Black Money

In India, the income earned in the black market for which one has not paid income tax and other tax is referred to as Black money. It is the unaccounted money concealed from the tax authorities. The total amount of black money deposited in foreign banks by Indians is still not known. The bribes taken by the corrupt officials, politicians, political parties, etc. is parked in foreign banks (generally tax havens) and transfer them to India as and when needed. At times, the money earned in such manner is also transferred abroad through the channels such as Hawala in order to evade taxes and the legal implications it could attract. One such suitable example in this context is that of the “Vodafone tax case”. The foreign multinational companies also tried to evade tax payments in India by making transactions with shell companies registered in tax haven countries.