Black money
Topic: Taxation: Direct and Indirect Taxes, GST and Global Tax Issues · NCERT: Class 12, Ch 3 "Money and Banking"
Meaning
Black money is income hidden from the tax authorities, so no tax is paid on it. It comes from tax evasion, corruption, crime, property deals and benami holdings. It reduces government revenue and weakens the fairness of the tax system. Studies include the NIPFP estimate (1985) and the White Paper on Black Money (2012).
Example
Steps to fight black money include the Special Investigation Team (2014), the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 and the Benami Amendment Act 2016. Curbing black money was also a stated aim of demonetisation in 2016.
Don't confuse with
- Money laundering: the process of making black money look clean by passing it through legitimate-looking deals. Black money is the hidden income itself.
Related concepts
- Tax avoidance and tax evasion
- General Anti-Avoidance Rule
- Tax compliance
- Money laundering
- Hawala
- Shell company
- Benami transaction