More Sharp and Hard Teeth given to Income tax officers To Frighten Tax payers.

Modi government's demonitisation drive is nearly failed now in disclosure of black money. Government has not been able to get revenue in form of taxes or non deposition of old currency notes of Rs. 500 and Rs. 1000 denomination.

Now government is trying to get more taxes with the help of harsh provisions (like 115BBE) of Income Tax act. Every one is expecting income tax officials to be much harsh rather cruel. Now if Income tax assessing officer expects that any assessee has not disclosed his income fully or truly then explaination would be called. Transactions for which problem may arise are like:-


Loans taken from Family members or friends

Properties and Gold etc received from parents or grand parents.

Money spent in family matters like marriage or major illness etc.

Source for any property purchased.

Then ITO would ask for proper source of funds and if ITO is not satisfied for geniuneness of Source or transaction like ITO is not satisfied that you have taken loan from friend and doubts that cash has been paid back against the loan bank entry then this loan amount would be added to income and 83%  of such addition in income would be taken as tax and penalty.

Every one in India knows that how the officers get satisfied. Now they have much more sharp and hard teeth to frighten the tax payers.

If government is planning to work this way then what will happen to the agenda of Ease of doing Business.

PM SIR -------- NITI (Policy) WAS GOOD BUT RAN NITI (Strategy) ????

Niti or Ran-Niti, policy and strategy ~ these words were used by our Prime Minister Shree Narendra Modi recently in an interview with a prominent media group. He said it was our policy or Niti to curb black money. It has been there without change and strategy or ran Niti was being changed as per the situation. He tried to justify the government’s approach after announcement of demonetization on 8th November. Everyone knows that demonetization decision was not only taken in haste but was also implemented in an unplanned manner.

Almost every day government issued new directions and notifications. It was being done to show that government is working proactively to curb black money.

           

In the start both prime minister and finance minister said that anyone having old currency notes of Rs 500 and 1000 notes in their bank accounts. Later, it was said that person depositing old currency notes into banks will have to satisfy bank officers by filling a simple form with some questions. This form was introduced when more than 70% of (nearly) Rs. 15 trillion of old currency notes was already deposited. Then very next day of this announcement the condition of satisfying the bank officers and this form was again discontinued.

Both prime minister and finance minister in election rallies, media briefings and their big size hoardings said that no interrogation would be done from the people depositing up to 2lakh 50 thousands in their account. But later, it was said that those depositing Rs. 2.5 lakhs also may be interrogated to the prove source and income and cash holding.

New currency of Rs. 2000 and 500 were not printed and distributed in banks with proper planning. This created long queues in the banks. India being a Cash economy, Business activities witnessed steep downfall.  From luxurious items and big brands to small vendors, hotels, restaurants and small chai valas, daily bread earners like rickshawalas and rahdiwalas all were affected.

      

Government imposed cash withdrawal limits from banks and even that much cash 24000 per week from saving accounts and 50000 per week from current account was not available in one go. So everyone has to visit banks and stand in queue everyday if he wanted to withdraw 24000 or 50000 per week.

Printing of new notes was not planned and cash was not distributed at district level currency chests all over the country.  ATMs were not calibrated for issuing new size Rs. 500 notes and it took more than 20 days before ATMs started issuing Rs. 500 new notes. It seemed that whole government machinery was working in a immature way. NITI or RAN Niti was good but the implementation was equally bad.

PM wants Financial Markets to pay more tax: An Analysis.

 PM has given a statement regarding taxation on financial markets where stocks, shares, commodities are being traded now digitally. PM just gives statements and after that lakhs of crores of people start applying their mind and discussing with the related experts about the possible outcome of such statements. Now people think whenever PM gives any statement after sometime the related party agencies start implementing the same. 

So now people related with stocks and commodity exchanges, brokers, sub-brokers and traders along with short term & long term investors are all busy thinking & discussing the possible changes in related provisions. PM wants a fair share & tax burden should be taken by people relating to financial markets. 

This is fine but financial markets are all operating in digital mode including all trading operations, payments, receipts. So things here are transparent except Grey Market commonly known as Dabba Trade and everyone wants this Dabba Trade to be curbed. 

From whom PM wants more tax, the traders who are already paying CTT & STT (Securities Transaction Tax). The annual collection from STT is estimated to be 7000 crores. This is a handsome amount so whether STT would be further increased.

If we talk about investors, if they are blocking/investing their money in listed securities for more than 1 year then they are exempt from paying tax. Previously FIIs and NRIs used to pay tax at lower rates than domestic investors. Later the government made the taxation structure for domestic investors at a similar level with foreign investors. Whether again taxation for only domestic investors would be increased or for both domestic & foreign investors.

Presently the dividends from listed share companies are tax free. Whether dividend would be made taxable from financial markets. 

Few things are there like Tax Minimisation Strategy by Bonus Issue. 

People who know the law and sometimes play with it by buying penny shares of small cap shares at very low prices and they sell these shares at a very high price after holding these shares for more than 1 year. This way they accumulate heavy Capital Gain Deposit without paying any tax. So action is really needed against such people.

No one knows what is going there in the mind of law makers and what FM is going to present in the budget but one thing should be taken care that law should only punish the guilty and not the investors & traders who are fairly and transparently doing their business in financial markets.

problems for dishonest would increase :- Four Dimensional analysis of the PM's statement

Today PM Narendra Modi said that after 50 days of currency ban ie after 30 december 2016, problems for dishonest would increase:-

What does this mean .......  Four Dimensional analysis of the PM's statement

Political Analysis:- PM wants to take political advantage in coming elections in states of Utter Pradesh, Punjab, . By such statements PM wishes to pitch that he is deadly against corrupt people and is working continuously for the cause of bringing black money out.

Personal Image :- PM wants to show that he is a strict implementer of his thoughts. It is not like that he has just done currency ban. He is still planning the  working on this front without any wait. as soon as one thing is over he would keep the topic hot by starting some new such big step.

Now the point arises, what may be next such step as PM says that after 30th december, dishonest would have to face more problems:-
a) PM may start the concept of online property bank, wherein every property is to be registered and is to be linked with adhar and pan. Due to this people having multiple properties with high value and not in tune with income declared will be in problem and benami properties will also come in lime light.
b) PM may instruct authorities to strictly and thoroughly check cash deposited in banks between 8 november 2016 an 30 december 2016 with books of accounts and cash balance in books.
c) Prosecution provisions as per law may be fast implemented against those who try to escape income from assessment.
d) Heavy transaction tax on cash withdrawing from bank may be implemented.
Or it may be to frighten people from non disclosure of income.

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There may be many further blasts like mallya. Lot of names are there in NPA (non performing asset) list which are as Mallya or nearly same or even much bigger in NPA quantum than Mallya.
Alok industries with nearly 18000 crores NPA being lended by consortium of banks lead by SBI is double the total Mallya's NPA.

An hindi article in Business Mantra news explains same......

http://www.businessmantranews.com/banking/%E0%A4%9C%E0%A4%AC-%E0%A4%AE%E0%A4%BE%E0%A4%B2%E0%A5%8D%E0%A4%AF%E0%A4%BE%E0%A4%93%E0%A4%82-%E0%A4%95%E0%A5%80-%E0%A4%AE%E0%A4%BE%E0%A4%B2%E0%A4%BE-%E0%A4%AC%E0%A4%A8%E0%A4%A8%E0%A5%87-%E0%A4%B2

INCOME TAX DEPARTMENT HAS LISTED 90 LAKH HIGH VALUE TRANSACTIONS, TO SEND 7 LAKH NOTICES SOON

Income tax department has collected details of 90 lakh high value transactions. Most of these transactions are collected from Property registrar offices and Banks through AIR. (Automatic Information Report).http://www.businessmantranews.com/banking/%E0%A4%86%E0%A4%AF%E0%A4%95%E0%A4%B0-%E0%A4%B5%E0%A4%BF%E0%A4%AD%E0%A4%BE%E0%A4%97-7-%E0%A4%B2%E0%A4%BE%E0%A4%96-%E0%A4%A8%E0%A5%8B%E0%A4%9F%E0%A4%BF%E0%A4%B8-%E0%A4%AD%E0%A5%87%E0%A4%9C%E0%A4%A8