1. Showing fictitious sales – You can convert income from illicit means or corruption with the help of businessmen by booking fictitious sales in the books of the company.
2. Increase the sale price of an asset – For example, A buyer buys a property for a price of Rs.42 Lakhs. But the buyer wanted seller to pay Rs.60 lakhs in cheque! In turn, he wanted to return the difference amount of Rs.18 Lakhs and additional stamp duty/registration charges in cash to the buyer. Thereby the seller converted Rs.18 Lakhs of black money to white without paying any taxes.
3. Hawala Route – Lets assume Mr.X, a businessman, politician or officer in Delhi has Rs.50 Lakhs in cash. Since it is black money, he can’t deposit the same in the bank. So, he searched for a hawala agent. The agent takes the cash in Delhi and through his counterpart, hands over Rs.50 Lakhs worth in dollars/pounds/dirhams in a foreign country to his/to his representative. Mr.X gets this money back to India as Foreign Direct Investment (FDI) or seed fund in a private company, etc. Or he may choose to invest abroad in properties / shares. Thus, he converts black money to white without paying any taxes.
4. Depositing in banks less than Rs.50000 – This route is taken by small time operators. They open multiple bank accounts and deposit cash upto Rs.50000 at a time. Remember, if you have to deposit over Rs.50000, you have to give PAN details to the banker. Mostly, these kind of petty transactions goes unnoticed by the income tax department and thus, black money is converted to white without paying any taxes.
5. Agricultural Income – Agricultural Income is exempt from Income Tax. This means the money earned from the sale of paddy, pepper or wheat is exempt from tax. So, the people who earn black money will obtain a fictitious receipt from traders in agricultural commodities as if they have sold the products. For the sake of records, these people will acquire or show the proof of ancestral property in villages!
6. Gifts from relatives and friends on occasions – Any amount of money received from relatives (gift) is exempt from Income Tax. Is it not an easy way to convert black money to white? Simple, show the cash received in your son’s or daughter’s birthday as gifts from relatives!
Gifts from non-relatives and friends attract income tax. But those who have huge black money can show gift and pay taxes. Still the money earned through corrupt practices can be converted into white (after paying taxes). One of the classic examples is the amount of gift declared by a former Chief Minister who paid huge taxes during that year. She declared around Rs.200 Crores as gift received from her well-wishers and paid taxes on it!
Gifts from non-relatives and friends attract income tax. But those who have huge black money can show gift and pay taxes. Still the money earned through corrupt practices can be converted into white (after paying taxes). One of the classic examples is the amount of gift declared by a former Chief Minister who paid huge taxes during that year. She declared around Rs.200 Crores as gift received from her well-wishers and paid taxes on it!
7. Sale of Gold and Diamonds – Well-known professionals suggest this route. Suppose, Mr.XYZ has Rs.25 Lakhs cash and gives this amount to a Jewellery shop (not all shops will do this kind of dirty job). The Jewellery shop will issue a receipt for having bought Gold/Diamond worth Rs.25 Lakhs and make payment in a cheque to Mr.XYZ. For facilitating this transaction, he will charge a fee. Thus Mr.XYZ converts his black money into white, without paying any income tax.
http://www.cainindia.org/news/11_2016/7_ways_to_convert_black_money_into_white_money.html?tstst=5827c72f9c240&ntitle=7%20ways%20to%20convert%20black%20money%20into%20white%20money
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