Black Money

Black Money :

1. A big hurdle in the speedy devlopment of our economy. Black money is obstructing the development of our economy and is posting a threat to its stability.

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1. Causes of the generation of black money.

(i) High rates of taxes.

(ii) poor tax administration.

(iii) controls restriction, licences permits etc

(iv) poorly planned public expenditure programmes;

(v) inflation

(vi) fas rate at which black money multiples.

(vii) funding of political parties.

(viii) lowering of moral standards.

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1. Three effects of black money.

(i) Misinformation about the actual state of our economy;

(ii) the Government deprived of large amounts of tax revenues;

(iii) widening gulf between the rich and the poor.

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1. Steps taken by the Government to check the generation of black money;

(a) Complusory filing of return for those with taxable income.

(b) Compulsary quoting of PAN in large financial dealings

(c) Compularory mainteanse of accounts

(d) lowering of tax rates

(e) Voluntary Disclosure Schemes. etc.

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1. Ineffectiveness of the steps taken.Nothing can be achived unless corruption is weeded out.

It is a well recognised fact that there exists in India a parallel economy based entirely on black money transations. Black money; also described as tainted money has seeped into every walk of life and is posing a great threat to the stability of our real economy.

The generation of black money is a complex affair with several factors substantially contributing to it High rates or taxes along with poor tax administration are a major impetus to tax evasion and black money generation The plethora of controls. restrictuios licences premits, etc to which the indi economy has been subjected till very recendy have nourished the black economy Poor designing faulty administration of many Public expenditure programmes have aggavated the situration General and Precis, Short Eassy and Comprehension Writing 821 inflation by raising the effective burden of taxes on individuals tempts them to resort to tax evasion and opt for black - money transactions.

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Two other very imoprtant causes of the genration of black money are the functioning of the indian political system and the low standards of morality pervailing in the indian society All political parties need their elections to be funded and since their election expenditure far exceeds the permissible limits. they accept underclared donations and when they get into power they reward their benefactors in several unethical ways This is closedly related to the general deteration of our moral standard. Acquistion of wealth has become the most important virtue of modern times causing a disarráy of the social order.

Since the Government is quite conscious of the mensace of black money It has been form time to time taking steps to prevenet its generation. It is now compusory for everyone with taxable income to file tax relturn and in large financial dealings, the Permanent Account Number allotted by the income tax Department has to be compulsority quoted.

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Every problem economic or social ultimately gets liked to one key factor corruption. People have got reconciled to corruption and there is hardly any will to fight corruption. It might be depressing to acknowledge that there is no solution in sight but that perhaps is the irrefutable fact.

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