50 Crore white from 1 Lac 🤝#shorts #shortsfeed #moneylaundering #tax #taxupdate #reels #taxevasion

​@Financewithishant @anushkarathod98
50 Crore white from 1 Lac 🤝

The case study explained in this video has been summarized as under:-

1. Profile of Alpha Ltd (the vintage company, a closely held company ):
• Net Worth: ₹50 crore.
• Assets: Mostly loans and advances (₹45 crore), FDs, cash.
• Equity Capital: ₹100000 (10000 shares of Rs 10 each).

Alpha has significant internal reserves but cannot:
• Pay money to shareholders directly (would attract dividend distribution tax u/s 115-O, or deemed dividend u/s 2(22)(e)),

2. Mr. Bond’s Objective:
Mr. Bond has ₹50 crore unaccounted (black) money, which he wants to convert into legitimately owned white assets, without loan obligations or taxes.

3. The Deal (Pre-Amendment Loophole):
• Mr. Bond forms two Companies, each with ₹1 lakh capital.
• These companies acquire shares of Alpha Ltd, 50% each.
• Thus, control of Alpha Ltd (₹50 crore net worth) passes to Mr. Bond without tax implications:
o No capital gains shown by Alpha's shareholders (sold at face value Rs 10).
o No dividend paid by Alpha, so no DDT .
o Mr. Bond gets legal control of Alpha, now containing his ₹50 crore.

Mr. Bond now "owns" Alpha Ltd. The loans and FDs are liquidated, and cash is secretly handed over to Alpha Limited's directors and shareholders , —thus converting black to white and white to black.

🛑 How Did the Government Close This Loophole?
🔧 Key Amendments Made:

1. Section 56(2)(viia) was brought which was omitted later on and similar provisions incorporated in section 56(2)(x) which provides to tax on receipt of shares below fair market value (FMV). Thus prevents transfer of shares at undervalued price.

2. Section 50CA provides to tax transferor if unlisted shares are sold below FMV. This has closed capital gain loophole on undervalued share sale.

3. Rule 11UA Prescribes method for computing FMV of unlisted shares Standardizes valuation

4. Section 68 Stringent rules on unexplained credits, including source of funds for share premium. Applies where bogus capital introduced.

✅ Post-Amendment Scenario: Why This Scheme Fails Now
If this same scheme as discussed is case study would have attempted after the amendments:
1. Alpha’s shares have a high FMV i.e. Rs. 50000/- per share based on Rule 11UA (Net assets book value ).
2. If sold at ₹1 lakh to Mr. Bond’s companies:
o Section 50CA: Alpha's shareholders will be taxed on deemed capital gains (50 Cr - ₹1 lakh).
o Section 56(2)(x) provisions of section 56(2)(viia) submerged: Mr. Bond’s companies will be taxed for receiving shares at a price lower than FMV. i.e. (50 Cr - ₹1 lakh).

💡 Both seller and buyer get taxed, making the scheme costly and risky.
________________________________________
🧾 What the Scheme Truly Shows
This example highlights:
• Systemic abuse of shell companies and vintage private limited/limited unlisted entities.
• How shareholding restructuring was used to avoid tax legally.
• The role of cash-based economy and poor enforcement allowing this until the law caught up.

✅ Conclusion
Before these targeted amendments, individuals like shareholders of Alpha Limited and Mr. Bond could exploit the system to:
• Avoid taxes on capital gains/dividends.
• Launder black money using shell transactions.
Today, due to valuation rules, FMV-based taxation, and audit trails, such schemes are far more detectable, taxable, and prosecutable.

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Видео 50 Crore white from 1 Lac 🤝#shorts #shortsfeed #moneylaundering #tax #taxupdate #reels #taxevasion канала Finance with Ishant