How to Convert Black Money into White Money?
Convert Black Money into White Money : Black money refers to the money which is earned and hoarded by dishonest means and are not declared to the Government and relevant authorities to avoid payment of taxes. The massive amount of black money in our country has created a parallel economy.
How Black Money Generated in India ?
Black money is generated in India in various ways. Let us look at some ways how black money gets generated from legal transactions. The rates of various taxes in India are too high. Many business concerns disclose reduced income in their financial statements by showing some expenses which have not occurred so as to pay less tax. Some people purchase properties or residential houses but only partial amounts of actual price are recorded in the documents which are registered with the relevant authorities. Huge amounts of black money are generated from antisocial, immoral and illegitimate transactions as well. Drug trafficking, smuggling, prostitution, bribery, Hawala transactions, etc. pumps huge amounts of black money in the Indian economy.
Read Article on Black Money : Black Money In India
Generation and accumulation of black money give rise to a huge threat to our economy and also endangers national security. The combination of money and power gives birth to black money. Origination of black money disturbs the balance of trade, commerce and industry of the country. Essential commodities can be hoarded, healthy competition can be driven out of the market and honest men and Government servants can be blackmailed.
An easy way of converting Black money into white is to pay Income Tax on them. The difficult job is to convert the black money into white money without payment of any taxes. Let us have a look at the ways of converting black money into white without opting for payment of taxes.
Ways To Convert Black Money Into White Money
Disclosing fictitious sales in the Financial Statements
Several business houses shows fictitious sales in the books of accounts. This is how money earned through illegitimate means black money converted into white as they become part of taxable income and eventually appear in the Income Tax Return.
Hawala Transaction
A person hands over cash of a certain amount to an agent. The agnet takes the cash and through his contact, hands over such amount in terms of foreign currency to his/her representative to convert black money into white. The person who initially hand over the money, gets it back as Foreign Direct Investment (FDI) or seed fund in a private company. Such person may also choose to make investment in abroad in properties/shares. In this way, black money gets converted into white money without Tax paying.
Depositing money in banks up to Rs.50,000
If a person has to deposit above Rs.50,000 in a Bank A/c, he/she has to furnish PAN card details to the banker. Therefore, a person can open numerous bank accounts in his/her name and deposit cash less than or equal to Rs.50,000 at a time. So his black money get converted into white money.
Income from Agriculture
In India Agricultural Income is exempted from Income Tax. The people who possess black money will generate fake invoices as a proof of sales of agricultural goods. In order to back such malpractices, these fraudulent persons will acquire or show the proof of acquired or inherited properties in villages.This is one of the easy way to convert black money into white money.
Gifts from relatives and friends on occasions
Cash received from relatives can be shown as gifts received on son’s or daughter’s birthday. Money received from relatives as gift is exempted from Income Tax. But those people who have huge stock black money can disclose them as gift received and pay taxes on them.
Sale of valuable ornaments made up of Gold and Diamonds
A person can give a certain amount of cash to a Jewellery shop. The latter will issue a receipt indicating that it has bought jewelries worth that amount and make payment to the person by cheque. The jewellery shop will charge some fee to facilitate such transaction. In this way black money turns white without payment of any income tax.
Disclaimer : Here we had shared just information about how to convert black money into white. We are not responsible for anything and we are not supporting black money .We suggest you to pay the correct tax and help nation to grow.