In this article you will find long and short Essay, Paragraph, Article on Black Money – for nursery essay, lkg essay, ukg essay, 1st to 12th, IAS, IPS Banking and other competitive exams essay and more. Essay of 250, 400 & 600 words for kids and students in Very Simple & Easy Words.
Black money is money that has been managed to keep it out of the reach of the tax authorities. Black money should be accounted for and tax cut to make the economy grow and prosper.
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600 Words – Essay on Black Money for Kids & Students in Very Easy Words
Money that has no account, or that escapes taxation, because it is not called ‘black money’. It also includes income earned by illegal means and has not been announced to the government for deliberate tax avoidance.
Sources of black money
There are many sources of black money in a growing or developed economy. It comes mainly as a bribe by corrupt government officials, politicians and people from the private sector.
In both the government and private sectors, the responsible improperly accept cash as a bribe to earn money. This wealth is never declared to the tax authorities and is therefore always unaccounted for. The tax on that money could be put to great use for public welfare schemes of the government.
Another source of black money is price manipulation; A common practice by parties involved in trade, mainly to avoid taxation. In this method, trading firms announce manipulated prices of goods, while the actual prices could have been different. This way a lot of cash is saved from taxation and the money is later invested in fake companies.
Impact of black money on the economy
Black money spoils the economy of a country as well as increases the social and economic divide. Every year the government loses crores of rupees in the form of black money which escapes taxation. Tax collected by the government can be used to build schools, hospitals and other infrastructural development or welfare schemes. But as money is saved it is never accounted for by taxation and it goes completely unnoticed. Therefore, black money slows down the economic development of a country.
Another effect of black money is that it increases social division by making the rich richer and the poor poorer. The money that should be planted and used for the welfare of the poor never reaches the treasury of the government. As a result, the rich get richer by imposing taxes and the poor live in a sorry state of things.
It also affects the general perception of common people on their government and its functions. With the massive black money trade, people lose confidence in their own government, often leading to unrest.
Unaccounted black money in the market also causes an increase in the prices of goods and commodities, resulting in general unrest and a damaged economy.
Black money solutions
The first and important way to check black money is to bring it to the notice of the tax authorities. This can be done by making necessary changes in the existing tax laws and giving more powers to the tax authorities.
Voluntary disclosure schemes implemented by the government from time to time are another step towards combating black money. The government allows black money holders to declare their funds within a specified time to avoid legal penalties. To encourage people, the government gives them loans with low tax rate to declare black money and does not ask for any kind of policy.
Demonetization is another measure employed by the government to combat black money. In demonetisation the currency belonging to a specific denomination / s is declared void beyond the specified time, making the currency redundant. Anyone in possession of such currency must either declare it to the bank and exchange it with a legal tender or destroy it. Although demonetisation may cause slight inconvenience to the common people, it is actually beneficial to the economy by declaring black money.
The conclusion
Black money is a hindrance not only in the economy but also in the development of society. The presence of black money leads to polarization of society as the divide between rich and poor increases.
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400 Words – Essay on Black Money for Kids & Students in Very Easy Words
Money that successfully develops taxation by the relevant authorities is called black money. Black money is a setback for the economic growth of a nation and also causes general unrest among people.
Due to black money
There are many reasons for the origin of black money. Sometimes the government can hold itself responsible while other individuals and business houses are responsible. Some of the main causes of black money mentioned below are –
Ineffective tax law
Sometimes tax laws are ineffective at checking for loopholes, which give tax thieves a good chance. They manipulate their tax declarations with the help of account professionals and explicitly evade taxes. Even if a person is caught with black money, the punishment often applied is too low to instill fear in the person.
Evasion of excise
Many manufacturers of different commodities take advantage of different excise rates and often downgrade a particular product to avoid taxation. This alone amounts to thousands of crores per annum for a generation of black money. This is a huge loss to the treasury of the government.
Invoice generation
Many firms involved in the foreign trade business manipulated their invoices to avoid taxation and to avail various tax benefits. This is done in conjunction with the tax authorities and causes huge losses to the government in the form of taxes. This is a common practice practiced by traders and business houses.
Corrupt public distribution system
A corrupt and defective public distribution system results in a price rise of goods. Due to the drop in supply, demand increases, leading to an increase in prices. This, in turn, is the result of accumulation of black money. By this corrupt system neither the public gets a fair price for the goods nor the government gets the necessary taxes.
Democratic election
In a democracy, elections are related to money. The parties spend thousands of crores on election campaigns and other related expenses. Such a large need for expenditure encourages the creation of black money with vested interests in political outcomes to various political parties. Large business houses resort to illegal methods of tax evasion to support the campaigns of political parties.
The conclusion
Black money is a drain in the nation’s economy and all methods of eliminating black money from the market must be completed. As long as black money remains, there will not be proper economic development and social equality.
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250 Words – Essay on Black Money for Kids & Students in Very Easy Words
Black money is money that is off the tax authorities’ radar because it is never declared by its owner. Such money, however, floats in the market, but remains out of the reach of competent authorities.
Black Money in India – Statistics
Black money in India is a major concern as it was estimated that a total amount of black money in India could be around Rs 300 lakh crore due to a writ petition filed in this regard in the Honorable Supreme Court. This money is deposited by smugglers, traffickers, money launderers, middlemen, tax thieves and people involved in other illegal activities.
There is also an approximate account of black money deposited by Indians in foreign bank accounts. Some estimates suggest that about $ 1.4 trillion has been snatched by Indians in Switzerland.
A report by the Central Bureau of Investigation presents that Indians rank the highest among countries with black money in foreign bank accounts. The report also estimated this amount to be around $ 500 million.
Due to black money
One of the main causes of black money in India is the sluggish and inefficient system to curb black money. Criminals easily find out by bribing tax officials and other competent officials. Large business houses, politicians, bureaucrats use their influential connections to escape the trap and accumulate wealth, which is not accounted for. It is a kind of safe haven for black money to grow and grow at an unprecedented rate.
The conclusion
Black money greatly influences the economic sphere and the social fabric of the nation. This disables the public resource system and makes infrastructure scarce. It is necessary to take necessary steps to eliminate black money and bring it under the ambit of taxation. Tax deducted in this way can be used for public welfare schemes.