What is Black Money?Black money is one of the major deterrents of Indian Economy. Black Money is the illegal or unaccounted money earned by dishonest individuals. It is not exposed to taxation.
Sources of Black Money
- Tax avoidance
- Black marketing
- Other illegal activities
Forms of Black MoneyIt can take various forms like
- Real estate houses
Black money has become a big menace that estimates indicate that more than 200 crore black money is created annually in India.
Need to curb Black Money
Actions taken by Indian Government
- The Government of India has played a master stroke by announcing all the existing 1000 and 500 rupee notes invalid on 8 th November, 2016. The prelude to this action is Special Investigation Team (SIT)
- The Government appointed Special Investigation Team (SIT) under SC judge MB Shah.
- The SIT commission recovered around 35000 crore from account holders.
- An investigation on the Indian accounts in Switzerland and other nations was conducted.
- Banks like HSBC revealed 628 bank accounts information of Indians.
- Government gave a compliance window till September end.
- This provision is a part of the anti money law passed by parliament on May 26.
- It is a provision under Black money and imposition of tax act, 2015.
- Individuals can come clear of undisclosed income by voluntarily declaring all assets
- Individuals have to pay a total of 60 percent tax and penalty.
Central Board of Direct Taxes
- Central Board of Direct Taxes is the nodal authority.
- CBDT declared that individuals declaring their income would not face proceedings under FEMA (Foreign Exchange Management Act)
- Individual will be exempt from punishment.
Areas of concern
- This surgical operation has an area of concern in the way it is going to bring back the stashed black money in foreign nations.
- Individuals within India will have to bring their cash to deposit in the banks
- In the process they have to pay tax for the excess income or cash deposited in the bank account.
- The concern is about recovering the money stashed abroad.
- Replacing old notes with new notes will cause a lot of discrepancies to entire public
- It has to be bared for a week in purview of the entire development of India and recovering the black money from cash hoarders and illegal traders