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Mission: Nab Tax Evaders

 

It’s mission ‘catch tax evaders’ for the income tax watchdog. And justifiably so, as the number of tax evaders have doubled in the first half of 2017 over last year. TRAI is backing the open and free internet. Over 10% of all the medical products sold in low and middle income countries fail due to substandard quality, says a WHO report. And, in the golfing world, master golfer Tiger Woods is back in action, again.

 

1.16 lakh

What is it? The number of individuals and firms who have received income tax notices for having made cash deposits of above Rs 25 lakh in bank accounts post-demonetisation but failing to file returns.

Why is it important? The number of people violating income tax laws have more than doubled to 609 in the first six months of 2017-18, from 288 in the corresponding period of the previous fiscal. The number of convictions of those violating tax rules has gone up from 13 to 43 in the same period. Earlier this year, the department had decided to launch a large-scale data project by matching information in different databases to nab tax evaders.

Tell me more: A total of 2.4 lakh people who have made deposits of Rs 10-25 lakh and not filed returns are set to receive similar notices in the second phase.

 

11

What is it? The number of months since the Telecom Regulatory Authority of India (TRAI) released a consultation paper seeking to establish a net neutrality framework in India.

Why is it important? On Tuesday, the telecom regulator published a set of recommendations supporting the basic principles of open and free Internet. Its suggestions include prohibition of discriminatory content, excluding content delivery networks (telecom firms providing content within their network without accessing the public Internet) from regulation and the setting up of a watchdog to enforce net neutrality.

Tell me more: The International Telecommunication Union, a specialised agency of the United Nations, has formed a group of experts to look into the issue of net neutrality. Recently, the Federal Communications Commission in the United States released a proposal to end net neutrality regulations championed by former President Barack Obama.

 

10.5%

What is it? The rate of failure in all medical products used in low-income and middle-income countries, according to a report by the World Health Organization (WHO).

Why is it important? A model developed by the University of Edinburgh estimates that 72,000 to 169,000 children may be dying each year due to the use of substandard and falsified antibiotics, while another estimates that substandard and falsified anti-malarials account for 116,000 additional deaths per year from malaria in sub-Saharan Africa. About 3.16% of drugs sold in India were found to be ‘not of standard quality’ while 0.0245% were found to be spurious, according to the first such survey carried out by the health ministry recently.

Tell me more: In the last four years, WHO has received 1,500 reports of cases of substandard or falsified products, of which antimalarials and antibiotics were the most common ones.

 

3

What is it? The number of chairpersons that Air India has had in 2017. On Tuesday, the government announced Pradeep Singh Kharola would be replacing incumbent Rajiv Bansal as the new chairman and managing director of the state-run airline.

Why is it important? The recurrent change at the top is the exact opposite of continuity, which a business on the comeback trail needs. But the government move could also be planned with the objective of executing the complex task of privatising Air India, which it announced earlier this year and has commenced work on.

Tell me more: Kharola, 56, is an IAS officer from the 1985 batch and Karnataka cadre. An engineer by education, Kharola has had 27 stints since joining the civil services in August 1987. His last posting was Managing Director at the Bangalore Metro Rail Corporation.

 

9

What is it? The number of months after which Tiger Woods will return to competitive golf, in yet another effort to return from yet another surgery. On Thursday, Woods, 41, will tee off at the Hero World Challenge, a tournament where his charity foundation is a key beneficiary.

Why is it important? His last comeback effort, in February, ended after just 18 holes. Once on pace to become the most decorated golfer ever in terms of number of majors, Woods has been beset by marital, legal and injury problems. A mellowed Woods, who has been seen on team managerial duties during this absence as a player, has confessed he has little idea on how effectively he might return from injury.

Tell me more: Woods has 14 majors, the second most in the history of golf, after Jack Nicklaus (18 majors). The last time Woods won a major was in 2008.

 

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A House for Mr Biswas

30 basis points

 

What is it? The cut in home loan rates by some banks, especially for affordable housing.

Why is it important? The cuts by Housing Development Finance Corp (HDFC), ICICI Bank, and LIC Housing Finance, follow that by State Bank of India (SBI). The rate cut is for loans upto Rs 30 lakh, which is applicable for low-cost and affordable housing. The rates look to capitalise on the government’s thrust on affordable housing projects as in seen in this year’s budget measures.

Tell me more: Earlier this year, there were wider cuts in home loan rates, with a host of banks passing on the reduced cost of funds.

Rs 18,000 crore

 

What is it? The amount India’s Employees’ Provident Fund Organization (EPFO) will invest in FY18 in stocks.

Why is it important? The news will boost the stock markets further, even as they rally on monsoon forecast and easing inflation. In FY16, the EPFO had invested 5% of its annual incremental corpus in the markets, and in FY17, 10%. This year it is going to be 15%.

Tell me more: Some of the equity-traded funds it has invested in so far are SBI mutual fund ETFs and UTI mutual fund ETFs.

Rs 34,000 crore

 

What is it? The amount in taxes evaded by companies, according to a fresh list drawn up by the Securities and Exchange Board of India (SEBI).

Why is it important? This is a follow-up investigation of January’s unearthing of 32,000 entities (companies/directors) which used stock price manipulation to avail of the long-term capital gains tax benefit, committing tax fraud. This time Sebi has 11,000 such cases, of penny-stock manipulation, on its hands. It has given the list to the Income Tax department.

Tell me more: The bogus beneficiaries involve inactive or penny stock companies, listed on the bourses. After a series of preferential share allotment, stock splits, share price manipulation, bonus issues and inflated capital base, the beneficiaries exit at jacked-up prices for their one year of LTCG. But cash settlements between such companies and false claimants are likely to scuttle legal persecution.

14,000

 

What is it? The number of confidential files pilfered by an Uber engineer from his former employer Waymo

Why is it important? This is yet another instance of Uber getting into the wrong side of the law. Earlier this year Uber was caught using a secret programme to avoid being caught by government in cities where Uber was operating without full legal clearance. In the latest case, according to a ruling made public, an Uber engineer stole documents pertaining to the Lidar technology from its former employer, the Google-owned Waymo.

Tell me more: The federal judge had ruled that all the files be returned to Waymo and Uber’s work related to lidar be opened to Waymo’s lawyers. Lidar is a laser based sensor that improves self driving cars’ vision significantly.

-3.6%

 

What is it? The percentage by which card transaction volume came down in April 2017 from a month earlier.

Why is it important? It’s an indication that cash transactions are picking up in the country, contrary to the expectations that demonetisation has given an irreversible push to digital transactions.

Tell me more: IMPS (Immediate Payments System), cards, prepaid instruments and mobile banking – all came down by both volume and value in April 2017, from March 2017.

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Comparing income disclosure schemes of 1997 and 2016

If one takes number of people who declared their black money, Chidambaram’s scheme received far wider number than the current one. But in terms of amount of money declared and tax (estimate) collected, then Jaitley’s scheme is bigger.

That’s not the correct way to compare as Chidambaram’s scheme was implemented 19 years back. So if we bring that number to today’s value, then how it would look?

 

We used compounding rate of 10%, then Chidambaram’s scheme would comfortably beat the current collection. One can always dispute the compounding rate. If 6% is used, then tax collected would be less than what is estimated under IDS 2016.

 

Beyond the numbers are two crucial issues:

 

  1. The inability of tax authorities to actively curb black money generation. It is not common to hear people demanding cash payment while buying or selling houses.
  2. Regular disclosure scheme emboldens people to indulge in tax evasion as probability of getting caught is less than the return from tax evasion.

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News in Numbers, May 12, 2016: New drought policies, some Amazon India sellers in trouble…

3

What is it? The number of months the government has to set up a National Disaster Mitigation Fund to tackle drought, per Supreme Court directions.

Why is it important? This would accelerate and streamline drought relief and preparations, and mitigate its impact including farmer suicides. Over 330 million people (about a quarter of India’s population) are drought-hit and 116 farmers have committed suicide in 10 states so far.

Tell me more: Other measures listed by the Supreme Court include: replace colonial methods and manuals with a modern, transparent, rule-based framework to deal with drought, implement provisions of the National Disaster Management Act and formulate a national policy under it, revise the existing drought management manual of 2009 and standardised nomenclature. The apex court rapped three states – Gujarat (for delay in acknowledging drought), Haryana and Bihar (for not declaring drought at all).

 

Rs 9,000 crore

What is it? The value of domestic assets and shares of liquor baron Vijay Mallya, which the Enforcement Directorate (ED) is reportedly considering to attach, in relation to the IDBI bank loan fraud case.

Why is it important? Mallya’s assets and shares are being examined to be attached under the Prevention of Money Laundering Act so that no third-party rights can be created in them, according to an ED official. However, attachment and attempts to sell Mallya’s properties have not fetched the authorities/banks anything so far.

Tell me more: The IDBI Bank loan fraud case pertains to an allegation by the investigating agency that Mallya has siphoned off Rs 430 crore from the Rs 900 crore loan given by the bank to his now defunct firm Kingfisher Airlines, to buy properties overseas. The grounded airline owes around Rs 9,000 crore to 17 banks.

 

50

What is it? The number of sellers of Amazon India who have been alleged to falsely claiming credit on Central Value Added Tax (Cenvat).

Why is it important? The alleged tax evasion – using the provision that allows tax relief on inputs for a product or service – could be about Rs 118 crore. It also highlights the tough time global tech companies – others include Facebook, Uber and Google – have been facing in India.

Tell me more: The authorities has questioned Amazon India and conducted searches in its business premises across the country to determine if Amazon is involved in any wrongdoing related to this case.

 

4

What is it? The number of telecom circles Vodafone will launch 4G services in, over the next few months.

Why is it important? This would help India’s second largest telecom service provider to cover 1,000 cities across nine circles by the end of this year, which will likely contribute to the onset of a pricing war and consolidation in the industry. Bharti Airtel is aggressively pushing to establish dominance in the 4G segment before Reliance Jio’s expected launch by the end of the year.

Tell me more: The new circles are Haryana, Gujarat, Uttar Pradesh East and West Bengal. According to a Deloitte India report, a third of the mobile users in the country are expected to adopt 4G services by the end of the year, possibly resulting in the reduction of traditional voice calls.

 

11

What is it? The average age of US technology companies that went public in 2014, compared to four years in 1999.

Why is it important? An indicator that these firms are shying away from an initial public offering (IPO) longer than earlier due to rapid increase in private investor money. Poor performance of IPOs of tech companies in the last few years have not helped. This is likely to change the way investments are done in tech startups, given that investors have to wait longer to realise their returns.

Tell me more: The data is according to a research by Jay Ritter, a University of Florida professor, which points to the fact that tech companies are preferring the private route to grow into unicorns (startups valued at over $1 billion) and decacorns (valuation above $10 billion) instead of the public listing route.

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