Black Money?

Black money is a term given to money earned or transacted in a clandestine manner. It is the opposite of white money. White money is the money that we earn through our sincere efforts and that is recorded in business books. Black money is not recorded in any business book and hence it is only in the form of cash. Black money has a major impact on the economy of a country.

Where does black money come from?The largest chunk of black money comes from the Real Estate industry. The government’s value of land is at a low price when it is valuated. But when it is actually sold, it has exuberant price. When a property is sold, it is sold at market price which is much higher than the government valuation. A major percentage of the money paid for such properties is dealt in cash. This is done to project lesser value of the said property and save property taxes. The one who buys a property also prefers to pay some amount in cash and save their taxes too.

However, people who are earning black money in major chunks keep all their money in tax havens like the Swiss bank, etc. These banks do not pose any hassle to get an account open in a foreign land. It is reported in some countries that black money is more than their white money. These counties have liberal economies. They allow any foreign national to open accounts with complete confidentiality.

The latest news says that India alone has more than 7 trillion rupees in the black money market of the world. These figures would have not come out easily if the world was not reeling under global economic difficulty. It is said that the amount of money that is hidden by people can buy another world if all the black money is taken together.

Linus Orakles
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