Tax Evasion using ₹40 Crore Building | Income Tax Case Study
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- Опубликовано: 2 окт 2024
- This video is to guide viewers of how people tend to evade taxes using buildings and how the same evasion can backfire and not be beneficial monetarily too.
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Imagine evading the law and still ending up paying more taxes that you were originally supposed to. I'm not trying to say that Case 2 will be beneficial in all cases for all your clients. All I am saying is that the notion "Depreciation can always help you save tax" is incorrect. Whether you actually get to save any tax depends on the case in point.
thank you sir...aaj hi sec 50 dang se samjh nhi arha tha...but ab perfect explain action mil gya h
Sir i am big fan
Sir agar building sell hi nahi karni hai to har saal depreciation claim karneko milega to ye situation me fayda hoga kya
What if someone is having a Family Trust like Godrej Family Trust and having crores of land registered,
And you didn't consider black transactions (done by 99% landlords and builders across India)
@@divyshah9467 No depreciation on land.
Even if transactions done with black money, you will never make any transaction of property with official money below circle rates.
So if you claim depreciation on circle rate value and later if you sell the property at the circle rate, difference between sale price and wdv of the block will be obviously high.
Seeing your videos, it gets reiterated to me that the fruits of being honest are innumerable. Great work sir.
Capital gain ki 3,4 section revised
Pgbp me depreciation
And indepth analysis
Awesome sir♥️🌹
Sir we have not considered the tax benefits forgone by not claiming depreciation in the second case. So over the years we would have paid 13.33 Cr (33.33*40%) excess tax. So net we would still have to pay 4.7 Cr in taxes.
Again if we consider that the benefit of 8.64 will be available in the future since we can only adjust it with LTCG and also the opportunity cost of money that was paid in taxes for not claiming depreciation, I think it would be beneficial to claim depreciation.
Since depreciation amount will reduce with each passing year, for simplicity I have considered yearly tax saving on depreciation to be 0.78 Cr (13.33 Cr/ 17 yrs). Assuming you did a RD for that amount and taking 6% CAGR you would have a fund of 23 Cr. So maybe 1st option is not so bad!!
This is better
true
But RD is again taxable
Although I have nothing to do with CA preparations, I'm learning a lot from your videos! These lessons are worth their weight in gold and make any general citizen like us wiser when making financial decisions even though they are smaller.
my guru is here 😁😁
Do you think someday AI might help to evade tax super cleanly? I mean it can create a girlfriend right off now😂
Umesh bhai, app edhar 😱
ayo you here 😹
Damn, interesting to see you here! JSR represent!
wow to the point explanation and all points covered.. just loved it, hope you continue it in the future..
sir , do you hire CA Articles Assistant ??, like i have completed my CA intermediate exam i want to do my Articleship under your guidance
Amazing insights. Im a CA finalist and love your videos
I am 16 and studying in 12th class your video help me to learn a lot.
Great bro keep doing
Sir aap baith ke kyu nhi padha rhe hain i miss that style ☺️
Me tooooo 😭
True😂😂
Weight loss p hai sir
Hmm waise samjh vi aata tha.
@@beasty007 sukhayega kya bhai unhe 😂
Sir your videos give a very amazing approach to understand stuff which we can't imagine just by reading theory. Amazing effort!
Thanks for your informative video sir ! Hatts of to your teaching style ❤️❤️!
Dashing sir with his spectacular knowledge , loved ur videos sir😍😍
The typical goverment rate of the property might be 1/3 of the total value. Sell it to your family member first and then after 2 or 3 years sell it to the outsider... you can get LTCG in this case. Just imagine first year alone he saved 4 crore tax by showing the asset as depreciation. Invest that 4 crore rupees, and at 8% CAGR in 17 years that amount would be more than 14 crores. If you calculate the rest of the years amount, it would become a humongous amount
Disclaimer:- This is only theoretical example
No one will sale his/her property less then index value cause (SDV always more than indexation benefits)
And second thing if you sell building then if you buy new property for same value under section 54 G
All stcg taxable @40% will be Nil
And you claimed depreciation also
It's all depends on your financial plan whether you want to rotate your money in property or you have another plan to use that funds to get better return then property
I would've appreciated if you made this comment as a way of discussing your point of view instead of outrightly stating that the video is theoretical and not practical.
I'll answer all your concerns point-by-point:-
Concern 1:- No one will sell his/her property at less then indexed cost (SDV always more than indexation benefits)
Answer 1:- Not necessarily. It is not like the value of every property is bound to grow and that too at a specific rate. There are properties the value of which has fallen or not grown immensely. In such cases, the indexed cost can very well exceed the SDV/FMV of such property resulting in losses.
Concern 2:- If you sell building, then if you buy new property for same value under section 54 G, the stcg which was taxable @40% will become Nil.
Answer 2:- Section 54G applies only when you sell property in Urban Area and then, buy a property in any "Area which is NOT Urban Area". Not everyone would be willing to invest the same amount in Rural Area just to get exemption.
I'm happy you made this comment. Gave us a chance to discuss a few more sections and enhance the knowledge of reader. God bless you!
@@TaxationWithCASahilJain Learned a lot, sir. Thanks for simplifying the taxation 😇😃🙏
@@TaxationWithCASahilJain Sir I am very impressed with your knowledge.
CAs like you are very rare, the misfortune of this country is that people watch nonsense videos a lot.
But don't like to see where knowledge and wisdom are found.🙏
sir thanks, sir your teaching quality is very very good.
I am preparing for civil services yet i am highly interested in your videos and yes ethics classes are also taught by you in hint style as in last part of video, where you cleverly change the topic😃
Kya ho kya raha hai..... hum CA wale tumhari videos dekh rahe hain aur tum logo ko taxation main maza aa raha hai...
@@arunkumar4u Bhai m bhe upsc 😂😂
IAS banke paisa udake,, tax evasion karna chah rahe,, ye batao
I learn communication skill from you sir because your teaching style is very well and I understand very well and smoothly .
Thanks sir thanks sir thanks sir
Sir pls make a course on full proof tax evasion and avoidance
feeling proud that i had a vague idea at the start of video....ki Dep lene mein problem kya hai....i knew STCG u/s 50 aa jayega
feeling so happy that i took you classes Sir
I am an IT professional but still watch your videos. They are so intersting and informative, just love the way you teach.
Sir just out of curiosity, if we cannot consider the impact of time value of money because of different irr's ,we still take into consideration the inflation rate or G-sec rate. because considering tenure (17 yrs) it would create certainly big impact I think?
This is also what I was thinking!
now govt. have removed indexation benefit.... Now pay 12Cr. tax whatever the case....🤣🤣🤣
sir if we take interest on claimed value , then also your analysis would be right?
*Sir aapne agar apna channel NIFTY50 pe list kraya hota to mai bahut paise kama leta* Congratulations for an exponential growth
Sir, I'm not a ca or related to this field but watching ur every video, i feel like I'm learning so many important things, i think every Indian should learn these tax laws and our Indian law 😊
I ain't even doing CA, These videos are just fun and informative
You are amazing Sir. Really Respect You
Sir,one day u will rule in your profession,All the best 🙏🙏!
Sir totally agree with you, but my point is that if the building is used for a shorter duration for example upto 5 years so it would be beneficial if you would claim the asset as business asset as even indexation would not be available if sold within 2years, then you will end up saving some amount of money if claimed as business asset.
But sincerely thankyou sir for uploading such case studies, it is very beneficial for the students.
Capital gain and PGBP revision hogyi 😉😉🙏
Sir, what if we hold the building is taken in our holding co or any say company A, and shown as investment (IndAs 40). The subsidiary say Company B can in return give a loan to its parent to nullify the income against such rent income of parent (allowd u/s 185) which can be used for buying the same property. Thus the transaction would be such that the subsidiary is paying rent to parent and parent is paying interest to nullify maximum tax burden. In future the transaction can be squared off say after 10years and the group would easily retain any such tax on profits so earned. Your insights and comments are highly awaited. Lastly, thanks alot for helping us brainstorm frequently.
Sir inorder to plan the capital gain tax in case 1 we can purchase another building to nullify the tax.
Also we can rent out the new 70cr property and definitely it will fetch more than the previous 40cr building.
So it makes sense to claim the depreciation
Correct me if I'm wrong.
Under which section are you trying to exempt the capital gains?
@@TaxationWithCASahilJain Under Sec54F, 54EC .....
@@TaxationWithCASahilJain Is SC judgement of Dempo co. Applicable here ?
Then we can get CG exempt by 54F, 54EC ?
Sir Waiting for ur reply , for some explanation of this doubt
The premise itself is so wrong. generally in India property prices will increase multi fold in 17 years. aur yahan double bhi nahi ho paya
Not sure how that defeats the purpose of video. If the value of property became 200 Crores instead of 70 crores, even then, the analysis remains the same and even in that case, the Case 2 only would be beneficial as pointed out in this video.
I've clearly mentioned that the figures can be different in your case but the way to carry out analysis remains the same.
You are awesome sir 🙏🙏
Sir in case 1 If we sell the property and reinvest the capital gains in another property than under section 54 whole capital gains tax would be exempted i think 🤔🤔
I'm not a finance background student but your videos are really good and informative
in this example we are at a loss after indexation, doesn't that mean its a bad investment to begin with and we would have be better to just hold cash.
Also does it matter if the person stopped claiming depreciation 2 years before selling
Accounting Trends: Predicting the New Business Future 2022 and Beyond -ruclips.net/video/LmHMoSfAapQ/видео.html
💯👍CA saab personality full h aapki
Gazab Sir ji 👏🏻
Khatam ho gaya indexations. Need a revised video
It's a request to start a course based on case studies only, so outsiders who are not preparing for any exams can also learn alot.
Yes....
Awesome 👍
but come to think of it sir, if am dealing only in trade and not in any kind of capital assets in my business then the LTCL has no use for me as am unable to set it off ever right, so in that case isn't it a good option? And i can claim maintenance cost of such building yearly
Can i claim depreciation for residential property where I'm residing and have taken a home loan for it?
Thank you
Sir if the building is stock-in-trade , and then it is converted into Business Asset , then would indexation benefit be available from the year it is converted or since the date we had it as stock in trade ?
From the date converted
😂😂 real estate me deal 60% cash me hoti hai i think aapko pata hoga
Sir please residential pe bhi bana do .
can you make a video on rental business taxes and how to profit
Best professor alert ⚠️ 💯
Sir in given case you have assumed that the block consists only one building ....
But your given conclusion would not apply in those case where there are more than one building AND opening WDV is more than the selling price of said building.....
And further not resulting in any STCG...
Sir I am struggling to choose between finance (chartered accountancy) or engineering (IT) as my career. I previously thought that I'll be taking engineering as my career, but I realized that on youtube there is an ample amount of content for it available for free on youtube regarding engineering. I followed it and it gave me skills more than that of college graduates. Therefore, I dropped the plan of becoming an engineer and planned that I'll be taking finance as my career. My main purpose for it is that it will help me build good business fundamentals and knowledge, it will give me abilities to take finance of my business on the skyline, and will help me enter into the fin-tech industry. My aim in my life is to set up a business related to tech and automation. What do you think about my plan? I couldn't get any videos/content on the entire internet regarding this. People are still telling me to drop it and go with engineering. By the way, my inspiration to become a CA was first sparked by your videos.
Go for IT , you ll be wasting too much efforts in CA course that you can invest in enhancing your skills .
@@cooldude2106 That's not a Good reason but it might be helpful for him, or will make him even more confused
Bro entry is easy , exit is too much difficult in CA
@@ashishagarwal9083I'll do some hard work do not worry ✅
Bro actually we have only one subject related to finance (intermediate paper8 and final: strategic financial management) majority of the syllabus is taxation and audit( audit is damn difficult as you should memorize a lot) and these subjects such as audit and tax don't relate much to finance. So I would suggest you to check out on CFA or acturial science which is completely related to finance. Or an MBA in finance from top colleges. Hope this might help you.
Hi Sir! Love your videos! Just one point I would like to raise for discussion -
Indexation basically brings the cost incurred to its present value right? And, on the other hand - we are ignoring PV calculation in the first option. So aren’t there two scenarios non comparable then?
In the first option , even if we take PV Calculation into consideration, the net tax saved wouldn't be as much as the benefits in case 2.
By rough calculations , I believe the ultimate tax obligations in case 1 after considering the PV of tax saved through depreciation will come down to almost NIL .
However in Case 2 , we're going to have a Long term capital loss of around 43 crores as shown in the video which can ultimately be set off . So Case 2 is going to beneficial in the above scenario even if we take PV into consideration in Case 1.
sir, honestly you are awesome at making taxation videos in easy ways. can you make complete videos for sole proprietors to save tax in India?👍👍👍👍👍👍👍☝
Sir 40% tax slab kyun liya ? Vo toh sirf FC ke liye hi hai na
And 2nd doubt ki if block has more then one assets and one assets sold and sales consideration is less then wdv of block then ? Mtlb tab to 50 trigger nahi hoga na ? And tab kya cap gain LTCG manege ?
In case A I can reinvest in new properties for tax savings or not?
Secondly every year by depreciation I am saving my capital to grow my business manifold without taking bank loans and paying interest
Case B without deprecation I’ll be paying heavy taxes and loosing capital every year eventually will have to take bank loans on interest that’s costly
And claiming losses without taking depreciation means I have no guarantee that my business will be in loss or profit in future years
So it’s viable to keep going on yearly basis of depreciation
Wow, already knew all these concepts of LTCG, STCG, depn, indexation but never thought this way 👏
Thank you Sir, waiting for more videos
sir say about Stock market trading in derivatives F & O is it a profitable business to trade in derivatives market
sir apki videos toh crime partrol ki trhaa lagti ha JO be invasion karta ha tax ki 🤣🤣🤣
Thanks sir your video Very help to me and your teaching is very well .my English few poor so you try to understand it . Other wise thanks sir for your RUclips video
Thanku
Sir who is liable to issue E-invoice in case of RCM and whether the treatment is same for all recipients u/s 9(3) & 9(4) ?
Chalo Tax Evasion video ke bahane apna 40 crore ka mansion bhi dikha diya
Ek tir se do sikhar😅
Sir ca ki Kuwait jaisi country mein kya value hai please batayein
Sir I am watching ur video for more than 10 months, trying to understand as much as u say as idk Hindi
Pls try to create a yt channel which teaches in English will be very useful to attract other subscribers widely 💐
Sir what about taxes paid on increased profits over 17 years due to not claiming depreciation?
having the same thought
Haan ji ♥️
What about SDV and consideration should be upto 10% of SDV ?
That’s a great 👍 information Sir, and still there are many legal loop holes one can avail , what if you sell your office or industry to your friend or relative for less whom you trust and ask him to sell , there by share the profits and invest the profit again for building construction or give it as a loan to the same Company to construct a new office again. It’s a loop 🔄
then ur friend will pay tax on profits
Ek video sir ca in foreign par lekar aayiye , usmein acca ki baat mat kijiyega
Sir agar koi 40 crs ka gar le rha hain tho vo beche ga jaru re thode hain
agar nhi beche ga tho pir tho pura profit he hoga na
Sir please provide a video that how to learn applying sections.
We students only know the sections but know how to apply those
it would too much beneficial for us
Sir if we purchase the asset in owners name and not company then we can avoid depreciation right?
Yes you can avoid in this case
Loved the video
But sir in this case you know the selling price of your building
But while buying we don't know the exact selling price
Well explained sahil
What if in Case 1 where we have claimed depreciation, We invest the Amount Earned i.e 63.7 lakhs into buying another house. Then there will be no taxes as the entire money is invested back again?? Or we will have to pay taxes ??
Hi Sahil , great explanation. I wanted to build up knowledge around taxation and corporate governance for the purpose of either building a business / growing up in my field of work. I am a 32 year old, with engineering degree from iit and nit. Currently I work in electric vehicle space for a top OEM.
It would be great to get some advice from you to resolve my dilemma.
IIT NIT mention karta hu, cool lagunga 🤡
@@denzen5583 😬 envious?
Bhai aap hame batare hai ya ED ko 😂😂😂
why i think that its sir personeel story
nice video, can u make a video on fedex challenge i want to participate
Abhi v samajh nahi aya... Me taxation nahi janta fir v aise janne ki kosis krta hu
Case no. 2 me 8 Cr ki benifit nikal rahi he but case no. 1 me v to 33 Cr ka depreciation mil raha he aur 12 Cr payable tha 33-12 =21 Cr (to isi me profit he na)
Ko samjha do to
sir par future mein agar ltcg nhi hone vaale ho to iss loss ko absorb hi nhi kar payenge
Agar ethic ko side mai fek dia hai toe aapko pta hoga land deals mai bas minimum value white dikhai jaati hai most deals mai major hissa black ka cash hota hai (that’s why property is best way to dump black money)
Amazing
Is CA Final DT lectures are available for purchase?
Bhai mat purchase krio bhot regret krega
@@sarfarazkun09 thanks for reply, may I know your detailed experience?
@@CAHarenRathod bhai sirf book reading krte h sir logics aise denge jo smjh nhi aaenge ..... Go for bb sir bhai
Thank you sir
I request all my Indian friends to just boycott every Chinese cracker or any other product this diwali and support make in India 🇮🇳
Let's show the power of 1.4 billion lions 🦁 💪
I always wait for your videos sir from Bangladesh ❤️🇧🇩 passion and dream to be a CA 💛💛💛
How does this calculation change if we buy building for investment purpose and rent some floors on same building?
Hello Sahil ji, commenting to let you know that I had sent you an email last week regarding brand collab. Please do check and revert. Thanks, Rahul
1.) Can we do something in case 1 to save further tax liability of 12 cr.
2.) Can we do in case we have a residential property
Case study - cash taken from small investors know other person is saying take property of my ... on loan....good n bad side
So if we are using a building for business we will have to show in depreciation and eventually end up in losses when we sell it ???
If we take sales consideration partly in cash and partly on records( like 10 crores in bank whereas rest as cash) then I guess the depreciation claim will be beneficial? 🤔
He could have sold the property at circle rate and took the remaining money as black money. Through this way, he could have saved a lot of money.
What if the person does not apply for depreciation in the last two years before selling? Will it be considered as STCG or LTCG?
Hi sir I have seen your video it was most informative sir. Sir please make video on less home loans with or without collateral loan. Another sir loan for buying agriculture land
One more point to be added - If we show asset in business, then we can also avail ITC of gst, so it will reduce cost of the asset
If I'm not wrong, You cant claim ITC ,as GST is not applicable on sale of ready to occupy property. And if it is construction of property, even then you can't claim ITC on any goods or services related to construction of the property as it is related to immovable property, not plant & machinery ( blocked credit u/s 17(5)(c) and (d) of CGST Act)
If, that building was used for commercial purposes initially for 10 years and claimed depreciation for 10 years, later they left it, hence no depreciation and sold after 7 years (total : 17 years),
Is it LTCG or STCG..?
If it is LTCG, What will be year of cost of indexation...?
Are you gonna say that if depreciation once availed, it should always be considered as STCG on sale..?