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How Corruption is Inflating Real Estate Prices in India - YouTube
Channel: pranjal kamra
[0]
Regret
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Lots of regret
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We have always been in our houses
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have heard our parents, grand parents discussing that
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20 years ago that land was going for Rs-5 lakh
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if anyhow I had taken that
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then today it will be of Rs-50 lakh.
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I've missed it.
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Our parents work hard their entire lives
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they work for 20 years, 25 years, 30 years
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after that sometimes very hardly
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one land in life
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or can take one house.
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And as long as they can take it
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then for 20-25 years
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they blame themselves.
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Sometimes they do double shifts
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sometimes despite of being ill
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in the fear of getting their salaries cut,
they go to the office.
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Everywhere
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they save money.
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Sometimes
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they walk by foot in the sun
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instead of taking Auto or Bus
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so that they can save money from it.
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So that 5 years later
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they can give their kids their own house.
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Their entire lives
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they make sacrifices
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so that they can buy a house for us.
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Do you know?
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that the blame they give themselves
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it is completely wrong.
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It's not even their faults.
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The reason they cannot buy their house
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it's not their fault.
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Do you know what the reason is?
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You are going to get very angry
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I am also getting very angry
after knowing this.
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It is the fault of corrupt people.
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And who are usually corrupt
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we all know that.
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So because of those corrupt people
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our family members
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can't buy their house.
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Today I am just not going to tell you that
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how because of corruption
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your family members cannot buy their house.
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You will also know that
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how because of corruption in India
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Real Estate prices are constantly increasing
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and they are becoming unaffordable.
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This is Pranjal Kamra
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let's start Finology.
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Now today we take a sample home
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umm...
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Mr. Graphics Man, please bring a good sample.
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So...
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Let's think that this house if of Rs-1 crore.
[129]
Just for an example to easily calculate it.
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So
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first of all
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it becomes 20% expensive because
20% tax is charged on it.
[137]
Now I will tell how corruption is related to it
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but 20% tax is charged on it.
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7-8% is stamp duty or registry
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and
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if it's an under construction house
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there are many different categories of GST
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but if it's an under construction house
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and you haven't got the completion certification for it
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the builder is still building it
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then GST is needed.
[156]
After completion certification GST in not needed
[158]
but it gets included in the price
and its price increase.
[161]
So
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if it's an Non affordable housing segment house
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Normal category house
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and it is under construction
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then it's charged with 12% GST
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and 7-8% stamp duty.
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That means 20% of tax is levied.
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Rs-1 crore house become Rs-1 crore and 20 lakh
just because of taxes.
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Now
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high taxes breed high corruption.
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Because more people will want
to save that tax.
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So they will try to buy that house with
more black money.
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So the reason I am talking about taxes is that
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because as the tax is this big
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that's the corrupt get encouraged by it.
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There is no justification.
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But today I'm going to tell you that
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how they not only save tax by corruption
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but also make that property more expensive.
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Now let's know that
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a common man
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umm..
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not that sweeper
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but the real common man.
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A common man and a corrupt man
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how they buy their house?
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So the common man
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he will get this Rs-1 crore house for Rs-1.2 crore
[215]
inclusive of all taxes.
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So he will give some money as a Down payment
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like Rs-25-35 lakh
[220]
and the rest
[220]
he will take a prolonged period home loan
of 15-20 years
[224]
and with great difficulty
[225]
he will be able to buy that house.
[227]
Vs let's come to a corrupt man.
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Think that
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his yearly is Rs-10 crore.
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So if he shows Income tax on it
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that I made this much profit.
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Then including of all the charges
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then he will have to give more than 40% in taxes.
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That means he made Rs-10 crore
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then he will have to give Rs-4 crore as tax.
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But what will he do
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he will not show the profit of Rs-10 crore.
[251]
He will show that he had many expenses
[253]
to repair this machine
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he will show increased salaries
[256]
and
[257]
he will make these fraud bills.
[259]
He will show that he gave someone Rs-2 crore
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he transferred from the bank
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and took cash in exchange of it.
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And he
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to save this tax of Rs-4 crore
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will show this Rs-10 crore profit as zero.
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He will take cash by showing expenses.
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And he will generate Rs-10 crore of black money.
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Now
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on that Rs-10 crore
[280]
the Rs-4 crore tax he would have to give
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if he had it as white money.
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He saved it.
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So his Rs-4 crore became free.
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But there is one problem.
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Now he's got black money of Rs-10 crore.
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And you cannot use black money everywhere.
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You can't buy shares with it
[297]
you cannot bank transfer it
[298]
you cannot put it in the banking system.
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Then what will he do?
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He
[303]
will go towards property.
[304]
That Rs-10 crore
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he will try to use it in the property market.
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Because Rs-10 crore cash
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is not safe to keep at home
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is not safe to keep in bank locker
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is not safe to keep anywhere.
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He will try to invest it in property
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and how to convert it in white.
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I will tell you all of this.
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But if that Rs-10 crore is now needed
[323]
then it is needed in the Real Estate market.
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Now think that there was a builder
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who made 15 houses of Rs-1 crore each.
[330]
His project was of Rs-15 crore for 15 houses.
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Now
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that honest common man
[335]
he wanted to buy one house from it.
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He just was managing the down payment money.
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He was almost ready to make the deal.
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Right then
[342]
this corrupt man got that Rs-10 crore black money.
[345]
And he found out that
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there is 15 houses available
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and each house is of Rs-1 crore.
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He has got Rs-10 crore black money.
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He will say that, "OK"
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"I will invest it here".
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And he
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will go to that builder
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and will say, "I want 8 houses from it".
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Now
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as soon as the builder got to know about that
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these 8 houses are about to be sold.
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What will he do?
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First of all, he will increase the prices
of the rest 7 houses.
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Because half of his products sold out
[372]
and he got back his investment.
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And now he will sell the rest 7 houses
at his own price.
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So the Rs-1 crore price that he decided
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he will think that this Rs-1 crore
that I sold was very cheap
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as soon as I sell them for Rs-1 crore
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8 houses immediately sold out.
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Now for the rest I will not sell
them for Rs-1 crore
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I will sell them for Rs-1.25 crore.
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So the price increased by Rs-25 lakhs.
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Until then
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your parents have managed the down payment.
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They went there with high hopes
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that here is Rs-25-30 lakhs
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now sell the house to us for Rs-1 crore.
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And the builder says, "No no no"
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That was last weeks price.
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This weeks price is Rs-1 crore 25 lakhs.
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And again your parents
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were just about to buy the house
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the price suddenly increased
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and they couldn't buy it.
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Now the question that comes here is that
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How can that corrupt man can buy
so many houses at once?
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He can buy it because
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for that house he is
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getting a close to 50% discount.
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Your parents are getting that house for Rs-1.2 crore.
[423]
Do you know how much will it cost
for that corrupt man?
[427]
So that corrupt man will go
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and he will say
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I have huge amount of black money
[431]
I want to make the deal in cash.
[434]
Now the builder will say, "OK"
[435]
you give 30% in white
[437]
Because the circle rate is like that
[438]
you have to show that much in white.
[440]
The registry will be at that cost
[442]
So you give Rs-30 lakhs in white.
[445]
Now
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as soon as he gave Rs-30 lakhs in white
[449]
So now the registry charges
[451]
and the GST of 20%
[452]
will not be counted on Rs-1 crore.
[454]
It will be counted on Rs-30 lakhs.
[455]
For Rs-30 lakhs it will be of Rs-6 lakhs.
[457]
If that Rs-1 crore was fully white
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and if the agreement was made with that Rs-1 crore
[461]
so the government would have got Rs-20 laksh in taxes.
[463]
Now they are getting Rs-6 lakhs.
[464]
So Rs-14 lakhs is already
[466]
reduced from that house for him.
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Rs-1.20 crore, which your family will have to pay
[469]
for him that is Rs-1 crore 4 lakhs.
[471]
So he already go a Rs-16 lakhs discount.
[473]
Besides this remember that
[474]
he has saved 40% in taxes.
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He saved Rs-4 crore in taxes.
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So what is going on in his mind?
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"If the house is a little expensive then take it"
[482]
"I have saved 40% already."
[484]
So here I think that
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the 40% which I would have to give
to the government
[488]
here I also got a discount on that.
[489]
Because that money either have
gone to the government
[491]
here it is going to the builder.
[492]
And also I am getting something in exchange for it.
[495]
So now think
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if the builder
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didn't had that Rs-10 crore.
[499]
If he had given the 40% tax
[501]
then he would only have Rs-6 crore.
[502]
Then he wouldn't have thought
about buying 8 houses
[505]
he would have bought 4 or 5 houses
[507]
and the builder
[508]
wouldn't have increased the price by Rs-25 lakhs
[510]
he might have increased it by Rs-5 to 6 lakhs.
[512]
But
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think of it like this.
[514]
When he was buying the house for Rs-1 crore
[515]
he has saved 40% tax on it
[518]
on Rs-10 crore he saved Rs-4 crore
[519]
and he saved Rs-40 lakh in tax on Rs-1 crore.
[522]
That means a Rs-1 crore house
[524]
he was already getting it for Rs-60 lakhs
[526]
the Rs-40 lakhs was already going
to the government.
[529]
After that
[530]
he also saved Rs-14 lakhs on GST.
[533]
So he saved Rs-40 lakhs on income tax
[535]
saved Rs-14 lakhs on GST
[537]
total Rs-54 lakhs
[538]
he has saved.
[540]
A Rs-1 crore 20 lakh house after taxes
[543]
for him
[543]
it only costed Rs-66 lakh.
[546]
So your family is getting that house
for double the price
[548]
the corrupt man is getting it
for half the price.
[551]
How will he now make more investment
[553]
he will keep on blindly investing in Real Estate
[556]
Because he is getting a straight 50% discount
compared to you.
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And the much he will buy
[561]
that much the demand will increase
in the market
[563]
supply will reduce
[564]
and the Real Estate prices will keep on increasing.
[566]
But he doesn't care
[567]
he is always getting a 50% discount.
[570]
It concerns you
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it is going out of your affordability.
[573]
And he is great
[575]
buying it at any price with black money.
[578]
Now here a question comes
[579]
that how can this happen?
[580]
A minimum Circle rate is decided
[582]
the agreement will be made on that circle rate.
[584]
So Circle rate means
[585]
the government says that, if you are
buying a house in this area
[587]
so we know that the rate here
is Rs-2000 square feet
[590]
no builder can sell for less than this.
[593]
That is also not a issue.
[594]
What the builders do is
[595]
they launch many big five star projects.
[597]
Where they add Amenity charges
[599]
add maintenance charges
[600]
add Swimming pool, Gym, Club house charges.
[603]
And say that we will not sell it for Rs-2000
[605]
we have a five star project.
[607]
We will sell it for Rs-6000 square feet
[609]
triple of the circle rate.
[611]
So
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when they set the price triple to the circle rate
[614]
just for show
[615]
Rs-6000 square feet.
[616]
So they can whenever
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reduce that.
[619]
That means if that house is at Rs-6000 square feet
[622]
for Rs-1 crore
[623]
and the circle rate is Rs-2000 square feet.
[626]
That means
[627]
they can reduce it by 66%
[629]
they can reduce the price by 2/3
[631]
and legally they will
[633]
sell that house for Rs-33 lakh.
[634]
They will show that we have sold the
house for Rs-33 lakh
[636]
at Rs-2000 square feet circle rate.
[638]
But in reality it sold for Rs-1 crore
[640]
and the rest Rs-66 lakh
[642]
they will take cash for it.
[644]
So that corrupt man is also happy.
[645]
From his Rs-10 crore, he adjusted
Rs-6 to 7 crore very well.
[649]
So these corrupt people
[651]
in every town, in every city
[653]
in every project
[654]
most of the units
[655]
most of the Real Estates are there
[657]
they capture them
[658]
with black money.
[659]
And you and I
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cannot buy it.
[662]
Now what can we do about it?
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I don't know
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We can't do much.
[666]
I know this
[667]
that
[668]
one time when I made a video on Ed Tech
[671]
two or three other people
[672]
also made videos on Ed Tech.
[675]
Everyone's video went viral
[677]
and a discussion was made at the Parliament.
[679]
The social media has this power.
[681]
If we want Real Estate to be affordable
[684]
black money needs to get out from this.
[685]
People like us
[687]
we should be able to buy them
[689]
and from it
[689]
this
[690]
artificially inflated prices should be finished.
[693]
I don't know what we do can.
[694]
Maybe
[695]
if you share this video
[697]
it reaches to many people.
[698]
To peoples WhatsApp, Twitter, Facebook
[701]
Instagram and to their homes.
[703]
So much discussion should be made about it.
[705]
That
[705]
you and I together
[706]
can bring a revolution
[708]
and any law that can come on it.
[709]
Maybe
[710]
The chances are very low
[712]
buy it is not impossible.
[714]
So can you try?
[715]
Can you share this video?
[718]
Let us try
[719]
from Real Estate in this country
[721]
any law that can be brought
to remove corruption.
[723]
Can you
[724]
try this with me?
[726]
So please this video
[727]
wherever you can
[728]
share it there.
[729]
This is Pranjal Kamra
[730]
signing off
[731]
Bye Bye
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