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Dec 5, 2014

Black Money Essay for Class 12

(663 Words ) :

Illegally made income or the income not declared for tax purpose is called black money.

Having undeclared money or hiding money in cash or in other form outside the country is also known as black money. High Networth Individual ( HNI ), private companies, politicians   of any nation have higher   linkage to black money and they are also remain in the highest suspicion for the illicit money flow outside the country.

 Black money had been also a political stunt for gathering publicity in the process of election. 

Black money is directly related to tax evasion and money laudering. The act of evading taxable income by act of malpractices the legal tools or by means of corrupt official, individual, mediator etc. is called tax evasion. Thus the amount hoarded by spreading or manipulating among the available financial tools is the black money. Lack of strong political will and due to weak judiciary system, black money system grows and persists in our society.

This is not the problem of an individual country. It is prevailing about everywhere except few places; where value of life is overruling all the negatives of human values. It is also because dishonesty, greed, selfishness etc by the people for the few people creates very good atmosphere of black money dealings. It is also because government sometime unfairly does not prove itself in truthful action despite collecting tax fairly, thereby compelling people to think in black way. For example while buying a land people many times deal by lowering the values of a land to evade tax. It is because government doesn't rate the land and has no power to buyback the land if its value is challenged by anyone or group of people. These are the loop holes of tax system. Similarly there are such loop holes in the system of many countries that are utilised by few to export illicit fund outside the country.

Black money got high talk in media in India in 2011 when Anticorruption movement came in focus. People used right to information ( RTI) tool to know about any financial or important deal or information.

Recently elected Indian government in 2014 promished high to bring back the black money from international pockets.  It also warned in tough tell to take a check on money laundering. In this connection supreme court of India issued an order to  set up  special Investigtion Team (SIT) and had given last day limit as May 28,2014. Present government formed the Committee  under retired justice M B shah on 27-05-2014 (one day in advance). Switzerland recently (2014) has amended its laws to help tax authorities of countries like India to provide information about the  people hoarding black money in Swiss pocket. It has also agreed on  not letting Account holders know this information. 

Switzerland has given information about Indian holding  in Switzerland bank as around. Rs. 9000 crore or 2.18 billion Swiss francs till 2012 record.  Global Financial Integrity (GFI), a non-profitable organisation located at Washington DC reported in 2010 that India lost $213 billion to illicit financial flow between 1948 to 2008  and most of the illicit funds flow found from High networth Individual ( HNI ) India ranked fifth  country in the world for exporting illicit money according to GFI report. GFI has valued present illicit money outflow from India to the tune of $462 billion. 

India was ranked 94 out of 176 countries in Transparency. Bribery payer index  is 7.5 out of 10 in 2011. Corruption control rank was 36% in 2010. (source: Transparency International). India has signed a treaty with many countries and Institution like  Organisation for Economic Co-operation and Development (OECD) to check the back money issues. We should be fare and try to put a pressure on the system to be positive for paying tax. We should also find out a way to check the evil activities of few politicians who think that what is other's is theirs and what they have is already theirs.

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