Emails (Others): RE: Short-Circuiting of Round-Tripping !

Thanks, RK

Warm Regards,

Hemen Parekh

(M)=91 – 98,67,55,08,08

From: RAJKUMAR SETH [mailto:rks_mayur@hotmail.com]
Sent: Friday, April 08, 2016 2:23 PM
To: hcp@recruitguru.com
Subject: RE: Short-Circuiting of Round-Tripping !

Have already shared it with my IITK community.
Regards
R K Seth

From: hcp@recruitguru.com
Date: Fri, 8 Apr 2016 10:59:37 +0530
Subject: RE: Short-Circuiting of Round-Tripping !
To: rks_mayur@hotmail.com

RK,

Thanks

Now help me spread the good words !

Warm Regards,

Hemen Parekh

(M)=91 – 98,67,55,08,08

From: RAJKUMAR SETH [mailto:rks_mayur@hotmail.com]
Sent: Friday, April 08, 2016 10:33 AM
To: Hemen Parekh; shaktikanta.das@nic.in; narendramodi1234@gmail.com
Cc: Hasmukh Adhia; ajaitley@del5.vsnl.net.in; jayant.sinha19@sansad.nic.in; piyush.goyal@gov.in; nitin.gadkari@nic.in; spprabhu1@rediffmail.com; kalraj@kalrajmishra.com; bandaru@sansad.nic.in; amitabh.kant@nic.in; smritizirani@nic.in; nsitharaman@nic.in; nandan@nandannilekani.in; viral@juliacomputing.com; Editors; L T Story; Loksabha1; Loksabha2; Rajyasabha; TV Anchors; ceo-niti@gov.in; secy-ipp@nic.in; mcitoffice@gov.in; ravis@sansad.nic.in; sureshprabhu@irctc.co.in; prakash.j@sansad.nic.in; Business Leader
Subject: RE: Short-Circuiting of Round-Tripping !

HCP

Excellent write-up & analysis.

Thanks

Regards

R K Seth

Short-Circuiting of Round-Tripping !

# What is Round Tripping ?

Black Money sent to tax havens ( eg: Panama ) for laundering and which returns to the country of origin as White Money , in the form of investments

# What is the Global Amount ?

Approx $ 23 Trillion ( China's GDP is about $ 17 Trillion )

# What is the mechanism ?

In India , it is LRS ( Liberalized Remittance Scheme ), under which any Indian ( including minors ! ) can remit abroad officially / legally , EVERY YEAR , $ 250,000 for any of the following reasons (and without prior RBI permission ! ) :

* Under Current Account

# Medical Treatment

# Education

* Under Capital Account

# Buying Property overseas

# Holding shares in an overseas company

# Combination of these two

# What is the safeguard ?

Details of foreign assets have to be declared in the Income Tax Returns

# How black money gets sent to tax havens ?

Some amount by Hawala route but most by legitimate banking channels !

You don't see plane-loads of cash landing in Panama !

# Does that mean Indian Banks are party to these ?

Without doubt ! They will advise you how to do this ! Of course, legally !

# If these remittances are legal, will 500 Indians get jail ?

Forget it !

Most legal experts say , they will be let off with some fines , if they have failed to declare these assets in IT returns

# Are laws designed so as to prevent Round Tripping ?

Far from that ! Here is what President Obama said yesterday :

" There is no doubt that the problem of global tax avoidance generally is a huge problem

The problem is that a lot of this stuff is legal , not illegal

We shouldn't make it legal to engage in transactions just to avoid taxes

A lot of these loopholes come at the expense of middle class families

Alternatively , it means that we are not investing as much as we should in schools , in making college more affordable, in putting people back to work rebuilding roads, our bridges, our infrastructure , creating more opportunities for our children "

# What is the best SOLUTION ?

* Make it unnecessary for our Black Money to first travel abroad ( to tax havens ) , before returning ( as White Money ) and getting invested in capital market

* Short-circuit the Round Trip by enabling our Black Money to become White Money , HERE itself ( no need for help from Mossack Fonseca ! )

* As suggested in my recent blog ( Make India a Tax Haven ? ), abolish Personal Income Tax ( remove incentive for tax evasion )

* Enable direct investment of " Black-turned-White " money into government approved INFRASTRUCTURE BONDS , thru creation of designated bank accounts where Black Money can be deposited , without any questions asked

* Obviously , interest / dividend earned from such investments will be tax

free , being Personal Income !

# Is this a practical solution ?

Not if you ask the Economists / Bankers etc

Just ask the man on the street !

This is a too serious matter to be left to the Experts !

# Will such a bill pass the legislative muster ?

Rahul Gandhi promised to pass the GST bill in 15 minutes if amendments proposed by Congress get incorporated

" Short-circuiting of Round-Tripping Bill " will get passed in 5 minutes - and unanimously too ! You know why !

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www.hemenparekh.in / blogs

08 April 2016

Warm Regards,

Hemen Parekh

(M)=91 – 98,67,55,08,08

From: Hemen Parekh [mailto:hcp@recruitguru.com]
Sent: Tuesday, April 05, 2016 11:52 AM
To: Hemen Parekh; 'shaktikanta.das@nic.in'; 'narendramodi1234@gmail.com'
Cc: 'Hasmukh Adhia'; 'ajaitley@del5.vsnl.net.in'; 'jayant.sinha19@sansad.nic.in'; 'piyush.goyal@gov.in'; 'nitin.gadkari@nic.in'; 'spprabhu1@rediffmail.com'; 'kalraj@kalrajmishra.com'; 'bandaru@sansad.nic.in'; 'amitabh.kant@nic.in'; 'smritizirani@nic.in'; 'nsitharaman@nic.in'; 'nandan@nandannilekani.in'; 'viral@juliacomputing.com'; Editors; L T Story; Loksabha1; Loksabha2; Rajyasabha; TV Anchors; 'ceo-niti@gov.in'; 'secy-ipp@nic.in'; 'mcitoffice@gov.in'; 'ravis@sansad.nic.in'; 'sureshprabhu@irctc.co.in'; 'prakash.j@sansad.nic.in'; Business Leader
Subject: Making India a Tax Haven ?

Making India a Tax Haven ?

Yesterday's leak / report " PANAMA PAPERS ", revealed that some 500 Indians have stashed away abroad , billions of dollars worth of " Undisclosed Assets " , courtesy Mossack Fonseca of Panama , a money laundering law firm with staff of 600 , operating in 42 countries and having a client-base of 300,000

Now Panama is not the only tax haven on earth

There are others such as Switzerland , Cyprus, British Virgin Islands , the Isle of Man , Guernsey , Jersey etc

Nor is Mossack Fonseca the only money launderer. It is only the 4th biggest

Acting unusually fast , Union Government has set up a multi-agency group to investigate and bring to book , the suspected Indian tax evaders

While wishing all luck to this Group , we cannot overlook the terribly disappointing results of the Supreme Court monitored SIT , during the past 16 months ( viz: discovery of illegal assets worth around Rs 6500 Crore )

Experts are clamoring :

* Tighten existing laws

* Make illegal , anonymous investments ( eg: Participatory Notes )

* Pass law to declare all undisclosed foreign assets as " National Property "

MY SUGGESTION :

* If you cannot lick them , join them !

* Abolish Personal Income Tax

* And , instead of a Tax Return , every existing tax payer ( approx , 4 cr )

to file , annual DECLARATION OF ASSETS ( Movable and Immovable )

* Introduce Amnesty Scheme under which , no questions will be asked as

to the source of any amount of CASH deposited in a person's SPV

INFRASTRUCTURE account ( at any local Indian bank of his choice )

* Encourage those 500 Indians to liquidate those Undisclosed Assets

abroad and deposit that CASH in SPV INFRASTRUCTURE accounts

Of course , all Indian citizens can do likewise !

* SPV INFRASTRUCTURE accounts can be used ONLY for investing in

government approved Infrastructure Funds ( especially funds devoted

to Renewable Energy / Swatchh Bharat / Health / Education / Homes

costing less than Rs 5 lakhs , etc )

* Make India a Tax Haven of sorts !

By no stretch of imagination , I am suggesting that India becomes a destination for parking

* Drug Mafia money

* Terrorist Money

* Bribe Money for international purchase contracts ( defense etc)

All I am saying is :

* Take away incentive to evade taxes , thereby stopping future generation

of Black Money

* Channel all existing Black Money ( locked up in assets , in India or

abroad ) into the main stream of economy ( Infrastructure Building )

* Enable current annual inflow of inward remittances from overseas

Indians to go up from $ 70 Billion to $ 700 Billion

* Through rapid development of Infrastructure , generate Self

Employment for 12 million youth every year

* Drastically reduce FDI requirement for rapid growth of economy

* By cutting down on government outlay for Infrastructure , reduce govt

borrowing from market and consequent debt servicing

* Raise GDP to 10 % by 2018

It is time to stop tinkering when govt has miserably failed to bring out black money stashed abroad (or locally) , nor succeeded in stopping future generation of Black Money

It was good that the NDA Government raised the expectations of citizens

Now , it is time to deliver on those expectations before Assembly Elections get over in 5 States

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www.hemenparekh.in / blogs

05 April 2016

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