Currency Demonetisation and Future course of Indian Economy

shiv · Post by **shiv** » 03 Dec 2016 09:25

Kakkaji wrote:Some posters have mentioned above that Indians do not like paying any tax. I can empathize with that.

I have an issue with the way this liking and not liking of paying tax is worded. No one likes paying tax, just like no one can like cleaning a baby's bottom or cleaning one's own father's bottom in the weeks before he passes away. But it is a duty. I have seen some bullshit being posted on this thread under the title "dharma". Dharma is a duty - an obligation. One does not have to like it any more than Arjuna liked killing his kaurava brothers

Rishi Verma · Post by **Rishi Verma** » 03 Dec 2016 09:55

shiv wrote:
Kakkaji wrote:Some posters have mentioned above that Indians do not like paying any tax. I can empathize with that.
I have an issue with the way this liking and not liking of paying tax is worded. No one likes paying tax, just like no one can like cleaning a baby's bottom or cleaning one's own father's bottom in the weeks before he passes away.

+1008
ShivJi can see through piskology very well. you mentioned baby's bottom, daddy's bottom... You kindly forgot no one likes to wipe their own bottom too but it's a duty...

In Europe, Japan, Singapore people's brains have evolved to see and act for the common good of society at macro and micro levels.

Indians, the away they think, drive, get on the bus, behave, greatly-inconvenience-others-for-own's-tiny-benefit requires a fundamental change in thinking.

It's called TKiran-thinking, it's very common in our society than is visible on BRF.

Modi may not know how to change this behavior, but in many of his previous speeches he has alluded to this behavior.

He had mentioned "when a babu gets a file for processing his first thought is "isme mera kya"?
(what's in it for Me) that's classic TKiran. How to be WeKiran?

Deans · Post by **Deans** » 03 Dec 2016 09:57

On UPI - I had informally advised the marketing team at NPCI on how to promote this. My feeling was that they were focusing more on credit cards (competing with foreign banks) and trying to have upscale features on Rupay, which were both diversions, instead of making UPI a game changer.
I saw this as a true `Made in India project' where UPI will replace foreign VC owned payment wallets and RuPay will replace Mastercard and Visa (otherwise they will be the biggest gainers of digital payments). This view is now gaining traction.

Our transaction fees are high partly because of : 1. Low volumes - Costs of hardware and installation of machines decline with higher volumes,
(which is already happening) 2. Data transfer charges (already falling) and 3. Commissions of Mastercard and Visa (which will be forced to slash
costs if Rupay transactions are free, of reduced to 50p as has just happened). There is huge lobbying by Mastercard/Visa to preserve the status quo.

shiv · Post by **shiv** » 03 Dec 2016 10:05

Deans wrote:On UPI - I had informally advised the marketing team at NPCI on how to promote this. My feeling was that they were focusing more on credit cards (competing with foreign banks) and trying to have upscale features on Rupay, which were both diversions, instead of making UPI a game changer.
I saw this as a true `Made in India project' where UPI will replace foreign VC owned payment wallets and RuPay will replace Mastercard and Visa (otherwise they will be the biggest gainers of digital payments). This view is now gaining traction.

Our transaction fees are high partly because of : 1. Low volumes - Costs of hardware and installation of machines decline with higher volumes,
(which is already happening) 2. Data transfer charges (already falling) and 3. Commissions of Mastercard and Visa (which will be forced to slash
costs if Rupay transactions are free, of reduced to 50p as has just happened). There is huge lobbying by Mastercard/Visa to preserve the status quo.

Let me tell you my problem with UPI aside from the fact that it ain't workin' currently..

I have been on e-payments for years and years now. My only cash payments are subziwala, istriwala, rikshawala, bus travel. (Other cash payments like domestic help, mali etc will all take cheque or e-paymrnt).

Over the last few days I have tried to encourage BLR auto drivers to install or use something that I can use to pay them. Mind - I am a local here and in daytime travel all autos go by the meter - so there is no haggling. I feel it is the "small cash economy" people who can broaden their customer base by heading the e-way.

Sicanta · Post by **Sicanta** » 03 Dec 2016 10:14

Govt raises MSS cap to Rs 6 lakh crore to manage liquidity

http://www.financialexpress.com/industr ... ty/462417/

Demonetisation crackdown: Narendra Modi govt suspends 27 public sector bank officials, transfers 6 others

http://www.financialexpress.com/economy ... rs/462969/

Black money: Income Tax Dept launches raids against builder Mahesh Shah who declared Rs 13,860 cr under Income Declaration Scheme

http://www.financialexpress.com/economy ... me/462968/

More good news in the offing: Government may eliminate taxman’s discretion, lower stamp duty

http://www.financialexpress.com/economy ... ty/462528/

Tightening the noose further around black economy, the government may abolish discretionary powers of tax officers in deciding liabilities for evasion, said NITI Aayog Vice-Chairman Arvind Panagariya.

He also hinted that stamp duty for real estate dealings may be eased with a possible rise in on-the-book property deals in the wake of the ongoing crackdown on unaccounted wealth.

“We have to also go back and begin to think much more seriously about a whole set of tax reforms, which would both bring in simplification and precision in the definition so that you reduce, and hopefully even eliminate, discretion of tax officers on this matter,” Panagariya told private TV channel India Today in an interview.

Panagariya, a former chief economist of the Asian Development Bank, was responding to questions on possible follow-up measures to the November 8 announcement of ban on 500 and 1,000-rupee banknotes.

“A lot of evasion of taxes happens when there’s too much discretion on the part of officers. So, we need to simplify,” he remarked.

“Simplification”, he explained, “would mean doing away with (tax) exemptions. In addition, (we need to) also define situations much more precisely so that it leaves no room for discretion for the tax officers to decide whether under such and such situations you are liable to tax, you are not liable to tax.”

The government, Panagariya said, is beefing up enforcement against tax cheats in the real estate sector. At the same time, concerns over the high rates of the stamp duty should also be taken care of, he suggested.

“On real estate, we need to begin to enforce it better. But we need to address the issue of stamp duty. Is it too high?” he asked. “If the transactions are going to come in white, probably the amount for which the transaction is taking place would rise.”

Asked whether he foresaw a drop in stamp duty, Panagariya answered “that’s something we ought to have on the table”.

Aadhaar set to replace PIN, debit cards, password: Will help situations like demonetisation; 5 things to know

http://www.financialexpress.com/economy ... ow/462173/

Govt wants all workers to get wages via banking channels; eyes quick passage for law in Parliament

http://www.financialexpress.com/economy ... nt/461946/

Labour Ministry's drive brings 9 lakh wage workers into banking fold

http://www.business-standard.com/articl ... 117_1.html

shiv · Post by **shiv** » 03 Dec 2016 10:21

Rishi Verma wrote: In Europe, Japan, Singapore people's brains have evolved to see and act for the common good of society at macro and micro levels.

Indians, the away they think, drive, get on the bus, behave, greatly-inconvenience-others-for-own's-tiny-benefit requires a fundamental change in thinking.

Indians who baulk at the idea of littering or spitting on the road in Singapore do it liberally and freely in India. The justification is "Indians are like this or like that". But the same Indians are something else when they go abroad where a big danda will be used if they break laws. So this business of painting a picture of other Indians and then saying "I behave like this because everyone else does that. It's not me. It's him" is hypocrisy. When people are told this they will get angry and deny that what they say has a huge hole in it. That also has a name. Cognitive dissonance. And saying this brings on the next argument "This is all western influence. We Indians are not like that. This is anti Hindu. Anti national" So paying tax is anti Hindu and anti national.

Suddenly you have to screw the country to make it strong.

Reminds me of the old story:

After Rajiv Gandhi became PM Sonia Gandhi told him that she wanted to divorce him. He asked "Why?" And she replied "Because you are doing to the country what you should be doing to me"

But she changed later - because "All Indians are like that"

Schmidt · Post by **Schmidt** » 03 Dec 2016 11:05

I sincerely hope the 2000 Rs note is here to stay

As a default mode most ATMs are only dishing out the 2000 Rs notes
We are yet to see the 500 Rs notes , forget the 100 / 50 Rs that have been sucked dry

The big time BM accumulators will have learnt their lessons and will keep their liquid cash in 50/100 notes
They would pay a fee to the bankers and keep exchanging any 2000s into lower denomination notes on a regular basis.

It is the aam admi who would still have some of these 2000 Rs notes , an whether you have just a single note or hundreds of these 2000 notes , you would still have to stand in line to get them exchanged or deposited.

The only possibility is the govt decides to withdraw the 2000 notes in stealth mode , ie , any of these getting into the banking system would be taken back and not reissued by the RBI, but that would be impossible to keep a secret

kvraghav · Post by **kvraghav** » 03 Dec 2016 11:09

You should read the papers as to who is having 2000 notes. All corrupt people hoarding 2000 now. I seriously hope it is withdrawn once 100 rs are in place.

darshan · Post by **darshan** » 03 Dec 2016 11:20

shiv wrote: Indians who baulk at the idea of littering or spitting on the road in Singapore do it liberally and freely in India. The justification is "Indians are like this or like that". But the same Indians are something else when they go abroad where a big danda will be used if they break laws.

You do not even have to change countries or states. One can just see it within an Indian shopping centers like in Edison, Chicago, etc. For example in Edison, all one has to do is cross two traffic lights and a road to see a human turn into something worse than monkey. Honking, spitting, what not. Or just compare theaters where desi movies are shown vs. videshi.

Schmidt · Post by **Schmidt** » 03 Dec 2016 11:20

kvraghav wrote:You should read the papers as to who is having 2000 notes. All corrupt people hoarding 2000 now. I seriously hope it is withdrawn once 100 rs are in place.

------------------------------------------------------
They will exchange it once there is greater availability of 500/100/50s

They are only doing it now because there is a severe shortage of lower denominations

g.sarkar · Post by **g.sarkar** » 03 Dec 2016 11:24

http://indianexpress.com/article/india/ ... s-4407999/
PM Modi biggest patron of black money: Congress
Congress said the country wanted to know as to how much money has been deposited in the banks from April 1 to November 30 this year by BJP, its leaders and RSS functionaries.
Calling Prime Minister Narendra Modi “biggest patron” of black money, Congress on Friday said after his demonetisation decision went haywire, he was getting black money converted to white through the “so-called” welfare programmes for the poor.
“He is the biggest patron of black money…he is flouting all Income Tax rules to get black money converted into white using welfare schemes for the poor,” Congress spokesperson Randeep Surjewala told reporters in Lucknow.
.....

I guess it has started to hurt bigley, as DT says. Being a politician in India is not like being a BRite, who writes a couple of lines in the forum and then relaxes with a cuppa. This is much more serious than that. You have to pay the creditors that financed your election and make tons of money, establish your chamchas in life and collect funds for the next round. This demonetization business gets at the root of politics namely money. Modi will never ever be forgiven for bringing this on.
Gautam

Gus · Post by **Gus** » 03 Dec 2016 11:28

Definitely the ones who used proxies / mules to do cash exchange are hoarding the notes

darshan · Post by **darshan** » 03 Dec 2016 11:35

There are also other angles like Old money (people who survived 50s, 60s, 70s) vs New money. I expect lot of old money to be backing Modi Co.
1) Envy
2) Would certainly not like to see Congress and company be back with IT raids, absurd tax rates, confiscation of anything that can be grabbed and running court cases till eternity, etc.
3) Clean up of goons
4) Possibility of elimination of encroached RE
5) Possibility of cleaned up court system resulting in movement of cases stuck in eternity
6) Possibility of cleaned up IT rules.

Not all will take loosing of money due to demonetization in the same manner.

Deans · Post by **Deans** » 03 Dec 2016 11:50

Shiv, I agree with your observations. My experience in Bangalore is exactly the same.
UPI was not expected to be ready (in terms of banks rolling out their apps) until at least Jan, but they rushed to market when DM happened.

For those people speculating that BM holders converted their cash to gold or forex:
The gold price in Mumbai has fallen from Rs 3145 / gm (24 karat) to Rs 2975 /gm today. That is the opposite of what would happen if there was a spike of people converting cash to gold. Nor has there been any increase in imports.
The Rupee has only fallen 2% against the US$ since March which is consistent with our differential rates of inflation and interest and the way other emerging market currencies have moved.
As the current raids/ seizures in Bangalore indicate, there may be high level laundering of BM by politicians through colluding bank officials.

Rishi Verma · Post by **Rishi Verma** » 03 Dec 2016 12:01

Lookie what I found!!

I hereby announce the biggest benefit of DeMo. Drum rolls pls.

Paki Diplomats in Delhi Having Heard time Getting Paid

According to Pakistan, the bank has imposed additional conditions for withdrawal of the salaries which Pakistan mission officials receive in dollars. Several senior diplomats have refused to withdraw their salaries protesting against the new conditions.

darshan · Post by **darshan** » 03 Dec 2016 12:01

There is one empirical thing that I noticed that still does not seem to be have been picked up by IT or Central Gov't. Sudden appearance of huge loans against bad assets. For this to be done, either documents were already prepared as an emergency parachute for any big event like this or were done through back dating with multiple people like bank officials, registrars, politicians, businessmen, etc. collusion. RE pieces that were in market before Nov 8th for combined sum of approx. 30 crores are now showing up as mortgaged off to banks for 10x more.

RajeshG · Post by **RajeshG** » 03 Dec 2016 12:44

Deans wrote: For those people speculating that BM holders converted their cash to gold or forex:
The gold price in Mumbai has fallen from Rs 3145 / gm (24 karat) to Rs 2975 /gm today. That is the opposite of what would happen if there was a spike of people converting cash to gold. Nor has there been any increase in imports.

http://timesofindia.indiatimes.com/city ... 714000.cms

Gujarat witnessed a significant spurt in gold imports last month. According to records of Ahmedabad Air Cargo Complex, 18.65 metric tonne (MT) gold was imported to Gujarat in November. The imports, which were at a 20-month high, rose by 191% as compared to 6.39 MT in November 2015. In fact, gold imports have doubled as compared to October 2016, which was at 9.2 MT. "A majority of the imports took place two weeks after the demonetization move by the Union government," confirmed Samir Mankad, executive director, GSEC Ltd.

RajeshG · Post by **RajeshG** » 03 Dec 2016 12:52

darshan wrote: 2) Would certainly not like to see Congress and company be back with IT raids, absurd tax rates, confiscation of anything that can be grabbed and running court cases till eternity, etc.

India is a democracy. Indians know nothing will last forever. Even Rama Rajya didnt last forever. People expect NaMo to get re-elected for 2019 for second term. But people know that no matter how good NaMo is he cannot be the PM forever. People also know that when it comes time to file taxes the collector is not going to be NaMo - its going to be the same guy ( or type of guys ) they have been dealing with all along. IOW the notes have changed but the guys collecting are the same. People also know that when govt has complete control they either (a) mess up - 80+ % leakage (b) come up with grand schemes like reservations/MNREGA which become politically impossible to back out. People are like this onlee.

Manish_Sharma · Post by **Manish_Sharma** » 03 Dec 2016 12:58

Karan M wrote:Rumor mongers will have a field day claiming tax raids on everyone, your family gold etc will be taken etc. ...

Already they are trying very hard :

http://www.amarujala.com/photo-gallery/ ... ivil-lines

Amar ujala is saying that on wednesday lot of stone pelting happened in Civil Lines Meerut and several people were injured. Now I have lots of friends in Meerut and I called to confirm, they all told me no such incident has happened. Its 100% pure lie.

kvraghav · Post by **kvraghav** » 03 Dec 2016 13:38

Went to two banks today. First one was Karnataka bank and queue at 9 30 was around 40. All were dispatched in 60 minutes flat and by the time I came out, another 25 were in queue which I am sure will be handled in 30 minutes. Cashier had a stack of 2000 and cleared people in 10 seconds after the other desk verified the cheque. The second was canara bank and was more dramatic. I went to open a FD tax saver and witnessed 3 incidents. One was a contractor trying to use a labourer lady to open account and deposit money but was sent away since she did not have KYC. Another was a peacefull guy trying to use his 11 yr old daughter dormant account to deposit 1 lakh but again was sent away saying the account was closed and open a new one. Lastly one guy whose cheque was rejected since the signature did not match. This guy was claiming his name was changed and many other things. It was plainly visible he is trying to use some one else account but again he was sent out.

Bart S · Post by **Bart S** » 03 Dec 2016 13:41

Schmidt wrote:
kvraghav wrote:You should read the papers as to who is having 2000 notes. All corrupt people hoarding 2000 now. I seriously hope it is withdrawn once 100 rs are in place.
------------------------------------------------------
They will exchange it once there is greater availability of 500/100/50s

They are only doing it now because there is a severe shortage of lower denominations

They can't do that, because it just isn't practical. There are some high profile news articles about people who were carrying suitcase loads of bribes in 2000 Rs notes and got caught. If they had to do that in 100 Rs notes they would have painted an ever larger target.

Bart S · Post by **Bart S** » 03 Dec 2016 13:42

darshan wrote:There is one empirical thing that I noticed that still does not seem to be have been picked up by IT or Central Gov't. Sudden appearance of huge loans against bad assets. For this to be done, either documents were already prepared as an emergency parachute for any big event like this or were done through back dating with multiple people like bank officials, registrars, politicians, businessmen, etc. collusion. RE pieces that were in market before Nov 8th for combined sum of approx. 30 crores are now showing up as mortgaged off to banks for 10x more.

Saar please report it to the finance ministry and other relevant authorities and tweet it to the media as well.

Bart S · Post by **Bart S** » 03 Dec 2016 13:46

Kakkaji wrote:
In India, the NaMo Govt is the first one in my memory where the PM has personally put so much emphasis on making sure that the tax money is spent, without leakage, for the benefit of people. I would not mind paying taxes to such a Govt.

The one fear I have is, once NaMO brings all the income above ground, and then he loses power, the Congress and others will have a readymade pot of gold to loot from.

JMT.

The main way that they used to steal from the system was in the distribution process. The first thing that Modiji came into power is to take away that process and send subsidies directly to the public.

Of course they will try to steal in some other way, but it won't be as easy as before. And they will be called out on it, since the difference will be night and day. For e.g (and this is my personal view) there was no major difference in any significant matters of policy or approach between the previous NDA govt and UPA-1 (UPA2 was order of magnitudes worse). So people 'knew what to expect' and it was business as usual in the past, regardless of who won the election.

The Modi govt is a sea change, even from previous NDA govts and marks a turning point in Indian politics.

Yagnasri · Post by **Yagnasri** » 03 Dec 2016 13:50

IT and GOI will have to look into many things after Dec 30. Cooperative banks in one thing they will surely look into. Others also will be there. Petrol bunks also will be there.

Bart S · Post by **Bart S** » 03 Dec 2016 13:55

shiv wrote: Let me tell you my problem with UPI aside from the fact that it ain't workin' currently..

On the UPI app, please try something from a private entity like ICICI's mobile app, ICICI's pockets (if you don't have an ICICI account and a good idea if you have one as well) or Flipkart's PhonePe. The PSU bank's apps might not be there yet. SBI's recently released UPI app is just a browser working off their website.

UPI is just something for use on mobile apps, it's just a user-friendly way of sharing your account (without having to give away your account number) such as xyz@bank. The core system on which it works is IMPS, which has been rock solid so far and works brilliantly. There might be some bugs and quirks with the mobile apps themselves that impact UPI.

shiv wrote:
Over the last few days I have tried to encourage BLR auto drivers to install or use something that I can use to pay them. Mind - I am a local here and in daytime travel all autos go by the meter - so there is no haggling. I feel it is the "small cash economy" people who can broaden their customer base by heading the e-way.

Ola has an option for auto-drivers as well, and is cashless. Don't know if it is prevalent in Bangalore though.

Picklu · Post by **Picklu** » 03 Dec 2016 13:57

The honest manpower %age of IT dept will finally decide the success of DeMo beyond the initial 1-2 lakh crore that as per Suraj's estimate won't get deposited in the first place.

If the IT dept is not very successful, that initial 1-2 lakhs will also come back in various garbs of WM.

So far, there are very few confirmed news of BM holders getting caught. Those 5 crore, 400 crore etc are pocket changes.

Picklu · Post by **Picklu** » 03 Dec 2016 14:08

Bart S,

I feel that too many digital options are ultimately confusing the hell out of the consumers. On top of them, none work for even 80% of the normal use-cases in an intuitive manner. There is also exclusion outside android. I feel one app that does 99% of the task well in all smartphone OS should have been the way to go. This has been the USP for paytm and no wonder it is the most widely used wallet even compared to mobikwik, freecharge, oxigen etc.

Once the same app provides an sms interface for feature phones, it would be a killer and rest can just go home. I hope paytm does not become that app for strategic reasons.

Among net savvy folks, there is just no comparison to netbanking and upi in terms of ease of use once you have access to a computer/tab. I still do most of my digital finance txns via browser in a computer for the very same reason.

Instead of focusing on this, govt is doing too much on too many different directions simultaneously including aadhar based payment etc.

I use windows phone and there is no option for UPI so far even though there are various apps from icici (imobile), hdfc, axis, allahabad bank etc for this OS.

Btw, OlaMoney charges Rs 20 extra per auto ride.

Picklu · Post by **Picklu** » 03 Dec 2016 14:22

Suraj wrote:
Picklu wrote:And last but not the least, "lot of fatkats burnt badly" is just equally hearsay, same as "lot of BM holders have converted completely in WM without significant loss".
This isn't hard to quantify actually. At least not the cash value. It will be known post Dec 30 when RBI reports how much of outstanding cash was not deposited back. How does 1-2 lakh crore (my estimate) sound ? The drop in price of RE is a picture of how much economic value in black money was destroyed by DeMo. Granted it's a paper loss at this point, but what's more, it's not the end of the story, since the BMer selling that property one day will face additional tax and penalty for non-disclosure of BM in the purchase. In this regard, the Benami Act prosecutions will give a picture of how much of the real estate value held in black was lost as paper value and subsequently taxed or penalized further. These are all 'really big numbers' (e.g. 10s of lakh crore), and it's just a question of whether it's 'big enough for Picklu'

I will take the 1-2 lakh crore of BM in cash going kaput just fine.

But we must remember
a. That is 50% of the estimated total BM in cash of 3-4 lakh crore which means the other 50% got laundered to WM (at least temporarily) just fine.
b. More importantly, without the curb on the generation side, it would not take much time to get generated once again. Worstly still, after getting wised up, they would do it in much more sophisticated manner to ensure that it appears white to even greater scrutiny. I gave some examples of what is happening (or happened in the last 5 years) already.

nandakumar · Post by **nandakumar** » 03 Dec 2016 15:03

After the latest amendment to the income tax law where unaccounted cash can be offered to tax @50% and 25% kept with the government under the PM Krishi Kalyan Scheme or whatever for five years, practically all of the demonetised currency will come back into circulation. It doesn't make sense for someone who has hoarded tax evaded income to not tender it and salvage 25% right away and salvage another 25% on a deferred basis rather than let 100% of it rot away. The question whether 2 lakh crore or 3 lakh crore will be frozen for good is academic.

Yagnasri · Post by **Yagnasri** » 03 Dec 2016 15:30

But the problem is not just evasion of tax. If there is any loot etc., then it is very problematic to justify it to people. That is why politicos will face a lot of problems.

Subdas · Post by **Subdas** » 03 Dec 2016 15:58

pay day came and went and no riot on the streets?

arvin · Post by **arvin** » 03 Dec 2016 17:00

One of the biggest energy source of 10J for winning elections was KNPP i.e Karachi Nakli-note Printing Press. . With a nice big modi-rating rod shoved through the core and it undergoing a crore meltdown with heavy water supply (500 and 1000) effectively stopped, chances of 10J making a comeback seems a remote possibility. As the meltdown progressess ,the crore catcher underneath (govt agencies) will be waiting with open arms as finer details of the crore structure emerges.

On another note, chanced upon a copy of mumbai mirror at home dated sep 17 2016. Page 28 had a article by columnist Ajit ranade about scrapping the 1000 note. Probably it was his own opinion, but no one might have taken him seriously then. Also mentions Arthkranti, baba ramdev and the usual supporters.

nandakumar · Post by **nandakumar** » 03 Dec 2016 17:04

Yagnasri wrote:But the problem is not just evasion of tax. If there is any loot etc., then it is very problematic to justify it to people. That is why politicos will face a lot of problems.

Yes. But it is still manageable. Lets say I am a PWD engineer and I have amassed 100 crore in bribe miney. I can offer it to tax at 50 % and escape IT prosecution. You are saying that I still cannot escape prosecution under prevention of corruption act. Fair point. But what the IT amendment has done is to expand the market bring hoarded cash to the surface. Up until now one had only the grey market launderer who was charging 40% premium to convert black to white. But niw the Govt too has opened up a route. As I see it the businessmen who were engaged in legitimate activiyies but had only tax evasion to contend with will take the official route while politicians and corrupt bureaucrats smugglers etc will take the grey market route. I am told that the grey market discount on demonetised currency has fallen from 40% to 25%. All this only suggests that practically all the hoarded cash will flow into the system. Or practically close to that. Which also means that the success should be measured not inmechanistic terms of frozen notes but in a more nuanced manner: in terms of monies coming under the new voluntary disclosure scheme, the liquidity in terms of M1 money translating into M3 which is many multiples thereof and hence lowering of interest costs in the economy as a whole, the higher tax base enabling the Govt to expand public expenditure without adding to the fiscal deficit and so on.

Yagnasri · Post by **Yagnasri** » 03 Dec 2016 17:10

It is the fear of unknown and IT department that will make then S77t in their pants and all. My car checked three times during my recent trip to the native place.

How to hid money when police are behind us all the time.

TKiran · Post by **TKiran** » 03 Dec 2016 17:26

shiv wrote:
Kakkaji wrote:Some posters have mentioned above that Indians do not like paying any tax. I can empathize with that.
I have an issue with the way this liking and not liking of paying tax is worded. No one likes paying tax, just like no one can like cleaning a baby's bottom or cleaning one's own father's bottom in the weeks before he passes away. But it is a duty. I have seen some bullshit being posted on this thread under the title "dharma". Dharma is a duty - an obligation. One does not have to like it any more than Arjuna liked killing his kaurava brothers

Shiv sir, your understanding of the DHARMA is different from my understanding. You say DHARMA is a duty. Corollary of that is every one has to pay taxes. Corollary of this paradigm is, you are a businessman, so you have to pay " jajiya". I don't care if you are making profit or not you have to pay Tax. Pay me Tax, if you want to call yourself "businessman". Fair enough.

My understanding of the DHARMA is that, it is the " natural property ". DHARMA is different for different people. For example, if you are a " shudra" (ie salary class or professional class) you get paid whether your employer makes a profit or not. So you pay the tax first, whatever is left is given to you. Enjaay. Make festival.

DHARMA for "vaishya" is, you have to generate revenue first and foremost. If your costs are exceeding your revenues, you need not pay taxes, if your costs are exactly matching your revenues, then pay zero Tax. But if your costs are less than your revenues, whatever is your profit, on that you pay Tax. Corollary of this is that, tax is not your primary botheration, revenues are. Actually you can make up for your losses by depreciating assets.

prahaar · Post by **prahaar** » 03 Dec 2016 17:53

TKIRANJI, you are offloading all the risk involved in the business on the shudras. How much profit sharing must be done and how? Paying tax is not voluntary contribution.

TKiran · Post by **TKiran** » 03 Dec 2016 18:18

prahaar wrote:TKIRANJI, you are offloading all the risk involved in the business on the shudras. How much profit sharing must be done and how? Paying tax is not voluntary contribution.

Prahaar ji, it depends on Kshatriya class(Govt).

If you have a Govt what we have currently, they will insist on jazya., only that much I can say.

shiv · Post by **shiv** » 03 Dec 2016 18:24

TKiran wrote: DHARMA for "vaishya" is, you have to generate revenue first and foremost. If your costs are exceeding your revenues, you need not pay taxes, if your costs are exactly matching your revenues, then pay zero Tax. But if your costs are less than your revenues, whatever is your profit, on that you pay Tax. Corollary of this is that, tax is not your primary botheration, revenues are. Actually you can make up for your losses by depreciating assets.

What you say here is still perfectly legal and dharmic. Nothing illegal that I can see - only play with words "I think about revenue not tax" . This is wordplay, not cheating. You may be avoiding (or reducing) income tax, but you are avoiding it legally. I do that too. There are many avenues to do that. As long as you declare returns, list losses, expenses and depreciation and balance your books what you are doing is staying within tax laws. There is nothing wrong in that - you are actually paying taxes in a sense because you are part of the legal economy paying indirect taxes. Purchases that add up as "depreciation" in your books only mean that you have books and are staying within the law. You may even be showing false/"ghost"/benami employees - but beyond a point the cheating can get more risky. As a businessman your income will have to be fairly high for you to actually pay 30% tax. You can always reduce that by so many means - and if you are clever enough you can keep it at zero tax. But that does not make you a cheat or a tax defaulter. Your books are clean-ish. You can hide some income. The government does not bother about that. The problem arises when the extent you cheat the government rises to very high levels and they can prove it. If you have 2-3 lakhs left over so you can celebrate diwali better than the mullas Id, it does not necessarily mean that you are a cheat

I disagree with your statement that tax is not your primary botheration. If it was not a botheration you would not use words like "depreciation" and "buying equipment" which is what every businessman does to avoid tax and it is perfectly legal. But it is still within the ambit of our tax laws.

Jaziya is what you would pay under Islamic rule. But Muslims don't pay jaziya - they pay Zakat. Zakat is basically a compulsory tax that they pay to the ruler who has money to keep an army. That army will make slaves and dhimmis of others, who will pay jaziya. Those Muslims who don't pay zakat and non Muslims who don't pay jaziya are punished. The national taxes you pay are for exactly the same reasons - so that the army can be maintained by the Sultan/GoI. Now the army can be used to keep invaders out. The same army, in the form of police forces can be used to punish those who don't stay within the tax laws.

shiv · Post by **shiv** » 03 Dec 2016 18:29

Bart S wrote:
shiv wrote: Let me tell you my problem with UPI aside from the fact that it ain't workin' currently..
On the UPI app, please try something from a private entity like ICICI's mobile app, ICICI's pockets (if you don't have an ICICI account and a good idea if you have one as well) or Flipkart's PhonePe. The PSU bank's apps might not be there yet. SBI's recently released UPI app is just a browser working off their website.

I installed ICICI Pockets earlier today after much researching. I have an ICICI account as well. Everything appears OK - charged it with a token 1000. Let's see..

Gus · Post by **Gus** » 03 Dec 2016 18:32

Listened to moradabad modi speech. It is hard to restrain oneself ..the man is gifted . I mean, we think we know how good he is based on what he promised he will do....he is at another level when he speaks on what he is doing