According to a data of the Government of India only 6.25% of the population of 132 crore people in India pay income tax, whereas if we talk about the numbers of tax payers of America, it is 45%. but you will be very surprised to know this, whether it is America or India or any other country all the billionaires living here hardly pay any tax to their government. Jeff Bezos, Elon Musk, Donald Trump, Larry Page, all these people despite being billionaires,.
Do not pay any tax to the government. Have you ever thought that all these top CEOs how do all these top people run their lives on just $ 1 salary? Like seriously, how can it happen, that the top one percent people of this world who should pay the most tax they hardly pay any tax. And let me tell you all of this is done legally. All this is done under the supervision of the government.
And you will be surprised to know that the government of any country doesn’t want that the rich people pay maximum tax! Their real target is someone else. And it is done so smartly that most of us never come to know about it! But the question is why? Why the richest people of this world don’t pay any taxes? After all, what kind of things do they do.
When they do not pay taxes that they do not get jail, and most importantly, if these people do not pay taxes, , then where does the government get so much money from? To understand this we have to understand that how the government collects money through tax! So in most cases, any government in this world collects money from these two types of tax.
The number one direct tax, which includes your income tax, that is, whatever money you are making and the tax you are paying on then comes your capital gains tax like, suppose you bought a property which was worth one crore, after that you sold that property for 2 crores, so you got 1 crore as capital gain on that also you have to pay tax to the government and lastly it is corporate tax.
These all types of taxes are direct taxes. But after that comes indirect tax and common people like you and me pay indirect taxes to the government. If we talk about India, then GST means Goods in Service Tax is indirect tax in India. But you will be very surprised to know that two people who fall in same income bracket they also pay different taxes to the government. For an example, there are two people, Raj and Amit.
Where Raj has a high paying job, while Amit is a businessman. So let’s suppose that both of them earn one crore rupees a year. Do you know that where Raj has to pay the government 20 to 25 lakhs tax, whereas Amit can pay zero tax to the government , even if the income of both of them is one crore rupees a year. Now after listening to all this, the first thought that will come in your mind that Raj is paying tax to the government legally.
And Amit is doing something illegal, so he is not paying tax to government. Right? Well it is not so! See most of us are often confused between these two things. Number one, Tax Saving and number two, tax Evasion! Tax saving means that you are reducing your tax liability.
By doing different types of expenses or by doing different things due to which you will have to pay less tax to the government Whereas tax evasion means that you are laundering your money here and there through illegal activities so that you do not have to pay tax or you are not showing your income. to the government in an illegal way, Basically the easiest difference between these two is is that tax saving means reducing your tax liability whereas tax evasion means not only paying tax to the government.
But keeping your tax liability hidden. After all, how do the richest people of this world not pay tax even after having money from all over the world? And most importantly, the biggest thing through which rich people become rich that is financial discipline. For suppose, credit card. On one hand people use their credit cards very casually on the other hand rich people use their credit cards very smartly. In-fact if you want, you can do the same.
Download the Mobiqwik app, and pay the credit card bills through this app. Because when you do this, Mobikwik will first ensure that you are paying all your credit card bills on time, it will give you regular reminders, so that you don’t forget to make any bill payment so that not only your civil score is good but also your credit limit also increases. And the heavy interest rate you have to pay.
If you miss the bill payment you will be able to save you from this interest too! Here your bills are settled in lightning speed only and within 30 seconds And here you can see the analystics of your spendings. That is, where have you spent how much money on travel, food, you see all these things, you know that where you have spent all the money! The most amazing thing is that.
No matter what your credit card is, whenever you settle your credit card bill through Mobikwik, you get 1% cashback, and the best think is that you do not get this cashback in the form of any coins or points, but you get this cashback in the form of direct ready to use money inside your Mobikwik wallet. You can use it as you want. How much amazing it is!.
That’s why if you are using credit card, then do it smartly. So if next time you have to pay your credit card bill, then inside the description and comment box, I have given you Mobiqwik link. You can download this app from there and pay your credit card bill timely and can save yourself from paying a lot of interest and earn a lot of cashback! So yes, the answer to taxation.
Is hidden inside these two words. And that is taxable income i.e. your income on which legally government can take tax from you For a job doer, his in-hand salary becomes his taxable income. On the other hand, when a businessman makes profit in a year that is, after removing all the expenses from his earnings whatever is left is his taxable income. In very simple words most of the people don’t pay tax to the government.
Because their taxable income is less than a decent earning person And that is the reason top billionaires and CEOs of this world are happy with $1 dollar salary! I know after hearing all this a question must have been very loud in your mind that how despite being among the top rich people of this world the taxable income of these people is less than that of a well-to-do person? The answer to this thing is also hidden inside the tax rules.
Which the government of any country makes to take tax from the people. US and Indian tax system even in the tax system of every country there are many loopholes using which these rich people do not pay tax even after earning crores of rupees. And yes in most of the cases it is done legally! But how? Well, mainly in these three ways!.
No. 1 – The Minority discount. Most of the rich people deflate the value of their assets. By seperating them in various owners, whether it is a property, a company, a stock, or any asset! But how? So for example, there is a rich man named Bambani, who buys a very big bungalow and he owns some shares of the company! Now the catch over here is.
Holding pattern. the property and stocks that Bhambani owns he will own them on the name of a LLC, Limited Liablity Company. And in this Limited Liability Company many other people would be made stakholders. Due to which the LLC holds that property! And because there are multiple stakeholders in the LLC the value of that property, supppose that is 1 crore rupees then the value can be shown on paper at 20 to 30% less.
Why? Because it is very simple. Because to sell this property it is necessary for all the stakeholders to be present so due to this dilution of power , it is very difficult to sell this property in the market at a good value. Due to which this asset is devalued on the paper. Now comes the second method and that is stock compensation!.
From 1997 to 2011 Steve Jobs took only $1 salary but if we talk about his stock compensation his stocks increased from $17.5 million had reached $2.2 billion. And that is the reason, most of the CEOs are happy with $1 salary. Because they pay theselves in the form of stock compensation not salary! But why?.
So see that whenever the payment is made in the form of stock, then the company has the power to count it as non-cash expense that is, it was not expense in the form of cash but it can be claimed as an expense, due to which the company’s profit is shown less and they save a lot on company taxes. Billionaires raise loans by mortgaging these stocks with banks banks and when the value of these stocks goes up they sell off some portion of these stocks and pay off the bank loan.
But the funniest thing is that this loan is not taken as an income. It is shown in the personal tax statement in the form of a loan and it is noted as an expense because you are also paying interest on this loan, also, whenever you take a loan against shares , you can use that loan to purchase anything, there is no control of the banks that after all this money what is it being used for. So ultimately, when there will be no income on paper,.
Then what tax will be levied! And then comes the third method, charity and donations! If we talk about India then India’s Income Tax Act, according to section 80G any amount that you are making as a donation to any charitable organization or trust no tax is charged on the amount, that is, you can count that amount today and expand your business. Many businessmen own many charitable organizations and whatever money is put inside these charitable organizations,.
They do not have to pay any tax on the money/ For example, two years ago, you bought shares worth Rs 10 lakhs whose value has increased to ₹ 1 crore today after 2 years, after 2 years, if you sell off these shares and book profit, then your profit would be 90 lakhs. if long term capital gain tax is imposed on it. then 10% out of this, 90 lakh rupees i.e. ₹ 9 lakhs you will have to pay as tax to the government. But if you donate these shares to a charitable organization.
Then you can deduct this 1 crore which is the value of your shares from your income statement today. And you will not have to pay any kind of capital gain tax. tax That’s why most of the rich people own many charitable trusts and organizations through which they deduct the taxable income so that to not give any tax on the income left. Philip Knight, founde of Nike, come in the front of public and says world that he will eventually donate his entire wealth to charity, hearing which everyone must have felt that how awesome he is.
And what he didn’t tell is that he has already transferred more than half of his wealth to his children by using different charitable trusts and different legal techniques over the years. Philip created several charitable trusts through which he has given all his shares in the name of those charitable trusts, and those shares of Charitable Trust are held by his children so indirectly the whole wealth of the Philip belongs to a Charitable Trust Trust and who is the owner of that Charitable Trust? Philip’s childern.
Some time back, Philip had transferred his major holdings of his assets to Shoes Luck Company and the majority stakeholder of this company is Travis, who is the son of Philip. He transferred those assets to all their children without paying any kind of capital gains tax on all the assets. We all think that all the rich people avoid tax in one or the other illegal way, they fool the government,.
But the truth is that the government itself has made such rules through which the rich people should not pay tax, but why the government has made such rules? It is super simple because every government wants to collect maximum tax and because a business owner creates many such opportunities through which people get jobs, and many such people are created in the economy who pay tax to the government, therefore, both directly and indirectly,.
The government collects tax from these people and an exception is given to the businessman. That’s why the business is given tax exemption. And all the rich people do some kind of business or own investments because of this no matter how rich they are, they do not have to pay any tax to the government legally. And yes, all these people Use your credit card very smartly not only to earn cashback,.
But also to increase your credit limit by paying the credit card on time and this thing is such that you can also do. Just download the app from the app given in the description and commnent box, pay all your credit card bills through it. It will also pay your bills on time and you will get 1% cashback on your bills directly in your wallet. And you can use that money however you want. So if you have also got value from this video, please like this video and please subscribe to our channel.
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