Know How People get Access to Black Money
Now that you know how to legally convert black money into white money, there’s no harm in gaining more knowledge about the creation of the wealth.
Multi-Level Marketing Scheme
Some individuals, in groups, float multi-level marketing or investment scheme assuring greater returns to the investors. The investors deposit cheques or cash in bank accounts that are floated by the firms. Well, these firms issue them the post-dated cheques in turn. Also, the firm carefully transfers the amount to a promoter’s personal bank account. The promoters generally wire transfer the entire amount to another bank account offshore to widen that trail. These banks issue the debit or credit cards valid anywhere that the promoter may use for transactions.
Indicators
- Lifestyle beyond the sources of income.
- Ownership of the assets abroad.
- Huge inter-account transfers without any economic rationale.
- Cash transactions with people who are unknown.
- Withdrawal of huge foreign remittance, that too in cash amount.
Disguised Ownership
Increasingly, the criminals are keen on owning their legitimate business. Well, it could either be to earn greater returns or else to ensure the conversion of black money.
Indicators
- International corporate buildings without any visible benefits.
- Shares of innumerable domestic companies that are sold at greater valuations.
- Tax returns that hardly support the capital contribution by the investors.
- Huge Cash Holdings.
The offshore organizations usually conduct business on international locations where it’s formed. These organizations can be run via nominee directors who aren’t required to publish the annual accounts.
Mixed Sales
Mixing the legit money sources with the illicit ones is indeed the popular method as it’s extremely difficult to detect in case, there’s huge cash component in legal business.
Indicators
- Huge increase in the turnover of cash and sales.
- Hardly any commercial reasons for cash inflows.
- Promoter has extremely poor business knowledge.
- Transactions without any supporting documents.
- Costs incurred without any corresponding increase in the turnovers.
SMURFING
This sort of transaction is mostly done to evade the notices by the authorities monitoring varied transactions above certain threshold.
Indicators
- Cash received from the countries with greater level of corruption.
- Concealed cash transportation.
- High cash transaction occasionally.
- Deposits are done in accounts of nominees or ‘straw men’.
Trade Mispricing
Traditionally, the goods that were imported or exported were mostly priced higher or lower to allow money laundering. At times, the products exported were completely different from that mentioned- description. With current technology, it is said that it’s easier to modify the invoices or else produce fictitious invoices. Corporations are easier to set up in order to how they have received goods.
Indicators
- Discrepancies between invoices and customs filings.
- A country, not known for exporting or importing goods.
- Huge difference between the declared as well as market value.
- Payments made by offshore companies.
- Commissions paid to the third parties without any supporting documentation.
Converting black money to white
Owing to the recent government rule that was being imposed to prevent black money circulation, some of the prestigious biggies of the country are striving hard to convert their illegally acquired notes to white cash. Are you keen on knowing how to convert black money to white? Well, before talking about entire procedure, it is significant to know what exactly black money is. Black money is mostly earned through illegal activities that are controlled by the regulations of the country. The wealth is received in cash from varied underground economic means. The recipients spend it only in underground economy, hide it or make attempts to provide it with the appeal of legitimacy through money laundering.
Though not advisable, there are loopholes in our economic system that makes the conversion possible for the black money holders. If you want to know more about where to invest to convert black money to white in utmost details, feel free to go through the following write-up:
1. Agricultural Income
The black money earners mostly tend to show their acquired cash as agriculture income. This income is tax exempted that requires you to have an agriculture land used for purposes like nursery, plantation etc. You can even take an area on lease to depict farming to be your source of income. However, to claim agriculture income, you need to satisfy several conditions.
- The land needs to be agricultural and should have the owner’s name on varied records of rights.
- Agricultural operations like the preparation of the field for sowing, germination, ploughing, use of pesticides, fertilizers, weed removal should be performed. Don’t forget to take the pictures and videos of the activities.
- Maintain the copies of bills if you are making use of electricity for irrigation. Keep the records once the crop is prepared for harvest.
Maintain the records of all the payments received in case, the crop fails owing to natural forces and you’re compensated by the government.
2. Use Investment as the Vehicle
This is looked upon as one of the best ways to convert black money to white money as the individuals can invest the black money they own. They can purchase insurance policies and pay the premiums in cash. Most of the times, they prefer paying their initial premium via cheque and the rest in cash. That’s where they can make use of the money. Also, people who have acquired enough of black money can secure them in their PPF account, tax saving funds or through fixed deposits. Among the different ways for converting black money into white, the safest option is buying gold from the local store. Make sure to keep the invoices and sell the gold back after a certain point. Avoid visiting any reputable store as they might insist on making the payments through cheque. Besides gold, you can also feel free to buy antiques, painting or any form of artwork.
3. Receiving Gifts for Conversion
If you’re keen on opting for the safe ways to convert black money into white money, don’t hesitate to take gifts from your close ones via cheque and provide him/her with the cash amount. The ceremony could be anything be it marriages or birthdays. You must confirm that the friend/relative received that amount in his/her bank account. We all know that the gifts received from relatives or even close friends are tax exempted. Make sure to keep the records of transaction as the proof.
4. Bogus Loan Entry
You need to show a bogus loan entry for the conversion to take place. The owners of black money usually receive cheque while taking the cash amount. People provide repayment of old loans by giving white money via cheque.
5. Doing Charity and Forming Trust
People tend to form a sense of trust for the individuals who actively take part in varied causes meant for social upliftment. The executive body usually consists of own people such as driver, cook, housemaid and security. They receive cash donations as charity. Though it may seem like charity but it is one of the ethical ways to convert black money into white money.
6. Receiving Cash Via Profession
Another smart way of conversion is showing the net income in cash. Well, the main source of earning can be from professional fees, tuition fee, commission or consultancy.
7. Sale of Jewellery
Visit any known jeweler store and feel free to hand the black money you’re keen on converting. Receive the cheque of same amount (deducting the taxes and commission). He would provide you with the purchase bill as a proof that you have sold your diamonds or personal jeweler to him. There’s no need of paying the gain tax on that amount.
8. Deposit Cash in Other Family Member’s Account
Make sure that all your family members have saving bank accounts. Deposit the cash amount within 20,000/- as it would save you from being in the limelight, specifically in the eyes of the IT authorities. In case, there are six members in the family, you would get the chance to convert more than one lac rupees every year without any hindrance. Though the amount might seem trivial, it can be used easily for investments in stocks, gold purchase and mutual funds.
9. Buy Real Estate
This is one sector wherein you can find the existence of a large amount of black cash. Individuals make use of real estate deals for the conversions. Also, it is seen that a number of people mostly do fake deals, exchange the amount and further cancel the deals owing to the non-payments from other parties. You can easily make property purchases in your adult children or spouse’s name. You can even show the rent income once the home is purchased. Well, the purchase prices can also be inflated in accordance with the requirements.
10. Declaration of Black Money to the Authorities
This is indeed the easiest way of conversion. The simplest way involves declaring the amount to the Income Tax authorities as well as paying taxes with penalties and turning them into white.
Why black money should be converted into white money? If the same question has popped into your head, it is significant to know that black money can only be used in underground economy. If you’re keen on investing the amount in something worthwhile, conversion is a must. It is significant not only to overcome the government regulations but also to get away with the illegal cash.
Disclaimer:-
We do not encourage anyone to find ways to convert black money to white. It is illegal to generate & have black money. We do not support the scam. This post refers to the loop holes that government of different countries have and indirectly it is allowing people to convert their black money as much as they can.
