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Old 25th May 2016, 18:44   #31
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Default Re: Income Tax Department procures customer data from luxury car dealerships

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Originally Posted by FrozeninTime View Post
@phamilyman - I don't understand why your targeting doctors, what about lawyers, IT professional , politicians, media and cinema stars. You didn't mention a word about them. So do you mean to say they are clean and only doctors make black money?
Such generalisations are unwarranted and deviate from core topic.
I am an IT professional, and would be really keen to understand how I can earn black money. As of now, I only earn through my salary, with the due taxes promptly cut every month by my organization and deposited with the IT department every month. I didn't think it was possible to 'earn' any black money until now.

The only bright side is that I have been able to put this line in my resume - "Among the top 3% of Indians who pay income tax".
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Old 25th May 2016, 19:49   #32
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I am an IT professional, and would be really keen to understand how I can earn black money. As of now, I only earn through my salary, with the due taxes promptly cut every month by my organization and deposited with the IT department every month. I didn't think it was possible to 'earn' any black money until now.

The only bright side is that I have been able to put this line in my resume - "Among the top 3% of Indians who pay income tax".
If you do not declare any other incomes including income from FDs etc, it is technically black money. False HRA receipts, false investment records, false medical bills, false LTA bills - list is long. It is same for every salaried person, from any industry.
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Old 25th May 2016, 20:23   #33
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Default Re: Income Tax Department procures customer data from luxury car dealerships

These Income Tax dept. people device ways to trap the public who evade taxes / black money but see to that they themselves and other politicians, netas etc. don't get caught in the trap set for us. It is common sense to link PAN nos with all transactions made above 20k, purchase of cars, FD's, land and property registration transactions etc. can all be found easily by linking the data bases.

The biggest loot of this system is the one where the MP's are paid pension after a single stint where as the army, police and other govt. staff have to put in a minimum of 25 years of service. Where is the need for them to be paid pension? As if they all are poor and don't have money for their next meal. Same goes for all other perks they enjoy in the name of serving us.
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Old 25th May 2016, 21:02   #34
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Default Re: Income Tax Department procures customer data from luxury car dealerships

I have a practical doubt, it would be really useful if someone could clarify things. Suppose my income is from speculative genre which falls in the 33% taxation, I am paying that through regular filing. Now when I pick up a 50 lakh wheels, I pay around 20% in Bangalore as road tax. So in effect I am paying 53% of my hard earned money to the government. That means I need to have 75 lakhs to buy a 50 lakh vehicle in reality.

Am I missing something? Guys please throw some light.
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Old 25th May 2016, 21:13   #35
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Default Re: Income Tax Department procures customer data from luxury car dealerships

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Originally Posted by Dry Ice View Post
If you do not declare any other incomes including income from FDs etc, it is technically black money. False HRA receipts, false investment records, false medical bills, false LTA bills - list is long. It is same for every salaried person, from any industry.
Ideally government should remove the all the nonsense of submitting receipts of HRA, Medical bills, LTA bills etc. actually such archaic rules forces people to create false receipts otherwise they will lose out of taxes savings. Example if I or my family donít spend any money on medicals then honestly I donít have any medical bills to show as proof to claim exemption until I fake it.

Our system is rigged and it encourage us to go on the wrong path to save our own money.

Ideally people should be incentivized for not claiming medical by lowering insurance premiums etc. I cannot even imagine the gains if we do away with such age old practices.
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Old 25th May 2016, 21:30   #36
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Default Re: Income Tax Department procures customer data from luxury car dealerships

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Originally Posted by nishsingh View Post
I didn't think it was possible to 'earn' any black money until now.
@nishsingh: You dont 'earn' black money - you 'make' it

And the making is not through legal ways and means. Say you have a house and you are selling it. Assume the market price is 50 lac. Now you sell it to the buyer, but the declared value of the transaction is 30 lac - not 50. So if you are to be taxed on Capital Gains - it will be on the 30 lac amount, the rest 20 you dont declare - so goes in a Black box, hence Black.

Get the drift ... ?
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Old 25th May 2016, 21:40   #37
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Default Re: Income Tax Department procures customer data from luxury car dealerships

Since we need to give the PAN number along with the ID proof and all at the RTO during the time of registration of all vehicles, what is the need for getting a separate customer data from the dealers? The IT Dept could get all the details right from the RTO's database, right?
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Old 25th May 2016, 22:07   #38
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Default Re: Income Tax Department procures customer data from luxury car dealerships

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Originally Posted by Dry Ice View Post
If you do not declare any other incomes including income from FDs etc, it is technically black money. False HRA receipts, false investment records, false medical bills, false LTA bills - list is long. It is same for every salaried person, from any industry.
hehe.. I'm pretty sure that's not called black money.

A salaried guy's basic income has already been taxed once. He can write a cheque against the money in his bank account to anybody (and hence is white). The IT dept knows about the existence of the bank account.

If the Income Tax Officer catches the software guy doing such hanky panky, he will charge him of "furnishing inaccurate particulars of income" under some section of Income Tax law. There will be penalties and interest charged.

If somebody is having *real* black money and is caught in a raid or a hidden co-operative bank account has been discovered, he will be charged with "concealment of income". Penalties and interest charged will be severe, and actually, there is jail term for this under some Section of Income tax law. However, I don't think anybody has ever gone to jail for being caught with black money.

Do a Google search for the 2 phrases (concealment of income & furnishing inaccurate particulars of income) to learn more. Are there no financial/CA type guys on Team-BHP? They will be able to explain properly.
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Old 25th May 2016, 23:34   #39
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hehe.. I'm pretty sure that's not called black money..
Black money - I meant for undeclared income from "other" sources. First part of the post.

The second part of the post was to highlight an average IT Joe also has enough violations under his/her belt as any other salaried professional.

I am not debating the clause under which he/she may be booked. Simply stating that if the tax man decides to pursue the case, they can find plenty of irregularities with salaried class also.
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Old 26th May 2016, 02:27   #40
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Default Re: Income Tax Department procures customer data from luxury car dealerships

Although this is an encouraging move from the Government and the IT Dept. I am skeptical about the success of such a method due to the following reasons:

1. No individual who has illicit money to the extent of facilitation of buying cars such as a Lamborghini or of similar ilk would want to actually make such a purchase and come in sight of the IT Dept or even relatives or business associates for that matter. It would attract a lot of unnecessary and unwanted attention in my opinion.

2. I think even for people who have the means to actually buy such a car it would be easy to take an alternative route via loopholes in the machinery and buy the car and make a part of their illicit money into 'legal' money using this purchase as one of the means to do so. so even a bit part conversion of such money is possible to be converted into cash

3. There are plenty of businesses which run with a vast amount of cash transactions involved thus a person could just approach a company pay them in cash and ask them to make the purchase on their behalf and and the benefit for the company would be in terms of the depreciation it could claim on that registered car which at even 5% of a 4Cr Rupee car would be 20 Lakh rupees.


So for me the ideal way isn't this. I am not an accounting professional so please feel free to correct me if I am wrong.
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Old 26th May 2016, 06:57   #41
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Default Re: Income Tax Department procures customer data from luxury car dealerships

I have come across quite a few people who do many things to evade tax but i've also heard a common chorus for a reason. They say that if they choose to declare all their hard earned income and pay tax it never really does show any positives in their own lives. The government uses a major chuck of it in providing freebies to people based on caste and more freebies to get re-elected. It does get difficult to explain to them about how paying tax to the government is only going to lead to the betterment of our country.

Property sales is a major source of unaccounted money.Simple logic to rectify this would be to raise the guidance value to actual market value of a property. It is as simple as that. what is stopping the government from doing that? There is a lot more black money in property deals than in car purchases. I have heard of people selling property worth in crores while the guidance value is less than 50 lakh rupees. So who is to blame in this case?

Last edited by zombiedriver : 26th May 2016 at 07:02.
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Old 26th May 2016, 10:19   #42
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Default Re: Income Tax Department procures customer data from luxury car dealerships

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Originally Posted by Dry Ice View Post
If you do not declare any other incomes including income from FDs etc, it is technically black money. False HRA receipts, false investment records, false medical bills, false LTA bills - list is long. It is same for every salaried person, from any industry.
Tax is deducted from interest income on FDs by bank upfront, unless you furnish in writing (form 15A I think). False HRA receipts? we have to furnish PAN no of Landlord too. Plus, mostly (esp. in big cities), HRA is just enough to cover actual rent paid (minus 10% of basic), no real increase in income there.

False Medical bills? only 15000 per annum is exempted. I am yet to complete a FY with <15000 medical expenses. Anyway Medical and LTA are not really additional income, they form a part of our salary package.

There might be many people who must be saving some pittance by falsely disclosing or not disclosing these things. But its a pittance anyway. Plus, the efforts to do so, and the rewards, does not make it a really worthwhile endeavor. I usually don't even furnish medical bills, the effort needed to keep all medical bills, fill out forms, attach bills and submit, is not worth the returns. Same is with LTA, during 8 years of my professional life, I have never availed LTA.

And I am not from IT industry (and do not earn that much ). There is no way a salaried person can create black money, through salary alone. One can hide some income (which actually is not hidden from IT deptt., just ignored, as it is insignificant), but can't CREATE black money (except for, maybe resale of property by declaring less value. But then, mostly one had paid through their nose to pay EMI + rent for buying it, and adjusted to inflation, there is hardly any real capital gain while selling it).

Last edited by Nav-i-gator : 26th May 2016 at 10:34.
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Old 26th May 2016, 11:18   #43
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Default Re: Income Tax Department procures customer data from luxury car dealerships

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Originally Posted by Dry Ice View Post
If you do not declare any other incomes including income from FDs etc, it is technically black money. False HRA receipts, false investment records, false medical bills, false LTA bills - list is long. It is same for every salaried person, from any industry.
I do not think salaried person would be able to save much by doing this. Yes some people do make fake HRA receipts. Fake Investment record is not possible in most of the organisations. to give you my example, our co. calculates tax based on self declaration of investment till the month of December. By January we have to submit all the proofs of such declared investments, if the Finance people do not get authentic documents, then they cover the balance tax after removing those investment in three months' salary.

Medical is not paid upfront, but we have to claim by submitting original bills. Fake medical bill is a crime and atleast our company takes it very seriously and the punishment is immediate termination of job without any notice. I know a few organisation who follow such practices. As far as fake LTA is concerned, trust me it is the most cumbersome job and the amount of effort it takes is just not worth it.

The whole point is salaried class in this country is the only one who pays income tax more honestly then anyone else. Escape routes are very narrow and not worth the efforts.
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Old 26th May 2016, 12:36   #44
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Default Re: Income Tax Department procures customer data from luxury car dealerships

There are two key out-right databases available for Income Tax Department to look at :

1. Property Registration data
2. Car registration data

Anyone owing (a) immovable property of any value (b) car over 3L price & (c) bike over 1L, must be asked to furnish PAN and tax declarations should be matched. Even if property/ vehicle was taken on loan, source of money to pay back the loan and loan closure duration must be checked.

In addition to the above, IT deptt must catch hold of the Property booking data and apply above scrutiny :
(a) Making PAN necessary for property booking
(b) Online system to report each booking directly by builder to IT Deptt.

I am sure that builder lobby would be hell bent against these steps. The builders who flaunt "Sold-out" / "only few remaining" must be snooped upon first. I have seen many people who book property at the launch of project, sell it before registration and make fat profits in the process. Most of these people are property brokers and habitual investors. This income is never reported.

I agree that Gold etc. also contribute to sizeable tax avoidance, but most tax-evaders do use their black money in alteast one of the above 3 ways. In the beginning honest people who made purchases with tax-paid money will surely feel harassed and will be against such moves of re-declaration; but in long run this is beneficial for us only. Net tax revenue will increase and tax slabs would be further rationalized and we can expect better infrastructure spends.

PS: some 10 years back I heard one clerk in a government office discussing with his colleagues. He was planning to buy a Honda City on loan and paying back loan in 6 months to avoid detection. I think it is mandatory in government service to declare any purchase beyond a limit (Rs. 10,000 IIRC)

Last edited by AutoNoob : 26th May 2016 at 12:51.
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Old 26th May 2016, 12:54   #45
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Default Re: Income Tax Department procures customer data from luxury car dealerships

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We donate to religious institutions with the expectations of more rewards (material, non material). So, it's like an investment in the stock market. But a tax does not give us any direct returns, but helps others. And we Indians don't like good things to happen to others unless better things happen to us.
Is it also because of cynicism that the the govt will not do well the tax collection ??

lot's of charitable institutions - which are religious neutral - are getting decent cash flow with no compulsions /forcing, primarily because people who contribute, can see something tangible happening or is having the trust that it will put to good use...

I think, if there is better transparency in how the tax collected is put to use, people will have less reticence in paying up tax.

Take for instance bangalore - the road tax is highest, (all taxes are high!) compared to the rest of the states.. the infrastructure - pathetic.. always the same excuses from the govt!


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Example if I or my family don’t spend any money on medicals then honestly I don’t have any medical bills to show as proof to claim exemption until I fake it.

Our system is rigged and it encourage us to go on the wrong path to save our own money.

Ideally people should be incentivized for not claiming medical by lowering insurance premiums etc. I cannot even imagine the gains if we do away with
What is the maximum one will save ? even assuming the highest 30% bracket, for the Rs.15k which is upper limit for medical, one will save max. rs.4500 PER YEAR!

If you see the other corporate laws, loop holes are abundant, which allows companies to make 100 times that amount!

the need of the hour is making the whole system transparent and accountable.. what benefit does an average person who has paid tax throughout his life gets ?? Nothing tangible!

one of my friend is a citizen of france - he says there are NO tax saving measures there - straight 49% tax.. but people pay it happily - for
a) if hospitalized NO CHARGES whatsoever - his wife delivered a baby and he didn't even need to pay a single euro!
b) if he loses his job, govt will pay for 1 year and will help him find a job
c) his kids gets 500 euros per month till they are 18 - for basic schooling and food
...
and this is for ALL the citizens!

Last edited by haria : 26th May 2016 at 13:08.
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