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Old 23rd April 2022, 12:40   #61
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

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Originally Posted by OffRoadFun View Post
By advocating high taxes to avoid chaos and crowding on roads, you are advocating acceptance of poor infrastructure and services from the government. This also makes the pathetic infrastructure and traffic management look like a privilege meant for only few. Does not need to be that way. Our car ownerships have not reached that level yet where it has to be discouraged via higher taxes. I am of firm belief that chaos and infrastructure can be improved significantly from current levels to support many more cars on road without much increase in road tax. The authorities need to be held accountable and traffic be managed and organized. The chaos on our roads is not primarily because of higher vehicle density, it is because of poor planning, poor infrastructure and poor rule enforcement. South Korea, Japan and Netherlands prove that, their vehicle and population density is much higher than ours and still driving can be fun there.
You are right,

Japan, SK and Netherlands have ~500 cars per thousand people and india has around 50 cars per 1000

but, taking the per capita by cities might reveal a different picture since the issues with cars are apparent only in cities.

data in per 1000 people

Amsterdam - 247

Tokyo - 232 (as of 2013)

Seoul - can't find proper data

Beijing - 209

Hongkong - 106

Mumbai - 190 ( 4mil cars and 20 mil people)

Delhi - 556

Bengaluru - 640

Hyderabad - 344

Indian cities have much higher vehicle densities and I'm not sure if infra can keep up (even with money) the better solution is to promote transit like Japan. and we have some historic handicaps like disorganised road layouts and narrow roads
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Old 23rd April 2022, 12:54   #62
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

Next major step needs to be proper taxation on real estate dealings. That’s where most tax escapism is happening by the babus swindling from us.
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Old 23rd April 2022, 15:11   #63
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

As they say, Death and Taxes are the only two things certain in this universe!!

Don't dwell over the tax bit - at the end of the day, if you can afford it, its your money your choice

Its not like other things we all use have no tax incidence - you buy an AC for your home it is considered a "sin good" at is subject to GST at 28%. Adding in your income tax argument, then over 50% of your AC cost is only taxes, and then you will pay tax on the electricity you consume to run the AC!!
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Old 23rd April 2022, 16:41   #64
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!



Refer to the part about taxes in India and what we get out of it.

For general awareness
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Old 24th April 2022, 00:57   #65
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

The view is so lopsided in India its cynical. The salaried class is never the sort of HNIs generally that anyone thinks off. All businessmen and big farmers will make multifolds money and still won't pay a penny in direct or so many indirect taxes of any sort. They are the ones who benefit from cheap loans to what not, whereas all everyone wants to do is tax that salaried employee who has come from humble background and is just paid because of their intelligence and their hardwork to reach where they are.
But what else can we ask of all the political goons. They will never tax themselves and that is the reality we live in. As a GEM i feel we are the most marginalised part of modern indian society. Never took any education to what not from government nor can I hope so looking at their infrastructure. Always paying for the burden never benefitting from anything.
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Old 24th April 2022, 08:37   #66
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

Folks,

One way to understand this high taxation is to understand that given our fuel is imported, core technology is imported, most people do very low value work just to survive, as a nation we pay through our nose for all these luxuries.

Secondly, I completely get the point about salaried man having to rough it up, do realise that while we (as in salaried people) pay high taxes, the real high "price" of our nation being poor/third world is actually paid by the poor people through generations due to issues that provide them with very little chance of moving up the value chain and earn more:
  1. Malnutrition at a very young age - which will mean the kids will have very little chance of moving up in life as all brain development happens by age 5-6 and if one does not get the right nutrition, one is condemned with permanent limitations
  2. Poor Quality of Life -> What chance does a kid from a typical slum or a small village has in competing with middle class kids from the cities who have access to the best tutors, independent room, not having the need to think about where there next meal comes from.....
So clearly, the govt needs the taxes to help the large number of poor (Gentle Reminder: 80 crore people in this country have been given free ration, most have got free vaccines -> And it all comes from our tax money!!)

Does this mean that the system is fair? Absolutely not!! For all the high taxes that are paid and all the need of the poor, we have an extremely inefficient system of government, and by this I am talking about the way things happen at the Ward level or the district/taluka level. If you look at the GOI rules, all seem to be made with a fundamental assumption: People are idiots, govt officers know best, govt is always right and people need to be threatened to get good behaviour. This has created such a huge power asymmetry between Govt Officials (and this includes the judicial system) and common people that as a common person, one stands NO chance IMHO.

Couple that power asymmetry with a huge demand supply gap and you have created the best circumstances for corruption!! This, unfortunately, is the reality we all live with. This means that you either pay high tax through money or pay a high cost through a low quality of life or BOTH. The guys with the power will, of course exploit the power asymmetry to their advantage. This makes the entire system extremely inefficient and corrupt.

Now coming back to your case: I wish you could have taken advantage of tax law which is supremely beneficial to those who pay tax in the 30% tax bracket. It is an absolute no-brainer for purchasing a depreciating asset like a car. And this is how it works:
  1. You pay exactly 0 as upfront cost. If you could invest that money (what ever be the amount) at even a super conservative 6.3% (RBI Bonds), you will earn despite post tax returns. If you invest in equities, you will earn a *lot* more and pay less tax
  2. The EMI you pay can save 30% of your tax -> Think you get 30% discount on the EMI you pay. This is SAVING tax or getting a 30% discount -> which ever way you look at it.
  3. The fuel bill (upto INR 2 Lakhs 50 thousand) can be submitted to save from your 30% tax bracket; this means you get a 30% discount on fuel
  4. Ditto with all car maintenance, car insurance (ideally both can be part of EMI in lease contract) -> But you can only claim maintenance separately
  5. You pay perquisite tax which is quite small compared to your EMI
I had put up the calculation in the Jeep Compass thread -> I have one on leased model for 5 years and the total cost of ownership with conservative calculations is much less. If you add the expected depreciation due to EV adoption, leasing is even more lucrative.

One can also argue that the current rules actually favour those who pay 30% tax as they get massive opportunities to save taxes and raise their standard of living by using expensive cars, which a person in 20% tax bracket or less is unlike to find very lucrative. But tax and accounting rules across the world are made by those who are on the right side of that power asymmetry, so you know where it will go....

My last two (unsolicited!!) cents: Just enjoy the ownership experience in the given circumstances, don't worry about the taxes as there is nothing you can do about it but be grateful that could actually purchase a car of your choice through your hard work!

PS: It is easy to blame the politicians but we are paying for choosing mediocrity over excellence post independence and that is explained in the type of systems and processes we chose to inherit from the Brits rather than build our own. It will take many more years to fix it and I am an eternal optimist so long as we dont elect jokers who offer freebies
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Old 24th April 2022, 08:58   #67
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

The biggest farce about high taxation in India? The notion that we are taxing the rich to feed the poor. Successive governments of all political hues sing the same song. The reality is: the government survives on your tax money. The day we don't pay taxes, they can't feed their bloated ministries. The curse is the amount of medicore government servants on a permanent payroll. Plus the hordes of retired government employees drawing a lifetime of pension. If we corporate the government structure and pay the employees as per performance, we will see a far smaller wage bill and a possibility of cutting taxes even.
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Old 24th April 2022, 09:20   #68
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

God Almighty! Another whining, moaning, groaning, bitching thread by the top 1% or 2% of the population by wealth & income of how tough life is for us poor luxury car buying, foreign holiday going, upwardly mobile citizens. Thank God the bottom 50% do not read these posts of the grumbling rich. This sounds like some of the ladies in my apartment complex hissing about the Rs 500 salary increment they have to pay to their hapless maids while sitting in the club getting their hair done for Rs 4000.

Yes taxes are high. The OP may consider himself lucky that his rate is 30% as I notice from his calculation. For some others it is 42%. Taxes pay for the direct to beneficiary system, the subsidies in agriculture, MGNREGA, a functioning of the Government (however messily) that holds the country together, keeps the two belligerent nuclear states on our borders at bay, and creates the overall socio-economic environment that enables the fat cats like all of us to pursue a well paying career in jobs or business. Without taxes and our functioning anarchy of a Govt you and I would be facing riots on the streets each day by the bottom 50% against the top 2% to which we all belong.

It is a fact also that our taxes can be and should be used efficiently. In many areas such as healthcare, primary education, MGNREGA, agro-subsidies the use of our money could be a lot more efficient than it is. No doubt about that. But equally today Govt control over the effectiveness of its expenditure in most (but not all) areas is many fold better than it was say in 1980. These things improve slowly. Too slow to notice except when measured in decades. Having observed, dealt with and suffered at the hands of the Govt in my 40 years of working life I can say hand on heart that on parameters of small corruption, big corruption, Govt effectiveness, Govt obfuscation, babudom, and the food subsidies we are miles better today than we were in 1982 when I started working, simply miles better. Not perfect yet, not even close to a good European country by any stretch but a darn sight better than the sinkhole we were in, in the 1970s and 1980s. I do not give credit of this to any one Govt. It has been a slow evolving process getting stronger as our population gets better educated and more aware. The internet and cell phones has suddenly taken that awareness factor up several times overnight. In the short run that may have negative benefits but, I believe, in the long run higher awareness strengthens democracy and making politicians and bureaucrats more accountable.

65% of our population lived below the poverty line in FY1956. That number is 22% in FY2018 as per World Bank (Govt claims a ridiculous 6.8% which I don't believe at all). This means in ~70 years we have lifted about 59 crores out of absolute poverty. Now here we are referring to absolute poverty - not enough to eat plus a tiny bit more. So some one at the 30th percentile is still very very poor. But just sharing to give a indicative direction to readers. To provide another context in the exact same time period USA lifted about 3.5 crores of its citizens above their poverty line*. So it is our right to criticize and we should but let it be informed criticism and not the usual India sucks lament.


Quote:
Originally Posted by Yeldo View Post
While I am in agreement with the general anguish over higher tax outgo that the salaried car buyers are made suffer, I would like to humbly point it out that taxes on income and taxes on consumption are basically different from the point of view of public economics.
(I am aware that this comment would be extremely unpopular here, but sorry, that's how taxation economics works.)
Quote:
Originally Posted by Poitive View Post
The point above is often missed out.

Just for context:

Source: https://m.timesofindia.com/business/...w/88149699.cms

61 lakhs means the average wealth of 92 Indian families from the bottom 50%.
(Wealth, not income)
@yeldo, @Poitive, thank you Gentlemen for two balanced posts in this sea of the grumbling rich.

*Let's not debate what the India poverty line is versus the American one. A poverty line is always contextual

Last edited by V.Narayan : 24th April 2022 at 09:29.
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Old 24th April 2022, 09:28   #69
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

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Originally Posted by Jangra View Post
Its a common analysis that one does in his / her head as to if it was worth it. And I do feel the Kodiaq is worth every penny of it. But paying 16lacs, which is 69% of SKODA's receivable in taxes justified? I love India, but not its city roads. Driving experience lately in Bombay is not something to write about. I already pay tolls to drive on a good road, then what is 5lacs RTO for? To drive in the never ending Metro construction zone?
I own a Superb and I am aware of all of these figures. Tax can be as low as 0% if you chose public transport or 13% for a car that was manufactured in India. It was your decision to pick a one that attracts 4x of it. Besides, the tax we pay is not meant for building and maintaining roads alone.

Defence, Healthcare, Education, Subsidies, Foreign relations, Elections ........ the list is endless.
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Old 24th April 2022, 09:34   #70
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

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Originally Posted by vinu_h View Post
Tax can be as low as 0% if you chose public transport or 13% for a car that was manufactured in India. It was your decision to pick a one that attracts 4x of it.

Wrong! Please read the post by Thanixravindran.
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Old 24th April 2022, 09:36   #71
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

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Originally Posted by apachelongbow View Post
Plus the hordes of retired government employees drawing a lifetime of pension.
This is *one* of the biggest problem IMHO. GOI (Central Govt) does not give lifetime pensions post year 2004 if I remember correctly and has moved to the New Pension Scheme: See this link. So this should reduce over time.

However, despite that, we still pay a huge amount of money for socialistic decisions like running Air India: the Civil Aviation ministries budget was INR 3210 crores while it ended up spending INR 72069 Cores; reason: "meeting expenditure on cash losses of Air India Limited, during COVID period, equity infusion in Air India Asset, Holding Limited and Loans to Air India Limited."

The India budget site makes for fascinating reading; e.g. all the PPF and PF that you contribute to has to be paid back and is a significant component of interest/debt payments. We are paying insane amounts of money on things like Food subsidy, urea subsidy, MNREGA.... the list is endless and way more that what one pays for Govt employees. Like I said, we are paying the price of incompetence, with loads of people still requiring direct Govt support to just survive!

Last edited by saumitra_joshi : 24th April 2022 at 09:51.
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Old 24th April 2022, 09:58   #72
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

Quote:
Originally Posted by V.Narayan View Post
God Almighty! Another whining, moaning, groaning, bitching thread by the top 1% or 2% of the population by wealth & income of how tough life is for us poor luxury car buying,

thank you Gentlemen for two balanced posts in this sea of the grumbling rich.
With all due respect sir, most salaried guys are not complaining about higher taxes on their income even though they pay higher than the corporates, they work for. (a topic for another thread probably)

Here the issue is that even after paying 30-42% taxes, individuals have to shell out a further 50-65% to buy a basic necessity like a 4 wheeler.

This thread is about a regular folk earning a reasonable salary, and paying 30% income tax. When he wants to buy a car for his daily commute or take his family on weekends, he has to pay 48% GST, 10-15% RTO plus whatnot and also bear the Interest charges on all these taxes as most of the purchases are on EMI.

The Indian salaried class is growing and aspirational. They want to stay in India, work hard and pay taxes honestly; it’s high time the Government realise these aspirations and does something that gives them more money to spend on their families and themselves.

Last edited by Turbanator : 24th April 2022 at 10:03.
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Old 24th April 2022, 10:00   #73
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

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Originally Posted by Jangra View Post
Wrong! Please read the post by Thanixravindran.
Read, no change in my stand.
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Old 24th April 2022, 10:07   #74
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

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Originally Posted by Jangra View Post
Yes, you heard that right! Well, technically.
Let me explain.

I'm a salaried employee, like many others here - A section of population who doesn't get much tax relaxation. But, we are not here to talk Budget.

I recently bought a Skoda Kodiaq - Sportline trim for which I paid Rs 43,81,800. For this discussion, I would keep the extras like Maintenance pack, Fast Tag, Accessories etc aside and just focus on Ex-showroom, RTO and Insurance - which was 42lacs.

So basically only 57% of the total amount was received by SKODA!

Its a common analysis that one does in his / her head as to if it was worth it. And I do feel the Kodiaq is worth every penny of it. But paying 16lacs, which is 69% of SKODA's receivable in taxes justified? I love India, but not its city roads. Driving experience lately in Bombay is not something to write about. I already pay tolls to drive on a good road, then what is 5lacs RTO for? To drive in the never ending Metro construction zone?

Then comes another thought (ONLY applicable to salaried ones). I pay with my after tax money. Calculation of pre-tax is a simple math, if 0.7x is 42.6lacs, then x is 61

So basically, I paid almost 35lacs to the government to buy a 24lacs car? While some may argue that this is not the right way to look at it, there is no denying that this is it. It was my choice and I'm not complaining. But I do feel as a taxpayer, returns from our government when it comes to infrastructure needs a lot of improvement.

So why this post?
1) Of the 43lacs I paid, only 24lacs gets in Skoda's pocket, want to know from other members if they feel its fair?
2) help someone who is unaware that ex-showroom cost consists of 48% taxes already
That's very correct. The thing is our Government is very corrupt and while 5% of the wealthy hold 95% of the country's wealth, the other 5% are responsible for generating that 95% of the country's wealth for the rich.

In the name of taxes (which have increased multifold in the last 7 to 8 years) we still don't get what actually the taxes are collected for. Let's see some basic things that are included:

1. Well Engineered Roads (Infrastructure)
2. Clean & Regular Supply of Water
3. Quality & Uninterrupted Electricity
4. Quality Medical Facilities
5. Quality Educational Facilities

These are just to name a few and I've highlighted the attributes in bold. Many would argue that the government is offering all this already, but are they? Due to the nature of my job, I've seen almost all parts of India and I can tell you the quality of infrastructure is PATHETIC to say the least. If I take these points one by one, I can highlight the following observations:

1. You already paid taxes to the RTO and still you pay tolls for highways and still the rolling resistance of the roads and their quality of construction is very poor. Those in this business will know what I'm talking about. Majority of the roads in this country are in a bad shape. Makes me wonder what was the tax collected for actually?

2. Tap water in India is still not drinkable and contains heavy metals and other impurities. There are some places where water is not even available to people and believe me that's a huge chunk of population. They need to carry water from the source to their homes (Yes this country is still that underdeveloped, no kidding).

3. Other than a few cities, most of the tier 2 & 3 cities, towns and villages still don't get a regular supply of electricity. In fact, there are so called Maintenance cuts almost every day. One heavy rain during the monsoon season and there is a 'fault' that no one will repair until the next day. Even in metropolitan cities like Delhi, Bombay etc. the quality of electricity is pretty bad. If you have a home theater system and need to understand the power losses, take a multimeter and start measuring. The resistance and variation in the quality of electricity for your appliances and home theatre equipment will tell you what the government is offering for the taxes you pay.

4. I don't need to even highlight the sorry state of Government hospitals. Just visit your local dispensary or a hospital and you'll know how it is. For some it is the only option when it comes to medical help but who cares, right? The illiterate corrupt politician can fly to Singapore for his medical treatment using tax payers' money, so it's not his problem anymore.

5. Government schools are the same story. They can never compete with regular Private schools, let alone the government schools of foreign countries which in some countries are even better than our best Private schools. But again, the politician can send his child to study abroad, so it's your problem not his. But still you're the ones paying taxes, not him.

Most of the times I'm on international forums discussing about my car and have many relatives living abroad as well in US, Australia, UK and some in Europe too. Now the salaries there are twice or maybe even thrice of ours, while the prices of goods is even cheaper than ours. If you look at it, we're paying double the price for everything, cars, petrol/diesel, car parts, anything that is imported is costing double the price and Indian made stuff is not even worth buying (car accessories, tools, machinery, etc. come to mind). So we end up paying double the prices for almost everything we buy while earning half the salary. That's NOT democracy or equal distribution of income and wealth. Our government has screwed the economics that I studied in my school days and done it in a beautiful legal way because no one wants to challenge them.

The thing is the bureaucrats and politicians have made themselves secure with multiple pensions and loopholes which will never get amended. There's a separate set of laws for the rich and politicians while others are judged by the regular law. They happen to have properties and cars in various countries, so it doesn't matter to them that you don't get to enjoy your ride in India. In any case, most of them are not even into cars, their hobbies are more about making money, if you know what I mean.

We people are still struggling with the deficiency syndrome, that is the reason why no one wants to raise their voice against these wrong doings. I mean all it takes is an RTI, petition or legal action against every wrong thing one observes but how many do it? How many can afford it in terms of both money and their time?

The thing is even if you want to take a legal action, the Indian government makes it a point to make you powerless so that you don't even think about it unless you're too free and rich to go on a "I'll set this right" spree. I filed 2 RTIs last year and it's been over 6 months already and it is still ongoing, now I'm sending a letter to the last channel after which I'll be able to take a legal action. I'll be spending around Rs. 50,000 on legal stuff, including paying the lawyer for a loss of Rs. 25,000 and still there is no guarantee that I'll win the case. How many would want to risk it in this country where salaries are peanuts?

No wonder the politicians and rich still enjoy the power that they do. And there are blind followers who still think it is justified because they themselves don't have anything in them to challenge those on the wrong side. I keep raising my voice wherever possible and within my affordability and I can only ask all others on this forum to do the same. If we all can make a change, then why not. If someone files a petition for something right, we all can sign it and stand by it and show that we're no nincompoops.

We as humans beings should not be less than our counterparts in developed countries, we deserve the same salaries, same facilities, equal legal rights, same standard of living, same availability of good quality goods and services among other things. Why should we be given any less than them.
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Old 24th April 2022, 12:52   #75
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Re: Include my income tax & I paid 61 lakhs to buy a Skoda Kodiaq!

This is a very nice illustration about the taxes you pay towards car ownership. It's slightly dated though, because fuel taxes are higher now.

Worth reading the article along with it:

https://timesofindia.indiatimes.com/...-of-the-stick/
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