Taxation, Big Data and opportunities (for freelancers in India )

As long as you are alive, you need to pay tax. As a matter of fact, in civilized mankind, you need to pay tax for cremation also – direct or in-direct. So, in life and in death, you cannot avoid taxation. Tax and Death are verily the only sureties in life.

For last decade and a half, in India, tax net is increasing. It will continue to increase. PAN is familiar as PCO (Public Call Office) was in our youth. The tax net is not only increasing, the net is worked up with other ‘networks’ and what is happening is a network of networks. There are hoardings in the city by Tax Department which starts ‘ We are vigilant’ and then there are figures which seem more like a Big Data summary. e,g 40,67547 people deposited more than 10 Lac in cash in their savings account this year.

We may ask with unwilling suspension of disbelief :

a. How these figures are arrived at ?

b. What are the underlying principles guiding the process (the above how)

c. What will be the evolution of this process ?

I shall speculate on the first two questions. The 3rd question leads to opportunity for freelancers.

Big Data 

Yes, the process must have something to do with Big Data. It is unlikley that the process is a manual one. Now if not manual, there will be a process and that process will be algorithm driven and there will be flags associated. There will be false flags also. Like any logical system devised by humans for humans will fall short as soon as nuance and complexity come in ( Google Translate, Automated Voice Agent etc). With ever more ‘transactions’ being radiating from a single data set (PAN —> investment, spending, expense, hi-value movable and immovable asset, travel etc), the system will be continuously evolving. This is not new. Global payment and ecommerce platforms analyse massive amount of subscriber data and they have anti-fraud, risky, suspicious flags and sometimes, admitted by the institutions that there happens false alarms.

Evolution and Opportunities

This process will evolve and one thing is sure : it will have to handle more and more data (increased tax net). Hence, just like SEO as a profession has emerged because Google works on an algorithm which is continiously evolving and is being anticipated, similarly, a new breed of tax professionals will emerge who will study the Big Data of tax and will anticipate what does (or does not ) trigger flags and how to pass through safely.

Opportunities :

  • Freelancers of India can see tax advisory, TEO (Tax Engine Opimization), Tax Guidance as a neat, interesting, rewarding and scalabale profession with a growing customer base.
  • With more and more digitization in tax assessement, collection and reporting, , customer location and TEO location will not matter much. This is very significant, especially for small towns and cities.
  • Any freelancer or small business owner with interest in the domain enjoys a very nice competitive advantage because he /she understands the needs, problems and issues of his / her customers (freelancers, sole traders, start-ups, small business)

Today, I was sitting in Calcutta’s Princep Ghat in the afternoon overlooking the body of water Sir Princep saw some 120 years back and was discussing with a friend. The friend, a very senior veteran of India’s IT campaign in four corners of the world was toying with the idea learning and becomiing a licensed professional of alternative medicine. The thought struck me that I can also think of becoming a TEO !

Yes, it makes sense….

Tax and Death are only surties of life and professionals who deal in these two themes in any way will never run out of business.

 

[Fiction] Calcutta Millionaire’s Dinner

My friend Chintamani was born and grew in a 10X8 room in one of those dated and fragile houses near College Street. In this room, he studied, slept, read and introduced me to a Bengali magazine called Dafa 302 and also to Kalika – the televaja institution in Surya Sen Street which I consider as the only contemporary institution of Calcutta (I am not forgetting 200+ year Institutions few hundred feet West of Kalika) which can be said to be first-class, global-leader, authentic, confident, genuine, innovative and glorious.

Chinta’s mother – a portly Mukherjee used to feed me dishes of such excellence that I have developed a weakness for Mukherjees. Should I been a top boss of a Consulting Firm or Corporation, you must have found some Mukherjee lurking somewhere with whom I must have been indicted for doing something called ‘Insider Trading’. Chinta grew up there and with a high genetic plus, rose and rose and finally became a mover and shaker ( what to move and what to shake ?)  in a large multinational corporation in Calcutta.

He dutifully did the romance in College Square and in those days ( mid 1990s), romance did not cost much and men and women could eat jhalmuri or some kabiraji and it was a very nice, low-maintenance affair.

In 2007, Chinta sold off the Dafa 302 memorabilia filled house and shifted to a tallish Complex in Calcutta East. He also had a longish car and and his childhood love – now a well-groomed corporate lady managed various complex issues for ‘global customers’.  I met him after some 12 years, while taking editorial walks one evening in East Calcutta city park while trying to cook some story.

I spotted him and went ahead and asked and 12 years fell off just like the barber’s thread wipes the hardened facewash. After customary information exchange, I came to know that he is a millionaire now and with both of them working, total family earning is little more than an average American’s earning.

I congratulated him for being a true millionaire and also being very successful executive. He could detect the sincerity and accepted. His mobile rang and he mumbled, ok, yes…ok….

“Wife.. stuck for few more hours in the office for a presentation to be pitched tomorrow’, I never played basketball and ‘pitching’ is something I could never feel at home with.

I remembered the old dishes and my tongue after many bitter taste of life and liquids in general still felt young. He sighed and reported of passing of both his parents quite after they all shifted into the new habitat.

‘My father died may be because I forecefully shifted him from our old home, mother followed him. She became uninterested in life after father;s passing.’

I fell silent.

The summer heat was bearable now, a half-shy moon was shining and Chinta called his driver, handed him some money. The driver went and the car sped off.

I asked : what is that ?

Chinta told with a morose face : ‘ I have asked him to bring two top ramens for dinner.

I visualized the fabulous lunches and dinners the man has been accustomed two decades back.

He opened his office bag, took a small bottle and drank directly from it. The sweet sickly smell notified that water of forgetfulness is nearby,

He lit a Dunhill and offered me one. The smoke apostrophied our silence. Then suddenly be burst out laughing.

” Tell me, how much was our pocket money those days ?’

I remained silent for the question had the answer.

‘Look, in those days, I used to eat like a king, earning nothing. Now, you say I am a millionaire and perhaps I am. But see my dinner.’

‘Buy why?’

He smiled, lowered his voice, coughed – not for Dunhill for sure and said :’Because my cook has taken leave for 4 days and today is the second day and this was yet to be tasted.’

 

 

 

Micro Review of a research paper : Skill Portfolio management and future-proofing of competitive advantage

Wordsmith friend, confidante and colleauge for three decades Pradipta Chakraborty, a veteran in Global IT consulting practice with TCS has published a research paper in Cutter IT Journal entitled Skill Portfolio Management:: Future-Proofing Your Competitive Advantage and is available here http://www.cutter.com/itjournal/fulltext/2014/03/itj1403e.html

The paper’s titlle has all winged-words and each ‘keyword’ opens vistas which are fast changing. Skill, Skill-Mix or portolio (first came into wide circulation in 1970s in management pratice), Future-proofing, competitive advantage (first coined by Adam Smith some 200+ years ago). The paper first identifies the looming and invisible shadows of demographics, rise of emegering and emergent economies, technological changes and skills needed thereof. In individual level, for us freelancers and seasonal workers, the following paragrpah is very suggestive and somewhat makes the invisible shadows visible

Future of work. Work will continue to be one of the most consequential aspects of our life. However, influenced by the technology enablers and economic forces, it is likely to be perceived by individuals and organizations as something beyond conventional employment. For individuals, multiple careers and micro-work, rather than lifelong employment, will be the new normal. Organizations will tailor employment patterns to synchronize with business needs. More contract workers and freelancers are likely to be seasonally engaged. The way we work and the driving motivations that impact our working consciousness will be transformed. Whereas the industrial revolution fostered consumerism and desire to acquire wealth and property, the new generation of technology will shift the priority toward the quality of experience over the quantity of consumption  (italics mine) Collaborative participation of experts will be inevitable. Specialization will be expected in combination with broad generalist skills (i.e., the T-shaped worker). Work will be more modularly defined, with flexibility built around time, location, and remuneration patterns.

 

If we agree to this picture of future of work, then successful organizations of the future’s key ability will remain to switch-channel-deploy-withdraw the skills just like a top batsmen does his business (of hitting a ball) and timing is critical of applying skill. This means that this management cannot be delegated to our standard HR practices which in most large organizations cannot manage even large number of people properly, what to speak of managing port-folio of skills almost in real time. 

The conclusion follows quickly and what the paper concludes as well. This management has to be a hi-level task and officer of CIO or CEO level needs to be supervising this. In micro-level, this is happening where deployment is almost happening at real time. Have you observed how Amazon tells you, in real time who are reading the book you are viewing now. 

We freelancers find good and bad news both from this global practice paper from a professional who has written in a simple language ( very less consultant speak) and in a clear manner. The paper shifted, softly from an airbrush picture ( looming shadows of gigantic proportion on the globe) to close range picture (how to create a map of work-area, skill-area and roles within an organization). I learn the following 

1. If you anticpate and develop skills needed by those organizations, these organizations will value you more than their employees.

2. If you still nostalgic about the full-term anf life-long or at least two decades of loyalty in an organization, you better start a retro/vintage website. Nostalgia sells well, if packaged properly.

Thanks for Pradipta for sharing this with me and now by implications with Wordsmith’s patient readers.

April Fool and Entrepreneur

My friend Sushovan is an enterprise builder and he has achieved one of the rarest things in India : to build, run and continue to grow a SME level business enterprise in Calcutta. Leaving a secure, cushy and generally stale corporate job while being a Bengali gentleman and a man of Calcutta (which discovered the product, first time in India called : Government Job somewhere in 1800s), he has been the true revolutionary. He confirms his calibre in his post Fool’s Day – entrepreneur’s day. It is worth reading for anyone in Bengal or interested to know Bengal. The post proposes that April Fool’s day should be celebrated as the entrepreneur’s day. He argues with example and at the end, you really agree that he is right. He also demolishes a myth, a dangerous myth that has strarted circulating where a young man incapable and unemployable as a an unskilled labourer considers himsellf cut out to be an enterprise builder and lo, this becomes a lifestyle statement.  

I am putting some notes below his structured summaries :

Family/Relatives:

This guy is a fool. The job was good with safely and security in life. Unnecessary he puts himself and family into trouble (if left job and started a venture to realize the idea).

This guy is useless. He could have opted for a job was good with safely and security in life. Unnecessary he puts his career into stake.  (If started a venture after completion of study).

 

It is quite natural. Once upon a time, a pregnant lioness was escaping a hunter and during the escape, she gave birth a cub. The cub was raised by sheep and after years, the cub ate grass and bleated like a sheep. One day, a lion preyed on the flock and found the cub. He approached and the sheep was running away in fear. The lion took him by force and showed in a pond that he is not a sheep but a lion himself. It was a freak that he was brought among sheep. You may be a lion among sheep. De-condition. 

Friends:

He has grown big now. But he neither spends money in treating us not help us to grow in his company. He forgot our past friendship. We are only Fools since still thinking on him.

 

Everyone in this world wants to associate with something he ‘thinks’ or ‘speculates’ to be of benefit to him. Even when there is no benefit perceived by him, still he follows hearsay and other’s opinion. This comes from not understanding the karmic law of desire and deserving. Tell you friends : First deserve, then desire and do not speculate. They will not listen to, though.

 

Ex-Office Friends:

Clever guy. Saved lot of money during job. Now enjoying life with independence as he is not answerable to anyone. But he wants to make us Fool keeping himself low in profile.

In Bengal, there are too many clever people and too less really intelligent people. Men of purified intelligence are almost non-existent. This proliferation of too many ‘clever’ ( chalak in Bengali) men made one of the greatest Bengali’s of all time to admonish the fellow-men : No great work is achieved by chalaki. He used this exact word. The complaint of low profile is actually a pschological balm for them : He keeps a low profile, he is not succesfull or could not do much. Didn’t I tell you long back ? Do you smell the smell of deep-fried chalaki ?

Business man:

Nonsense person. Keeps on venturing into ideas. No sense of business, ROI and profit. He cannot be successful in life.

Rabindranath Tagore once told in one of his essays : ‘The person who has saturated himself by reading the lifestory of tycoons like Rockefeller can naturally argue that what is the need of having biography of a person like Jesus Chirst whose net worth was negligible. However, if we just shift the metric of accounting, the whole picture changes.’  A business man is like what an art-dealer to a painter. Van Gogh died penniless and hungry, his art-dealer now is a millionaire. 

Fellow Business Partner:

Always talks big beyond reality. No idea how to make it successful. No control on situations. Always freaks out. Wasting my time spending time with this Fool.

See first entry entitled : Sheep might have raised a lion

Employees/Subordinates:

Boss always exploits us. Business is in full swing. But he always keeps on crying and deprive us. We are not Fools even though he tries hard to prove us so.

There are two types of men. One who obeys to learn how to command. One obeys ruefully because he thinks that to be in command does not need qualification but freak or chance or some hidden advantage. Add this with a communistic past, this sentiment is as clear as Euclid’s Fifth postulate. 

Neighbors:

He is big shot now. Earns lot of money in business. But do not like to spend social causes in the locality. He forgot his past and root. No point fooling us.

When a society does find most of the doors of wealth creation either monopolized or non-existent, it feeds on anything it finds has anything to do with wealth. The population loses sense of proportion and magnifies absurdly. 

Customers:

Now he is a big business man and sucks us by premium. He keeps on talking of competitive prices, but never extended any benefit in terms of discounts or free services. We are not fools. Next time we need to see alternatives beyond him

As a revolutionary, you need to rebel against revolution. From serving other person’s customers (an employee), you have rebelled and have your own customers. If you find your customers are not worthy of you, they need to be amupated. Fire them ! 

As a true revolutionary, do the unthinkable – fire your own clients, suppliers, employees, associates if your business so demands. No one but you are the true custodian of the business  !

Tax – National, Global, Cosmic

It is the end of March and very taxpayer is busy and so are the tax-collectors. As our work’s span is increasing so there are arising situations and issues which need global tax framework. Very sharp minds are at work to resolve and make the framework. 

Tax and Death are the only sureties of life. Ordinary taxation of a country itself is too complex. Imagine how complex the global taxation framework will be. 

Government of any type: monarchy, democracy, plutocracy any type demands and collects tax. The right to tax citizens is one of the fundamental, rather existential right of a state. 

I rose very early today and took a walk in Calcutta’s Eastern parks and the sun was rising. A small red ball initially and then it became a while orb. I sat down in a bench and remembered my adolescent years when I wished to be a physicist. I could not become (like youj seldom get your first love) one but the effort was sincere. I studied from the Iwonian awakening to the Quantum physics and did quite hard work by the time I was eighteen. I was thinking that even a very slight change in the radiation of the stupendous thermonuclear reactor will burn everything till Mars into cinders. Who is maintaining this cosmic power station ? Who is reining (law and order) of this institution called the sun ?

Do we need to pay any tax for the services the sun has been offering without fail ? Let us say this solar tax. Who collects solar tax ?

What is the currency the tax needs to be paid ?

I took an auto and went to Ahiritola Ghat, further South to the Ganges. In the ghat, I saw people taking bath and offering their prayers. The prayer in Sanskrit is like this :

Ehi surya sahasrangshu bhaswate vishu-tejase

jagat sabitre suchaye karmadayine 

eso arghya om namo sree surya namo.

[ Oh the thousand-eyed Sun, illumined by the effulegence of Lord Vishnu

  Purifier of the world, Kindler and Giver of work,

I offer my prayer in all humbleness to you, the sun-God ]

This acknowledgement is the tax. This acknowledgement of the services taken in humbleness is the cosmic tax.

This acknowledgement can be offered to water, air, fire, earth, one’s breath, one’s eatables, in one’s mind or acknowleding this in any work.  The cosmic tax collection is so subtle and so sophisticated that it can collect tax from all these agents. 

If a petty planet like earth can conceive of Global Taxation Framework, the Cosmic Government must have designed the Tax Collection. 

The next important question is : Who heads this Cosmic Government of which we are a subject ?

Labour, Work, Project, Mission

We use work in a loose sense. I think some clarity is needed. This clarity illuminates the whole process. The attempt below :

Labour :Labour is the unconscious work. There are so much labouring in the world by human beings. Most labour goes in fulfilling four aspects : eating (food, fast-food, junk-food, haute cuisine, gourmet), sleeping ( cave, slum, penthhouse, gated community), mating ( legitimate, illegitimate, prohibited, anonymous, same-sex, trans and other variations), defense ( fire, security, hi-secriuty perimeter, remote controlled survelliance, smart security, cctv, ICBM, hydrogen bomb,vaccination). Think about your labour and try to find out how much goes into these 4 quadrants. Labour does not end as a living being’s 4 quadrant needs remain a moment before death ! A person doing labour is in 2 states : desiring something or regertting the fruits of past desires – fulfilled or un-fulfilled. Oh, if I could get this job…. I have chosen a wrong job….

Work : Labour with more consciousness. The choice comes in. Human beings only choose their work. No other animal has found to have any choice in their work. Higher consciousness elevates our labour into work. Due to this, many people leave otherwise highly remunerating labour to do something which has lesser or zero reumernation. Work has a begining and an end. Work which has no such conscious start and conscious end is labour. Many start work (launching a company) and then forgets that this is work and does labour only – they do not know when to stop or at what growth to stop. Example : No user left behind doctrine for many start-ups…

Project :Work with higher consciousness. The ‘worker’ consciously and continuously has the start-stop cycle in front. He/she has a clear and detailed idea regarding the time, involvement, risk, reward and exit. A project oriented worker divides his life into segments and since he exits-enters into segemnts consciously, life is never stale for him. An old man is completely inexperienced in relation to his old age. This segmentation of work and life is an art and has to be practiced. Those who do no practice envy those who does. A very rich businessman who has performed mostly labour and work look at a project oritented man and regrets – ‘I wish I did not build such a large organization which has become beyond me !’ 

Mission : The most refined stage of projects. A person with a Mission does not labour, he accepts all work in its true aspect, his projects are integrated and coherent and he knows the ultimate purpose of all work. A mission may degrade into incoherent projects. In its perfection, a person with a mission attracts everyone of past, present or future. A mission starts with a question and ends with a surrender. The question : What is the ultimate purpose of my life ? The answer : To know and serve the ultimate Truth. A person  with a mission integrates as well as transcends labour, work, project and his mission. In ordinary vision, a person with a mission may seem same or similar like a man in labour or work or projects. But there is a fundamental difference : He /she is all of these with high conscisouness. With such a consciousness, he does not desire or regret. 

In all ages, labourers + workers + project-oriented persons constitute 99.99% of the population. 

A man with a Mission is very rare. The rarity is something like one or two in 2000 – 3000 years. The power and potency of a man of Mission is so high that even in such statistical level of occurence, time cannot dim the message they deliver ! 

Are you labouring, working, handling projects or you are man with a mission ?

Four Fundamental Principles a Freelancer should know

First law of thermodynamics

There is no business engine which can be designed which will run in 100% efficiency, i.e. it will be able to translate the input (time, money, work, expertise) into 100% desirable input. There is no work or vocation or professional that can do that, ever. The conclusion is that : there is no ideal work. Corollary : Don’t  be envious thinking that somebody has that ‘dream’ project. 

Law of diminishing return

This law primarily from economics is actually widely applicable. When you thought that when you will earn $1,00,000 you shall have a happiness that you shall cherish forever. No. A soon as you reach the goal, you shall see so many who have long passed this goal and you shall cease to be special. In that case, you shall see yourself a commoner as million will be the goal. Your happiness peak will rapidly decrease and you shall find yourself in a valley with a much steeper incline. Do not trust the future, however pleasant. 

The second law of thermodynamics 

Every natural process has a pre-directed path to follow and the path is from more -orderliness to less orderliness. Any reversal needs spending external energy. A company into chaos will not automatically become nice, unless a leader, an event shape it back. This law governs the collapse of all businesses, empires and institutions. So unless you consiously and externally ‘feel’ your business, the natural trend will be towards more disorder and chaos.

The Pareto Principle or 80/20 rule  

Every task does not have equal output. You shall have 20% of clients who will give you 80% of value. Hence your customer service and attention should be aligned to this 20% proportionately. You fail there, you shall work harder and get less and less value. One of the ways to align your business into this principle : Fire those customers who are adding less value but demanding more value and thus choking you to give those to your top 20% clients.