How can we solve the problem of black money?

The only way to get rid of the problem of unaccounted or “black” money is to legalise it with a penalty, and let all money work towards lifting the economy. The Parliamentary Standing Committee on Finance has come out with some ballpark figures on the extent of “black” money held by Indians outside the country.

What are the causes and effects of black money?

Black money is largely attributed to tax evasion. Its direct impact is the loss of the Government revenue. Since the Government fails to get sufficient tax revenue due to large-scale tax evasion, it is forced to resort to high taxation and deficit financing which again carry their ill-economic effects.

Who are responsible for black money?

The black money is accumulated by the criminals, smugglers, hoarders, tax-evaders and other individuals opposed to theft. Around ₹22,000 crores are supposed to have been accumulated by the criminals for vested interests, though writ petitions in the supreme court estimate this to be even larger, at ₹900 lakh crores.

What is the source of black money?

Sources of Black Money in India Sellers or traders who do not give bills or receipt creates black money. Many people invest in bullion or jewellery to hide their actual income from the authorities. In the real estate sector, many people undervalue their real assets to refrain from paying the rightful tax.

How does black money affect Indian economy?

Higher Inflation: The infusion of unaccounted black money in the economy leads to higher inflation, which obviously hits the poor the most. It also increases the disparity between the rich and the poor.

Does demonetization achieve the goal of eliminating black money?

In brief, demonetisation neither eliminated black money nor stopped black income from being generated.

What is the impact of black money?

Impacts: Loss of Revenue: Black money eats up a part of the tax and, thus, the government’s deficit increases. The government has to balance this deficit by increasing taxes, decreasing subsidies and increasing borrowings.

Can black money be deposited in bank?

Consequences to be faced by Black Money Depositors: The ban on Rs. 500 and Rs. 1,000 notes has forced everyone in the country to exchange or deposit their cash in banks.

Do IAS officers have black money?

IAS officer posted as SDM in allotted district after 1 year of training. As SDM he earn black money range from 0 to 1 crores. If you are honest officer then you will earn zero black money.