Shefali Jariwala's scooter ride at 19 made her into a pop icon: Why ‘Kaanta Laga' is being retired now
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Time of India
an hour ago
- Time of India
Buying farm land to legitimise undisclosed funds? New Tax tribunal ruling a big blow; here's how these deals work
Tax authorities are now scrutinising the often used practice of using agricultural land transactions to conceal unaccounted money. A recent verdict from the Income Tax Appellate Tribunal (ITAT) could potentially disrupt this established practice. Tired of too many ads? go ad free now According to an ET report, though the ITAT's observations stem from a routine tax evasion case unrelated to these questionable transactions, its implications directly affect this property-based money conversion mechanism. ITAT, which functions as a quasi-judicial body, addresses disputes before they reach the High Court. How do these deals work? For instance: an individual with unexplained funds negotiates with a farmer to acquire land valued at ₹10 crore in the market. In this scenario, the land transaction shows an official value of ₹2 crore in documentation, whilst an additional ₹8 crore changes hands unofficially. The seller, typically a farmer exempt from tax monitoring by Income Tax authorities, readily accepts cash payment, which serves practical purposes like wages, agricultural inputs and other farming necessities. Subsequently, when this land is resold at its actual worth of ₹10 crore, the entire sum is processed through official banking channels, with proper documentation at market value. These sequential transactions enable the initial purchaser to legitimise ₹8 crore of undisclosed funds, representing the gap between ₹10 crore and ₹2 crore. According to the report, for years, influential individuals including babus, entrepreneurs, political figures and entertainment personalities have employed this scheme of purchasing agricultural property at understated values through cash payments, later selling these at actual market prices through official channels to convert their undeclared wealth. Tax Loophole The mechanism works because agricultural land enjoys special status. Unlike urban property transactions, where buyers must pay tax on differences between market and transaction values, farm land purchases below ready reckoner rates attract no such levy. Also Read | Furthermore, when the land is sold at ₹10 crore, its full value, no capital gains tax applies as agricultural land falls outside the scope of 'capital asset' classification. Farm land classified as 'Immovable Asset' The Ahmedabad ITAT bench has confirmed the exemption of capital gains tax for farm land sales, whilst raising concerns about untaxed portions of the initial transaction (involving a ₹10 crore asset purchased for ₹2 crore). According to Section 56(2)(x) of the I-T Act, the difference between market value and transaction price of "immovable property" (and other assets) is fully taxable. Tired of too many ads? go ad free now In its May 27 judgement, the ITAT stated, "The term 'immovable assets' has not been defined in section 56(2)(x) or in any other section in the I-T Act. This renders the word to be used in general parlance. In general understanding of the term, the word 'immovable asset' means an asset which cannot be removed without destroying or altering it. Therefore, going by the general definition, 'immovable property would, in our view, include any rural agricultural land, in absence of any specific exclusion in section 56(2)(x). " If the High Court endorses this interpretation, it would create significant obstacles for those attempting to utilise agricultural land transactions as a means of money laundering and undisclosed cash dealings. Also Read | Ashish Karundia, founder of CA firm Ashish Karundia & Co, was quoted as saying: "It is a well-settled principle that the nature of income for the recipient does not necessarily depend on the nature of the source from which it is derived. Likewise, it is also recognized that the characterization of income arising from a transaction need not be the same between the parties involved. Based on this principle and considering that the difference between stamp duty value and actual transaction value is explicitly included as income, such difference can be taxed as income in the buyer's hand, regardless of the land's classification or the tax treatment in the seller's hand. ' 'However, if it can be established that the difference in these values of agricultural land qualifies as income or revenue derived from agricultural land, it can be considered agricultural income. Once the income qualifies as agricultural income, tax cannot be levied since tax on agricultural income falls within the domain of the state legislature. It would, therefore, be very interesting to see how the higher courts interpret the nature of such a differential amount, especially given that agriculture is a state subject,' he said.
Time of India
an hour ago
- Time of India
Future of B2B supply chains is digital: Moglix's Rahul Garg
Moglix , the Singapore-headquartered e-commerce company, is focused on transforming supply chains within the manufacturing and infrastructure sectors. The company, valued at $2.6 billion, currently provides support to over 1,000 large manufacturers and more than 3,000 factories. In an interaction with ET Digital, on the sidelines of an event in New Delhi, Founder & CEO Rahul Garg talks about global ambitions, tech strategy, and their $50-million push in Credlix—Moglix's digital supply chain finance company in India. Edited excerpts: ET: What are your criteria for selecting new international markets and assessing readiness for B2B e-commerce? Rahul Garg (RG): We follow a structured, research-driven approach. We prioritise countries with growing manufacturing bases, a strong infrastructure focus, and high digital adoption; key factors include robust internet connectivity, mobile penetration, and digital payment adoption. Ease of doing business, regulatory clarity, and a predictable policy environment are also essential. Additionally, we assess local talent, logistics capabilities, and economic indicators like GDP growth (gross domestic product) trends and currency stability. Importantly, we gauge procurement maturity and the willingness of enterprises to embrace digital transformation . ET: What opportunities and challenges do you see in emerging markets like the Middle East, Southeast Asia, and Africa? RG: These regions offer significant growth, especially with rising industrial activities and digital adoption. In the Middle East and Southeast Asia, infrastructure and SME digitisation are gaining momentum, supported by government initiatives. Africa, with its young, mobile-first population, is also seeing early movement in manufacturing and industrial services. However, these markets pose unique challenges. The regulatory environments differ significantly. The logistics infrastructure may be underdeveloped, leading to delivery delays. Trust in digital payments is uneven, and cultural differences demand localised strategies. We address these issues by investing in regional partnerships, adapting our tech, and building local capabilities. Live Events ET: Moglix recently invested $50 million in Credlix . Tell us how this move aligns with your global expansion strategy. RG: Our latest bet on Credlix will drive our expansion into the US and Mexican markets, as it plays a crucial role in our global operations. Credlix provides financial tools such as invoice discounting, supply chain finance, and purchase order financing to help in managing working capital. In new markets, these services allow both suppliers and customers to scale confidently. Embedded finance makes procurement more accessible: suppliers get quicker payments while buyers enjoy more flexible terms. This strengthens supply chain reliability and makes entry into new geographies smoother. ET: How does Credlix's tech edge strengthen your supplier and customer relationships? RG: Credlix's presence in over 50 countries boosts our credibility as a global partner. For suppliers, early payments reduce working capital constraints, improving delivery consistency and trust. For customers, especially in capital-heavy industries, Credlix provides flexibility by financing purchases without straining balance sheets. It enables cross-border payments, mitigates currency risks, and ensures timely execution. This resilience and financial support help us maintain consistent service and expand our global footprint. ET: Tell us about technological innovations tailored for international markets. RG: We've invested heavily in adaptable platforms to drive international growth. Our tools include real-time inventory management, AI-driven demand forecasting, and automated procurement workflows. The system supports multiple languages, currencies, and compliance frameworks, making it region ready. In the Middle East, the platform aligns with local procurement and reporting standards. In Southeast Asia, we've prioritised mobile-first features. Catalogue-based buying, dynamic pricing, and robust analytics offer localised relevance and insight into buyer behaviour and supplier performance. These innovations help lower costs, speed up transactions, and improve transparency. ET: How do you navigate regulatory challenges in foreign markets? RG: Entering new countries involves dealing with complex compliance norms. We tackle this through a mix of local legal partners, compliance consultants, and automated tools that track regulatory changes. Understanding trade policies, customs norms, and content requirements is key, especially in the Middle East and Southeast Asia. Data privacy and e-commerce laws are also evolving fast. To stay ahead, we use localised onboarding, readiness checklists, and flexible models that adapt to regional legal frameworks. This keeps our operations compliant and disruption-free. ET: What are your target regions for future growth? RG: Our international expansion depends on a blend of industrial momentum, digital maturity, and regulatory clarity. We look for regions with stable trade laws, efficient logistics, and a supportive financial ecosystem. At the same time, we're mindful of challenges like local regulations, varied customer needs, and tech adoption barriers. Currently, we operate in the Middle East, the US, and Mexico. Going forward, we aim to replicate our tech-enabled procurement model in other regions—backed by local operations and embedded financial solutions—to fuel industrial efficiency and growth.
Economic Times
an hour ago
- Economic Times
JioBlackRock Mutual Fund: 3 NFOs open for subscription today. Should you invest?
(Catch all the Mutual Fund News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online.
