How can the government curb black money?

The government has come up with a Gold Amnesty scheme to prevent black money in this asset. This is similar to Voluntary Income Disclosure scheme to tap black money in income taxes. Again any cash transaction above Rs 2 lakh demands PAN number. So any large cash deal won’t be able to generate black money.

Did demonetization eradicate black money?

Of the Rs 15.41 lakh crore worth invalidated notes, notes worth Rs 15.31 lakh crore have returned. In February, 2019, the then finance minister Piyush Goyal told Parliament that Rs 1.3 lakh crore black money has been recovered through all anti-black money measures including demonetisation.

What is not true about black money?

Black money includes all funds earned through illegal activity and otherwise legal income that is not recorded for tax purposes. Higher amounts of black money in the economy often lead to increased corruption. Black money can be illegally disguised as legitimate money through money laundering.

How can we reduce black economy?

So in order to reduce black economy, one of the things that the government could do is reform the labour laws that currently make hiring labour through formal channels costly. That may not sound positive or pro-labour, but will ultimately turn out to be exactly that by increasing employment in the formal sector.

What are the illegal activities that can lead to black money generation?

The illegal activities that can lead to black money generation are:

• Crime.
• Corruption.
• Non-compliance with tax requirements.
• Complex procedural regulations.
• Money laundering.
• Smuggling.

How did demonetization affect black money?

Rahul Gandhi blames note ban for ‘destroying’ economy, allowing Bangladesh to ‘surpass’ India. On the fourth anniversary of demonetisation, Prime Minister Narendra Modi on Sunday said the move helped in reducing black money, increase tax compliance and formalisation of the economy.

What can you do with black money?

People can invest their black money in cash. They can purchase an insurance policy and pay a premium in cash. Many a time they pay the first premium by cheque and rest in cash. They can save in PPF account, tax saving mutual fund, fixed deposit etc.