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Brain teaser for the RE experts

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Brain teaser for the RE experts

Last updated: December 14 2010
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  • Brain teaser for the RE experts

    Mr. A has inherited property of the worth 100Rs and want to buy another property of 145Rs from reputed builder. Please purpose a plan to arrange 150 Rs money(in white)for Mr. A. Here are the conditions.

    1. Mr. A's inherited property on his father name.
    2. Mr. A can take maximum 50rs home loan through his pay slip.
    3. Buyer of Mr. A inherited property ready to give the money in form of 50% white and 50% black.



    __________________________________________________ ____

    e.g. one wrong answer is

    step 1 :Mr. A take the loan of 50rs in white
    step 2 :Mr. A can show the 50rs in white from his father property- He can show father has given 50 Rs to him for buying the property.
    step 3 :Mr. A convert his 50 rs black money by getting the receipt of gold sale from any jeweler. For this he need to 5 Rs to jeweler. So now Mr. A has 45 rs in white.

    so total is 50 +50 + 45 = 145Rs

    Catch : Mr. A need to pay the hefty(around 28%) tax on selling the gold. As selling gold comes under Long term capital tax gain. Hence Mr. A will be short of 28% of 45 rs = 12.6 rs.
  • #2

    #2

    Re : Brain teaser for the RE experts

    the only problem here is how to launder 50 rs in black money without paying more then 10% in commission. that can be achieved in many ways.
    1. Mr. A goes to one of his relatives who has 45 Rs in white money, he will loan him money without interest. and Mr A can provide him 45 in black money to compensate. or if relative wants something extra for his troubles remaining 5 rs can be given to him as his profit.
    2. Mr A buys property in CLP. for next 3-4 years, he can withdraw least possible amount from his salary account and instead use black money for his day to day expenses. that way his black money will be converted to white slowly. e.g. lets say his annual expenses are 20 rs. he only withdraws 5 rs from bank and rest 15 he spends from black money. now he will have extra 15 rs in bank. but this will take time, also he will have to stop using any debit/credit card and checks/direct transfers. now an extreme case can be, that he stops withdrawing any amount from salary account only uses black money. that will be wrong as it will raise suspicion.
    3. an addition to above point is using the "baki" (its a Hindi word, don't know what it is called in English) from previous years. lets say he spent 20 rs in last year on his day-to-day expenses. if he financed these expenses by withdrawing 20 rs from his salary account, he can deposit 15 rs right now again in bank and just say that he only spent 5 rs and remaining 15 rs he held as on-hand cash. if he has been on job for lets say 5 years , he can deposit up to 15x5 rs immediately in bank this way. only catch is, this lower amount of expenses he is showing shouldn't be unrealistically low. for proper figure he will need help of a tax adviser.



    Originally posted by dheerajchugh303 View Post
    Mr. A has inherited property of the worth 100Rs and want to buy another property of 145Rs from reputed builder. Please purpose a plan to arrange 150 Rs money(in white)for Mr. A. Here are the conditions.

    1. Mr. A's inherited property on his father name.
    2. Mr. A can take maximum 50rs home loan through his pay slip.
    3. Buyer of Mr. A inherited property ready to give the money in form of 50% white and 50% black.



    __________________________________________________ ____

    e.g. one wrong answer is

    step 1 :Mr. A take the loan of 50rs in white
    step 2 :Mr. A can show the 50rs in white from his father property- He can show father has given 50 Rs to him for buying the property.
    step 3 :Mr. A convert his 50 rs black money by getting the receipt of gold sale from any jeweler. For this he need to 5 Rs to jeweler. So now Mr. A has 45 rs in white.

    so total is 50 +50 + 45 = 145Rs

    Catch : Mr. A need to pay the hefty(around 28%) tax on selling the gold. As selling gold comes under Long term capital tax gain. Hence Mr. A will be short of 28% of 45 rs = 12.6 rs.
    Last edited December 8 2010, 02:44 PM.

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    • #3

      #3

      Re : Brain teaser for the RE experts

      if you take a loan from relative/friend, it is mandatory to pay a reasonable rate of interest.

      Originally posted by alokgarg View Post
      the only problem here is how to launder 50 rs in black money without paying more then 10% in commission. that can be achieved in many ways.
      1. Mr. A goes to one of his relatives who has 45 Rs in white money, he will loan him money without interest. and Mr A can provide him 45 in black money to compensate. or if relative wants something extra for his troubles remaining 5 rs can be given to him as his profit.
      2. Mr A buys property in CLP. for next 3-4 years, he can withdraw least possible amount from his salary account and instead use black money for his day to day expenses. that way his black money will be converted to white slowly. e.g. lets say his annual expenses are 20 rs. he only withdraws 5 rs from bank and rest 15 he spends from black money. now he will have extra 15 rs in bank. but this will take time, also he will have to stop using any debit/credit card and checks/direct transfers. now an extreme case can be, that he stops withdrawing any amount from salary account only uses black money. that will be wrong as it will raise suspicion.
      3. an addition to above point is using the "baki" (its a Hindi word, don't know what it is called in English) from previous years. lets say he spent 20 rs in last year on his day-to-day expenses. if he financed these expenses by withdrawing 20 rs from his salary account, he can deposit 15 rs right now again in bank and just say that he only spent 5 rs and remaining 15 rs he held as on-hand cash. if he has been on job for lets say 5 years , he can deposit up to 15x5 rs immediately in bank this way. only catch is, this lower amount of expenses he is showing shouldn't be unrealistically low. for proper figure he will need help of a tax adviser.

      Comment

      • #4

        #4

        Re : Brain teaser for the RE experts

        that is true, and you also have to pay him back in white at some point of time. and when you do that, he will pay your black money back to you. same arrangement can be made of nominal interest that you will be paying him. that's where 5 buck remaining will come in play.
        Originally posted by pravinchaudhary View Post
        if you take a loan from relative/friend, it is mandatory to pay a reasonable rate of interest.

        Comment

        • #5

          #5

          Re : Brain teaser for the RE experts

          Explore the ways, one can get one's black converted into tax free white by spending only 4%.

          Smarter people are getting 105 white for 100 in blk.

          Not the right place to be open......
          Last edited December 8 2010, 05:48 PM.

          Comment

          • #6

            #6

            Re : Brain teaser for the RE experts

            this is true, there is so much financial innovation in india, that mind boggles sometimes. Asti, would you like to outline some methods. no need to paste details of specific people, just how do they go about it.
            Originally posted by asti_sure View Post
            Explore the ways, one can get one's black converted into tax free white by spending only 4%.

            Smarter people are getting 105 white for 100 in blk.

            Not the right place to be open......

            Comment

            • #7

              #7

              Re : Brain teaser for the RE experts

              Originally posted by alokgarg View Post
              this is true, there is so much financial innovation in india, that mind boggles sometimes. Asti, would you like to outline some methods. no need to paste details of specific people, just how do they go about it.
              Misuse of Sec-10(38) of IT Act, where no tax on LT gain on listed securities.

              There is huge list list of other ways. New and innovative ideas come on daily basis.

              Most of the charitable societies exempt under tax specially educational, have very big amount which can be used by governing body for limited purposes. They don't bother for cost, but they look for genuinely verifiable entity, to withdraw money in his/her name with all support even tax liability also. Because they have no cost of that money.
              Last edited December 8 2010, 06:15 PM.

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              • #8

                #8

                Re : Brain teaser for the RE experts

                BAba Ji , Swami ji .....etc JAN KALYAN ke liye hi to baithe hain.

                Comment

                • #9

                  #9

                  Re : Brain teaser for the RE experts

                  First thing first , guys thanks a lot for reply.
                  Here are some more facts.

                  CLP option can't be taken as Mr. A is interested in only buying the ready to occupy property.

                  Baki is really good idea but the amount converted through baki would be too less for buying the property.


                  looking forward to see more reply and ways. Please feel free to send me pvt msg.

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                  • #10

                    #10

                    Re : Brain teaser for the RE experts

                    I don't know the below idea can work for you or not but atleast work for people going to marry


                    At marriage time any person/relative can gift you 50K and that is tax free for you. Just collect the person in numbers and take 50K white from each and in return can pass your black money.

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