Currency Demonetisation and Future course of Indian Economy

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TKiran
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Re: Currency Demonetisation and Future course of Indian Economy

Postby TKiran » 22 Nov 2016 20:23

shiv wrote:
TKiran wrote:Srin sir, you didn't read my post or you don't understand businesses, how can you get raw material from a village guy, with VAT registration, for example, you are running a restaurant and you need vegetables as your raw material? Totally ridiculous no??

Serious question. Deposit 1 lakh (or 10,000) profit in the bank. Withdraw 5000 or whatever amount from the bank and pay the vegetable man. Claim that 5000 cash withdrawn as cash paid to the vegetable vendor. As long as you do it regularly from the bank - you can claim it as a business expense. If you do it from cash in hand you are losing tax benefits


Shiv sir, the point I was making was something entirely different, no problems for me to pay my vendors now, by God's grace. My business is different.

All I was saying is that, I pay the VAT on the value add. I will go back to the same example. If I go to Walmart and buy vegetables for 90 rupees and pay VAT of 10 rupees, I sell cooked vegetables at 270 and collect the VAT of 30 rupees, and pay the government 20 rupees Tax, every body is happy. But I have to pay 30 rupees as tax to government if I buy from local guy, so I would not buy from local guy. That was what I was telling you.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby SBajwa » 22 Nov 2016 20:31

all land in USA is under the very local county and township. The people decide (by voting) whether the land is
1. Business.
2. Parks and sports.
3. residential.
4. religious.
5. roads.
6. other community usage.
7. Agriculture.
8. defense (though under eminent domain (compulsory purchase) state and federal government can declare any land for defense and get it.

Once designated any of the above any sale/purchase must be legal as per these.

do we have such rules in India?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby shiv » 22 Nov 2016 20:32

TKiran wrote:ESI guys never troubled me, but PF guys harassed me for 10 years, I had to pay a fortune to get out of their books permanently.

Once bitten twice shy, now I don't employ anybody, take any number of employees through consultancy, and remove any body more than 3years experience in my company. They can get jobs anywhere now that they acquired experience.

All this happened because the CA told me that the employees would be loyal to me if I provide them with benefits of ESI and PF.

In fact I provide my contractors with accommodation and food, and they are very loyal to me. I don't trust my employees too. It's becoming a headache for me to remove my employees, as they plead with me, but then I only arrange for some other job for them, by searching in job portals, and remove them only when they get some other job. Usually they get double the salary that I pay.

A lot of businesses try and hive off employees after a while so that they don't have to keep offering increments - but as far as I know anyone with more than 6 permanent employees must enroll in ESI. It is a valid way of keeping one's profits high and expenses low. If that is your business model and you are successful - I don't see a problem. However some jobs that require good skills can't run on this model.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby abhijitm » 22 Nov 2016 20:34

TKiran wrote:When Infosys was $100 million company, with 5000 employees, they didn't have to pay service tax, they got land for free, they didn't have to pay Fringe benefit tax, thokka, tholu etc,

But if I have to start a business, I have to pay all the thokka, tholu, rent, etc, it's unfair no.

This is a valid point. I am no businessman but I hear nowdays startups are not facing much problems. Is it true?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Lisa » 22 Nov 2016 20:35

TKiran wrote:
shiv wrote:Serious question. Deposit 1 lakh (or 10,000) profit in the bank. Withdraw 5000 or whatever amount from the bank and pay the vegetable man. Claim that 5000 cash withdrawn as cash paid to the vegetable vendor. As long as you do it regularly from the bank - you can claim it as a business expense. If you do it from cash in hand you are losing tax benefits


Shiv sir, the point I was making was something entirely different, no problems for me to pay my vendors now, by God's grace. My business is different.

All I was saying is that, I pay the VAT on the value add. I will go back to the same example. If I go to Walmart and buy vegetables for 90 rupees and pay VAT of 10 rupees, I sell cooked vegetables at 270 and collect the VAT of 30 rupees, and pay the government 20 rupees Tax, every body is happy. But I have to pay 30 rupees as tax to government if I buy from local guy, so I would not buy from local guy. That was what I was telling you.


You would be buying the veg net of VAT, ie 90 rupees not the gross 100 Walmart charge. So all in all you still pay the state 20 rupees (no input VAT is payable). Does this make sense?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby sanjayc » 22 Nov 2016 20:36

Manish_Sharma wrote:
durairaaj wrote:Demonetization is getting serious and dangerous.
It looks like the economy is totally unhinged. Quick steps are a must. But the RBI looks paralysed and are hiding behind the retail banks
. Except for the first few days we dont get to see Urjit Patel and Shanktikanda Das.


why you say this? Money is flowing faster now, queues are much shorter now, 500s have started arriving. BJP has won back its seats...


Today in Delhi, I managed to withdraw money in 20 minutes from ATM. Things improving fast. People have also stopped panicking.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby pankajs » 22 Nov 2016 20:37

yensoy wrote:I have been reading articles (often forwards from my well meaning family & friends) from eminent economists. The common thread in a lot of critical articles goes like this:

1. Folks doing black money are smarter than that, they have invested the illicit proceeds in land, gold or foreign currency. The amount of black money in the form of cash is miniscule.

2. Common folks and folks in white business are going to be hit because the wheels of the economy will come off because there is no liquidity to go around.

Here's my peeve: If removal of liquidity from (1) will have no effect on their illicit holdings, why will removal of with gradual replacement of liquidity in (2) kill the legitimate economy?

As far as I can see, the demonetization exercise should completely jam up the liquidity situation of (1) while only slowing the part (2) down due to the fact that low-denomination notes are still valid, and legitimate or low-value exchanges are permitted. I am not an economist, so what am I missing?

Not a direct response to your question but on why you are reading what you are reading. A lot of folks in the media want Modi to fail and hence try to create panic by writing stuff. This is not to say that there are no hardships.

An Odia banker responding to an Odia jurno.

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Last edited by pankajs on 22 Nov 2016 20:39, edited 1 time in total.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby kmkraoind » 22 Nov 2016 20:38

TKiran garu, thanks for those lessons. If you are comfy, can you elaborate us how PF babus harassed you.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby vnms » 22 Nov 2016 20:41

Kiran, if you start a business that employs 5000 people, you too will get all the benefits that Infosys got.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby TKiran » 22 Nov 2016 21:06

kmkraoind wrote:TKiran garu, thanks for those lessons. If you are comfy, can you elaborate us how PF babus harassed you.


I had a sole trading company. They sent me to my permanent address the letter saying that I need to pay for the PF for 2 years, I went to Bombay and provided the documents showing that my business suddenly collapsed and I have the acknowledgement that I have given the reason for collapse of my business and explained that I discontinued the business and I gave him the shops & Establishment's acknowledgement that I stopped the business from so and so Date. He wanted original. I said I only photocopied the letter and got it acknowledge d by the authorities.

I came back, I got another notice after 1 month, that I didn't prove anything, calculated the amount put penalty, and interest. I had to personally go to Bombay after 6 months getting the same notice every month.

I gave a lot of money as bribe to the commissioner through his pimp.

After 6 months, some other commissioner, same story, for 2 years,

After that another commissioner, same story for 2 years, each time more money as bribe,

5 different commissioner s 10 years, finally I took a commissioner to a dance bar, gave me my file, I destroyed the file, no computerization nothing, happy ending..
Last edited by TKiran on 22 Nov 2016 22:14, edited 1 time in total.

TKiran
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Re: Currency Demonetisation and Future course of Indian Economy

Postby TKiran » 22 Nov 2016 21:10

vnms wrote:Kiran, if you start a business that employs 5000 people, you too will get all the benefits that Infosys got.


विभूषणं मौनमपण्डितानां

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Re: Currency Demonetisation and Future course of Indian Economy

Postby csubash » 22 Nov 2016 21:28

TKiran wrote:Businesses need not pay taxes, if properly exploit the provisions of the tax laws.

The whole problem I see here is that many of posters have no idea of businesses, most of them are salaried or professionals such as doctors or lawyers.

I check my profit and loss account before I go to the CA for tax filing, if my revenues are high and my expenses are low, immediately I increase my salary, my office expenses, and buy a car, or two wheeler ( even if I don't require), buy some additional equipment etc to show only nominal profit, and then only I call the CA. If I am already incurring loss, I would be more happy, I don't have to show any profit, so no tax.

But I crossed the bridge, (crossing the bridge takes heavy toll on health, wealth, happiness, and it takes anywhere not less than half a decade of extreme torture),

I said here first, the unintended consequence of this step is that more than 70% of Mom and pop businesses are going to wind down in another 6 months.

We can expect Western concepts of businesses such as, heavy investment, employing only a handful of people, all are law abiding, with no 1 black, 2 shades of black etc.

I hate the tax guys, I have not come across a single honest tax guy ( income tax or sales tax or service tax guys) in my life. We have to give biscuits to shut the mouth of the dogs, even if you are honest.

This situation will not change, and I hope NM would desist from sending any tax guys behind business people, the objective of this drive is to make FICN invalid and out of circulation, and catch the politicians who have amassed 2nd shade of black money, and make the corrupt babus loose all the wealth.

But if you touched the 1st shade of black money, you have the responsibility of creating jobs for 70% of the mom and pop businesses which have already collapsed. Heck, even in Shanghai, I see the whole businesses run in cash. A cashless society, I would certainly don't want.

Sorry for the rant.



TKiran,
Could understand your angst in running a business. Belittling the salaried class for paying tax is a bit rich. Nobody gives salary to a poorly performing employee including you. By the way why should a salaried class pay tax, when business class doesn't want to pay tax. If mom & pop shops can't run a decent tax abiding business then they need to perish. Being a salaried class myself - why should i pay for the roads in front of your shop, police your street, provide colleges to your kids? Why should a salaried class understand you when you dont understand them?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Singha » 22 Nov 2016 22:05

How can a business grow if the goal is always to show less profit or a small loss via various means like singhvi ji claimed to have purchased 4 cr of laptops for his staff.

Businessmen dont hv a divine right to evade taxes while salaried class has tds...ultimately we share the same country roads and schools

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Re: Currency Demonetisation and Future course of Indian Economy

Postby TKiran » 22 Nov 2016 22:12

Singha ji, Tata consultancy services, never made profit till three years before listing, as it is mandatory to show profits for 3 consecutive years in order that they become public Ltd company and the profits should be good enough so that you can demand premium over the nominal value of the shares.

Tata sons is still the major share holder

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Re: Currency Demonetisation and Future course of Indian Economy

Postby geeth » 22 Nov 2016 22:28

Guys pls understand that what is being talked about is the deductions allowed for businesses as per law..not any illegal activities. Whether to buy an expensive car or additional machinery to boost production is the prerogative of the businessman. All his expenses and deductions etc are vetted/audited by CA. The reason for this is the inherent risks involved in doing business. Many a time people lose their life savings for no rhyme or reason of his. One has to experience i how difficult it is to run a business...the concerned poster has put it in a crude way though it is all true.

Ofcourse many people indulge in creative accounting. Remember Ambanis never paid any corporate tax for many years? It was because of this that Chidambaram introduced Minimum Alternate Tax in 1996(?). So there are many checks and balances. By the way there are no standard deduction for corporate tax and if yours is not a proprietorship firm, money earned from business is taxable at infividual level also. There is a limit to writing ones own personal expenses as well.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby TKiran » 22 Nov 2016 22:30

Singha wrote:How can a business grow if the goal is always to show less profit or a small loss via various means like singhvi ji claimed to have purchased 4 cr of laptops for his staff.

Businessmen dont hv a divine right to evade taxes while salaried class has tds...ultimately we share the same country roads and schools


I used to see NTR's movies when I was young, he was popular because in his movies all the people who are rich are bad. He fights with the filthy rich people, and distributes the money to "పేదవాళ్ళు" poor people and finally marries beautiful rich daughter of the villain (who is the rich man).

Why don't you stop paying the TDS and become a business man? Too much of risk right? Even Donald Trump evaded taxes, that didn't stop him to become president elect.

The difference is capitalistic and socialistic thinking.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Primus » 22 Nov 2016 22:33

TKiran wrote:Businesses need not pay taxes, if properly exploit the provisions of the tax laws.

The whole problem I see here is that many of posters have no idea of businesses, most of them are salaried or professionals such as doctors or lawyers.
/snip..........

But if you touched the 1st shade of black money, you have the responsibility of creating jobs for 70% of the mom and pop businesses which have already collapsed. Heck, even in Shanghai, I see the whole businesses run in cash. A cashless society, I would certainly don't want.

Sorry for the rant.


Kiran Ji, 2 points.

1. A truly cashless society is neither desirable nor practically possible anywhere in the world. Even in the most technologically advanced countries small things are usually bought with cash. It is just so much more convenient.

2. I run two businesses and even though the laws may be somewhat different, the ethos remains the same. You do need to pay your legal tax bill, creative accountants can give you advice which in the end is up to you to follow or not. Over the past 20 yrs I've learned that it is best to follow the guidelines closely and not get adventurous, it backfires in the end.

Finally, it is unfair to expect the salaried class to subsidize the 'mom and pop' business owners for everything that they take for granted, as has been pointed out already. If they cannot be a productive part of the society then they cannot expect the society to be sympathetic to their plight when things go south.

BTW, even in the US, those small businesses that deal mostly in cash, are liable for and do pay all the other kinds of taxes that businesses incur, including the equivalent of ESI/PF and some others for their employees that are not applied in India. I do agree that the lack of corruption at grass-root level does help enormously.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 22 Nov 2016 22:34

RajeshG wrote:Suraj

i was trying to tell you something else. consider..

- you said 1/3 of cash has been deposited which is prob 4-5 lac cr. which means there is still 10 lac cr to go. maybe it is the 8 lac cr or 2 lac cr idle money ? or maybe its the black or double-black money that people have "set" - a lot of it with 20-30% commission per all reports.
- i posted this in response to the interesting analogy you posted (mithaiwala). i asked you to realistically tell me how many mithaiwalas have 100% white ? i can guarantee that none of them would have double-black. i am guessing some amount would be single-black. and that is part of that 2.5 lac cr.
- about 65k cr was deposited as part of vds scheme. thats about 20-25% ? i am guessing none of them were double black. otherwise its more like 10%.
- if we were to assume that all single-black money comes into the system with say 50% ending up with govt that would end up being 1.25 lac cr.
- if the same ended up getting "set" thru the agents then equal amount of money would end up with the kind of people that you dont like as you have made so abundantly clear

if we just go by ideology and principles then NM would never have teamed up with PDP. but politics is art of possible. you just try to make the best of the situation with best-interests in mind - best interest in terms of principles, ideology, support-base etc.

You're not telling me 'something else' - you sound like a thief making a completely unconvincing effort to exonerate himself :)

You are seeking a reprieve while sitting on black money, i.e. 'art of the possible'. The last date of possibility was Sept 30. You're talking about 'possibilities' 2 months late. Who are you trying to kid now ? You are sitting on waste paper. Come forward and declare it, pay tax on it, and continue.

You claim business suffered from demonetization. It's businesses who refuse to quickly make themselves white that suffer. Doesn't matter how black they were on Nov 8. Have you deposited everything ? No ? Your fault entirely then. You had a choice to declare on your own before June. You had the choice to declare using IDS between June-Sept.

Claiming that the present is a Hobson's choice, is your own creation. You refused to voluntarily pay tax, so GoI just made your money worthless and said i you want to have your wealth back tell us how much paper it is.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby pankajs » 22 Nov 2016 22:40

http://www.thehindubusinessline.com/eco ... 367649.ece
Demonetisation sets off huge spike in tax queries

The ripple effect of the Centre’s recent move to demonetise high-denomination currency notes is being felt in hitherto-unforeseen areas, including in the apparent readiness of more and more businesses to stop evading taxes — and voluntarily bring themselves onto the taxman’s radar.

Tax-filing e-portal ClearTax, for example, has witnessed a six-fold spike in the number of tax-related queries on its platform since the government announced the scrapping of the ₹500 and ₹1,000 notes on November 8.

This isn’t just academic interest. Archit Gupta, founder of the Bengaluru-based portal, told BusinessLine he expects the demonetisation to lead to a 200 per cent growth in the number of people paying taxes in the next 18 months as small businesses scramble to get their earnings on the right side of the tax law. The number of tax filings will also go up dramatically, he believes.

We have seen enquiries from gym trainers, housewives, salon owners, coaching centre owners, among other small and medium businesses, who have legitimate enterprises but were not paying any taxes or were evading tax payments,” said Gupta, whose company is educating people on tax laws and the impact of demonetisation on their busineses.

With the government nudging small businesses to migrate to digital payment processes, more of these small busiesses will come onto the taxman’s radar. “There will be a greater inclination to pay taxes as digital payments become the preferred option,” Gupta said.

At least six tax lawyers and chartered accountants to whom BusinessLine spoke acknowledged that their client base has increased in recent days. “Demonetisation is primarily intended to curb cash hoarding and tackle counterfeit notes, but it will also solve a larger problem of under-reporting of taxes as more transactions are made through e-wallets and mobile banking, where the money trail can be established,” said a Mumbai-based tax advisor.

Pritam Mahure, founder of Pune-based tax advisory firm Lawgical Consultants, noted that only about 3-4 per cent of the Indian population comes under the direct tax net (sales and income tax), and that even within this subset, there is under-reporting of income to the extent of 40-50 per cent of their income. “As digital transactions take off, as they will, more of these under-reported incomes will be brought above the board. Tax compliance will go up,” he adds.

In Mahure’s view, the perception that the cash crunch will last for 6-8 months if the government imposes limits on monthly cash withdrawals will likely incentivise businesses to embrace digital payments for fear of losing customers. {I don't think the GOI will squeeze liquidity for so long.}

There is also a widely held belief that the government has more measures in the pipeline to stamp out black money. Small businesses and individuals may opt to come clean on their taxes rather than risk harassment,” he said.

Rohit Lohia, Co-Founder of fintech marketplace CoinTribe, said tax collections could increase on two counts: first, from the tax and penalty on hitherto-undeclared incomes that are now being flushed out into the open; and second, from higher reporting of income in the remainder of the financial year to account for the disproportionately high cash deposits that some businesses may end up making.

This higher reporting will also reset the levels at which these businesses will move in the future,” he said. In this context, he pointed out, the larger impact will be from the introduction of a goods and services tax (GST): in an environment where much of the black money has been flushed out of the systeml, this will lead to more accurate tracking and, therefore, reporting of sales, which in turn will positively impact tax collections going forward.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Marten » 22 Nov 2016 22:46

TKiran wrote:Singha ji, Tata consultancy services, never made profit till three years before listing, as it is mandatory to show profits for 3 consecutive years in order that they become public Ltd company and the profits should be good enough so that you can demand premium over the nominal value of the shares.

Tata sons is still the major share holder

Please substantiate your claim about TCS losses with any verifiable or publicly available document.
To my knowledge and memory (and I have known TCS for a LONG while), TCS never faced losses. If anything, it seeded other research centers two decades before it became fashionable.

TCS went public in 2003-4. Here is an article from 1998:
http://www.rediff.com/computer/1998/may/19tcs.htm
Tata Consultancy Services, the wholly owned subsidiary of Tata Sons, seems poised to post a turnover of around Rs 10.75 billion for the year ended March 31, 1998.

The company had posted a turnover of Rs 7.21 billion in 1996-97. The last fiscal's estimates mark almost 50 per cent increase over the previous year's figures.

The company's gross profit is also likely to see a 70 per cent rise to Rs 3 billion from previous year's Rs 1750 million.

Its robust performance has surpassed all expectations. The company has been growing at a rate of 35 per cent over the past few years and had expected to clock a similar performance in 1997-98.


Please start paying your taxes, stop blaming PF commissioners for your need/urge to visit dance bars, and stop gassing at least on this thread.
PS: Here is another from Tata.com.
http://www.tata.com/article/inside/w97p ... YVr3YPkMU=

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Re: Currency Demonetisation and Future course of Indian Economy

Postby csubash » 22 Nov 2016 22:55

TKiran wrote:
Singha wrote:How can a business grow if the goal is always to show less profit or a small loss via various means like singhvi ji claimed to have purchased 4 cr of laptops for his staff.

Businessmen dont hv a divine right to evade taxes while salaried class has tds...ultimately we share the same country roads and schools


I used to see NTR's movies when I was young, he was popular because in his movies all the people who are rich are bad. He fights with the filthy rich people, and distributes the money to "పేదవాళ్ళు" poor people and finally marries beautiful rich daughter of the villain (who is the rich man).

Why don't you stop paying the TDS and become a business man? Too much of risk right? Even Donald Trump evaded taxes, that didn't stop him to become president elect.

The difference is capitalistic and socialistic thinking.



Again assuming that business people are risk takers & hence to be rewarded. They are taking risk for themselves, not for any altruistic reason. Heck even a gambler is a risk taker. Now , by paying tax one becomes a socialist & evading tax is capitalistic - i think you are doing a disservice for a lot of businesses including possibly yours.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 22 Nov 2016 23:11

TKiran wrote:I used to see NTR's movies when I was young, he was popular because in his movies all the people who are rich are bad. He fights with the filthy rich people, and distributes the money to "పేదవాళ్ళు" poor people and finally marries beautiful rich daughter of the villain (who is the rich man).

Why don't you stop paying the TDS and become a business man? Too much of risk right? Even Donald Trump evaded taxes, that didn't stop him to become president elect.

The difference is capitalistic and socialistic thinking.

This isn't 'capitalist vs socialist'. This is the outright condoning of theft. NTR was a moron for trying to portray such a Robin Hood persona as an ideal. In case anyone is wondering, Robin Hood was a thief. Yeah maybe he took on the 'corrupt rich' but he's still a thief. Don't wrap theft into an economic theory. Say it is what it is. No need to insult people by tap dancing around it.

A businessman who evades taxes claiming the greater good, is a thief. Just say it as it is. That's the first step. He steals from the populace by denying them the public services the taxes could pay for. "He did it too!" never kept someone from being convicted. Heck, it didn't even get any of us out of a playground fight as 5 years olds, did it ?

The only difference with demonetization is that the power dynamic of the thief vs state is gone. In the past the thief could say he's doing good overall, so he will not pay taxes because of government corruption etc. What demonetization did, is make it no longer optional to decide. Regardless of how honorable you think your actions are, you have to step forward anyway. Well you could use a tout to launder cash, but the tax man may knock on your door tomorrow, and you'll be in even more trouble.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby RajeshG » 22 Nov 2016 23:21

Suraj wrote:You're not telling me 'something else' - you sound like a thief making a completely unconvincing effort to exonerate himself :)


:) chalo thik hai..

i will take leave for now until things get clearer.

hopefully all this is just GoI's chankianness as always and i just dont see it.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Gus » 22 Nov 2016 23:23

Hackthoory vomits - "
"We are examining the issue and we would like to move contempt notice against PM after discussing with other Opposition parties," Mr Yechury said, criticising Modi for his "arrogancy and obduracy" in not facing Parliament"

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Re: Currency Demonetisation and Future course of Indian Economy

Postby ManSingh » 22 Nov 2016 23:25

abhijitm wrote:
TKiran wrote:When Infosys was $100 million company, with 5000 employees, they didn't have to pay service tax, they got land for free, they didn't have to pay Fringe benefit tax, thokka, tholu etc,

But if I have to start a business, I have to pay all the thokka, tholu, rent, etc, it's unfair no.

This is a valid point. I am no businessman but I hear nowdays startups are not facing much problems. Is it true?


Just informational: Kiran's point regarding Infosys is also not correct. Corporate's face corruption of another level altogether, numbers which are even hard to fathom. No one is left untouched in this problem.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby pankajs » 22 Nov 2016 23:26

This is crazy...... contempt for what ..... not facing the parliament. :roll: :rotfl:
This is acknowledgement of helplessness on part of opposition.

Gus
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Re: Currency Demonetisation and Future course of Indian Economy

Postby Gus » 22 Nov 2016 23:27

All this talk about how the salaries class don't know nothing and businessfolks know etc...for somebody who knows stuff, they ought to know .. especially brfites - that steps are being taken to move more into formal economy and tax evasion will no longer be tolerated.

srin
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Re: Currency Demonetisation and Future course of Indian Economy

Postby srin » 22 Nov 2016 23:32

What's so special about being a businessman that you don't want to contribute your share to the society ? Seen in a different light, a salaried employee is also a businessman in his own right. His offering (his skills and knowledge) has a market price, he has to compete, he has to keep upgrading his wares and move up the value chain. Only differences are that he is tied down by an exclusive contract of indefinite duration, and there is TDS ! If you want to enjoy the subsidized electricity and water and you want to drive on the roads, then pay your share for them.

Schadenfreude is a really pleasant feeling :D


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Re: Currency Demonetisation and Future course of Indian Economy

Postby TKiran » 22 Nov 2016 23:39

Primus wrote:
Kiran Ji, 2 points.


Finally, it is unfair to expect the salaried class to subsidize the 'mom and pop' business owners for everything that they take for granted, as has been pointed out already. If they cannot be a productive part of the society then they cannot expect the society to be sympathetic to their plight when things go south.

BTW, even in the US, those small businesses that deal mostly in cash, are liable for and do pay all the other kinds of taxes that businesses incur, including the equivalent of ESI/PF and some others for their employees that are not applied in India. I do agree that the lack of corruption at grass-root level does help enormously.


Primus ji, you are missing the jungle for trees. In India, small business people provide the employment for almost 95% of the population. 5% are elites, most of the people in brf are in that category. This demonetization is not primarily intended to disrupt smaller businesses, but a collateral damage.

There's no mitigation to repair the collateral damage.

The focus should be to protect the small businesses, what I mean to say is that nobody should talk about taxing businesses, in fact, the government should say that nobody would be harassing the businesses, they are not our target. We have already achieved the target of

1. FICN has been rendered useless
2. Black money horders (big fishes such as politicians and baboons) lost their wealth

And no more objectives.

But I think a lot of posters want to add another objective

3. We will tax businesses, close all the loops.

The 3rd objective is a good one, if we have less population like in Australia or Canada, where the responsibility of generating employment opportunity rests with the governments.

Here in India, it's not practical with very high semi-skilled or unskilled workers which comprises 95% of the population. They all depend on cash for transactions. You can call it 1shade of black money or 2 shades, it's immaterial, they are not your target.

Added later.....

Gus wrote: ..for somebody who knows stuff, they ought to know .. especially brfites - that steps are being taken to move more into formal economy and tax evasion will no longer be tolerated.


Gus ji, you said it... You cannot employ 1crore people to produce 83 LCA's in HAL, where is the formal economy?
Last edited by TKiran on 22 Nov 2016 23:58, edited 1 time in total.

nachiket
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Re: Currency Demonetisation and Future course of Indian Economy

Postby nachiket » 22 Nov 2016 23:51

TKiran wrote:Primus ji, you are missing the jungle for trees. In India, small business people provide the employment for almost 95% of the population. 5% are elites, most of the people in brf are in that category. This demonetization is not primarily intended to disrupt smaller businesses, but a collateral damage.

There's no mitigation to repair the collateral damage.

The focus should be to protect the small businesses, what I mean to say is that nobody should talk about taxing businesses, in fact, the government should say that nobody would be harassing the businesses, they are not our target. We have already achieved the target of

1. FICN has been rendered useless
2. Black money horders (big fishes such as politicians and baboons) lost their wealth

And no more objectives.

But I think a lot of posters want to add another objective

3. We will tax businesses, close all the loops.

The 3rd objective is a good one, if we have less population like in Australia or Canada, where the responsibility of generating employment opportunity rests with the governments.

Here in India, it's not practical with very high semi-skilled or unskilled workers which comprises 95% of the population. They all depend on cash for transactions. You can call it 1shade of black money or 2 shades, it's immaterial, they are not your target.

Why stop at small businesses then? Big businesses employ even more people. So they shouldn't be taxed either. Agriculture is already out of the tax net. Stop taxing everyone and anyone except salaried people. And watch whatever infrastructure we have also crumble to dust since the govt. has no money to pay for its upkeep.

Your problem is your sense of entitlement. I provide jobs, so I should not be taxed. That is bullsh1t. You provide jobs because you need those employees to make your business work and generate profit for yourself. Nothing wrong in that. That is how the economy works. What is wrong is you thinking that it somehow entitles you to avoid paying taxes.

You can use whatever tax loopholes you can find to avoid taxes, as long as you declare your income and don't break the law. If someone is avoiding taxes by collecting money in cash and not declaring some or all of it, they do not deserve any sympathy whatsoever. No matter how many people they employ. Even then Modi gave these people one last chance to declare their income before Sept. 30 and get away with paying 40% tax. They didn't take it and are crying now. Well boo hoo!
Last edited by nachiket on 22 Nov 2016 23:54, edited 1 time in total.

csubash
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Re: Currency Demonetisation and Future course of Indian Economy

Postby csubash » 22 Nov 2016 23:53

TKiran wrote:
Primus wrote:
Kiran Ji, 2 points.


Finally, it is unfair to expect the salaried class to subsidize the 'mom and pop' business owners for everything that they take for granted, as has been pointed out already. If they cannot be a productive part of the society then they cannot expect the society to be sympathetic to their plight when things go south.

BTW, even in the US, those small businesses that deal mostly in cash, are liable for and do pay all the other kinds of taxes that businesses incur, including the equivalent of ESI/PF and some others for their employees that are not applied in India. I do agree that the lack of corruption at grass-root level does help enormously.


Primus ji, you are missing the jungle for trees. In India, small business people provide the employment for almost 95% of the population. 5% are elites, most of the people in brf are in that category. This demonetization is not primarily intended to disrupt smaller businesses, but a collateral damage.

There's no mitigation to repair the collateral damage.

The focus should be to protect the small businesses, what I mean to say is that nobody should talk about taxing businesses, in fact, the government should say that nobody would be harassing the businesses, they are not our target. We have already achieved the target of

1. FICN has been rendered useless
2. Black money horders (big fishes such as politicians and baboons) lost their wealth

And no more objectives.

But I think a lot of posters want to add another objective

3. We will tax businesses, close all the loops.

The 3rd objective is a good one, if we have less population like in Australia or Canada, where the responsibility of generating employment opportunity rests with the governments.

Here in India, it's not practical with very high semi-skilled or unskilled workers which comprises 95% of the population. They all depend on cash for transactions. You can call it 1shade of black money or 2 shades, it's immaterial, they are not your target.


I presume you run a business for enriching yourself - not for providing employment. You employ people because you can't do all the job for yourself. I presume you don't pay any of your staff more than the income tax limit. If you pay them less than the limit, then you should be giving them ESI & PF benefits or if you pay them above the limit - it creates a paradox in which your employee pays tax but you don't - why shouldn't business - small or big not taxed?

ManSingh
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Re: Currency Demonetisation and Future course of Indian Economy

Postby ManSingh » 22 Nov 2016 23:53

^^^http://censusindia.gov.in/Census_And_You/economic_activity.aspx

2% ( financial intermediation) + 3.7%( construction) + maybe half of the retail trade, hotels and retaurants = 11.4 %.
Even if all were suddenly ground to stop, it comes to around 10%. Now this is assuming all work in these industries stopped.

Suraj
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Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 22 Nov 2016 23:57

TKiran: would you mind describing in detail what it takes for a simple shopkeeper to pay his taxes ? How many forms, supporting documents etc ? In other words, what is the additional workload over an individual IT payer ?

In general, the discussion on ease of doing business is NOT the subject of this thread. I'm not saying the argument is invalid. It's not the topic of this thread.

Suraj
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Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 23 Nov 2016 00:03

ManSingh wrote:^^^http://censusindia.gov.in/Census_And_You/economic_activity.aspx

2% ( financial intermediation) + 3.7%( construction) + maybe half of the retail trade, hotels and retaurants = 11.4 %.
Even if all were suddenly ground to stop, it comes to around 10%. Now this is assuming all work in these industries stopped.

The question is *why* would they grind to a stop ? If they do business in cash, the solution is to simply declare it, have everyone's bank account on payroll and pay them by bank transfer or cheque. What exactly makes cash indispensable to *business activity* ? Not personal consumption like going to buy a bag of brinjal and tomatoes, but business activity ?

Banks are primarily bottlenecked in their exchange lines, not deposit lines. No business should have much trouble depositing its entire cash - it should take a day at most. If your employee has no PMJDY account, it's his problem to go get one, not yours. What else needs to be done ?

ManSingh
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Re: Currency Demonetisation and Future course of Indian Economy

Postby ManSingh » 23 Nov 2016 00:14

Err..i was replying to Kiran's post about small businesses employing 95% of population.
The number 95% is exaggerated.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby TKiran » 23 Nov 2016 00:17

Suraj sir, the small business owners are not educated mostly, but they are risk takers. Most of them even don't run the businesses to get rich, just to make a comfortable living.

They will also start filing returns etc, when the need arises, such as when they want to expand their businesses, they need loans etc., this is what happens even in developed world. As long as the things get better and better, they automatically comply, after all who doesn't want to make an honorable living, once you come out of survival mode? Unfortunately, the unorganized sector is 10 times bigger than the organized sector in my experience.

My personal experience is that I started one business in a metro area, with a primary target of IT professionals as they have a higher disposable income. I was entirely wrong, 95% of my customers were Real Estate guys, very nasty, but once you learn the tricks of the trade, you can make more money from these guys.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 23 Nov 2016 00:32

I am not arguing that the unorganized sector is huge. I'm trying to take the discussion in the direction of facts, instead of the overt class warfare here where black market businessmen and apologists like RajeshG basically assert some right to not pay tax based on altruism and moreover dismiss 'salaried class' arguments.

I would just like data, not the handwaving. What sort of forms does it take to pay taxes for a business ? Good businesses will accept the cost of doing business legally. Living in a cash business is lower barrier to entry for sure, but you've very few avenues for growth, no access to capital, no recourse to legal help if you face criminal behavior (e.g. some goonda coming after you), nothing. All these services that can help, are paid for with taxes.

Do you mind mentioning what general business area it was and why RE people became customers instead of IT people as expected ? And what were the issues you faced in general ?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby kvraghav » 23 Nov 2016 00:51

All these greatly troubled businessman, have you ever experienced a layoff? Please do before understanding where the salaried class angst lies. I know a colleague who comiited suicide on layoff because of 2 kids schooling and a house loan.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Gus » 23 Nov 2016 00:56

I'll keep it simple. That I am employing people and in a hard job and govt does not make it easy for me is NO excuse to justify tax evasion.

I employ people too and my spending employs people. I am in a hard job and it is not easy money. I will never ask for tax evasion. I don't even go for those LIC and such stuff to avoid tax.


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