Idea similar to Carbon Credit, called Tree Credit!

I aim at planting a good idea in your mind.

We all know beautiful glaciers are melting daily in some part of the world because of Global Warming. Yet we do nothing but relish the thought of not contributing significantly towards it.

I don't expect you to go to Antarctica and hold on to the glaciers. But do your least by reading and sharing this with others.

Being a nature lover and a CA student, I decided to design a scheme that will control global warming and supercharge economy.

Carbon Credit system has played a vital role in saving environment. What if we apply the same concept to trees and call it Tree Credit!

Tree Credit is nothing but  benefit given for planting and possessing trees. More a person will plant and possess, more tree credit he will earn.

One can sell these credits to others. Needless to say one who will possess no or less trees will have to buy tree credits from those who have earned.

One will have to purchase Tree Credits if they have less than 40 trees per acre

Consider JSW Ltd that owns 500 acres of land all over India. Going by the above rule, JSW should have at least 40 trees per acre.

So overall it should own at least 20,000 (500 x 40) trees to avoid purchasing Tree Credits.

How can one earn Tree Credits?

Say during the year you have planted 30 trees

Check the table to see what Tree Credit rate you are eligible for.

Assume you fall in 10% Tax slab and own less than 10,00 sq. feet of land.

*This table will be provided by the Government. The figures are only illustrative and may undergo a change.

As per the table, you will be eligible for 20% of trees owned by you.

i.e. 30 trees x 20%

i.e. 6%

Since tree credits are directly linked to the number of trees you possess, it acts as a clear motivator to plant more trees.

Now in your Income tax computation, check the Gross Total Income.

Say you had GTI of Rs. 3,00,000

So the Tree Credit you get will get is 3,00,000 x 6% = 18,000 Tree Credits

Now in your computation check deduction u/s 80 availed by you.

Say you availed 1,00,000.

So the additional Tree Credit you get will be 1,00,000 x 6% = 6,000 Tree Credits

 => 18,000 + 6,000 = 24,000 Tree Credits for the 1st year.

As you can see, Tree Credit is directly related to your GTI and deduction u/s 80.

“It acts as a de-motivator to hide income and also invest more u/s 80.”

Say in the 2nd year you planted 50 trees.

Now you own total 80 trees, 30 planted in the 1st year and 50 in the 2nd.

The Tree Credits will be allowed on cumulative number of trees. That means, trees planted in previous years will earn you tree credits too, provided they are alive!

Assuming all other things remain constant, 2nd year you will be eligible for 64,000 Tree Credit.

How?

=> 80 trees * 20% = 16%

=> (3,00,000 GTI+1,00,000 Deduction)*16%= 64,000 Credits.

Now his accumulated Tree Credit will be 24000 + 64000 = 88,000 (provided he doesn't sell tree credits to anyone)

The rate at which these tree credits can be sold will be decided by appropriate government.

“Carbon Credit focuses on reducing the carbon emissions from the root, whereas this scheme will focus on increasing the carbon absorption capacity of earth (carbon sequestration)”

Few question that arise here are like

1. Whether who will check if assessee should purchase Tree Credits or not?

2. If the Tree Credit claim of the individual is real or bogus?

3. Who will physically verify the trees, to check if they really exist?

Ever heard of Arborists? They are specialist in trees. They know everything about trees.

These guys will be called as 'Certified Arborists' only after they pass a set of exams held by government. Just like a Chartered Accountant is called after he passes exam held by ICAI.

In short, Arborists will be the Chartered Accountants of the assessee's Trees.

What if a person does not own land? Where will he plant the trees? Does he have any other option?

The government will conduct Public Plantation Scheme (PPS) every year.

Any person willing to earn tree credits but not owning land will be assumed to have a land of 10,000 sq. feet for this purpose only. By planting trees in PPS and following the above table he can earn tree credits in the same manner a land owner does.

How is this good for the economy?

1. This will create tons of employment opportunities.

Employment by way of Certified Arborists.

Employment in government sector.

Employment by way of ancillary activities.

2. Open up a new area of study, which had not been adopted by people till now.

3. Government’s tax revenue will increase, as income from selling tree credits.

4. Encourage people to invest u/s 80, that means more will be invested with the government. 

5. Encourage people to show more income. Reduce Tax evasion. 

6. Supercharge economy. 

7. New way to earn money. 

8. Best of all, protect environment, and prevent natural disasters.

Those who wish to read this article in detail, visit: treesaviour.blogspot.com

This article is nothing but a piece of paper until Government of India approves and implements it. So do your little contribution by sharing it with others, Thank You :)

By: Paras Kedia

Email: ParasKedia@yahoo.com