Ever since, Govt. of India banned Rs.500 and Rs.1000 currency note, people are searching how to convert black money to white money on search engines. Maximum queries are coming from Gujrat state.
But let us understand who these people are and why are they searching this information.
These people are those who have not paid taxes on their income and are worried now. The money on which no required taxes are paid (like income tax, VAT, stamp duty etc.) is called black money.
Now, if they deposit this black money in their bank account, certainly, income tax department will get to know about it and one has to pay tax + penalty on that.
And, if they don’t deposit this money in bank account, it will be useless paper after 30-Dec-2016.
See our previous article Rs 500, Rs 1,000 ban : Complete Guide, Form and What to do now
[irp posts=”15979″ name=”Rs 500, Rs 1,000 ban : Complete Guide, Form and What to do now”]
So, they want to convert this black money to white money without being noticed by Income tax department.
Let’s see what are different ways they are using to convert black money to white money in India. Also, we’ll put light on whether they can get rid of Income tax department in that way.
People are buying Gold in hurry to convert black money to Gold. Many jewellers are selling Gold at heavy premium price. At some places, Gold is selling at around Rs.55,000 per gram where as actual price of Gold is currently around Rs.30,000/- per gram. Jewellers are taking cash and giving them Gold.
Also, you need to give PAN no. if you’re buying Gold worth Rs.2 lacs or more. It’s mandatory.
Even, if you buying Gold for less than 2 lacs without giving PAN no., you can not escape as Income tax department has clarified that they will check all cash transactions of jewellers irrespective of bill size.
Almost all jewellers are using CCTV cameras in their showrooms / shops. Income tax department has given a statement that they will check CCTV footage of jewellers during 8 Nov 2016 to some period.
Secondly, where will you keep so much of Gold? It’s not safe at your home / office. If you choose bank locker, there is no guarantee from bank on safety of its contents.
Converting Indian Ruppes to other currency
Many people are converting Indian currency note to US Dollars, EURO and other international currency. The exchange rate is 100% – 150% more than actual curreny rate. And, if you follow it, where will you keep so much of currency note. You may get rid of Indian currency note and end up with other currency note.
Putting cash in Jan Dhan account
If you’re planning to put extra cash in your servant account and planning to withdraw cash later on, hold on for a minute. Govt. has put cap of Rs.50,000/- in Pradhan Mantri Jan Dhan account. That means, you can not deposit more than Rs.50,000/- in that account.
There are many other ways also, which can be discussed here. But there is “catch” in every way.
Now, the question arises – what is the final solution?
There is only one solution.
Declare all your black money honestly and pay tax + penalty on that. The rest of the money after tax will be yours white money.
Also, you’ll get many more benefits.
- Tension-free life
- No fear of income tax department raid
- No fear of theft / robbery
- Safe money in bank account
- and above all – healthy mind with healthy body. You need healthy body and mind to ENJOY money you’ve earned.
And think of your family members also. What is their present and future if income tax department catches you with black money and put you behind bars? What will be you social image?
So, stop searching “how to convert black money to white money in India” and consult your CA to give tax honestly.