It has been a habit in India to not get bills for groceries, medicines at pharmacy, paper bills which are given for namesake since bill books with same serial numbers are already available so the shop owner is anyway not going to pay the bills. Real estate companies are the biggest generators of black money. Politicians receive black money up to infinity. Movie business is the one where black money easily enters and leaves. All schools and colleges collect fees from all students as donations.
Nowadays even those shops which have computerized billing do fake by having two system wherein actual purchase is maintained and in other a reduced value for income tax department. Two books are maintained in all shops one for actual sales and other for reduced sales count for income tax department even if you come on raid you cannot find.
I give below the nearest perfect solution. Take it and make it! 150% guaranteed.
Income tax department must come up with a software so that it can be used by all shop owners and made compulsory for those who do any kind of business. All transactions like bill generations, payment of employee salary, payment to dealers, dealers must be done through this software. The shops should invest in only a pc with printer. The details of the purchase should be sent to income tax server once every hour after consolidation of details, like what item was bought by each sale and the total amount. Even the details of products can be sent to income tax server.
The income tax department instead of raiding each business office can buy few products from the shop and check if the same is updated in the server for the hour, even there is a delay the cost will be updated by end of day. Real time maintenance of the logs must be checked. The data can be sent by a xml with details of products purchased, the debit card used for purchase, the transaction id from bank and other details. This will lead to better revenue for central and state government. Most of the state govt, are not much eager to spend on e-governance since the cost involved is huge. But central govt. takes the initiative most of the issues will be resolved.
The above idea is a basic version you make it complicated by using super computer to monitor real time using aadhaar based details, the pan card, passport, the bank accounts, the real time usage of money. All gold buying should be authorised by providing pan card remove all limits. All gold buying should be linked to pan card and the billing software send out details to income tax server to know how much gold is being purchased by local people. The gold smuggling details will also be easily recovered.
For installing this software and the pc govt, can give tax relief upto 10,000 for all those who implement. The offer will be for first year only. All gold and jewellers must implement this compulsory without any of the above suggestions. SME must be given more time to implement the same.
All payments done in film industry by the producers to directors, actors, industry people must be sent through this billing software only. Hence better awareness on tax collection can be done. If a person buys a car also or imported the entry will be there in the income tax server and hence no body will escape the system. Initially the software may be sluggish due to heavy load hence make it a super computer with IIT, IISc, TCS, ISRO and RBI.
Even if the person who makes the purchase is not given the bill, the earning can be found since he needs to pay to his dealers and wholesale dealers through this software.
The software design can be configured by intense discussion with software companies, RBI, public, private sector banks, SME division, small business, big business, Income tax department. RBI must actively take part in activities where black money is being generated instead of just sitting on the fence saying i will change monetary policy when the inflation reduces. RBI was the sole reason behind black money since they didn't actively engage with Income tax department. This issue of black money could have been solved long back.
Aadhaar database will be linked to bank accounts, bank statements must include aadhaar number in that so that we confirm that all are aadhaar compliant. Passport issue must be linked to aadhaar. KYC is a major issue, RBI has been saying a separate organisation should take care of KYC, aadhaar has already done that. If any address changes public should upload their photo, id proof - college id, student id, passport, pan card, Electricity bill, bank statment, ration card, etc,. All these must be linked with immediate effect.
Anyone coming to bank to do transaction must provide PAN card if amount above Rs. 5000 since i see many people sending money from multiple banks to a single person to get some task achieved to avoid giving pan cards. And all pan card details provided in challan must be verified by the bank clerk by hitting income tax server and getting the photo details. The photo of the person and the person who gives the money must be checked. Banks must be proactive to prevent black money.
Cash transaction are happening in large quantities, tax department has the right to question anyone when money has been withdrawn from a bank account or salary account and not spent i.e. in case the money is spent it will be available in the billing system. So ever 3 months when the system subtracts the money earned minus spent will give the details of major transactions which slipped the system. Income tax department can post or email the person the details of why 1 Lakh or whatever is not coming in the system where was it spent. And improve the sytem to cover places where the system is not covering.
PAN card must be compulsory for all bank accounts. Private banks are the one who are holding heavy cash from illegal sources. They are worried more on targets than proper way to get money. All pan cards must be verified automatically by it department. All neft and rtgs transactions take place through RBI server hence RBI must be proactively work with income tax to provide IT department real time feed of all transactions done by a particular user.
There has been a lag in collection of VAT in state govt, since most of the govts are not automated or e-governance was not properly implemented or supported by central govt. More IT professionals must be recruited to implement e-governance at break neck speed.
Continue to support the blog by your suggestions and views and correct me wherever necessary.
Regards,
Venkatasubramanian B
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