Black Money
C(r)ash course: 22 ways of generating black moneyBlack money, according to the white paper released today, can be generated mainly under two heads: generating it by manipulation of accounts and generating it in some vulnerable sections of the economy. | |
As promised, finance minister Pranab Mukherjee is out with the white paper on black money, which attempts to give an elaborate backgrounder on the generation of black money in India and abroad.
Black money, according to the white paper released today, can be generated mainly under two heads: generating it by manipulation of accounts and generating it in some vulnerable sections of the economy.
Under each of these heads, the paper lists 11 different ways to generate cash. Here are 22 ways to generate black money:
Manipulation of accounts
1. Out of book transactions: Not entering transactions that might result in taxation into the book of accounts. The taxpayer either maintains no book of record or reports partial transactions only.
2. Parallel book of accounts: Adopted by those who are obliged under law to maintain books of account. The taxpayer maintains one book for their own use which records all transactions while another is submitted to concerned authorities reporting part of the transactions.
3. Manipulation of books of account: When tax payers have to maintain books under different acts like Companies Act, Income Tax Act etc, it is difficult to maintain multiple parallel books. In that case they just manipulate the books of account.
4. Manipulation of sales/receipts: A taxpayer is required to pay taxes on profit or income which is the difference between sale proceeds or receipts and expenditure. Thus manipulation of sales or receipts is the easiest method of tax evasion. They might also divert sales to dummy or associated entities.
5. Under reporting production: Manipulation of production figure may be resorted to for the purpose of evading central excise, sales tax, or income
As promised, finance minister Pranab Mukherjee is out with the white paper on black money, which attempts to give an elaborate backgrounder on the generation of black money in India and abroad.
Black money, according to the white paper released today, can be generated mainly under two heads: generating it by manipulation of accounts and generating it in some vulnerable sections of the economy.
Under each of these heads, the paper lists 11 different ways to generate cash. Here are 22 ways to generate black money:
Manipulation of accounts
1. Out of book transactions: Not entering transactions that might result in taxation into the book of accounts. The taxpayer either maintains no book of record or reports partial transactions only.
2. Parallel book of accounts: Adopted by those who are obliged under law to maintain books of account. The taxpayer maintains one book for their own use which records all transactions while another is submitted to concerned authorities reporting part of the transactions.
3. Manipulation of books of account: When tax payers have to maintain books under different acts like Companies Act, Income Tax Act etc, it is difficult to maintain multiple parallel books. In that case they just manipulate the books of account.
4. Manipulation of sales/receipts: A taxpayer is required to pay taxes on profit or income which is the difference between sale proceeds or receipts and expenditure. Thus manipulation of sales or receipts is the easiest method of tax evasion. They might also divert sales to dummy or associated entities.
5. Under reporting production: Manipulation of production figure may be resorted to for the purpose of evading central excise, sales tax, or income