Monetary and Tax reformation

To mankind to fulfill their duties to macro family of our nation to build a developed India and to release their entire karmas and attain jeevanmukti

CHARTER POINT NO.14:

Monetary and Tax reformation

Black money menace in the country

In India, black money is funds earned on the black market, on which income taxes have not been paid. Also, the unaccounted money that is concealed from the tax administrator is called black money. The black money is accumulated by the criminals, smugglers, and tax-evaders. Writ petitions filed in the supreme court estimate this black money in India to be tune of over ₹900 lakh crores.

In March 2018, it was revealed that the amount of Indian black money currently present in Swiss and other offshore banks is estimated to be ₹300 lakh crores or US$4 trillion.[8]

Sources of black money income

The root cause for the increasing rate of black money in the country is the lack of strict punishments for the offenders. The criminals pay bribes to the tax authorities to hide their corrupt activities. Thus, they are rarely punished by the judge. The criminals who conceal their accounts from the government authorities include big politicians, film stars, cricketers, and businessmen. Some Indian corporations practice transfer mispricing, by under-invoicing their exports and over-invoicing their imports from tax haven countries such as Singapore, UAE, and Hong Kong. Thus, the promoters of the public limited companies who hold rarely more than 10% of share capital, earn black money abroad at the cost of majority share holders and tax income to the Indian government.[9] By the year 2008, the cumulative Illicit Financial Out flows from the country touched US$452 billion.[9]

Political organizations, corrupt politicians and government officials take bribes from foreign companies then park or invest the money abroad in tax havens for transferring to India when needed. In addition, locally earned bribes, funds and collections are often routed abroad through hawala channels in order to evade Indian tax authorities and consequent legal implications.[10]

In the Vodafone-Hutchison tax case, a foreign multinational company also evaded tax payments in India by making transactions with shell companies registered in tax haven countries.[3]

The unlawfully acquired money kept abroad is routed back to India by the round tripping processes. Round tripping involves getting the money out of one country, sending it to a place like Mauritius and then, dressed up to look like foreign capital, sending it back home to earn non favourable profits.[11]

Foreign direct investment (FDI) is one of the legal channels to invest in Indian stock and financial markets. As per data released by the Department of Industrial Policy and Promotion (DIPP), two of the topmost sources of the cumulative inflows from April 2000 to March 2011 are Mauritius (41.80 per cent, US$54.227 billion) and Singapore (9.17 per cent, US$11.895 billion). It is not plausible that the small economies of Mauritius and Singapore are the true origins of such huge investments. It is apparent that the investments are being routed through these jurisdictions in order to conceal from revenue authorities the identities of such tax evaders; In many cases they are Indian residents who have invested in their own companies.[12][13]

Investment in the Indian stock market through participatory notes (PNs) or overseas derivative instruments (ODIs) is another way in which the black money generated by Indians is re-invested in India. The investor in PNs does not hold the Indian securities in her or his own name. These are legally held by the FIIs, but derive economic benefits from fluctuations in prices of the Indian securities, as also dividends and capital gains, through specifically designed contracts.[citation needed]

Foreign funds received by charitable organisations, non-government organisations (NGOs) and other associations need not disclose the Indian beneficiary.[3]

Gold imports through official channel and smuggling is a major conduit to bring back the black money from abroad and convert into local black money as the gold commands high demand among the rural investors particularly. Also fictitious high value round trip transactions via tax haven countries by diamonds and precious stones exporters and importers is a channel for to and fro transactions outside the country.[15] Also, fictitious software exports can be booked by software companies to bring black money into India as tax exemptions are permitted to software companies.[citation needed]

Unlike in earlier decades, the interest rates offered abroad in US currency is negligible and there is no capital appreciation if the money is parked abroad by the Indians. So, Indians are routing their foreign funds back to India as the capital appreciation in Indian capital markets is far more attractive.

Thus a parallel economy is operating in the country through this black money with politicians, businessmen, smugglers, drug traffickers, government officials etc.

This black money is held by very few % of Indian population but they hold the majority % of the money in their hands as black money, in India and abroad.


Who are the people accumulating black money:
Black money is accumulated by Businessmen, politicians, government servants, film stars, sportspeople, people doing illegal and immoral business like drug and human trafficking.

How black money is accumulated businessmen?​
Business people do their business in two forms pucca account and kuccha account. I pucca account they bill with GST and show the sales turnover  in their balance sheet and pay income tax for it.  But the sales done through kuccha account which forms  a larger part, it involves sale without bill on which no GST is declared nor it is shown in their books of account as sales income and hence this sales done through kuccha account will not be subject to income tax.  The money accumulated through kuccha account sales is black money.  As they have to purchase raw material to the extent of goods sold through kuccha account, they do hawala transactions to procure the same through shell companies.

How black money is accumulated by politicians and government servants?​
Politicians like Ministers, MPs, MLAs in power get bribe on signing of MOU with foreign companies who intend to start their wholly owned subsdiaries or joint ventures in india especially in sanction of government land for construction of factory and for getting various licenses for running the same.  They get huge bribes in grant of contracts for purchases for defense, railways, various government projects,. They take bribes while granting tender for various infrastructure projects  in State and Central Government departments. Besides they siphon funds allocated for various social welfare programmes showing wrong accounts and accumulate black money.  Government servants take bribes for various approvals and registration or while finalizing assessments.  This black money with these politicians and government servants are all unaccounted black money which they keep in their binami names in acquisition of and or gold  or stash in swiss banks or keep in tax haven countries.


How Black money is accumulated with filmstars, sportsperson?
Top Film personalities get huge income from their film acting, direction, music etc.   Some top film acters and reputed sportspersons earn huge money for acting as models or brand ambassador for commercial advertisements. To avoid tax they take major portion of these amount as unaccounted black money which they keep in their binami names or stash it abroad in swiss bank or tax haven countries.

How black money is accumulated by smugglers, drug and human traffickers?​
Smugglers, people involve in drug trafficking or human trafficking like sale of children, girls, sale of human parts, they accumulate only unaccounted black money.

How illiterate people are accumulating black money?​
In India with over 140 crore population only 5 crore people are filing tax returns and show their income. But there are lot of small time street vendors, Paanipuri walas who earn lacs per month but being illiterate they do not know about income tax and they accumulate this as unaccounted black money.

What is the spiritual loss these businessmen, politicians, film stars, sportsperson, etc are suffering due to this accumulation of black money?
These people who are accumulating black money physically are infact accumulating sins and bad karmas to their karma account spiritually, which they should avoid.


Why business people are not disclosing their entire sales income and booking under kuccha account and accumulating black money?
In India there are many taxes and cess levied by central and state governemnts like Corporate tax, capital gains tax, personal income tax, GST, Customs Duty, Excise duty, Service Tax, Education cess, local taxes etc. Corporate tax is a 30%, GST is at upto 18%  and so on. These taxes eat away the major portion of their income and to avoid these taxes, the businessmen are doing kuccha account business transactions and accumulated hawala black money.


How to eradicate this accumulation of black money by businessmen, film stars, sportsperson and account their entire business income to make them to avoid accumulaton of sins and bad karmas?​
Government should introduce 100% virtual currency and ban all physical currency so that all transactions can be done only through banking transactions when all the money get accounted. Besides Government should reduce the direct and indirect tax rate to 10-15% so that the entire sales income will be disclosed by all the businessmen and the government will be huge direct and indirect tax income.

As regards the unaccounted income of film stars, sportsperson, once the government introduces 100% virtual currency, then they can receive their money through banking transactions which will automatically get accounted for which they need to pay tax.

Government should announce tax amnesty under direct and indirct tax for all the businessmen, film stars, sportsperson to disclose their accumulate unaccounted back money income over a period and pay the minimum tax and avoid penalties and prosecutions.  Once they account their entire accumulated unaccounted black money of the past and disclose entire income and pay tax in the present and future, they will be released of their bad karmas.


How to eradicate accumulation of black money by politicians, government servants from ther unaccounted bribery income?
Corruption and bribery taken by politicians and government servants cannot be eradicated from the system in full.  However, with the introduction of 100% virtual currency, this entire bribery amount can be received only through banking channel and hence their entire bribery and money received through siphoning of social welfare programs will get accounted in their books for which they have to pay tax.  Besides government can introduce an amnesty scheme for these politicians and government servants to disclose their entire accumulated black money and pay one time tax without levy any penalty or prosecution.  Once they account their entire accumulated unaccounted black money of the past and disclose entire income and pay tax in the present and future, they will be released of their bad karmas


How to eradicate black money accumulated by smugglers, drug and human traffickers:​
Since smuggling, drug and human trafficking and are illegal and immoral acts Government should take stringent steps to eradicate this illegal and immoral activities from the system.  For this Government should form separate Anti smuggling and anti drug & human trafficking squad to do thorough investigation of all such back money activities and bring the culprits to books by arresting  and penalising them. Besides they should confiscate their entire bank accounts, properties in India and abroad. By this way spiritually these smugglers, people involved in drug, human trafficking if their properties are confiscated by tax authorities and if they avoid doing such fresh transactions, they can be released of accumulating future karmas. But for past karmas they have to face the consequences by accepting the penalties and prosecution, by which they can be released for their karmas.


How to eradicate accumulation of black money without their knowledge by the illiterate people?
“One person one bank”:  Today it is observed out of total 140 crores population, only 5 crores of people are filing Income tax returns. But there are lot of small time street vendors, Paanipuri walas who earn lacs per month but being illiterate they do not know how to file Income Tax Returns.  To bring all the citizens to contribute for the economic upliftment of the country to make a Developed India, Government should introduce “Virtual Currency linked with One person one bank account”  where the Govt. should abolish cash in all forms and introduce only virtual currency  ie. all earnings & payments be done only through netbanking or gpay etc through their banking account. For this Govt should introduce “One Person One Bank Account” stipulating that each citizen or corporate entity should have one bank account whereby all income and expenses of the person will be done through virtual netbanking, or gpay which gets recorded in the single bank account. At the end of the financial year, each bank should appoint tax practitioners/ tax auditors to finalise the accounts from the individual bank accounts of all the account holders and file the tax returns of each account holder after discussing with them and after adjusting the threshold limit, deduct the tax liability, if any from their account and pay to the Govt.  This will ensure more tax payers and the income tax revenue will multiply exponentially to the Govt. that can be used for people’s welfare schemes and for infrastructure development to make our nation into a developed India.

Thus with the Government taking the above steps, the black money accumulation can be eradicated and make all people to pay tax and fulfill their duties perfectly by which they can have peace of mind and also relieved of their karmas that can take them in the path of attaining jeevanmukti one day.