Black Money is the fund earned through black marketing on which the income and various other taxes are not submitted. Black Money is the money which is concealed from the tax administrator. It is the income earned through illegal activities.It is a socio-economic evil.
This concept is prevailing in our society since long. It dates back to the era of Britishers.
The part of the income in form of black money that is not presented in front of the government affects the economic growth and development of the country.
Prohibition of things by law such as drugs, cocaine, marijuana etc.
Use in public rallies and political funding.
Inadequate use of power and authority to take bribery.
Inflation in the economy also leads to black money.
Indian companies and politicians misuse the money of public trust in an illegal way to conceal the origin of money.
It leads to dual economy in the society:
Parallel economy-which includes black money.
Reported economy- which excludes black money.
The objective of bringing equity in the society through progressive direct taxation by the government is ruined by the non tax payers in the community which ultimately leads to a big gap between the rich and the poor.
Loss of the government revenue which could be used in public interest.
A recent major step of demonetization of high value currency of rs. 500 and rs. 1000 which ultimately lead to increase in mutual funds .
Income tax department conducts raid.
Black Money and Imposition of Taxation Act, 2015.
Making of Special Investigation Team (SIT) by the Supreme Court.
Benami Transactions Act 2016 to deal with domestic black money cases.
Other than these the taxpayer need to be convinced that the tax money paid by the them is used for beneficiary purposes and it is not going waste.