How people Convert black cash income to white money?
What is Black Money?
Black money is the income earned on which tax is not paid or the income is not disclosed in Income Tax returns.
Is every Cash income is Black Money?
No, only the income which is not disclosed in ITR and on which tax is not paid.
How do People convert their cash Black money in White money?
People file the return of their spouses showing Other Income, the cash income is divided between family members in their returns.
Suppose Mr.A earned 3,00,000 in cash and have not shown that income in his return. He will disclose 1,80,000 in his wifes return and balance in his HUF income. Both the incomes will be exempted and tax is not payable since income is below taxable limits.
Is government doing anything to stop this tax manipulation?
Yes till Assessment year 2012-13 it was possible to divide the income, now income tax department have issued a notification where proof is required for income shown under other source.(Ex: Mehandi income, Tailoring etc.)