BLACK MONEY AND THE

POLICY MEASURES BY THE

GOVERNMENT OF INDIA TO
CONTROL BLACK MONEY
By Abhijith S Vinod
Roll Number :03
Section A
1st year BBA,LLB
BLACK MONEY
WHAT IS IT?

■ Black money may be defined as the money

that is generated by activities that are kept
secret in the sense and not reported to the
authorities.
■ This money is also not accounted to the fiscal
authorities or you can say that taxes are not
paid on this money.
IMPACT OF BLACK MONEY
1. Less Tax for the Government
2. Uncontrollable Inflation
3. Leads to Mass Poverty
4. Lack of Technology
5. Impact on Growth by moving investments on Gold, Stones and
Jewellery
7. Inflated Real Estate
8. Transfer of Indian Funds Abroad to Safe Heavens
9. Encourages Anti-Social Activity
WHY DO PEOPLE RESORT TO BLACK MONEY?
1. Unrealistic Tax Laws and Tax Frauds
2. Different Rates of Excise Duty
3. Control Policy
4. Quota System
5. Scarcity
6. Inflation
7. Elections in a Democratic System and Political Funding
8. Real Estate Transactions
9. Privatization
10. Agricultural Income.
POLICY MEASURES AND PROGRAMMES
INTRODUCED BY THE GOVERNMENT OF INDIA
TO CURB AND ELIMINATE BLACKMONEY
1. Lower Tax Slabs for encouraging Voluntary
Compliance
2. Introduction of Tax Deduction at Source on high
Value Transactions
3. Special Bearer Bonds
4. Amnesty Scheme
5.Punishment to Corrupt Officials
■ The Double Taxation Avoidance Agreement (DTAA) with
Mauritius was amended.
■ GAAR (General Anti-Avoidance Rules) that came into force
on April 1 last year.
■ The Benami Transactions (Prohibition) Act of 1988 was
amended in 2016.
■ Black Money (Undisclosed Foreign Income and Assets) and
Imposition of Tax Act, 2015.
■ Income Declaration Scheme (IDS) in 2016 .
■ Pradhan Mantri Garib Kalyan Yojana (PMGKY)
 CONCLUSION
■ Black money or the illegal money circulating in the parallel economy is a big
menace for the Indian economy. It is also an originator of big loss in the tax-
revenues for the government of India. Because of the existence of the black
money in Indian economy, the per capita income of the people has not been
growing in line with the other advanced countries despite the liberal measures
taken by the government of India since early 1990s. Even after several decades
of economic planning and push in the right direction, India still continues in the
same state as an underdeveloped economy in terms of per capita income and the
reason behind it is the existence of black money. The elimination of black money
from Indian economy is needed and it will benefit the economy in more than one
way. It will also help in creating more revenues for the government .