We all must have heard this at one time. Some rich people have bought a painting for 5 to 10 crores.
And after hearing this, we start thinking that if we had that much money to purchase anything, we would have taken land, property, or invested this money in mutual funds or directly into stocks. Instead of purchasing this painting?
Related Post: Why do Rich People buy Expensive Paintings?
And as you know there is a reason behind everything. The same is true behind this thing as well. Let us know the reason.
Why Rich People Buy Expensive Paintings
People with high incomes are also taxed accordingly.
Most people adopt a method to avoid taxes.
Suppose you buy a painting that costs one crore rupees.
Then you get this painting displayed in the museum or exhibition.
During the auction, many people get interested in your painting and they are willing to offer you somewhere between five to ten crores.
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You bought the painting for around one crore and now someone else is ready to buy that painting for ten crores.
It means that the value of that painting has now become ten crores.
And now you donate that painting to some charity.
This means that you have donated ten crores to charity.
And now if the income tax slab in your country is 30%.
You will get an income tax credit of Rs 3 crore.
This means that you have saved an income tax of Rs 3 crore.
Look how great this deal is for you.
You bought a painting with your investment of Rs one crore and you have saved Rs three crore in taxes.
Conclusion: Why Rich People Buy Expensive Paintings At 5-10 Crores?
In order to save taxes, Rich peoples buy expensive paintings. There can be many other reasons too.
Generally, people choose to own art, even if they don’t know anything about it because they love it or have a sentimental attachment to it.
It helps them diversify their portfolio, so they consider it an investment. In addition, if they have paid a high price for the artwork, they want others to appreciate it.
“Money is just a consequence. I always say to my team, ‘Don’t worry too much about profitability. If you do your job well, the profitability will come’”