ICICI

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More


Benefits for Tree Plantation

I aim at planting a good idea in your mind.

Carbon production is rising daily by huge volume. Gases like Carbon Monoxide (CO) and Carbon dioxide (Co2) continue to increase their share in atmosphere as you read this article.

Important question here is, do we have enough trees to absorb carbon that is produced everyday?

Being a nature lover and also a CA student, I decided to design a tax scheme that will allow Individuals to get tax incentive for tree plantation.

The article is just a shallow introduction of my idea.

This concept is similar to 'Carbon Credit'. However it deals in trees and called '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 get.

One can either sell this Tree Credit to others. Needless to say one who will possess no or less trees will have to buy Tree Credit from others. Thus generating income for a person who owns more trees.

One will have to purchase 'Tree Credit' if they have lesser than 40 trees per acre.

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

That means overall it should own 500 acres x 40 trees per acre = 20,000 trees to avoid purchasing Tree Credits.

How can one earn 'Tree Credit'.

Say during the year you have planted 30 trees

Then check the table to see how much 'Tree Credit' you are eligible for

Tax Slab

If land owns less than 10,000 sq. feet of land

More than 10,000 but less than 1,00,000 sq. feet of land

More than 1,00,000 sq. feet of land

'Tree Credit' Rate

Minimum Trees

Max rate of incentive

'Tree Credit' Rate

Minimum Trees

Max rate of incentive

'Tree Credit' Rate

Minimum Trees

Max rate of incentive

10%

20% of trees owned

10

50%

25% of trees owned

40

70%

20% of trees owned

120

70%

20%

25% of trees owned

10

50%

22.5% of trees owned

40

50%

20% of trees owned

120

50%

30%

20% of trees owned

10

33.33%

17.5% of trees owned

40

33.33%

15% of trees owned

120

33.33%

*The figures in the table are only demonstrative, and needs to be revised.

Assuming you fall in 10% tax slab and own less than 10,000 sq feet of land to you.

Tax Slab

If land owns less than 10,000 sq. feet of land

More than 10,000 but less than 1,00,000 sq. feet of land

More than 1,00,000 sq. feet of land

'Tree Credit' Rate

Minimum Trees

Max rate of incentive

'Tree Credit' Rate

Minimum Trees

Max rate of incentive

'Tree Credit' Rate

Minimum Trees

Max rate of incentive

10%

20% of trees owned

10

50%

25% of trees owned

40

70%

20% of trees owned

120

70%

You will be eligible for 20% of trees owned by you.

=30 trees x 20/100 =6%

Now in your Income tax computation, check the tax that was payable by you (before deducting any prepaid tax).

Say you had to pay tax of Rs.10,000.

So the 'Tree Credit' you get will be 10,000 x 6%

= 600 Tree Credits

This will be your 'Tree Credit' for the 1st year.

As you can see, Tree Credit is directly related to your Tax Payable. So it acts as an de-motivator to evade tax.

Disclose all these details in your IT return, regarding number of trees planted, code of the trees, type of the tree etc.

Say you planted 50 trees in 2nd year.

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

Assuming all other things remain constant, 2nd year you will be eligible for 1600 'Tree Credit'.

=> 80*20%= 16%

=>10,000*16%= 1600 Credits.

Now his accumulated 'Tree Credit' will be 1600 + 600 = 2200 provided he doesn't sells it.

Few question that arise here are like

1. Whether who will check if company 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 tree specialist, or tree surgeon. They know everything about trees.

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

Certified Arborists will check for all the compliances.

Before one discloses details in IT return, one has to get a certificate from Certified Arborist stating the trees were physically verified.

In short they will be the Chartered Accountants of the Assessee's Trees.

How is this good for the economy?

1. This will create tons of employment opportunities.

a. Employment by way of Certified Arborists.

b. Employment in government sector.

2. Will generate income for those who own more number of trees.

3. Also this will widen up a new area of study, which had not been adopted by people till now.

4. This will help environment, by punishing those who do not care for nature and just cut trees.

5. Governments tax revenue will increase, as income from selling tree credits and new employment opportunities created.

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

If you have made it till here, then I guess I've made this article interesting. Let me know what you think, because conversation is good, debate is healthy!

*The figures in this article are only demonstrative and needs to be revised.

"Loved reading this piece by Paras?
Join CAclubindia's network for Daily Articles, News Updates, Forum Threads, Judgments, Courses for CA/CS/CMA, Professional Courses and MUCH MORE!"






Category Others, Other Articles by - Paras 



Comments


update