People earn money from different sources and do not expose them so that they can avoid paying taxes. The money which is not taxed on the accumulated wealth is known as black money. For a long time the problem of black money in our country has been prevailing. There are many factors contributing to this problem
Due to black money
Here is a look at various reasons which are the cause of the problem of black money in India:
High tax rate
Tax rates in India are quite high. Increase in tax and duties has forced people to take the path of illegal money accumulation. Tax free income limit in the country is only Rs 25,000 / -. These days when inflation is so high then this amount is not enough to run the house. This is the reason that the professionals who earn more are working to hide their income so that they do not have to pay taxes.
Price control policy
Some value items such as fertilizers, sugar, cement etc. are priced by the government through price control policy. This policy is harsh and does not make any difference in the market fluctuations. Private manufacturers and retailers have taken advantage of this policy, resulting in black money accumulation.
Various excise duty rates
Based on the quality of the product, the government has set different rates for excise duty. To avoid paying higher rates of excise duty, producers often reduce the rate of the product. It generates black money.
Real Estate Transaction
Real estate transactions involve large amounts of money transactions. People collect black money through real estate transactions. Selling after buying property at affordable rates and after prices rise has become a lucrative business, which results in a lot of black money.
quota system
The government has fixed a certain quota for exports, imports and foreign exchange. Although it is determined for the benefit of the people, but it is often used to deposit black money.
Inflation
The rate of high inflation is considered to be one of the reasons for black money.
Black money effect
Black money not only has a negative impact on the economic condition of the country but also has adverse social consequences. It generates economic inequality in the country, which is undoubtedly the basis of social inequality. Such practices are the only reason that rich people are getting rich here and poor condition is getting worse. Social inequality increases the frustration among the people so that crimes like robbery, bribery etc. are born.
Tax evasion also means that the amount used for the development of the country could not reach the government. If the government does not get enough revenue then it will not be able to create new projects for the development of the country and the upliftment of the poorer sections.
Countries where people pay religious taxes are better than those countries where black money is accumulated in huge quantities.
Conclusion
To overcome the issue of black money, the government has said something. Recently, one of the major steps taken in this direction was the decision of the captive. Although there has been some degree of success in removing black money through this move, many people have also condemned it. Note help from captive but this help was definitely not enough. There is a lot to do to prevent this bad practice. The government should make more effective measures to stop this problem and remember that the government alone can not end this issue. If every citizen of the country contributes to it, it can be stopped.