Question

how black money is produced​

Answer 1

black money is produced by doing wrong thing s

Answer 2

Answer:

STEP 1: Illegal money is mixed with actual sales, by depositing in the company's bank account. The cash deposit will be justified as legitimate business income, say, cash receipts in restaurant. STEP 2: The company projects the fabricated sales as total income and files an income-tax return.

Black money is turning out to be big issue with many political leaders and civil society members speaking a lot about it. ET brings out the ways in which the black money is created.

METHOD 1: MULTI-LEVEL MARKETING SCHEME

A recent trend is to use international debit or credit cards issued by offshore banks. This enables easy usage.

STEP 1: A group of individuals float a multi-level marketing scheme or investment scheme promising extraordinary returns to investors.

STEP 2: Investors deposit cash or cheques in bank accounts floated by the firm. The firm, in turn, issues them post-dated cheques.

STEP 3: The firm transfers the money to personal bank accounts of the promoters.

STEP 4: The promoters wire transfer the money to an offshore bank account in a tax haven. They wire transfer it again to another offshore bank account, in another tax haven, to widen the trail.

STEP 5: The offshore bank issues a credit or debit card valid anywhere in the world, which a promoter can use for transactions.

LIVE EXAMPLE:

In 2009, India's Financial Intelligence Unit ( FIU) received suspicious transactions report from banks that a large number of deposits had been made in a few accounts. Further investigation revealed these accounts had a common permanent account number (PAN), address and contact numbers, and that it was a multi-level marketing scheme promising extraordinary returns. As explained above, the firm transferred the money collected to personal bank accounts of its directors.

Fifteen operators floated 10 firms, which in turn opened 35 bank accounts in 11 different banks. One operator alone received Rs 130 crore in his accounts over a period of 16 months, and the state police have attached Rs 190 crore of assets in various locations.

METHOD 2: DISGUISED OWNERSHIP

Increasingly, criminals want to own legitimate business. It could be to earn a return or to convert black money into white. A typical example of how this is done:

STEP 1: Criminal X generates Rs 10 crore in cash from illegal activities in India, and wants to 'launder' it abroad. He uses the 'hawala' route to transfer the money: he gives the Rs 10 crore cash to a local hawala operator. The operator, for a fee, arranges to deposit the sum in an offshore bank account belonging to a company floated by X.

METHOD 3: MIXED SALES

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