The Double Bluff Against The Taxman

Now the banks are fiddling the IT department in another way. Some banks have been allowed to write off their capital against losses so that they can access the market with a cleaner balance sheet and get better premiums on their shares.

However, for the income-tax department's consumption they have done no such thing. This is because the banks insist on carrying forward their losses for tax calculation purposes as a hedge against any profits made in the future.

So while the banks gain from both ends, the tax man is a little concerned about losing revenue from all angles. A real case of heads you win, tails I lose. But the income tax should not be too concerned. After all, it all stays as a part of the government-owned nationalised family.