Thursday, 22 December 2016

Hidden tax/cost in Pradhan Mantri Garib Kalyan Deposit Scheme, 2016




















                                                                                                                                                      Where everyone talking about that Pradhan Mantri Garib Kalyan Deposit Scheme, 2016 is 50-50 schema, where you can convert your black money into white by paying 50 percent of the portion to the government.

    We are against that statement because might everyone are ignoring the important condition of the schema, which is as under
Declarant has to deposit 25% of the undisclosed income in Pradhan Mantri Garib Kalyan Deposit Scheme, 2016. The deposits are interest free and have a lock-in period of four years with other conditions of non- transferable and tradable.

    Now taking the example, where I have Rs. 100 Black money now I have to deposit Rs.25 out of that is the same (Bonds)
This blockage of funds leads to extra cost to declarant and extra benefit to government over to the Tax amount of 50 percent (Precise 49.90 %)


     Let’s say if, I have that Rs. 25 to invest today
Then future value over the four year will be as under                    

Year
Future value     @10 %
Investment  Made in starting of the year
Cumulative value
Income during the year
1
1.10
25.00
27.50
2.50
2
1.10
27.50
30.00
2.50
3
1.10
30.00
32.50
2.50
4
1.10
32.50
35.00
2.50


    Income during the year which could be earn will no more possible to the declarant  
Now those benefit will be lost in the future so present value of the same benefits is as under


Income
        Present value Factors           @ 10 percent
Present value
2.50
0.91
2.27
2.50
0.83
2.07
2.50
0.75
1.88
2.50
0.68
1.71
Total
7.92

So the benefit to be lost by the declarant will be the 7.92 on the that Rs 25 deposit

So we can say there is Extra tax/cost of 7.92 percent over to the 50 percent.





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