Read the above article in text format below: Housing societies’ gatherings in the 1980s often featured food stalls and light gambling games. One popular game was ‘Lucky 7’, played with two dice. Players bet on […]
Retail investors vs algorithms: Like lambs to slaughter Read More »
Lakhs of tax payers receive notices from the Income tax dept. regarding their expenses or investments being disproportionate to their taxable income for the same year – implying that the expenses or investments are from unaccounted sources. Most cases have simple explanations – the income was declared in a previous year or it is exempt income – facts already available in the tax dept database. Yet lakhs of tax payers have to duel with the tax authorities to prove their credentials. Most people emerge victorious after a long and arduous ordeal costing time and money. The tax department resources are used up in dealing with the honest tax payers & the tax evaders may escape. Harsh’s article in Business Standard on why the tax departments Data Analysis Package can cross tally more information and thus have more pointed search results more likely to net tax evaders while being bothersome for fewer honest tax payers.
Employees earning Rs. 15,000 pm pay “tax” @42% (the same rate as those earning more than Rs. 5 crores do). Finance minister late Arun Jaitley in his budget speech for 2015 mentioned “the situation with regard to the dormant EPF accounts and the claim ratios of ESIs is too well known to be repeated here. It has been remarked that both EPF and ESI have hostages, rather than clients. Further, the low paid worker suffers deductions greater than the better paid workers, in percentage terms.” He went on to advocate the solutions listed here. These solutions though promised a decade ago in a budget speech on the floor of the parliament have been stonewalled by the powerful EPFO and ESI establishments. Bureaucrats can justify anything as exemplified by the fictional UK bureaucrat Sir Humphrey in the BBC series “Yes Minister”. Watch how he justifies continuing a hospital with no patients but with 500 administrative staff https://shorturl.at/pdau2 . Don’t let the Sir Humphreys win this battle.
Read the above article in text format below: In the early 2000s, it was widely anticipated that the government would reduce the excise duty on cars in the upcoming Budget. As a result, demand for
Two friends, Ram and Shyam, were travelling on a train when robbers started looting its passengers. Shyam owed some money to Ram. Before the robbers could reach them, Shyam took the money from his pocket and repaid his loan to Ram. Shyam was technically correct in repaying the loan then. Similarly, the Govt.’s move to do away with indexation is technically not a retroactive amendment but it has retroactive impact and is against tax stability. The removal of indexation follows global practices but its abrupt implementation does not. The govt should allow indexation till 2024 with the reduced rates of 12.50%. Opponents will become supporters & the future capital gain taxation will be as per government wishes. The govt can snatch victory from the jaws of defeat as far as the attempt to project a taxpayer friendly image of India is concerned if they announce incorporation of tax admin changes and an enforceable taxpayers charter into the proposed new code.
One of the less discussed impact of the budget is the likely reduction in misselling of life insurance policies. The highlight is the simplification of the capital gains regime (at least as far as assets bought from now on are concerned). The situation in respect of past assets bought till 23rd July 2024 remains a little complicated. Harsh’s article in the Business Standard on the impact of the budget.
Simpler capital gains tax regime highlight of Budget Read More »
Back in the 1970’s the Soviet bureaucrats worked out a clever ploy to deny permission to a US citizen seeking to marry a Soviet citizen. They asked him to provide proof that he was not “already married”. Getting a document certifying a negative fact is impossible. An Indian bank account holder, victim of cyber fraud, faced a somewhat similar predicament when he was required to prove that he had not received any OTP sms or email from the bank. Harsh’s article in the business standard on how the issue was resolved and what lessons can be learnt so that citizens facing similiar issues have an easier time.
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Harsh just spent an idyllic week trekking through south west france. His tour organiser could put this together so well because the basic infrastructure already exists. Things like complete Geo marking of every square meter, availability of licensed hotels and taxi services who actually follow the licensing conditions & general cleanliness allowed them to build and deliver excellent packages on top. His article in the Business Standard drawing an analogy to an investors journey where the lack of a basic infrastructure like a centralized KYC has meant that 20 crore indians are involved with crypto/online gaming platforms with real money, but only half as many have demat accounts, and less than a quarter invest in MF.
Lack of central KYC hinders market participation Read More »
The idea of an inheritance tax or estate duty is bandied about from time to time. It is in human nature to rejoice at the suffering of those who are better off than themselves. Hence it is attractive for political parties that think short term (are there any political parties that are otherwise??) since it impacts a tiny fraction of the population only. Harsh’s article in Business Standard on why it is an idea that is doomed to failure.
There is more to retirement planning than ensuring enough monetary corpus to last out a long retired life (almost as long as the working career itself). Unfortunately, even corporate executives nearing retirement, do not think about retirement at all and the few who do, concentrate on the monetary resources required for retired life. As the example of my friend Yogesh shows even a well planned retirement plan can have it’s twists and turns but is better than none at all. Harsh’s article in the business standard. Your comments and suggestions are welcome as always.
