Wednesday, 1 June 2016
INDIAN CROOKS-Converting the Fixed Deposits into Shells or corroding their real value
Converting the Fixed Deposits into Shells or corroding their real value Suppose the rate of inflation is ten per cent. Suppose a person gets a pension of Rs 40000/-per month and the Fixed Deposits in his Bank are Rs Fifty Lakhs and the interest on FDs is also ten percent. The interest on FDs is really nil and it is a fake income. Because the real rate of inflation is more than the rate of interest, which incidentally is further reduced now. But by adding Rs Five lakhs fake income called the interest on FDs, he is paying additional income tax Rs 2000 plus 96000 or Rs 98000/ plus educational cess at three percent or Rs3330/-.The total income tax on the fake income is Rs 100940/-Add to this the corrosion in the value of the FD itself at ten percent. That means on account of inflation Rs Five Lakhs is lost from the real Value. Therefore the total loss in the real value of the FD is Rs6,00,940 /-in one year. This is the sacrifice he is making by putting his money in Fixed Deposits. His FD of Rs fifty Lakhs becomes Rs44,00060 at the end of the year. Here I am ignoring the total wipe out in real value of Fixed Deposits because of the sky rocketing of the price of land. Relationally along with the fall in the value of money the real value of the Fixed Deposits is vanishing. As the price of land is always sky rocketing, relationally the value of money is diving very low. Along with money, Fixed Deposits which are tied to an unchanging numerical figure are losing their real value totally, making them mere scraps of paper. It is the Fixed Deposits that make the banking system exist. On the banks the Netas have their eyes to dole out to people the freedom from paying back the bank loans. We know the million services which the banks give. The entire banking system really nurtured by the FD depositors is now under threat. The depositors themselves are targeted for special attacks. Black money is hunting the honest money. The least the government can do is to remove interest on fixed deposits from the taxable income. As it is lakhs of crores of NPAs are being written off. Vijay Mallya takes Rs9000 crores goes to London and offers to pay back as final settlement Rs 4000 crores! But we find the spectacle of the advertisement given by the Income Tax Department to disclose real income. Not a word about the fake income attributed to the fixed deposits and the great sacrifice of one’s life savings in the shape of FDs because of the wipe out in real capital value totally.