Why is black money a problem?

Black money has been a big issue in India for many decades. Adverse Effects of black money : (a) Black money eats up a part of the tax and, thus, the government’s deficit increases. The government has to balance this deficit by increasing taxes, decreasing subsidies and increasing borrowings.

Is black money good or bad?

Black money not only weakens the economy of a nation but also widens the economical gap by making rich richer and poor poorer. A large amount of black money also pollutes the social structure of a nation and adversely affects the functioning of government agencies. Black Money is earned by dishonest means.

What is the punishment for having black money?

2.1 Section 3 of the Act provides that tax shall be levied at the rate of 30\% on undisclosed foreign income and assets of an assessee w.e.f. 01.04. 2016….Challenges under Black Money Act, 2015.

What is black money act in India?

Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 is an Act of the Parliament of India. It aims to curb black money, or undisclosed foreign assets and income and imposes tax and penalty on such income. The Act has received the assent of the President of India on 26 May 2015.

How black money is earned?

In its simplest form, black money is money on which tax is not paid to the government. The sellers in both examples have earned money from legal sources but evaded taxes. The most common source of black money is the black market or underground economy.

What is the source of black money?

The most common source of black money is the black market or underground economy. Activities in the black market may include selling prohibited drugs, gunrunning, terrorism, and human trafficking.