FEATURE

The epidemic that wasn’t.

Prof. B. M. Hegde,

hegdebm@gmail.com

“The fact is that in creating towns, men create the materials for an immense hotbed of disease, and this effect can only be neutralised by extraordinary artificial precautions.”             Anonymous

The memory of that “great” epidemic (that wasn’t) news broke out in all headlines in both print and electronic media in the summer of 2009. It continued day in and day out spreading from the sacred American media to the lesser media channels all over the world. Indian media is probably the most obedient of all as far as the western media news goes. Everyone was worried that they might die anytime due to this deadly pandemic where a deadly virus, that imaginary H1N1, had taken hold of this world! Today it is the scare of that deadly virus ZIKA which, luckily has failed to kill anyone since 1947. There is a twist in the tale now. The threat is not for you but for your yet to be born progeny growing in the mother’s womb oblivious to this threat. Instead the mothers to be are scared which might affect their bun in the oven.

You might wonder as to why we are talking of 2009? There is a pattern that never dies. History repeats itself. Newer facts have come to light about that innocent H1N1 now. We were only blaming the drug companies and the WHO for sleeping in the same bed for that episode. Now a new partner has come to light which is much scarier. The watch dog body that is the protector of the common man, the CDC itself, has been found to have been in cahoots with the other two in this game. The Centres for Disease Control (CDC) at that time claimed there were roughly ten thousand Swine Flu victims in America.Sharyl Attkisson, the CBS news channel investigator discovered something quite strange. Back in July, the CDC had stopped counting Swine Flu cases. This was found out by Sharyl. She wrote on October 21, 2009 in an article in the CBS website: "Swine Flu Cases Overestimated?":If you've been diagnosed 'probable' or 'presumed' 2009 H1N1 or 'swine flu' in recent months, you may be surprised to know this: odds are you didn't have H1N1 [Swine] flu. In fact, you probably didn't have flu at all.""In late July, the CDC abruptly advised states to stop testing for H1N1 [Swine] flu, and stopped counting individual cases. The rationale given for the CDC guidance to forego testing and tracking individual cases was: why waste resources testing for H1N1 flu when the government has already confirmed there's an epidemic?" The investigators found out that the“vast majority of cases were negative for H1N1 as well as seasonal flu, despite the fact that many states were specifically testing patients deemed to be most likely to have H1N1 flu, based on symptoms and risk factors, such as travel to Mexico." Despite this the CDC put out their statistics in November 2009 that "Shockingly, 14 million to 34 million U.S. residents — the CDC's best guess is 22 million — came down with H1N1 swine flu by Oct. 17 [2009]."

Sharyl Attkisson replied to that "...we discovered through our FOI efforts that before the CDC mysteriously stopped counting Swine Flu cases, they had learned that almost none of the cases they had counted as Swine Flu was, in fact, Swine Flu or any sort of flu at all!” Attkisson's investigation was fair, accurate, legally approved. Does that mean that the public took and gave their children an experimental vaccine that may not have been necessary? Hundreds of thousands all over the world must have taken the expensive drug for no fault of theirs? Governments stockpiled the drugs as Swine ‘Flu was declared a pandemic by the WHO obligating governments all over to buy drugs. Every tax payer in all those countries has the right to question that. Do we learn any lessons from these happenings? If not, we will have to relive those experiences. Now with the new threat of Zika do we become wiser? The other day I met our Health Minister, Mr. U. T. Khader,in a plane who was all worked up about this threat of Zika. His whole department is working overtime to stop the devil,Zika from invading Karnataka State. I did try my best to tell him the other side of the coin but I wonder if he has taken that to heart! In the bargain I got an opportunity to inform him that the best method to stop malaria is to give every poor man, woman and child a mosquito net. I think that has set in. He told me that he will think on those lines. This was a plus point in the whole meeting.

“Thought is an infection. In the case of certain thoughts, it becomes an epidemic.”     Wallace Stevens

Budget & Fine Print

A N Shanbhag

Our perusal of the fine print of Budget 2016 has been throwing up some very interesting findings. Over the past few weeks, we have aggregated some of the more significant amendments that have managed to pass under the radar, so to speak, and hence not reported extensively (if at all) in the media. Through this article the same is being shared with our readers.

Sec. 24: The interest payable on capital borrowed for acquiring a housing property was exempt u/s 24 up to some specified limits if its acquisition or construction was completed within 3 years from the end of the year in which the capital was borrowed. Finding that in the current scenario, this requirement has become too tight, the limit of 3 years has been raised to 5 years. However, corresponding amendments have not been inserted for Sec. 54 and Sec. 54F related with exemption of Long Term Capital Gain (LTCG) where the 3 year limit continues to apply. Hopefully, corrective action will be taken by the next Budget.

New Sec. 47(viic) & 48: In the case of bonds and debentures, the benefit of indexation is not available. However, Indexed Bonds issued by the government attract indexation. On the same lines, Budget 2016 has brought Sovereign Gold Bond issued by the RBI under indexation. However the newly inserted Sec. 47(viic) does not consider these bonds as capital assets at the time of their redemption by an individual!

Sec. 48: Consequent upon the judgment of various courts related with the definition of ‘securities’ under SCRA, it is  clarified that the LTCG arising from transfer of a share of a private limited company shall be charged to tax @10%. Moreover, the period for getting benefit of LTCG in case of shares of unlisted companies has been reduced from 3 to 2 years.

New Sec. 115BBDA:  Even if normally, dividends are tax-free in the hands of the recipient, an additional tax @10% will be applicable if dividend during the FY received by an individual, HUF or a firm who is resident in India, exceeds Rs. 10 lakh. No deduction in respect of any expenditure or allowance or set off of loss shall be allowed in computing the income by way of dividend. This amendment fortunately does not cover dividend received from Mutual Funds. It has to be realised that the DDT, by itself, has risen to quite a high level of 17.7675% on equities and 29.6125% for debt-based MF schemes. This being so, the new law that triply taxes dividends is most unfair even if it results in only being applicable to High Networth Individuals.

Sec.  211: has been amended  to provide that the number of installments and due dates for payment of advance tax in the case of individuals, HUFs, firms, etc., shall be the same as is applicable to companies. This is most scary!!! It forces such an assessee to pay advance tax four times in place of three times with the first installment of 15% required to be paid on or before 15th June instead of 15th September. The rest of the installments are adjusted taking in view of the first installment. TDS is treated as advance tax paid. Senior citizens are exempt from paying advance tax if they do not have any business or professional income.

Voluntary Disclosure Income Scheme

The FM has offered an Amnesty Scheme without naming it as such. It  provides an  opportunity to persons who have not paid full  taxes in the past up to FY 2015-16 to declare such  undisclosed income and pay  tax @30% of undisclosed income  plus 7.5% ‘Krishi Kalyan cess’ plus 7.5%  penalty aggregating to 45% tax of such undisclosed  income.

No scrutiny and enquiry under the IT Act and Wealth-tax Act shall be undertaken in respect of such declarations and immunity from prosecution under such Acts shall be provided.

Following cases shall not be eligible for the scheme:

• where notices for assessment, reassessment or  search has been issued;

• where a search or survey has been conducted and  time for issuance of notice has not expired;

• where information has been  received by competent  authority under an agreement with foreign  countries in respect of undisclosed asset.

 This then sums up our discussion on some of the nuances of Budget 2016. Also, the authorities do not reserve only the Budget to make any major announcements – these can be made outside the Budget too (case in point – the recent Small Savings rate cut). Whether through the mode of the Budget or otherwise – if there are any amendments or changes to the law that affects your investments or taxes, we assure you that the same would be reported and analyzed as usual through this column.

(The author may be contacted at wonderlandconsultants@yahoo.com)