Different Ways To Convert Black Money Into White

Rooting through bank accounts

Black money hoarders are using poor people accounts to exchange their amount and also deposit an amount of up to Rs 2,50,000 as up to this amount it will not come under surveillance as per earlier guidelines.

Now income tax department has said that it will check all the accounts of housewife, artisans and others where the income earned is suspicious.

Individuals are also rooting cash deposited through their family members by depositing amount of up to Rs 2.5 lakh. No doubt there has been a surge in deposit in Jan Dhan accounts.

 

Temple donations

There have been reports that people are using temple donations to convert their black money into white, as hundis will not be asked questions. In one of the media sting operations, temple authorized person were willing to convert an amount of Rs 50 lakh by charging 20% commission.

Some individuals find different ways to not to pay tax, one of the common method is making donations to charity and temple donation as these are exempted from tax.

Train Tickets

As old notes were expected till November 14 to book train tickets many individuals have booked their tickets with an intention of cancelling and getting the refund in smaller denominations by paying small fee of cancellation charges.

Thus, the railways said that refunds will not be made in cash. If train tickets are booked through travel agents, funds are transferred through electronic channels.

Money laundering firms

There are some money laundering firms which are run by CA and tax experts utilizing the loopholes in the system. Such firms run the business in cash and allow individuals to park their funds for short term.

These firms show a back dated transaction in current fiscal to make it look legal.

Buying gold

Buying gold, which Indians love to do. When demonetization was announced most of them rushed to buy gold as few jewellers were open till midnight. Some jewellers were also sold the metal for higher rates.

The government has asked the top jewellers to provide details of the transactions. Income tax department has raided few jewellers who allegedly accepted Rs 500 and 1,000 notes from the customers and issued invoice of previous dates.

Showing as agriculture income

Income earned from agriculture is exempt from tax in India. Agricultural activities consist of basic operations such as tilting, sowing, irrigating and harvesting. So, farmers can go and exchange any amount of old currency with banks and he will not be questioned.

However, to show  agricultural income he has to meet certain conditions as specified by the Income tax department.

Conclusion

Please note that these are not recommendations to follow for conversion. These are only few methods which people follow to convert black money into white. There is no guarantee that these are safe methods. There are always chances that Income Tax department may send notice or ask you to show certain proof of income.