Scrigroup - Documente si articole

Username / Parola inexistente      

Home Documente Upload Resurse Alte limbi doc  

CATEGORII DOCUMENTE





loading...

BulgaraCeha slovacaCroataEnglezaEstonaFinlandezaFranceza
GermanaItalianaLetonaLituanianaMaghiaraOlandezaPoloneza
SarbaSlovenaSpaniolaSuedezaTurcaUcraineana

AdministrationAnimalsArtBiologyBooksBotanicsBusinessCars
ChemistryComputersComunicationsConstructionEcologyEconomyEducationElectronics
EngineeringEntertainmentFinancialFishingGamesGeographyGrammarHealth
HistoryHuman-resourcesLegislationLiteratureManagementsManualsMarketingMathematic
MedicinesMovieMusicNutritionPersonalitiesPhysicPoliticalPsychology
RecipesSociologySoftwareSportsTechnicalTourismVarious

INTRODUCTION TO BLACK MONEY

financial

+ Font mai mare | - Font mai mic






DOCUMENTE SIMILARE

Trimite pe Messenger
FORMATION OF BLACK MONEY AND FACTOR RESPONSIBLE FOR BLACK MONEY
INTRODUCTION TO BLACK MONEY

TERMENI importanti pentru acest document

INTRODUCTION TO BLACK MONEY



MEANING OF BLACK MONEY:

Black money or unaccounted money circulating in the parallel economy is a big menace to the economy. It is also a cause of big loss in the tax-revenues for the government. As such it needs to be curbed. Its elimination will benefit the economy in more than one way. It will also generate more revenues for the government. 

Black money may be defined as the money that is generated by activities that are kept secret in the sense that these are not reported to the authorities. As such this money is also not accounted to the fiscal authorities i.e., taxes are not paid on this money. Contrasted to this is the white money that is shown in relevant accounts and tax paid, if due. 

HISTORY OF BLACK MONEY:

The period 1946-61 was one of the intense creativity. A black or parallel economy emerged both in the wake of the Second World War and the expansion of the economic activity in the post-independence period. Incentives were provided through the taxation laws to promote savings and investment; this made the tax laws more complex. Then, there was the need for larger revenues to finance the plans of economic development. Thorough investigations were, therefore, conducted into the structure of taxation not only with a view to widen the base of income tax but also to look for new taxes and to prevent tax evasion and avoidance. The Income-tax administration came under heavy strain due to the increase in the volume and complexity of its work.

ARTICLE FROM MAGAZINE:

Following is the article dated 10th feb 2009 from the magazine India News Today on ---

Come To Terms with Black Money by C.J. Prabir Ghose

BLACK MONEY is a term that is unique to the Indian style of life – it means money earned through dubious methods or ill gotten gains. It is money which the tax brigade does not know about or, even if they know, they pretend ignorance. How this money accrues to an individual might spark off heated debates but the fact is that Indians cannot deny its presence.

Under valuing of assets is a method – a house will be sold at a certain sum as per the official deeds but the purchaser has to pay an additional sum which is not acknowledged in any official document. Similarly, when one wants to take a house or a bungalow or even a flat on rent, he has to shell out unrecorded moneys to close the transaction. These become black money to whosoever accepts them.

Then there are the bribes that one has to pay to get things done in any Government office or department – this is rampant and unless greenbacks change hands, the relevant files just do not budge from one table to the next. The RTOs, the police, the service department and, in some cases, even the medical and education departments are not rid of this evil. To get admission to Government institutions, one has to proceed through specified channels and greasing the palms is what opens the doors of opportunity.

The commoners who are affected bear the sufferings silently because the red tapism and the labyrinth of procedures are so complicated that they would rather pay something to get things done instead of trying to personally get involved and stumble at every step. If one dares to go it alone, he will have to make several visits to the offices and move at a snail’s pace from one obstacle to another.

Therefore, one resigns himself to his fate and pays out that little bit extra to reach his objective. Black money is a result of corruption which is a disease that does not have any apparent remedy.

Thanks to the quick response time of the electronic media, we get glimpses of people who are trapped by the Anti Corruption Bureau. The guilty keep their faces covered with the handkerchief and the officials, dressed in their best beam happily at the camera. But, the number of instances where corrupt ones are apprehended hardly justifies a huge setup like the ACB. And, to get to these to the stage of conviction is a pipe dream – probably it would take a lifetime.

Statistics: It is said that black money in India accounts for 20 % of GDP. If this is true, then black money generated every year must be around Rs 400,000 crore or $ 80 billion. This is a huge amount, more than the entire budget of the government at the Centre. We have a government that spends about Rs 350,000 crore a year, most of it on itself, and asks for accounts of every paisa. On the other side, we have black money worth Rs 400,000 crore every year, which is just guesswork, and there are no accounts. This money goes into property, which is why real estate prices are so high, and of course five-star hotels. If the government could have all this money, or even a small fraction, there would be no need for revenue or fiscal deficits, and no need for huge borrowings to make two ends meet.
How big is $ 100 billion? It is bigger than you think. It is worth Rs 500,000 crore, which makes it bigger than the central budget. It is more than twice our annual exports. It is equivalent to 30 times what Enron is supposed to have invested on its Dabhol project. It is more than what the US government is expected to pay those who have suffered from the September 11th smash. And, if you must know, it is a fifth of our annual GDP, which is itself a big figure.




The CBDT is hopeful of collecting more than Rs 7,000 crore (Rs 70 billion) as income tax area, the target indicated by Finance Minister P Chidambaram for the current financial year. The board has already collected Rs 3,400 crore (Rs 34 billion) during the first six months of the current fiscal year, compared to Rs 2,700 crore (Rs 27 billion) in the same period a year earlier.
Finance Minister P Chidambaram's Budget speech for 2004-05 shows there were only 27 million taxpayers in the country on the date of the presentation of the Budget. This indicates the tax evasion rampant in the country.
The economy keeps growing and so does the deficit, while the revenues do not increase in the same proportion as the economy grows. There could be a number of reasons for the shortfall, which may vary from year to year like recession in the industrial sector or shortfall in agricultural production. But one factor that has been constant for the last five decades is the tax evasion. There are so many loopholes in the tax system that allows people and organizations to evade taxes with impunity. There are no reliable estimates of the extent of the tax evasion in this country. But some studies show that the size of black money has grown significantly over the past many years If this tax evasion were checked, the Finance Minister would never be faced with shortfall in tax collection and would have a very low fiscal deficit. Therefore, the Finance Minister instead of resorting to increase in tax rates or coming out with amnesty schemes should find other means to increase the revenue collection. One such way is to plug the loopholes, which encourages tax evasion. Most of the tax evasion occurs when transactions are done in cash and never recorded. This has been the experience of many countries and they have come out with measures that discourage cash transactions and encourage recorded transactions. One such mechanism has been the use of debit and credit cards combined with payment through banking mechanism. The Finance Minister should come out with such a provision, which encourages cashless transaction.
As a first measure it may be made mandatory that all salaries above Rs 10,000 per month, both in public and in private sectors, be directly credited to individuals' accounts in their respective banks. Secondly, payments above a certain amount may also be made mandatory through debit / credit cards and through cheque or bank drafts. With electronic banking gaining importance, transfers through banking mechanism will become as easy as receiving or making payments by cash. In most of the countries the use of debit and credit cards for making and receiving payments has reached a point that for buying even one small ball pen payment is made through credit / debit card.
Similarly, payments for the sale and purchase of immovable property, various kinds of consumer goods and services beyond a certain stipulated amount should also be made mandatory through banking channels. While doing so, the Finance Minister will not only be plugging one of the biggest loopholes leading to tax evasion but would also reduce the need for ready cash and hence the printing of currency notes on a large scale.
The biggest chunk of black money is invested in real estate and gold. The circulation of black money in the housing sector is beyond imagination. Since the house tax is based on the current purchase price only one fourth of the money is paid by cheque and the rest in unaccounted cash. Even an honest buyer of flats / houses is forced to pay in black money if he wants to acquire one.

ARTICLE FROM MAGZINE:

Following is the article dated 2nd April 2009 from the magazine India News Today on --

Massive Black Money Economy Cripples Nation.

APART FROM being the world’s largest democracy, India also has a parallel economy, which is termed as a ‘shadow economy’, and even ‘underground economy’, because a number of things/events that go along with the functioning of the economy are not seen in reality as they are highly concealed. This term was coined long back, and it applies very well to India. It has many connotations. One of them relates to the existence of black money. Let us briefly elaborate on this issue.

Black money is usually untraceable, and hence untaxable business and other dealings that are not reflected in a country’s Gross Domestic Product (GDP) computations. In other words, it is concealed money that is kept in secret account books (called ’number two’ accounts). It employs illegal (and even criminal) methods. Black economy and black money go hand in hand. It is an essential feature of the parallel economy, shadow economy, or money laundering.

One basic truth that has recently emerged in this context is that Indians (especially the undeserving super rich like the film stars, cricketers, business tycoons and so on) have amassed huge amount of black money both in India and abroad. Besides, there is also enormous black money in the coffers of the politicians, bureaucrats, and their supporters. They normally get involved in nefarious activities and entertain strong links with the mafia, essentially for muscle power, and through that they get involved in ‘rent-seeking activities’ and also in ‘directly unproductive profit-seeking activities’ to gain ‘unearned’ income. According to one study, about 45 per cent of our national income gets channeled every year to this concealed kitty.

Even the custodians of the administrative machinery themselves seem to have joined the race to accumulate such wealth. Many professionals like medical practitioners, chemists, lawyers who charge good amount of fee from their clients, but do not give any receipt do not show such collections in their income tax returns, and this amount eventually gets automatically converted into black money. Besides, tax evasion is also done by the intermediaries between the buyers and the sellers like the property dealers, and also agents between the public and the government officials like income tax experts, RTO agents and so on. Even the fake pharmaceutical companies severely violate the copyrights of the patent medicines, and evade everything they earn. They are the worst tax evaders.

All this happens despite the fact that tax rates in India today are moderate by any yardstick in the world. Even bribery helps in the creation of the black money. In terms of bribery we are the worst. According to the Transparency International, which publishes a Corruption Perception Index, about Rs 21,000 crore ($ 4,108 billion) annually is estimated to exchange hands in the form of bribery in the country. All these activities are highly illegal, unethical, and immoral. They also reflect severe lack of loyalty towards the nation. This is pathetic for a country that is known to be culturally rich. The fact is that through these activities, country’s parallel economy has got deeply entrenched with massive black money.

It has been revealed that the Swiss Bank Deposits by Indians over the past decades are estimated to have swelled. It is estimated that last year Indians had whopping $ 1, 456 billion in secret accounts, which is more than the balance held by all other nationalities taken together. Russians held $4700 billion, UK US $ 390 billion and China US $ 96 billion.

Once there is a strong will to provide strong barriers to the generation of black money in the country, there is nothing that is difficult. Let the concerned public authorities focus on tracking the black money and their manipulators, and then seize whatever they have, and punish them in a highly deterrent way, so that no one can dare to go for black money. If this happens all black money would become white, and we will become a strong nation. All this hoarded money will give a strong push to our growing economy, and we will surpass all the nations of the world.



loading...






Politica de confidentialitate

DISTRIBUIE DOCUMENTUL

Comentarii


Vizualizari: 1386
Importanta: rank

Comenteaza documentul:

Te rugam sa te autentifici sau sa iti faci cont pentru a putea comenta

Creaza cont nou

Termeni si conditii de utilizare | Contact
© SCRIGROUP 2019 . All rights reserved

Distribuie URL

Adauga cod HTML in site