“How to convert Black money into white money” this has become Top query at present as per Google trends. People are searching on Google from the point of time when PM Narendra Modi surprised by demonetization of Rs. 500 and Rs. 1000 notes in India. This query has reached 100% in the Google trends graph, Once Prime Minister Narendra Modi’s declared the ban of old Rs. 500 and Rs. 1000 in Indian.
Note: This article is not to encourage any illegal activates, this is only to spread awareness about “What is black money?” and “How black money exists?”
This is something crazy that people started searching for because the first thing having black money is a crime and secondly converting black money into white by avoiding taxes.
There are people who try to convert black money into white money without paying any tax. In this article, I have taken examples of those people who convert black money to white. Once again I’m mentioning that having black money is illegal. Okay, now let’s get into the topic that booming from a couple of days.
- 1 How to convert Black money into White money?
- 1.1 What is black Money?
- 1.2 How Black Money Exists?
- 1.3 Ways for “How to convert black money into white money”?
- 1.4 Showing Fake sales
- 1.5 Tax Calculation for the Black Money in India
- 1.6 Convert into Foreign currency
- 1.7 Agriculture Income tax exemption
- 1.8 Gifts from family or friends
- 1.9 Gold and Diamond sale
- 1.10 Spending on events
- 1.11 Wrapping up
- 1.12 Share this:
- 1.13 Related
How to convert Black money into White money?
before we talk about how to convert black money into white money, I need to tell you something about what is black money and how does it get generated. Few people may or may not know about this and they store money at home instead of depositing in banks. If you have excess money stored at home, that which doesn’t match your job or business profile then it is considered as black money. Okay, let’s head into the topic in detail.
What is black Money?
The very simple definition for black money is the money which not declared for tax purpose. The black money is liquid cash which is not exposed to the government for tax purpose.
How Black Money Exists?
The main thing for stopping the growth of the country is corruption. The corrupted money turns into black money. Because the money you earned is illegal and there are no proofs to show that it’s your hard-earned money.
Example 1: Let’s say Mr.ABC, a govt officer and Mr. XYZ, a common man. Mr. XYZ approaches government office for some official work (let’s say apartment sanction) and meets Mr.ABC. Now here Mr.ABC is greedy about money and demands Mr. XYZ for Rs.2 lakhs to approve his plan. For not having any other option for Mr.XYZ he handovers Rs. 2 lakhs for government officer. This money is called corrupted money or black money which he won’t claim for tax. So, Rupees 2,00,000 generated as black money.
Example 2: Let’s take the same names here as well. In this example MR.ABC plays a role of seller and whereas Mr.XYZ as a buyer. Now seller Mr.ABC is selling a land for Rs. 50 Lakhs and he take 30 Lakhs in cheque or DD. The rest of the amount he takes from Mr.XYZ through cash payment. In this case Rs. 20 Lakhs are generated as Black money.
Example 3: If someone buying a product and that costs approximately Rs. 70,000 and of course the total bill will include taxes. The very common question we ask the seller, Is there any discount? And seller replies yes sir/madam. Seller says I can give you this product at Rs. 68,000 without invoice or bill. He also mentions that I can write and give you on some paper for warranty purpose. So here in this case also Rs. 68,000 is generated as black money.
Ways for “How to convert black money into white money”?
This is really a big task in converting black money into white money without paying any tax. As we were discussed in the above examples, the black money generated in different ways are can’t deposit in banks. I think this is clear right? So what someone does with this cash. They can invest this money in purchasing properties, white goods etc. They also keep this black money in lockers; briefcase and some people hide their money somewhere in the house that no one knows.
Showing Fake sales
To convert black money into white money people try all different ways, one of them is showing fake sales. For example, if you are selling some product or land, then you generate a fake bill compare to the actual price to convert your black money into white money slowly. In this case, you are showing that you got profit amount by selling something. This situation takes place when there is a mutual understanding in both seller and buyer.
Example: Mr. ABC is selling a land for Rs. 55 lakhs and Mr. XYZ is the buyer. Here, Mr. ABC will ask a help from Mr. XYZ that he wanted to get paid Rs. 60 lakhs in cheque. Now, in return Mr. ABC will hand over Rs. 5 lakhs which he had at home and it is a black money. So, this is how MR. ABC converted his Rs. 5 lakhs black money into white money.
Tax Calculation for the Black Money in India
Convert into Foreign currency
This is also a way people do for converting Black money into white money. There are few people who have foreign currency and this is their business. Okay, let’s get into details I think example works much better and easy to understand. Let say Mr. ABC is a black money holder and MR. XYZ is a foreign currency holder. Mr. ABC or his/her representatives approaches Mr. XYZ for exchanging the Indian currency into foreign currency and Mr. XYZ does this because it is their business. Now, Mr. ABC claims that money as foreign funds or foreign direct investment etc. He can use this money in investing abroad properties or shares. This is how people do to convert black money into white money.
Agriculture Income tax exemption
The money earns from paddy fields, wheat etc are exempt from income tax. The people who have black money generate fake bill saying that he sold agricultural goods. This happens only when there is a mutual understanding between you and traders.
Gifts from family or friends
The amount received as a gift from family is also Tax exempt. Converting black money into white money is not a simple thing. You need to do a lot of risk and experiments to get it. You need to show the proofs for gifted money.
The gifts you get from friends are not tax exempt but you can claim for tax. If someone has black money with them they can show gift and pay taxes for it. This is how one can convert black money into white when you pay tax for it.
Gold and Diamond sale
People with black money approaches well known and favorable jewelry shop owners to generate a fake bill (Note: few owners do this kind of dirty job willingly or forcefully). In this case people with black money hand over’s certain amount of cash (let’s say 30 lakhs) to shop owners and ask them to generate a bill as they have sold out gold or diamonds for the shop owner. Then the owner of the shop pays the same amount Rs. 30 lakhs in cheque. This is something like give and take transaction but black money converted into white money.
Spending on events
This is the best way most of the people choose to do. If you have black money then, spend on events. Most of the people spend a lot of money on events like marriages, cradle functions etc. This is how you can spend an excess of black money.
Spending black money on properties, functions, schools donations and elections you can reduce the excess amount which you stored.
The major question that arises in everyone’s mind, who read this article, is that government doesn’t know these activities? To be frank, everyone knows about this all activities, especially for the people who own black money. Thank you for following the article till now for any more queries please comment below.