Tech beauty|Entertain with blog: social

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<span style="font-size: large;">First of all, I am stating that I am with our prime minister
Narendra Modi, who have taken a major action against corruption and black money
holders. Being said that, I will give a short explanation about the ways which
are taken by people in order to convert the illegal or “black” money to legal
or “white” money. </span></div>
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<span style="font-size: large;"><b><span style="color: black; font-family: "Arial","sans-serif"; font-size: 14.0pt; mso-fareast-font-family: "Times New Roman";">First of all the question arises that “What is Black Money”?</span></b></span></div>
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<li><span style="font-size: large;"><b><span style="color: black; font-family: "Arial","sans-serif"; font-size: 14.0pt; mso-fareast-font-family: "Times New Roman";"><div class="MsoListParagraph" style="background: white; line-height: normal; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; text-indent: -.25in;">
<span style="color: black; font-family: Symbol; font-size: 9.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;"><span style="font: 7.0pt "Times New Roman";"><span style="font-family: Times,"Times New Roman",serif;"></span></span></span></span><span style="font-weight: normal;"><span style="font-family: Times,"Times New Roman",serif;"><span style="color: black;">Black money is the
earned money which is done by evasion of tax</span></span></span></div>
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<li><span style="font-size: large;"><span style="font-family: Times,"Times New Roman",serif;"><span style="color: black;"><div class="MsoListParagraph" style="background: white none repeat scroll 0% 0%; line-height: normal; text-indent: -0.25in;">
<span style="color: black;"><span><span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="color: black;">It can be earned through
both legal and illegal means</span></div>
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<span style="font-size: large;"><span style="color: black;"><span><span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="color: black;"><span></span>      The majority of the black money is the income
received in cash which is not accounted in legal books and not revealed to the
government for tax purposes.</span></span></div>
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<b><span style="color: black; font-family: "Arial","sans-serif"; font-size: 14.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-spacerun: yes;"></span><span style="font-size: large;">Now the question arises
that how does the black money get generated?</span></span></b></div>
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<span style="font-family: Times,"Times New Roman",serif;"><span style="font-size: large;"><b><span style="color: black;">1> Corruption</span></b><span style="color: black;">– Mr. X, an officer in government service, demands
Rs.1 lac from Mr.Y for doing a favour (eg. to approve the building sanction
plan). Now<span>  </span>Mr. Y hands over Rs.1 Lac to
the officer in cash as no one takes a bribe in cheque or demand draft. This
money will not be accounted in the books of Mr X and he will not pay any tax on
it. <span> </span>Hence Rs.1,00,000 black money is
generated.</span></span></span></div>
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<span style="font-size: large;"><b><span style="color: black;">2>Property selling</span></b><span style="color: black;">– Mr. A buys a property from Mr. B for a total
sale value of Rs.25 Lacs. Mr B takes Rs.15 Lacs in cheque/DD and the rest 10
lacs in cash. He pays stamp duty on Rs.15 Lacs, and the seller pays income tax
on<span>  </span>Rs.15 Lacs. Hence Rs.10,00,000 black
money is generated.</span></span></div>
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<span style="font-size: large;"><b><span style="color: black;">3>Selling of goods/services without invoice</span></b><span style="color: black;"> – Suppose Mrs A buys a dinner table along with
sofa set from a furniture dealer. Now,<span> 
</span>the shopkeeper <span> </span>tells “the price
is Rs.50000 plus taxes at 14.5%”. Mrs A asks for discount from the shopkeeper. <span> </span>The shopkeeper tells her that he can offer it
at Rs.38,000 without any bill and if Mrs X <span> </span>wants, the former can write on a piece of
paper . Hence Rs.38,000 black money is generated.</span></span></div>
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<span style="font-size: large;"><b><span style="color: black;">4>Accounting for fictitious(false) expenses</span></b><span style="color: black;"> –  Mr X, a businessman, tells his
chartered accountant that the former can’t pay so much tax and asks the
chartered accountant to do something in order to reduce the taxes. <span> </span>The accountant does the favour <span> </span>by booking fictitious expenses. If the businessman
declares a profit of Rs.5 Lacs against the actual profit of Rs.10 Lacs, black
money of Rs.5 lacs is created. Hence Rs 5 Lacs black money is generated.</span></span></div>
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<span style="font-size: large;"><b><span style="color: black; font-family: "Arial","sans-serif";"><span> </span>Now the big question that
how the illegal or black money converted into legal or white money? </span></b></span></div>
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<span style="font-size: large;"><span style="font-family: Times,"Times New Roman",serif;"><span style="color: black;">The
difficult part is converting the black money into white money without any
taxes. In all the above examples, the people who have earned money in cash
(black money) can’t deposit it in the bank.<span> 
</span>So, they have to make a safe storage of <span> </span>the cash somewhere else eg in a bank locker,
suitcase, etc.<span>  </span>They can also spend this
amount in cash by<span>   </span>purchasing of
property, goods, etc. Let us see the ways of converting black money.</span></span></span></div>
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<span style="font-size: large;"><b><span style="color: black;">1>By showing fictitious(false) sales – </span></b><span style="color: black;">Few years ago, a movie got casted by the son of
a powerful politician. The movie was a big flop. But, it ran ‘houseful’ (false)
in Kalpana Theatre of K G Road for a year. During those days, people were
talking that the black money earned by the father is converted into white by showing
the income from the movie which got casted by his son. In this way the money
earned by<span>  </span>illicit means is converted
with the help of businessmen by booking fase sales in the books of his/her own
company.</span></span></div>
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<span style="font-size: large;"><b><span style="color: black;">2>Increase the sale price of an asset – </span></b><span style="color: black;">Suppose a buyer wants to buy a property from a
seller<span>  </span>for a price of Rs.40 Lakhs. But
the seller wanted him to pay Rs.60 lakhs in cheque and in turn the seller
wanted to return the difference amount of Rs.20 Lakhs and additional stamp
duty/</span><a href="http://www.balakrishnaandco.com/ca-services-offered-by-ca-firm-balakrishna-co-bangalore/" target="_blank"><span style="color: #444444; text-decoration: none;">registration</span></a><span style="color: black;"> charges in cash to the buyer. Thereby the
seller<span>  </span>converted Rs.20 Lakhs of black
money to white without paying any taxes. The seller then reinvested the
corrupted money in another property and got the long term tax exemption.</span></span></div>
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<span style="font-size: large;"><b><span style="color: black;">3> Route through Hawala</span></b><span style="color: black;"> – we have often heard about hawala transactions.
Now let us understand it in simple words. Let us assume Mr.A, a government
officer or a politician in Kolkata has Rs.25 Lakhs in cash. Since it is black
money, he can’t deposit the same in the bank. So,what he does is that, he
identifies a hawala agent . The Hawala agent takes the cash in Kolkata and
through his counterpart,he hands over Rs.25 Lakhs worth in dollars/pounds in a
foreign country to his representative. Mr.A gets this money back to India as
Foreign Direct </span><a href="http://www.simplifiedlaws.com/tag/investments"><span style="color: #444444; text-decoration: none;">Investment</span></a><span style="color: black;"> (FDI) or seed fund in a private company, etc. Also he may choose
to invest abroad in properties / shares. Thus, he converts black money to white
without paying any taxes.</span></span></div>
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<span style="font-size: large;"><b><span style="color: black;">4>Depositing in banks an amount less than Rs.50000</span></b><span style="color: black;"> – This route is taken by small time operators.
They open <span> </span>accounts in multiple banks and
deposit cash upto Rs.50000 at a time. Now the rule says that if one has to
deposit over Rs.50000, he/she has to give PAN details to the banker. Mostly,
these kind of small transactions goes unnoticed by the income tax department
and thus, black money is converted to white without paying any taxes.</span></span></div>
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<span style="font-size: large;"><b><span style="color: black;">5>Income through agriculture </span></b><span style="color: black;">– There is Income Tax on agricultural income.
This means the money earned from the sale of paddy, rice or wheat is free from
tax. So, the people who earn black money will obtain a false receipt from
traders of agricultural commodities,as if they have sold the products. For the
sake of records, these people will acquire or show the proof of ancestral
property in villages!</span></span></div>
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<b><span style="color: black;">6>Gifts</span></b><span style="color: black;"> – Any amount of money which is received from relatives as gift is
free from Income Tax. Hence it is an easy way to convert black money to white.
What happens that the person shows that the cash received in his/her son’s or
daughter’s birthday as gifts from relatives.</span></div>
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<span style="color: black;">Gifts
from non-relatives and friends attract income tax. But those who have huge
black money can show gift and pay taxes. Still the money earned through corrupt
practices can be converted into white (after paying taxes). One of the classic
examples is the amount of gift declared by a former Chief Minister who paid
huge taxes during that year. She declared around Rs.200 Crores as gift received
from her well-wishers and paid taxes on it!</span></div>
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<span style="font-family: Times,"Times New Roman",serif;"><b><span style="color: black;">7>Selling of jewellery in fake</span></b><span style="color: black;"> – Suppose, Mr.X has Rs.5 Lacs cash and he hands
this amount temporarily to a jewellery shop (that does not mean each and every
jewellery shop). The jewellery shop will issue a receipt for having bought
Gold/Diamond worth Rs.5 Lacs from Mr X and make payment in a cheque to Mr.X.
For facilitating this transaction, the jewellery shop <span> </span>will charge a minimal amount of fee. Thus Mr.X
converts his black money into white, without paying any income tax.</span></span></div>
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How corrupted people convert black money into white money?

First of all, I am stating that I am with our prime minister Narendra Modi, who have taken a major action against corruption and black...