Alia Bhatt, another prominent actress, acquired a luxurious apartment worth Rs 37.8 Cr under the name of her production house. The motive behind these purchases seems to be primarily driven by tax benefits, liability protection, and privacy concerns.
By exploiting the loopholes in India’s tax laws, these actresses have managed to secure significant financial advantages.
Meanwhile, Alia Bhatt’s decision to purchase the property under her production house shields her personal assets from potential liabilities.
ALIA BHATT
While celebrities are entitled to avail themselves of legal tax benefits, these instances raise questions about fairness and equity within the system. The ability of high-profile individuals to exploit such loopholes further widens the gap between the wealthy and the less privileged in society.
It is essential for tax authorities to scrutinize such transactions rigorously and ensure that individuals are not misusing agricultural or business classifications to gain undue advantages. Addressing these issues will contribute to a more transparent and equitable tax framework in India.
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Suhana Khan, daughter of Bollywood superstar Shah Rukh Khan, recently purchased three houses worth Rs 12.91 Cr claiming to be an agriculturist.
SUHANA KHAN
Designating herself as an agriculturist allows Suhana Khan to potentially benefit from tax exemptions and deductions associated with agricultural.
KL Rahul and actress Athiya Shetty were in the spotlight when they received gifts worth Rs 55 Cr for their wedding, yet paid no taxes on them as marriage gifts are exempt from taxation. This highlights another example of how individuals exploit tax loopholes to their advantage. Similarly, the Board of Control for Cricket in India (BCCI) earned a staggering Rs 24,195 Cr solely from IPL rights but did not pay any taxes due to its classification as a charitable organization. These instances raise concerns about the fairness of the tax system and the need for stricter regulations to ensure equitable taxation for all.
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The stark disparity in India’s tax system is highlighted by the fact that 670 million Indians belonging to the poorest segment of the population are responsible for paying a whopping 64% of the total tax burden. In the fiscal year 2022, these individuals contributed a staggering amount of Rs 14.83 Lakh Cr. This disproportionate burden on the poor is further exacerbated by the fact that the middle class, comprising 33% of the tax base, also shoulders a significant tax burden.
KL RAHUL & ATHIYA SHETTY
Adding insult to injury, the lower and middle-class individuals end up paying approximately six times more in indirect taxes compared to the wealthiest individuals. This glaring disparity emphasizes the regressive nature of the Indian tax system, where the burden of taxation falls disproportionately on those who can least afford it.
Further magnifying the imbalance, the top 10% of the Indian population, who own a staggering 77% of the country’s total wealth, contribute a mere 3% of the tax revenue. This alarming statistic sheds light on the stark income inequality prevalent in the country.
Another glaring example of inequality can be seen in the tax treatment of high-profile entities. The Board of Control for Cricket in India (BCCI), a highly profitable organization, managed to avoid paying any taxes despite earning a staggering Rs 24,195 Cr from IPL rights alone. This was possible due to its classification as a charitable organization. If the BCCI had fulfilled its tax obligations over the years, the Indian government would have collected substantial tax revenues that could have been utilized for the welfare of the population.
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In the realm of celebrity privilege, there are three common ways in which income tax loopholes are exploited in India:
- Fat Weddings: Despite Section 56 of the Income Tax Act covering the taxability of gifts from family, friends, or relatives, wedding gifts remain exempt from taxation. This loophole allows celebrities to receive substantial financial gifts during extravagant weddings without incurring any tax liability.
- Brand Endorsements: Celebrities often earn significant incomes through brand endorsements and sponsorship deals. However, some celebrities exploit loopholes in tax regulations to avoid paying their fair share. By categorizing these earnings as sponsorship services instead of taxable income, they manage to evade the tax liabilities associated with their lucrative endeavors.
- Cash and Gold: Influential personalities such as influencers and actors often accumulate their wealth in the form of cash and gold, which can be easily concealed from tax authorities. This practice enables them to maintain substantial financial assets while evading taxes on those assets. Recent raids conducted by the Income Tax Department in 35 locations in South India have unearthed substantial evidence of tax evasion by high-profile individuals.
Suhana Khan buys 3 houses for Rs 12.91 Cr as an agriculturist!
Alia Bhatt bought an apartment for Rs 37.8 Cr under the name of her production house.
Both actresses did it for tax benefits, liability protection, and privacy.
KL Rahul and Athiya Shetty received gifts of Rs 55 Cr… pic.twitter.com/KGmoGnuYqX
— 0xVivek (@0x_Vivek) July 2, 2023
The prevalence of these income tax loopholes and the exploitation of tax benefits by celebrities not only perpetuate income inequality but also undermine the principles of a fair and equitable taxation system.
To address these issues, it is crucial for tax authorities to enforce stricter regulations, close loopholes, and ensure transparency in the tax system. Fairness and equity in taxation are fundamental for fostering a more inclusive society and addressing the socio-economic disparities that exist in India.
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