There is a lot of talk these days about Black Money. There is a lot of talk about how Black Money is plaguing our economy and affecting it. In fact, there was an article about Black Money a couple of weeks ago in this blog. The article covered the basics of what Black Money is and also about the hottest topic for news these days – India’s attempt at recovering its Black Money from overseas Tax Havens. Did you know that easily 50% or more of India’s black money is actually concealed within our borders where the Government can easily dig it up?
The purpose of this article is to make you understand how you “As a Responsible Citizen” can help eliminate this menace. In this article, we are going to cover a few – TO DO Actions on our part that can help move India forward towards an economy where Black Money isn’t as big a deal as it is now…
TO DO No. 1: Always Ask for a Bill or Receipt
Yes, the simple and most effective step from our side to eliminate black money is to “Ask for the Bill”
Most Businesses in India do not offer a Bill or Receipt to its customers. They do this because, by issuing a bill, they are actually acknowledging the “Income” and would have to pay “Income Tax” on this income. In order to motivate “You and Me” the Customer to accept the goods or services without the bill, they usually offer us a small discount. Blinded by our urge to save a couple of quick bucks, we don’t insist on the bill and help the shopkeeper conceal his income and increase his stash of “Black Money”.
You may ask me – Will my asking for a bill make a difference?
Yes of course. Think of this scenario. Lets say you buy groceries for your house from a nearby shopkeeper and the bill is Rs. 1,430/- The shopkeeper smiles and asks you to give him Rs. 1,400 with a 30 rupees discount. You are happy with the discount and the shopkeeper gets “Cash” and does not show this 1400 rupees you gave him as an income.
Lets say you asked for a “Bill”, the shopkeeper most likely wont offer you that discount and will ask you for the full amount. But, he will be forced to show this 1400 rupees as income and will end up paying taxes on the profit he made. Yes, you paid an extra 30 rupees but you also made sure that as a citizen you were responsible and did your Part to help the nation digout all the black money.
TO DO No. 2: Try To Pay Using Your Credit/Debit Card
Are you thinking?
What if the shopkeeper gives me a fake receipt? In India it is so damn easy to get your hands on a bunch of make-a-do receipt booklets. So, just because I got a receipt doesn’t mean the shopkeeper is going to show the money as an income. In such a situation, am actually paying an extra 30 rupees (from the example above) and the black money continues to grow…
Yes, you got a point here. This is where the TO DO item No. 2 comes into the picture.
If you make your payment using a Credit or Debit Card, the money actually changes hands through an intermediary – The Bank. The Bank will credit the transaction amount into the shopkeepers bank account and at the end of the year, the shopkeeper would have no other option but to show these transactions as part of his income.
TO DO No. 3: Never Give a Bribe
Ok, am not taking any lines out of a Movie. A Bribe is an unauthorized income for the person receiving it and by giving a bribe you are actually fueling the black money menace. Even if you don’t want to do the above 2 TO DO Items, at least try this. This will help our country move towards a corruption free and a black money free economy.
TO DO No. 4: Ignore Nay Sayers
When you start behaving responsibly – as a citizen, there may be many people who might confuse you with the following points:
a. Anyways the Politicians and Govt. Officials are going to eat our Tax money. Why pay taxes then?
b. Just you being responsible isn’t going to change a thing
c. Nobody can change India
Country's like Singapore that can boast very low rates of corruption were actually built on principles of “Self Discipline”. Responsible Citizens are the fundamental pillars to any strong nation and by being responsible we can have a chain reaction effect. By seeing us being responsible, more and more of our friends and family members will join the bandwagon and together we can help move towards a black money free economy…
The Direct Impact – Of our Actions:
As more and more customers ask for their bills, the income that is actually included for tax purposes by businessmen goes up and their stash of black money comes down gradually.
The Indirect Impact – Of our Actions:
Tax Authorities will all of a sudden see a huge spike in income records for such people which will make them curious to dig-out more. A Businessman who filed taxes for an income an income of say 15 lakhs this year after showing an income of just 4 or 5 lakhs over the past 3 or 4 years consistently will raise eyebrows. One authorities start digging, more and more black money will come out…
Some Last Words:
You and I are salaried employees. Every single penny we earn is taxed. But, in spite of this, our government doesn’t have enough money for public welfare programs. If everyone in our country pays their taxes properly – the government can actually reduce the tax slabs. Yes, a country like Singapore is able to afford lower tax rates because, almost everyone pays taxes properly. With everybody paying taxes, the government already has enough money and hence gives back the benefit to its citizen by means of better facilities and lower taxes.
Lets do our part towards the Nations Development and slow but surely, we can bring about the change that we all dream about…