Black Money Essay – 500 Words
Black money is considered to be the money or transactions in the economy that remains undisclosed or hidden with a motive for the benefit of the end user. This money is mostly received or deposited in cash and hence becomes difficult to trace the records of these transactions. Black money has infested the society and the nation at all levels. Black money can be lump sum cash money hoarded in an apartment which remains undisclosed from tax authorities. Black money is the cause of tax evasions and undisclosed income.
Sources of black money
The main source of black money lies in the land and real estate industry, where the actual value of the land or build will not be shown for which stamp duty is paid while part of the value of the property or building is paid in cash in order to evade stamp duty and taxes this becomes a source of black money for the seller as he receives cash which remains undisclosed to the Government and tax authorities.
Another source of black money is the bullion or gold jewelry which is purchased for cash remains undisclosed. The value of gold goes up day by day making gold more valuable and highly taxable, hence to avoid taxes most of the time gold and jewelry is purchased for cash, benefitting the seller and the buyer there by leading to black money in the economy.
NGOs are another sources through which black money is floated. NGOs receive donations in the form of cash which again remains undisclosed thereby leading to rise in black money in the country.
Casinos and gambling dens have become a major source where huge amounts of black money is floated due to large amount of cash transactions where in most of it is not shown in the books or records making its easier for Black money to float in the economy.
Most of the overseas banks like Swiss Bank have huge sums of black money being hoarded in these accounts, which lies untraceable and undisclosed to the tax authorities.
Measures taken to withdraw black money from the economy.
The Government introduced digital India campaign where in most of the transaction were being processedcompulsorily and easily through only mode of payments or receipts through this the Government could trace huge amounts and were able to apply taxes on these transactions according to the tax rates applicable.
Demonetization was another big step taken by the Government of India to devalue the old notes and introduce new notes into the economy, this led to seizing of black money form the system. As the old notes which were being hoarded in cash were devalued.
Conclusion
Black money has created a huge menace in the society and to the economy affecting the GDP of the economy. Black money has been used for several illegal and criminal purposes and continues to float in the economy despite the measures taken by the Government and Tax Authorities.
FAQs
- What is Black Money?
Ans. Any kind of asset, cash or high value transaction that remains undisclosed to the eyes of the tax authorities and the Government is known as Black Money.
- Sources of Black Money.
Ans. Donations to NGOs, Casino betting, Real estate business, Gold and Jewelry businesses etc.
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