abk

Members this thread is to know if RE will continue to be the best
place to hoard Blackmoney.

Please suggest other avenues other than RE for black money.
Please post with reasons. Do not post without reason.

wiseman

Abk,

This has been the historical practice. But there have been tremendous changes to India, much of which is making the very notion of tax evasion through black money irrelevant and maybe even a dangerous idea.

Much of this has been to do with the usurious taxation schemes of Socialist India where the highest tax bracket was (if I'm right 99%). And the bracket was set quite low. So, it gave tremendous motivation for even slightly rich people to evade. Another important condition was the non-availability of comprehensive systems to trap transactions at every level so detailed analysis could be done to detect evasion even years later.

With fairly decent tax rates (I would ideally like it to be a flat 15% - 20% on every paise earned and you can do anything you want with the rest), the incentive to evade has rapidly declined while the systems to trap and detect it has rapidly improved.

The other thing with black, is that when you lose it, all you can do is cry in a secluded place in the dark. Can't really go to town about it.

I believe the time has come to start changing attitudes about black itself, since much of its usefulness and rationale has disappeared.

Not quite answered your question, but wanted another view to come out.

cheers

abk

the corruption money or 'mamool' can never be given in white and as long as that exists black money will.

wiseman

No argument with that at all! Mamool money has always existed and since it is under control, it might even be healthy for the economy that some of it is black! Its when things go out of control (like in the US) that it becomes a National Calamity.

Only, the black money which forms 40% of your property value and becomes so huge that you have difficulty hiding it under the carpet is the one I'm talking about.

cheers

chataara

Friends,
Yes. Like wiseman told black money exists for years.
No one can tell it was there at the peak period only.
So it is not the reason for the inflated price of property.
High salary, High rent income in (purchased) buildings, demand for vast area from the
reputed builders for constructing apartments etc. are some of the
reasons for inflated price of property.
Now, all these reasons are gone with economic tsunami.
So, downtrend in RE is imminent.
Thanks
chataara

ks2071746

Dear friend,

More than parking the black money, any one holding large chunks of BM ( Black Money ) would like to convert them into white. There are so many ways and means best known to the Indians holding BM especially the politicians, business people, brokers, corrupt officials etc. One recent trend is to make cinema films and even buy the produced/under production films to show loss in the dealing.

ks2071746

madrasi

wrong KS.
it is not just showing losses. you have to first show the source.and if you show losses you are actually converting white into black.people show losses only to offset profits to save tax,otherwise you actually you lose capital on your balance sheet.
people on the bourses actually buy profits or losses to offset their earnings or save their white.
converting in to white is only a small portion which they req for their expenses.otherwise if you show cash or invst you have to show returns or losses again tax or more black money.

chataara

Friend

I can see sun shining in your post

thanks

chataara

ks2071746

Dear friend,

I understand. Regards.

ks2071746

Natarajg007

Whether RE is the best place to park BM is another question? Can I sell one RE and buy another in a convenient location without BM troubles is my question. For example, one reason I have been trying to sell some property in Chennai is to buy for that price in Bangalore. Now it is almost impossible to do it. Suppose the price I sell is 100 then in Chennai with such absurd guideline values and Registrars preventing fair deals, I wont get more than 20 in white and in the best case will be 50. Now the remaing 50 is BM whether I like it or not, whether the buyer likes it or no. So I might sell my property to a Gentleman with 100% white money, but if I cant register my transaction due to the registrar it becomes black! Not my fault or the fault of the buyer.
Now in Bangalore the rate of White:Black is not as bad as Chennai. So if I sold for 100 and took say 30 white and 70black and bought a property for 100 in bangalore I will need to pay 50white and 50black or even higher percentage of white. Now I need to get the remaining white and need to hide the black.
Explains why RE in Chennai might never fall and why having RE in Chennai is worthless if you want to liquify it into cash!