Loophole Games

by Smarak Swain

This book reveals loopholes available within ambit of law, used by corporates in legal ways to avoid paying taxes. All abusive tax avoidance structures have been brought together here in a single book. There are infinite clandestine ways of indulging in tax evasion. But tax avoidance has to happen within the constraints of accounting principles and law. Tax avoidance preys on loopholes available within the ambit of law. Hence, the number of techniques at the disposal of an accountant for avoiding taxes is limited (while techniques for evading tax are infinite).
In this book, author has discussed key rulings of Indian as well as foreign courts, and brought out the modus operandi discussed in major court rulings. He has also discussed the modus operandi of organised syndicates that facilitate tax evasion. Organised syndicates such as the stock market syndicates, shell company syndicates, and hawaladar networks often facilitate in laundering of black money and their infusion into formal accounts. Business managers and forensic auditors should be aware of how these syndicates perform, so that they can raise red flags on detecting accommodation entries made in accounts on behest of the syndicates. It will help the forensic auditor in looking for trouble areas in accounts of a business concern.

Based on True Stories on:
- Profit Shifting
- Base Erosion
- Sham Transactions
- Tax Havens
- Money Laundering

Genres: Taxation, Business

320 pages, Hardcover

Reviews

[Pari · Rating 4 out of 5]

India is a fast developing economy and in the current global platform, laws which are more relaxing and less stringent are preferred. Moreover, there are syndicates working against the laws to evade taxes through various means. Author Smarak Swain tries to focus on this scorching issue with detailed diagrams, structures and figures, to provide his findings and guide those engaged in this field to be aware of the financial crimes.

He discusses on the topics of Profit and Gain Suppression, Base Erosion. Profit Shifting, Sham Transaction and lastly, on the current trends that facilitates blatant evasion of the dynamic taxes. I found the last section thought-provoking and stimulating as I have harbored an interest on these systems for a long time.

Specifically, I have always been fascinated by the traditional Hundi system. So, to learn extensively about the Hawala system, its evolution, the transaction process and networks and channels, the focus on all these points made this chapter amusing and informative for me.

It was an enlightening read that shows how, in a country with indigenous, informal systems as well as diverse formal laws and with increasing numbers of organizations and business practices established at a regular interval, there exists certain legal loopholes which benefits certain agencies who uses innovative methods to avoid payment of taxes.

[Sam]

yes

[Aaron Rego · Rating 4 out of 5]

Well written and well explained, this book should be read by business owners and professionals who think they can outsmart MCA company laws, corporate structures, and the Tax Department, and how these departments have cracked down on them.