5 loopholes to convert black money to white

‘How to convert black money into white money’ is one of the top most search keywords on Google. After Prime Minister Narendra Modi’s ‘surgical strike on currency’, which meant Rs 500 and Rs 1,000 is no longer legal tender. All black money holders are worried and trying to find ways to convert black money to white. Some of them have already found out ways to convert black money to white. It is because of loopholes in our system. So, let’s explore loopholes of converting black money to white.

Convert Black Money

5 loopholes to convert black money to white

Religious Place

Shame on people’s attitude they are using religious places to convert black money to white nowadays. Modus operandi is simple deposit Rs 500 and Rs 1000 cash in religious places. Take back Rs.50 and Rs.100 denomination notes. The religious organization gets it replaced with a donation amount.

So, my advice here is one should avoid doing charity at religious places till 30 Dec 2016. If you find any malpractice at religious place report it immediately at the nearest police station.

Divide and Deposit

The second most popular method of converting black money today is finding multiple people with a low-income group. Once you have a pool of people divide your cash into multiple parts and deposit it in the low-income group accounts. It is nothing but taking advantage of a loophole that tax is not applicable up to 2.5 Lakh.

Here, my advice is never to give your account for depositing such money. The government is tracking every cash deposit and you are likely to face problem at later date.

Illegal Cash Exchange

The another method of converting black money to white money is finding vendor/shopkeepers or small businessman who is replacing cash at premium. Today people are ready to accept Rs.500 note at Rs.300 and Rs.1000 at Rs.600. 30% -40% is premium rate is being offered for illegal cash exchange.

I recommend staying away from this type of illegal cash exchange. If you find anyone involved in such type of activity, report it to Income tax or nearest police station.

Booking Train Ticket

It is seen that people are booking train ticket worth 2 Lakh in a day with a plan to cancel them at a later stage. This is the simplest method to convert black money to white.

The government should impose a ban on train ticket cancellation or they should find out a method to identify legitimate and false train ticket booking.

Gold Jewelers

Gold Jewelers are one of the biggest sources of converting black money to white. People with unaccounted cash approach jewelers. Jewelers take cash and return a cheque with a lesser amount. On the book, it is shown as a sales transaction.

If you find any malpractice like this report it to Income tax or nearest police station.

At MoneyAlpha we don’t endorse or encourage any of these actions. These are illustration of what’s already happening.

Article by Raviraj

Raviraj is the man behind moneyalpha.com. He is graduate in finance, engaged in blogging since 6 years. He is not affiliated with any financial product, service provider, agent or broker. The purpose of this blog is to spread financial awareness and help people in achieving excellence for money. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

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