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Cryptocurrency Taxation

The <keyword id="19994390" type="General" weightage="100" keywordseo="GST-Council" source="keywords">GST Council</keyword> on Monday is expected to deliberate on a host of issues, including <keyword id="20118944" type="General" weightage="20" keywordseo="taxation" source="keywords">taxation</keyword> of insurance premiums, GoM's suggestions on rate rationalisation, and a status report on <keyword id="19939772" type="General" weightage="20" keywordseo="online-gaming" source="keywords">online gaming</keyword>, sources said. Sources said the fitment committee, comprising Centre and state tax officials, will present a report on GST levied on life, health and reinsurance premiums and the revenue implications. The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers, will decide on whether to reduce the tax burden on <keyword id="19894985" type="General" weightage="20" keywordseo="health-insurance" source="keywords">health insurance</keyword> from the current 18% or exempt certain categories of individuals, like senior citizens. The deliberations will also happen with regard to the goods and services tax (GST) cut on <keyword id="23083492" type="General" weightage="20" keywordseo="life-insurance-premium" source="keywords">life insurance premium</keyword>. In 2023-24, the Centre and states collected Rs 8,262.94 crore through GST on health <keyword id="22612491" type="General" weightage="20" keywordseo="insurance-premium" source="keywords">insurance premium</keyword>, while Rs 1,484.36 crore was collected on account of GST on health reinsurance premium. The issue of taxation on insurance premium figured in Parliament discussions with opposition members demanding that health and life insurance premiums be exempt from GST. Even Transport Minister Nitin Gadkari wrote to Sitharaman on the issue. Finance Minister Nirmala Sitharaman in her reply to discussion on the Finance Bill had said 75% of the GST collected goes to states and opposition members should ask their state finance ministers to bring the proposal at the GST Council. West Bengal Finance Minister Chandrima Bhattacharya had raised the issue in the meeting of the Group of Ministers (GoM) on rate rationalisation last month and the matter was referred to the fitment committee for further data analysis. The GoM had opined against any tinkering of four-tier GST slab of 5, 12, 18, and 28 % for the time being. The panel, however, had asked the fitment committee to look into any scope for rationalisation of rates of goods and services. With regard to online gaming, Centre and state tax officers will present a "status report" before the GST Council. The report would include <keyword id="20053837" type="General" weightage="20" keywordseo="GST-revenue" source="keywords">GST revenue</keyword> collection from the online gaming sector before and after October 1, 2023. From October 1, 2023, entry-level bets placed on online gaming platforms and casinos were subject to 28% GST. Prior to that, many online gaming companies were not paying 28% GST, arguing that there were differential tax rates for games of skill and games of chance. The GST Council in its meeting in August 2023 had clarified that online gaming platforms were required to pay 28% tax and subsequently, Central GST law was amended to make the taxation provision clear. Offshore gaming platforms were also mandated to register with GST authorities and pay taxes, failing which the government would block those sites. The council had then decided that the taxation on online gaming sector would be reviewed after six months of its implementation. Sources said the Council would deliberate on the status of taxation on the sector, and any change in tax rates is unlikely. Besides, the Council is likely to be apprised about the ongoing drive against fake registration, the success of the drive and action taken against such entities. The total amount of suspected GST evasion would also be presented before the Council. The drive, from August 16, 2024, to October 15, 2024, is aimed at detecting suspicious/fake GSTINs and to conduct requisite verification and further remedial action to weed out these fake billers. In the first drive between May 16, 2023 to July 15, 2023, against fake registration, 21,791 entities (11,392 pertaining to state tax jurisdiction and 10,399 pertaining to CBIC jurisdiction) having GST registration were discovered to be non-existent. An amount of Rs 24,010 crore (state - Rs 8,805 crore + centre - Rs 15,205 crore) of suspected tax evasion was detected during the special drive. Also, the Council would approve notifications, including that of the amnesty scheme, announced in the last council meeting. The council in June meeting took a host of taxpayer-friendly measures, including waiver of interest and penalty for demand notices issued in the first three years of GST -- 2017-18, 2018-19 and 2019-20 -- if the full tax demanded is paid by March 31, 2025. To reduce litigation, a monetary limit for tax officers, to file appeals before the GST Appellate Tribunal, the High Court and the Supreme Court was fixed at Rs 20 lakh, Rs 1 crore and Rs 2 crore, respectively, by the Council. It also recommended a reduction of the quantum of pre-deposit required to be paid by taxpayers for filing of appeals under goods and services tax (GST).

GST Council to deliberate on taxation of insurance premium, report on online gaming tomorrow

Budget 2023: The need of clarity on ESOPs taxation

<ul><li>The minimum deposit allowed is ₹1,000, while the cap on maximum deposit is ₹2 lakh. </li><li>This scheme provides a fixed interest rate of 7.5% per annum, which is credited quarterly and paid at the time of closure of the account. </li><li>After one year from the date of opening of the account, the account holder can withdraw up to 40% of the account balance. </li></ul>Bank of India, one of the largest public sector banks in India, has launched the <keyword id="10896558" type="General" weightage="20" keywordseo="mahila-samman" source="Orion">Mahila Samman</keyword> Savings certificate, becoming the first bank to launch the small savings scheme designed specifically for women and girls. Here is everything you need to know about the scheme. <cmsannotation type="cmsannotation" annotationid="The origins" comment="subhead" text="The origins">The origins</cmsannotation> Union Finance Minister Nirmala Sitharaman unveiled the Mahila Samman Savings Certificate scheme in her Budget Speech 2023-24. The scheme is meant for either a <keyword id="6354542" type="General" weightage="20" keywordseo="woman" source="Orion">woman</keyword> herself or the legal guardian of a young girl. It has been available only through a <keyword id="6380711" type="General" weightage="20" keywordseo="post-office" source="Orion">post office</keyword> since inception, however, going ahead it will be available through all major banks as well. “It is expected that the Mahila Samman Savings Certificate will soon be made available at all scheduled commercial banks, and eventually investors should be able to open accounts digitally via netbanking and internet banking,” says Adhil Shetty, chief executive officer, BankBazaar.com. <cmsannotation type="cmsannotation" annotationid="Deposit amount &amp; maturity period" comment="subhead" text="Deposit amount &amp; maturity period">Deposit amount &amp; maturity period</cmsannotation> Under the Mahila Samman Savings Certificate scheme, the minimum deposit amount required is ₹1,000, with the option to deposit in multiples of ₹100. On the other hand, the maximum deposit allowed is ₹2 lakh for a single account or across all Mahila Samman Savings Certificate accounts held by an individual. This scheme provides a fixed interest rate of 7.5% per annum. The interest will be credited quarterly and paid at the time of closure of the account. The scheme has a maturity period of two years. The scheme offers a partial withdrawal facility. After one year from the date of opening of the account, the account holder is eligible to withdraw up to 40% of the account balance. <cmsannotation type="cmsannotation" annotationid="Taxation of Mahila Samman Saving Certificate scheme" comment="subhead" text="Taxation of Mahila Samman Saving Certificate scheme"><keyword id="6383566" type="General" weightage="20" keywordseo="taxation" source="Orion">Taxation</keyword> of Mahila Samman Saving Certificate scheme</cmsannotation> The Central Board of Direct Taxes (CBDT) has notified that tax deducted at source (TDS) would apply to the Mahila Samman Saving Certificate scheme. However, as per Section 194A of the Income Tax Act, TDS will apply only when the interest received from the scheme in a financial year is more than ₹40,000 or ₹50,000 (in the case of senior citizens). Since the interest amount of this scheme for a maximum of ₹2 lakh investment for two years does not exceed ₹40,000, TDS is not deducted from the interest received. The interest earned will be added to the recipient’s total income and applicable taxes need to be paid if the total income exceeds the taxable limit.

As BoI becomes first bank to launch Mahila Samman Savings Certificate, here's what you need to about it

<ul><li>India’s current <keyword id="173153" type="General" weightage="20" keywordseo="capital-gains-tax" source="Orion">capital gains tax</keyword> regime provides for multiple tax rates and differential treatment based on the holding period and type of assets. </li><li>A simplified capital gains tax regime can help investors plan their investment/divestment strategies efficiently. </li><li>Writing exclusively for Business Insider India, the columnists suggest amendments that the government needs to consider in the upcoming Budget to rationalise India’s capital gains tax regime. </li></ul>Capital investment plays an important role in facilitating economic growth, creating employment and encouraging savings. Hence, many countries tax capital gains at a preferential rate. India too follows a preferential-tax policy for capital gains, e.g., partial exemption on long-term capital gains on sale of listed shares (up to ₹1,00,000 of such gains were fully exempt from tax until 31 March 2019) and lower tax rates for certain types of capital gains. However, the current capital gains tax regime in India provides for multiple tax rates and differential treatment based on the holding period and type of assets. To bring clarity to the capital gains tax regime, the government should consider simplifying the norms. A simplified capital gains tax regime can help investors plan their investment/divestment strategies efficiently. Amendments to be considered in Budget FY24 to rationalise India’s capital gains tax regime The current capital gains tax regime with numerous tax rates and differential tax treatments causes uncertainty and confusion amongst investors. To simplify the tax regime, the following steps can be considered: <ul><li>Currently, the assets are classified into long-term and short-term based on their class – for instance listed shares of a company qualify as long-term capital asset if held for more than 12 months, whereas listed units of a business trust qualify as long-term capital asset if held for more than 36 months, resulting in differential treatment for similar class of assets. </li></ul>Hence, the holding period for various types of capital assets can be rationalised. <ul><li>There are numerous tax rates for different types of capital assets and their holding period, e.g., the long-term capital gains on listed shares are taxed at 10% whereas, the long-term capital gains on house property are taxed at 20%. </li></ul>Such multiple rates can be reduced to a maximum of 2 to 3 rates. <ul><li>To tax only the actual cash gain earned by the investors on sale of capital assets, expenses such as Securities Transaction Tax (STT), legal fees, portfolio management fees, consultation fees, etc., incurred by investors in connection with the purchase and sale of shares can be allowed as expense to compute capital gains. </li></ul><ul><li>Long-term capital gains arising from sale of capital assets (other than residential house property) are exempt from tax for individuals and HUFs (Hindu undivided families), if the entire ‘net consideration’ is deposited under Capital Gain Account Scheme. However, in some cases (such as deduction of tax by buyer, receipt of consideration in instalments, etc.), the actual amount available to deposit under the scheme would be less than the ‘net consideration’, resulting in a shortfall. </li></ul>To avoid litigation, clarity should be provided on this aspect. <ul><li>Individuals and HUFs are exempt from capital gains tax arising on sale of agricultural land if such gain is invested in another agricultural land within two years of the sale. </li></ul>Like the relief provided for residential house property, the exemption on sale of agricultural land should be available if invested in another agricultural land either one year prior or within two years of sale. <ul><li>The capital gains tax regime provides for deemed income consequences for both buyer and seller, where the transfer of assets takes place at a price lower than their fair market value. Hereby, the fair market value is considered as the deemed sale consideration for the seller for computation of capital gains and the difference between the fair market value and the purchase consideration is considered as deemed income in the hands of the buyer. </li></ul> <div type="image" title="Shivani Kotadia - Photo" msid="97090764" hostid="261" sizebytes="313968" caption="&amp;lt;p&amp;gt;&amp;lt;em&amp;gt;Shivani Kotadia is a Manager at Deloitte India.&amp;lt;/em&amp;gt;&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;&amp;lt;em&amp;gt;&amp;lt;br&amp;gt;&amp;lt;/em&amp;gt;&amp;lt;/p&amp;gt;"></div>However, there is some ambiguity in the deemed income provisions for certain types of transactions (such as transactions effected pursuant to Insolvency &amp; Bankruptcy Code, 2016, slump sale transactions, conversion of compulsorily convertible instruments, etc). Such transactions can be kept outside the purview of the deemed income provisions. <ul><li>To incentivise promoters, most private equity players are increasingly introducing a combination of clauses in the shareholders’ agreement, including consideration payable in a contingent manner based on certain performance milestones. However, there is no clarity on taxation of such contingent consideration. </li></ul>It may be clarified that the contingent consideration should be taxed only in the year in which the same is crystallised. <ul><li>Currently, capital gains tax exemption/relief has been provided to some forms of business reorganisation, this relief/exemption can also be extended to other forms of business reorganisation, such as: <ul><li>Exemption from capital gains arising on conversion of LLP to a company i.e., exemption in the hands of the partners of an LLP on transfer of their interest in the LLP in exchange of shares of a company, aligned with exemption provided to a firm on being succeeded by a company. </li><li>Specific exemption to be provided for merger of an Indian company into a foreign company. </li><li>Similar to the relief provided to a foreign company, relief from capital gains tax too can be provided to the shareholders of the amalgamating foreign company. </li><li>It can be considered to provide tax exemption to intra-group slump sale transactions, subject to a certain lock-in period. </li></ul></li></ul>Also, clarification needs to be provided on the applicability of grandfathering clause in case of amalgamation/demerger of listed entities, post 31 January 2018. <div type="image" title="Shivani Kankaria" msid="97090806" hostid="261" sizebytes="31524" caption="&amp;lt;p&amp;gt;&amp;lt;em&amp;gt;Shivani Kankaria is a Deputy Manager at Deloitte India.&amp;lt;/em&amp;gt;&amp;lt;/p&amp;gt;&amp;lt;p&amp;gt;&amp;lt;em&amp;gt;&amp;lt;br&amp;gt;&amp;lt;/em&amp;gt;&amp;lt;/p&amp;gt;"></div>Given that income from capital gains is a secondary source of income for the majority of the taxpayers, lack of clarity and tedious compliances is cumbersome for such taxpayers. The above amendments/clarifications would help in rationalisation of the capital gains tax regime and improve the vibrancy of capital markets in India. Utkarsh Trivedi is a Partner at Deloitte India. Shivani Kotadia is a Manager and Shivani Kankaria is a Deputy Manager at the same firm.

Capital gains in taxation: What are the major factors driving the long-term and short-term capital gains?

<ul><li>The finance minister of India, Nirmala Sitharaman, will introduce the <keyword id="123776" type="General" weightage="20" keywordseo="finance-bill" source="Orion">Finance Bill</keyword> of 2022 in the Lok Sabha.</li><li>As per the latest Finance Bill, cryptocurrency gains will be taxed at 30%, which is the highest tax bracket.</li><li>The Finance Bill also proposes that the Central Bank Digital Currency “should also be regarded as bank notes”.</li></ul>The finance minister of India, Nirmala Sitharaman, will introduce the Finance Bill of 2022 in the Lok Sabha, or the lower house, on Thursday. The bill includes proposed rules on cryptocurrency taxation, among other things. Today, Sitharaman is scheduled to<a href="https://www.indiabudget.gov.in/doc/Finance_Bill.pdf"> discuss the Finance Bill of 2022 </a>and each of its amendments with the elected member of parliaments in the Lok Sabha. The members will then be voted upon. <cmsannotation type="cmsannotation" annotationid="wazirx" comment="wazirx" text="wazirx">wazirx</cmsannotation> As per the latest Finance Bill, cryptocurrency gains will be <a href="https://www.businessinsider.in/budget/news/from-cryptocurrencies-to-nfts-india-to-tax-all-virtual-digital-assets-at-30/articleshow/89268587.cms">taxed at 30%</a> – which is the highest tax bracket, and the <a href="https://www.incometaxindia.gov.in/pages/tools/income-tax-calculator.aspx">same rate as</a> lottery winnings. This would be applicable to all “virtual digital assets,” from Bitcoin to Non-Fungible Tokens (NFT) and related earnings. Besides this, the government of India has also proposed a 1% tax deducted at source (TDS) on payments made in relation to transfer of cryptocurrency. While speaking at India Global Forum earlier this month, Sitharaman had taken a jibe on the latest <keyword id="11252230" type="General" weightage="20" keywordseo="crypto-taxation" source="Orion">crypto taxation</keyword> as well. On being asked<a href="https://www.businessinsider.in/cryptocurrency/news/indias-finance-minister-nirmala-sitharaman-says-she-expects-the-central-bank-to-roll-out-the-countrys-digital-currency-this-year/articleshow/90074661.cms"> whether she sees the future of crypto in India</a>, Sitharaman said, “Many Indians have seen a lot of future in it and, therefore, I see a possibility of revenue in it.” The Finance Bill of 2022 also proposes that the Central Bank Digital Currency (CBDC) “should also be <a href="https://www.businessinsider.in/budget/news/digital-rupee-to-be-introduced-by-the-rbi-confirms-fm-nirmala-sitharaman-speech/articleshow/89268343.cms">regarded as bank notes</a>”. The central bank has been working on the CBDC for the last two years, and it plans to conduct a pilot project soon to develop a proof of concept. The bill has already been sent to Rajya Sabha, the upper house, for consideration. Since the Finance Bill falls under the category of a ‘money bill’, the role of the upper house would be limited as the members of the upper house are not elected representatives of people. The suggestions of the upper house may or may not be considered by the lower house. The bill also proposes <a href="https://www.businessinsider.in/business/startups/news/budget-2022-mandates-all-startups-to-disclose-source-of-income-of-their-creditors/articleshow/89315291.cms">amendment to Section 68 of the Income Tax Act</a>, which will put the onus on startups to disclose the source of capital of the creditor they are borrowing from. Besides this, the Lok Sabha is also slated to take up discussions and voting on demands for grants for several ministries, including commerce and industry; ports, shipping and waterways; and ministry of fisheries, animal husbandry and dairying. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/indias-crypto-regulations-dont-recognize-the-full-scope-of-web3-say-experts/articleshow/90414200.cms">India’s crypto regulations don’t recognize the full scope of web3, say experts</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/zee-entertainments-share-price-rallies-up-to-17-as-invesco-puts-down-the-sword/articleshow/90411886.cms">Zee Entertainment’s share price rallies up to 17% as Invesco puts down the sword</a>

Proposal for crypto tax policy will be up for discussion in Indian parliament today

<ul class="summary-list"><li><keyword id="12026653" type="UNKNOWN" weightage="60" keywordseo="fiscal-policy" source="Orion">Fiscal policy</keyword> describes how a government uses taxation and spending to influence the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword>.</li><li>Fiscal policies can be neutral, expansionary, or contractionary depending on the goal.</li><li>Changing fiscal policy could affect interest rates, inflation, employment, and your investments. </li></ul>Fiscal policy is how a government manages spending and taxation levels in ways intended to influence the economy. If US officials want to stimulate growth, they might increase spending or cut tax rates. Conversely, they might want to slow down an overheating economy with lower spending and higher taxes. In turn, these changes can have an impact on interest rates, employment, trade deficits, and <a href="https://www.businessinsider.com/what-is-inflation" target="_blank" rel="noopener">inflation</a>.Current US fiscal policy has its roots in Keynesian economics - which makes a case for the proactive government response to crises and up-and-down business cycles. Fiscal policy may be intertwined with, but is separate from, <a href="https://www.businessinsider.com/monetary-policy" target="_blank" rel="noopener">monetary policy</a>.<h2>How does fiscal policy work?</h2>Fiscal policies are always present, but changes in them may be driven by a specific situation or a broad agenda."You can have specialized fiscal policy, such as the response to COVID, where the federal government gets together and provides relief," says Kevin Flanagan, head of fixed income strategy at <a href="https://www.wisdomtree.com/" target="_blank" rel="noopener">WisdomTree</a>.In responding to COVID, the government's emphasis was on increasing spending through relief programs, including direct stimulus payments and Paycheck Protection Program (PPP) loans. Specialized fiscal policy responses also occurred during the <a href="https://www.businessinsider.com/what-caused-the-great-recession" target="_blank" rel="noopener">Great Recession</a>, such as the Troubled Asset Relief Program (TARP). The government's increased spending was driven, in part, by a desire to end the recession.In the news: Changing fiscal policy isn't always easy, as demonstrated in the compromises and arguments over President Biden's <a href="https://www.businessinsider.com/democrats-want-end-reagonomics-trickle-down-infrastructure-except-dozen-moderates-2021-10" target="_blank" rel="noopener">infrastructure proposals</a>. Not all fiscal policy changes are made in response to a crisis. For example, the 2017 Tax Cuts and Jobs Act (TCJA) is an example of an agenda-driven fiscal policy. "One is reactive, and one is more in line with everyday government," explains Flanagan. "They're trying to determine policy going forward." <h2>What are the 3 types of fiscal policy?</h2>Fiscal policy is generally put into one of three categories, depending on its goal:<ul><li>Neutral policy is when the government's fiscal policy isn't intended to influence the economy. Policies may still be enacted, but new expenditures may be completely balanced by increased revenue. </li><li><a href="https://www.businessinsider.com/what-is-expansionary-monetary-policy" target="_blank" rel="noopener">Expansionary policy</a> is when the government increases spending or decreases taxes to stimulate growth. Expansionary policy may be an attempt to avoid or end a recession and prevent high unemployment. </li></ul><ul><li><a href="https://www.businessinsider.com/what-is-contractionary-monetary-policy" target="_blank" rel="noopener">Contractionary policy</a> is when the government decreases spending or increases taxes to prevent unsustainable growth. Contractionary policy may be put in place to slow inflation, decrease government debt, and try to maintain a healthy unemployment rate. </li></ul>Officials may take a neutral approach if there's a stable economy that they want to maintain. However, changing business cycles or a crisis may quickly lead to expansionary or contractionary policies. <h2>Who determines fiscal policy in the US? </h2>In the US, the executive and legislative branches have the most direct impact on fiscal policy. "While the president requests a budget that outlines [their] priorities, Congress ultimately controls the government's purse strings and sets fiscal policy," explains Jason Blackwell, chief investment strategist at <a href="https://www.thecolonygroup.com/" target="_blank" rel="noopener">The Colony Group</a>. The judicial branch could also have an influence on fiscal policy if it finds spending or tax proposals are unconstitutional.<h3>Fiscal policy vs. monetary policy</h3>In the US, the <a href="https://www.businessinsider.com/what-is-the-federal-reserve" target="_blank" rel="noopener">Federal Reserve</a>, or Fed, is an independent federal agency that sets the country's <a href="https://www.businessinsider.com/monetary-policy" target="_blank" rel="noopener">monetary policy</a>. <div type="image" title="Monetary policy explainer" height="1727" width="1668" msid="87172597" hostid="261"></div>While fiscal policy tends to be targeted, Blackwell says monetary policy is often a blunt tool that can influence consumers' and business' interest rates and borrowing. And while they're different and separate from each other, fiscal and monetary policy work in tandem at times.Quick tip: Fiscal and monetary policy can have an impact on inflation. In turn, this can affect your <a href="https://www.businessinsider.com/purchase-power" target="_blank" rel="noopener">purchasing power</a>, a measure of how much you can buy with a unit of currency, such as one dollar. "For example, in the last two recessions, the Federal Reserve lowered the lending cost for banks to incentivize them to make more loans to businesses, while Congress authorized cash infusions more directly to consumers and businesses," says Blackwell.However, at other times, the government's fiscal and monetary policies may counteract each other. "If fiscal policy is being viewed as restrictive, perhaps the Fed would want to counter or offset that," says Flanagan.<h2>How can fiscal policy affect investments </h2>Fiscal policies may have direct and indirect impacts on your investments.Consider, for example, a new tax rate that could leave you with more or less money to invest. And new rules about tax-advantaged accounts could require you to adjust your investment strategy. For investors, the impact fiscal policy can have on the overall economy, <a href="https://www.businessinsider.com/where-to-invest-when-interest-rates-are-low" target="_blank" rel="noopener">interest rates</a>, specific industries, and individual companies can be quite significant, says Blackwell. Fiscal policy can also impact the overall economy, interest rates, specific industries, and individual companies. "For investors, the impact can be significant," says Blackwell.He shares a hypothetical example related to the clean-energy industry to explain: "If the government allocates tax credits and prioritizes spending within the space, it can create risks for traditional energy companies and opportunities for new entrants."Predicting fiscal policy might not be possible. But being aware of changes and their potential consequences is important. <h2>The financial takeaway</h2>Fiscal policy is the government's approach to spending and taxation. Both reactive and agenda-driven policies could affect your household's financial situation, as well as the overall economy. "We tend to focus on fiscal policy during times of crisis," says Blackwell. "For example, the automaker bailouts in 2008 or the PPP-loans in 2020. Those are examples of the government targeting spending to specific sectors of the economy to smooth the economic recessions." However, agenda-driven fiscal policy decisions may have a much longer time horizon. Whether it's a change to the tax code or a new infrastructure plan, the impact of fiscal policy could play out be felt for decades to come.<a data-type="6011da94dc3da472bb064a63">How to take advantage of low interest rates - the best financial moves for investors and borrowers</a><a data-type="6130f96f0d5b750e8a4ba772">What is hyperinflation? Understanding the rapid increase in the cost of goods and services over time</a><a data-type="615b322f440ead1e716e8e27">What is Modern Monetary Theory? Understanding the alternative economic theory that's becoming more mainstream</a><a data-type="613a80502864561673290c31">What to know about the main causes of inflation</a>

Understanding fiscal policy: The use of government spending and taxation to manage the economy

<ul class="summary-list"><li><keyword id="11916124" type="UNKNOWN" weightage="60" keywordseo="paul-constant" source="Orion">Paul Constant</keyword> is a writer at Civic Ventures and cohost of the "<a href="http://www.pitchforkeconomics.com/">Pitchfork Economics</a>" podcast.</li><li>In a recent episode, author Anand Giridharadas explained how wealthy Americans use <keyword id="12250640" type="UNKNOWN" weightage="60" keywordseo="philanthropy" source="Orion">philanthropy</keyword> to avoid <keyword id="12278598" type="UNKNOWN" weightage="60" keywordseo="taxation" source="Orion">taxation</keyword>.</li></ul>In this week's episode of "<a href="https://pitchforkeconomics.com/episode/why-philanthropy-isnt-the-answer-with-anand-giridharadas/">Pitchfork Economics</a>," journalist Anand Giridharadas, author of the excellent book "Winners Take All: The Elite Charade of Changing the World," explains how billionaires use philanthropic giving to whitewash their reputations - and avoid taxation."We're living in this time in which you cannot walk down the street in certain ZIP codes of this country without bumping into a plutocrat trying to change the world," Giridharadas said. It seems as though every billionaire in America has at least one nonprofit foundation focusing on one social ill or another. But aren't these splashy hundred-million-dollar-plus donations a good thing? Aren't these billionaires creating positive change with their charitable donations? Giridharadas argues that the charitable giving is a smokescreen to disguise the fact that the richest humans in the history of world "benefit from a near-monopoly on the fruits of the future" in which they have "essentially rigged the society to function as a casino in which the house - i.e., them - always wins.""You've got a whole class of people who have cause to be resented," Giridharadas said, "who are, in many cases, manipulating their company books so they don't pay taxes, who are underpaying workers." For those wealthy few, he said, philanthropy is "a relatively cheap, bargain-basement way of changing your name. You can do bad things in the billions and wipe it out with gifts in the millions."Despite their splashy press releases touting huge donations, the fact is that the super-rich's charitable giving is a drop in the bucket compared to their ever-growing fortunes. <a href="https://blog.datawrapper.de/weekly-rich-people-tax-charities-donations/">Zara Khan points out for Datawrapper</a>, "charitable donations by the richest 20 Americans account for less than 1% of the total wealth of the donors." If you are an average American taxpayer, <a href="https://www.cnbc.com/2021/09/23/americas-richest-400-families-pay-a-lower-tax-rate-than-average-taxpayer.html">the 400 wealthiest families in America now pay a lower tax rate than you</a>. Imagine all the programs and projects we could have built had the tax rate for the wealthiest Americans stayed at 91%, where it was in the US from 1951 to 1964 (<a href="https://ctj.sfo2.digitaloceanspaces.com/pdf/regcg.pdf">PDF</a>), <a href="https://www.theatlantic.com/business/archive/2012/08/60-years-of-american-economic-history-told-in-1-graph/261503/">when the economy was growing at its fastest</a>. That's why "<keyword id="11916123" type="UNKNOWN" weightage="60" keywordseo="pitchfork-economics" source="Orion">Pitchfork Economics</keyword>" host Nick Hanauer this week wrote <a href="https://newrepublic.com/article/163852/tax-rich-people-grow-economy">an editorial for the New Republic</a> calling on Congress to raise taxes on the wealthiest Americans - including Hanauer. "It drives me crazy when I hear Democrats say that 'for the sake of the <keyword id="11893570" type="UNKNOWN" weightage="60" keywordseo="economy" source="Orion">economy</keyword>' we have to cut back on the $3.5 trillion spending in Biden's Build Back Better legislation, or that we can't possibly raise taxes on the wealthy and huge corporations as much as Biden proposed," Hanauer wrote. "Those folks have it totally backward," Hanauer continued. "Taxing the rich is the only plan that would increase investment, boost productivity, grow the economy, and create more and better jobs." He's right - raising taxes on wealthy Americans and corporations <a href="https://americansfortaxfairness.org/issue/broad-coalition-throws-weight-behind-tax-reforms-build-back-better-agenda/">would pay for the $3.5 trillion</a> in spending over the 10 years of the Build Back Better plan, and the mammoth scope of that legislation, from greening the economy to investing in childcare to increasing educational opportunities for children and adults, would more significantly transform the economy than any plutocratic philanthropy ever could. That's because there's another benefit to raising taxes on the super-rich: Their money would no longer be hoarded in the kind of offshore accounts that we learned about last week <a href="https://www.icij.org/investigations/pandora-papers/">in the bombshell Pandora Papers</a>. Instead, once it was invested in ordinary Americans, that money would circulate through local economies from hand to hand, creating jobs, spurring small business growth, and strengthening local communities through increased consumer demand. It's a much simpler system than elaborately disguising ostentatious wealth through philanthropic giving - and it has the added benefit of being better for everyone in the long haul.

Ultra-wealthy Americans want you to think their philanthropy will change the world. They should just pay their taxes instead.

Vodafone Idea, banks, RIL and other top stocks to watch out for on August 6

<ul class="p-rich_text_list p-rich_text_list__bullet"><li>India has decided to do away with a 2012 law that allowed the government to tax profits from earlier years even though theywere not taxable at the time.</li><li>This brings to end a decade-long tussle with foreign companies that saw the law as a deterrent to investments in India.</li><li>Finance Minister Nirmala Sitharaman introduced 'The Taxation Laws (Amendment) Bill, 2021' which will undo the damage from the 2012 law.</li><li>The bill also proposes to refund the amount paid so far, in these cases, without any interest thereon.</li></ul>In a bid to bury the ghost of retrospective taxation, the government on Thursday brought a bill in the Lok Sabha to withdraw all back tax demands on companies such as Cairn Energy and Vodafone and said it will refund the money collected to enforce such levies. Finance Minister Nirmala Sitharaman introduced 'The Taxation Laws (Amendment) Bill, 2021' in the Lok Sabha that seeks to withdraw tax demands made using a 2012 retrospective legislation to tax the indirect transfer of Indian assets. The bill provides for the withdrawal of tax demand made on "indirect transfer of Indian assets if the transaction was undertaken before May 28, 2012 (i.e. the day the <keyword id="996979" type="PERSON" weightage="20" keywordseo="retrospective-tax">retrospective tax</keyword> legislation came into being)." "It is also proposed to refund the amount paid in these cases without any interest thereon," it said. The bill has a direct bearing on long-running tax disputes with British firms Cairn Energy Plc and Vodafone Group. The Indian government has lost two separate arbitrations brought by the two companies against the levy of retrospective taxes. While the government has virtually no liability in the Vodafone case, it has to refund USD 1.2 billion to Cairn Energy for the shares of the company it had sold, tax refund withheld and dividends confiscated. The bill states that the issue of taxability of gains arising from the transfer of assets located in India through the transfer of shares of a foreign company (indirect transfer of Indian assets) was a subject matter of protracted litigation. The Supreme Court in 2012 had given a verdict that gains arising from indirect transfer of Indian assets are not taxable under the extant provisions of the Act. But to circumvent this, the provisions of the Income Tax Act, 1961 were amended by the Finance Act, 2012 with retrospective effect, to clarify that gains arising from the sale of shares of a foreign company is taxable in India if such shares, directly or indirectly, derive their value substantially from assets located in India. "Pursuant thereto, income-tax demand had been raised in 17 cases. In two cases assessments are pending due to stay granted by High Court," the objects of the Bill said. Out of the 17 cases, arbitration under Bilateral Investment Protection Treaty with the United Kingdom and the Netherlands had been invoked in four cases. "In two cases, the Arbitration Tribunal ruled in favour of the taxpayer and against the Income Tax Department," it said in a reference to arbitration awards won by Cairn and Vodafone. "The said clarificatory amendments made by the Finance Act, 2012 invited criticism from stakeholders mainly with respect to the retrospective effect given to the amendments. It is argued that such retrospective amendments militate against the principle of tax certainty and damage India's reputation as an attractive destination," it said. While the government has in the past few years brought major reforms in the financial and infrastructure sector to create a positive environment for investment in the country, "the retrospective clarificatory amendment and consequent demand created in a few cases continue to be a sore point with potential investors," it said. The country today stands at a juncture when quick recovery of the economy after the COVID-19 pandemic is the need of the hour and foreign investment has an important role to play in promoting faster economic growth and employment. "The Bill proposes to amend the Income-tax Act, 1961 so as to provide that no tax demand shall be raised in future on the basis of the said retrospective amendment for any indirect transfer of Indian assets if the transaction was undertaken before 28th May 2012 (i.e., the date on which the Finance Bill, 2012 received the assent of the President)," it said. It further proposed to provide that the demand raised for indirect transfer of Indian assets made before May 28, 2012 shall be nullified on fulfilment of specified conditions such as withdrawal or furnishing of undertaking for withdrawal of pending litigation and furnishing of an undertaking to the effect that no claim for cost, damages, interest, etc shall be filed. It also proposed to "refund the amount paid in these cases without any interest thereon," it said. The bill proposes to amend the Finance Act, 2012 so as to provide that the validation of demand under section 119 of the Finance Act, 2012 shall cease to apply on fulfilment of specified conditions such as withdrawal of pending litigation and furnishing of an undertaking that no claim for cost, damages, interest, etc shall be filed. SEE ALSO <a href="https://www.businessinsider.in/tech/news/google-is-now-using-chrome-as-another-security-layer-for-account-sign-ins/articleshow/84975356.cms">Google is now using Chrome as an added security layer for account sign-ins</a> <a href="https://www.businessinsider.in/stock-market/news/how-to-check-allotment-status-of-glenmark-life-sciences-ipo/articleshow/84978486.cms">Glenmark Life Sciences IPO: How to check allotment status, listing date and more</a>

Indian government brings in a bill to bury the infamous retrospective tax that haunted Cairn and Vodafone for nearly a decade

<ul class="summary-list"><li><keyword id="287807" type="ORGANIZATION" weightage="60" keywordseo="ProPublica">ProPublica</keyword> said it does not know the identity of the source who passed them a trove of IRS files.</li><li>The outlet published a bombshell investigation into the tax practices of the mega-rich.</li><li>ProPublica said it is confident of the material even if the source had hostile motives.</li></ul>ProPublica says it does not know the identity - or motivations - of the source who passed it private tax documents for its recent bombshell investigation of the ultra-rich.On Tuesday, the left-leaning outlet published <a href="https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax">its a flagship investigation</a> based on the private IRS documents of billionaires such as Jeff Bezos, Elon Musk, Michael Bloomberg and Warren Buffett. The <a href="https://www.businessinsider.com/propublica-tax-bezos-elon-musk-warren-buffet-taxes-irs-leak-2021-6">federal government is now investigating</a> the origins of the leak, which it says was illegal. <a href="https://www.propublica.org/article/why-we-are-publishing-the-tax-secrets-of-the-001">In an accompanying article</a>, ProPublica's CEOs Stephen Engelberg and Richard Tofel revealed that they don't know who sent the documents."We do not know the identity of our source," they wrote. "We have considered the possibility that information we have received could have come from a state actor hostile to American interests."Engelberg and Tofel said the source told them they were motivated by ProPublica's previous reporting on <keyword id="6383566" type="UNKNOWN" weightage="60" keywordseo="taxation">taxation</keyword>, but, the CEOs said, "we do not know for certain that is true."Noting recent hacks on US servers from hostile states, they added: "We have long held that those motives are irrelevant if the information is reliable."They said that they had vetted the information extensively by comparing the documents to those they already had access to. "In every instance we were able to check - involving tax filings by more than 50 separate people - the details provided to ProPublica matched the information from other sources," they wrote.The ProPublica story revealed the actual rates of tax the ultra-rich pay, as well as a wide array of details of their tax practices.Explaining why they published the private information, Engelberg and Tofel argued that it is in the public interest to reveal the tax avoidance practices of the billionaires, who were often found to have paid proportionately much less than regular Americans. Tactics highlighted by ProPublica include <a href="https://www.businessinsider.com/american-billionaires-tax-avoidance-income-wealth-borrow-money-propublica-2021-6">low-interest borrowing</a> to keep tax bills down, and an allegation that <a href="https://www.businessinsider.com/jeff-bezos-claimed-tax-credit-for-children-propublica-2021-6">Bezos claimed a tax credit</a> designed for much lower-income households than his.

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