This is not the first attempt
government has made to coerce people into declaring their gold holdings.
In Budget 2015-16, the
government introduced the Gold Monetisation Scheme.
The initiative hardly made a
dent with banks accumulating only 11.1 tonnes gold as of August 31,
2017, a measly figure as compared to estimated holdings north of 25,000
tonnes.
The Taxation Laws (Second Amendment) Bill,
2016 passed in the parliament in 2016 enhanced the applicable tax rate from
existing 30 percent to 60
percent, plus a surcharge of 25
percent and cess.
Unaccounted or unexplained gold could have been taxed under
this law with up to 75 percent tax (60 percent and 25 percent
surcharge). Gold jewellery up to 500 grams per married woman, 250 grams per
unmarried women and 100 grams per male member of the family were exempted from
the ambit of the law.
================================================
In my following E Mail to Cabinet Ministers :
Gold can finance Infrastructure ……………………………………………………[
02 Feb 2018 ]
You will find following explanations of that Gold Monetization Scheme of 2016 :
Ø What are the advantages of this Scheme to
the Economy ?
Ø Advantages to gold depositors
Ø Negative Point
Ø Public Reaction
Ø Why did it fail ?
And the most important :
Ø
Is there a way out ?
YES - as follows :
* Calculate
current value of gold being deposited ( say, Rs 50 lakhs )
* After 10
years, return to depositor, Rs 50 lakh + simple interest at 10 %
( to take care of price increase but no guess work ! )
( to take care of price increase but no guess work ! )
[ Why ? :
Gold Price in Aug 2016 >
Rs 3010 / gm
Gold Price in Aug 2920 >
Rs 5314 / gm [ Rs 2304 increase =
76 % in 4 years ]
* Also credit
Rs 50 lakhs to depositor's Income Tax account as " Advance Tax " paid
* From
depositor's Annual Tax Return , keep offsetting this amount
over 10 years,
thereby reducing his tax liability ( Rs 5 lakh per year, in this case )
Now, if the depositor is in 20 % tax rate slab, this would mean saving of Rs 1
lakh/year !
* Most
Important : No need to disclose " Source
of Gold " being deposited .
No questions !
======================================================
May be, in 2018, my
above-mentioned suggestion sounded CRAZY !
( - remember the sanctity of,
: how can you reward dishonest tax-evaders ?
)
But , if the scheme being
proposed in 2020, fails to answer the issues that I raised in 2018 , then it is bound to meet with the
same fate !
What to
expect :
Ø With
more or less, scheme similar to 2016 scheme…………………………. 110 tons
Ø With
dramatic incentives ( + no penalty / investigation of source ).. 10,000 tons
[ Valued at Rs 53,00,00
Crore = Rs 5.3 Lakh*Crore = approx. $ 80 Billion ]
Will
this meet our requirement for National Infrastructure
Pipeline ?
Ø Far
short of Rs 102 Lakh*crore needed ( USD $ 1.4
trillion = $ 1400 billion )
Is
there an alternative ?
Yes
A high-level trade panel estimates that
India could recover up to $500
billion of black money stashed overseas if it implements its proposal to issue
a type of long-term government bond to those with undisclosed wealth.
Indonesia, which had launched its tax amnesty scheme in 2016 to forgive
taxes and criminal sanctions, received declarations of hidden assets valued at $ 367.9 billion from around 970,000 participants during
the amnesty period, according to the HLAG [ Nov 02, 2019 ]
Source :
Black
money: ‘Elephant bonds’ can help India recover $500 billion stashed abroad,
says govt panel
Do you have any proposal better than Elephant Bonds ?
Yes .
Implement the modified Elephant Bond Scheme as described at :
Congratulations, Shri Surjit Bhallaji
……………………………………………………..[ 31 Oct 2019 ]
What other E Mails have you sent for unearthing Black Money thru
Amnesty Schemes ?
Here is a partial list :
Magic Wand ?
[ 09 June 2011 ]
Prime Minister Who Listens [ 03 Dec 2016 ]
Indonesia Shows the Way [ 23 Dec 2016 ]
One Infrastructure SPV ? More will
follow [ 20 Mar 2017 ]
What Goes Out , Comes Back ? [ 05 May 2017 ]
Why a Begging Bowl ? [ 08 May 2017 ]
Private Sector in Infrastructure ?
[ 28 July 2017 ]
Nibbling on Crumbs ? [ 08 Aug 2018 ]
#FiscalDeficit / #IndianEconomy ?
[ 18 Oct 2017 ]
But , Where is the Money ?
[ 01 Dec 2017 ]
Thanking You in Anticipation !
[ 24 Jan 2018 ] ( Links of 22 Emails )
========================================================
Dear Shri
Narendrabhai,
Raising $ 1400 billion / Rs 102 lakh*crore ( without raising
taxes ), was a daunting task even before COVID struck
Now, it looks almost IMPOSSIBLE, with both, the Central
Govt and the State Governments having run out of money ( even to pay salaries
of employees )
Of course, there will be
criticism from opposition parties ( who have no constructive / concrete
suggestions re : how to raise Rs 102
lakh*crore ), if you announce BLACK
MONEY AMNESTY SCHEME as suggested by me
The real MORAL
ISSUE is :
Even as the economies of
countries around the World are shrinking and millions of jobs are disappearing,
how can we revive the livelihood of our citizen by channeling the Black Money to create jobs ?
We do not have the luxury of
time for indefinite debate / analysis
If anyone has a better answer,
let him / her say :
Here is an alternative to
raise Rs 102 lakh*crore in 10
weeks !
=========================================================
With regards
Hemen Parekh / hcp@RecruitGuru.com / 06
Aug 2020
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