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.
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  • This has been the tradition ...

    Originally Posted by 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.


    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
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  • Originally Posted by 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

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

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



    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
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  • 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
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  • Originally Posted by 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.


    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:D
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  • Originally Posted by 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:D


    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.
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  • Friend

    I can see sun shining in your post

    thanks

    chataara
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  • Originally Posted by chataara
    Friend

    I can see sun shining in your post

    thanks

    chataara


    Dear friend,

    I understand. Regards.

    ks2071746:o
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  • Originally Posted by 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.

    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!
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  • Originally Posted by 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!


    no no natraj you can register a transaction at any value you(both parties) choose the stamp value is to be paid for the transaction or guideline value whichever is higher.the registrat can only insist you pay the guideline value or 8% transaction value (whichever is higher). you can choose to say you sold for Rs 1/ also doesnt matter to the Registrar.
    but the capital gain will be calculated on the sale price or guideline value whichever is higher.there is no cieling on the price only minimum price(guideline value) is insisted
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  • Originally Posted by Useless


    Explains why RE in Chennai might never fall and why having RE in Chennai is worthless if you want to liquify it into cash!


    When one cant liquidate an asset(RE) its dormant asset and when its not a livable house its of no use other than helping to claim 1C 2C 3C. Am not sure the Nth C the lunatic is quoting now.

    This illiquidity is because of the exorbitant prices quoted by worthless people . With the increasing job cuts across all the industry one can be rest assured until the RE Guys and Prices plummet into your foot.
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  • Originally Posted by sethugm
    When one cant liquidate an asset(RE) its dormant asset and when its not a livable house its of no use other than helping to claim 1C 2C 3C. Am not sure the Nth C the lunatic is quoting now.

    This illiquidity is because of the exorbitant prices quoted by worthless people . With the increasing job cuts across all the industry one can be rest assured until the RE Guys and Prices plummet into your foot.


    Dear friend,

    I agree. Lack of liquidity is due to the high prices being quoted by the promoters/builders as also the buyers are awaiting further drop in the prices.
    I have been noticing that in the away from city areas, the prices are coming down even to the tune of 25 % or so. Where as, in the city areas, they have come down to a small extent only and here too no new projects are coming up and only already started projects are going on.
    In Saidpaet area, in Alandur Road nearer the sub way, one project with 2 bed rooms are going on and the rate settled is Rs. 4500/sq. ft. Due to locational advantage, I gather all the flats have been sold of very fast and the project is also progressing fast. I feel, people still go for buying for their own use in good localities/of their preference even if the prices do not come down appreciably.
    Today, I saw an advertisement in The Hindu, one developer has advertised that the buyer need to pay only 10% and the balance 90% can be the house loan. This is not in line with what we hear that banks are insisting on margin money of even 25 to 30 % for the new house loans now for fear of reducing value during the course of the repayment.

    ks2071746
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  • Originally Posted by sethugm
    When one cant liquidate an asset(RE) its dormant asset and when its not a livable house its of no use other than helping to claim 1C 2C 3C. Am not sure the Nth C the lunatic is quoting now.

    This illiquidity is because of the exorbitant prices quoted by worthless people . With the increasing job cuts across all the industry one can be rest assured until the RE Guys and Prices plummet into your foot.

    So Dear Pitchakaran thinks that a said price is high because he cant afford it. Let us assume a ground of land is as low as Rs 10lakhs, to please our Pitchakaran. Now if someone has 100 grounds to sell then it again will be worth 10crores. Now on the converse suppose a ground costs 10 crores, then it means that one should be able to reuse it to sell 100 blocks for 10 lakhs or 10 blocks for 1crore each or 2 blocks for 5crores each.
    In other words affordability is a person's ability and worth is determined by the demand and supply not by some pitchakaran's needs.
    BTW keeping land is an extremely useful investment. Since its appreciation is higher than any rental value as also the fact that you pay no tax until to sell it.
    This is like telling whether one should invest money in a MIS (monthly income scheme) or a FD (Fixed deposit). PItchakarans need MIS since they will die without it. Others choose FD.
    I hope Mr Pitchai has got the answer!
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  • Originally Posted by abk
    no no natraj you can register a transaction at any value you(both parties) choose the stamp value is to be paid for the transaction or guideline value whichever is higher.the registrat can only insist you pay the guideline value or 8% transaction value (whichever is higher). you can choose to say you sold for Rs 1/ also doesnt matter to the Registrar.
    but the capital gain will be calculated on the sale price or guideline value whichever is higher.there is no cieling on the price only minimum price(guideline value) is insisted

    Nope ABK. WHat you are telling is Theory. No doubt. In practice the Registrars dont allow registration at higher prices since they tend to have an obligation to the residents of the locality (mostly the influential lot) who dont want higher guideline values since they deal in BM.
    FOr example if the guideline value in an area is 1000 and if I register at 3000 then the guideline value tends to increase. THis means the next time the local BM expert wants to sell out he has to collect most of his money in white which he does not like.
    What I told u is the practical truth in CHennai! Check it out.
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