Converting black money to white is very common today.
People use all illegal methods to convert black money to white. This article is written to expose ways that people use to convert black money to white. I do not encourage any taxpayers or anyone to use any of the below methods.
10 Ways to Convert Black Money to White
#1 Bogus Loan Entry
A popular method people use to convert black money to white is by showing bogus loan entries. Modus operandi, in this case, will be people give black money to friends or relatives and taking a cheque from them. This is a kind of bogus loan entry to convert black money to white.
In some cases, people give a repayment of this loan by giving back a cheque. People doing this must understand that the Income tax department is watching every transaction and tax payers have to prove the genuineness of every transaction.
#2 Formulation of Trust & doing Charity
Another popular way used by people to convert black money to white is by formulating trust for a social cause. They make executive bodies of own people in trust sometimes illiterate people like driver cook etc. They donate black money to this trust as charity to convert black money.
On paper it is charity but off the shelf, it is the conversion of black money to white.
#3 Showing Income as Agriculture Income
Another popular way of converting black money into white is by showing income as agricultural income. In order to show income as agricultural income you must possess the land and it must be used for agricultural purposes like plantation, garden nurseries etc.
However, there are various conditions you need to satisfy in order to claim agriculture income.
#4 Showing Cash Income from Profession
Another popular way to convert money to white is by showing income in cash. Income from tuition, professional fees, or commission is shown as cash by many taxpayers it is nothing but converting black money into white.
#5 Sale of personal belonging like Jewelry
Go to a known jeweler and give him all the black money you want to convert. He will give you a cheque for the same amount. He will also give you a purchase bill showing you sold your personal Jewelry to him. In this way, your Black money is converted to white and you need not pay capital gain tax even.
#6 Converting Black money by Investment
Another method people use to convert black money to white is by making investments in cash.
People purchase an insurance policy and pay premiums in cash. For example, if the insurance premium is 50000 Rs/- payable quarterly than people pay the first premium via cheque and rest of all premiums in cash. This is the most simple and popular way to convert money to white.
#7 Getting Black money as a gift
Another popular way to convert black money to white is by getting gifts from relatives. Modus operandi is simple you have black money and your relative has the same amount of white money. Your relative issues a cheque to you as a gift and you will give your black money to him/her.
#8 Depositing Black Money on the name of Family members
Another popular method for converting black money to white is to open a bank account on each and every individual family member. Deposit black money in the name of every family member to convert it in white.
#9 By Real Estate
Real estate is a sector where the majority of black money is parked. People use real estate deals to convert black money to white. It is observed that people do fake real estate deals exchange money and cancel these deals due to non-payment of money.
#10 By Declaring Black Money
The best method for converting black money to white as per me is by declaring this money to IT authorities and paying tax on this money to convert it to white.
Disclaimer –
I don’t recommend readers to follow any of these methods for black money conversion. This article is just for exposing loopholes in our system. So, RBI and the government can take appropriate action by formulating strict rules to remove black money from India. I am against black money and black money generation ideas.
If you have any information about people holding black money and trying to launder it. Please send an email to blackmoneyinfo@incometax.gov.in This email id will be monitored by a special cell and immediate action will be taken on information sent by you.
Let’s help the government to fight against black money and tax evaders.
If I have missed any other methods which people use to convert their black money into white money I request you to share them with our team.
Let’s fight against black money and corruption.
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