An income which is not declared by a person or a group of persons in a nation is
termed as black money. It is also termed as ‘illegitimate’ as it goes unrecognized for the tax declaration. It is a huge social and economic issue for India, hence important for the IAS Exam.
Why is it called black money?
In India, black money
is funds earned on the black market, on which income and other taxes have not been paid
. Also, the unaccounted money that is concealed from the tax administrator is called black money. … The total amount of black money deposited in foreign banks by Indians is unknown.
What exactly is black money?
What Is Black Money? Black money includes
all funds earned through illegal activity and otherwise legal income that is not recorded for tax purposes
. Black money proceeds are usually received in cash from underground economic activity and, as such, are not taxed.
What is black money class 10?
Black money is
the money that is unrecorded in the tax department and concealed from the tax administrator by the owner
of that money. In India, black money mainly aids and funds the black market that is a centre of fraudulent and illegal activities.
What is black money and its causes?
The
increase in prices of commodities like petrol, etc.
, in international market, increase in prices of commodities due to high increase in duties and taxes imposed by the government, conspicuous consumption indulged in by people with unaccounted money, diverting resources from production to speculation—all these cause …
Is black money legal?
The black money law enacted by the government in 2015 to
crack down on undisclosed foreign income and assets
has started showing significant results. Under various sections of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 till May 31, orders have been passed in 166 cases.
Is Black dollar real money?
The black money scam, sometimes also known as the “black dollar scam” or “wash wash scam”, is a scam where con artists attempt to fraudulently obtain money from a victim by convincing them that piles of banknote-sized paper
are real currency that has been stained
in a heist.
Which is not cause of black money?
1. Prohibition causes black money. Certain activities are usually forbidden by law such as
gambling
, production of illicit liquor, smuggling, trafficking illegal drugs, lending at exorbitant interest charges, money lending without proper license etc.
What are the effects of black money?
Black money is largely attributed to
tax evasion
. Its direct impact is the loss of the Government revenue. Since the Government fails to get sufficient tax revenue due to large-scale tax evasion, it is forced to resort to high taxation and deficit financing which again carry their ill-economic effects.
What is the round tripping of money?
Round-tripping is
the process where funds are returned after being transferred to an entity
, shell company, financial instruments, location, or a person that have lower regulatory standards or obligations – giving the impression that the funds have derived from a clean source and thus completing a round trip.
What are the remedies to stop the black money?
- Demonetization. Demonetization of currency of high value say Rs. …
- Voluntary Disclosure Scheme. …
- Raids. …
- Rationalization of Controls. …
- Taxation Reforms. …
- Vigorous Prosecution. …
- Special Bearer Bonds. …
- Rewards and Awards.
What is black money essay?
Black Money is
the money on which income tax is not paid
. This money is earned through corrupt practices and not declared fearing legal action. Black money is collected by corrupt officials, politicians, businessmen, criminals, smugglers and any other individual trying to evade taxation.
What is white money?
white money. noun [ U ] /ˌwaɪt ˈmʌn.i/ us. /ˌwaɪt ˈmʌn.i
/ money that is earned legally, or on which the necessary tax is paid
.
Can black money be deposited in bank?
The fact that large quantum of high denominational currency has been deposited with the banks does not render this money to be legitimate cash. Black money does not change its colour merely
because it is deposited in bank
. On the contrary, it loses its anonymity and can now be identified with its owner.
Why is black money bad for the economy?
Adverse Effects of black money : (a)
Black money eats up a part of the tax
and, thus, the government’s deficit increases. … (c) The infusion of unaccounted black money in the economy leads to higher inflation, which obviously hits the poor the most. It also increases the disparity between the rich and the poor.
Why Swiss bank is safe?
Swiss banks have served as
safe havens for the wealth of dictators, despots, mobsters, arms dealers
, corrupt officials, and tax cheats of all kinds. … When foreign clients deposit holdings into a Swiss bank account, the bank is legally prohibited from disclosing balances or client information to tax authorities.
