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Friday, July 15, 2016

SIT report on black money should be implemented with even more steps to curb black money

(Guinness Record Holder for letters in Newspapers)

It refers to quite a ‘liberal’ report presented by Special Investigation Team (SIT) set up by Supreme Court for suggesting ways to curb black money. Limit suggested by SIT for cash-transactions of rupees three lakhs is quite low and should not be more than rupees fifty thousand, now with a wide network of banks throughout the country where even poor-most can open bank-account with zero-balance. Likewise maximum cash-holdings can be further reduced to rupees five or ten lakhs rather than rupees fifteen lakhs as suggested. Permission can be obtained and given liberally for having more cash-holdings in actual need.

Useless and misused tax-exemptions like including 80G, 80GGB and 80GGC relating to donations for social cause and contributions received-by/made-to political parties should be abolished. Agricultural income should be taxed where super-rich rather than ordinary farmers take benefit to evade taxes. Import and sale of gold should only be through banks because gold-traders issue multiple numbers of cash-receipts even for bulk sale made to those parking black money in gold.

Tax-laws should be simplified by providing a permanent voluntary-declaration scheme to declare as much income as possible from ‘undisclosed sources’ on payment of maximum tax-slab of 30-percent. This will catch hold of those purchasing property from unaccounted cash when tax-persons will find ‘income from undisclosed sources’ in tax-returns of those selling the property. Capital-gain and stamp-duty should be reduced to 10 and 2 percent respectively to make people voluntarily declare true value of transacted property which in turn will give much-much more revenue than at present.

Sweden should be the role-model for India to become totally cashless country, where presently India is far behind 86-percent deals through cash. Aim should be to ultimately stop printing notes of higher denominations of rupees 500 and 1000. Not only all government-payments, but even salaries and other expenses by private parties above say rupees 5000 should also be compulsorily made through electronic bank-transfers only. System of electronic bank-transfers should also be encouraged and popularised so that small-salaried persons may not have to wait for three days to get cash. Such a system will effectively check corrupt practices as well apart from tax-authorities having an automatic tracking of suspicious bank-transactions if bank-accounts are compulsorily linked to Aadhar-number and Income Tax PAN card.

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