हिंदी
Tamil Nadu Board of Secondary EducationSSLC (English Medium) Class 10

Concept of Black Money

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Topics

  • Introduction
  • Sources
  • Effects
  • Measures to Control
  • Cycle of Black Money
  • Real-Life Application
  • Key Point Summary
Maharashtra State Board: Class 11

Introduction

Black money is any income received in cash that is not declared to the government and no tax is paid on it. This means it is hidden, untaxed income and can be earned either legally or illegally.

Maharashtra State Board: Class 11

Sources

  1. Illegal means: Bribery, corruption, smuggling.
  2. Legal but undeclared: Businesses hiding sales, taking cash payments without bills, and property deals in cash.
Maharashtra State Board: Class 11

Effects

  1. Encourages illegal activities: corruption, hoarding, and black marketing.
  2. The government collects less tax, reducing money for schools, roads, hospitals, etc.
  3. Leads to more inequality and instability in the country.
Maharashtra State Board: Class 11

Measures to Control

  • Demonetisation: Cancelling high-value currency notes to force people to deposit unaccounted cash in banks.
  • More digital payments and strict tax laws.
  • Increasing penalties and tracing undeclared wealth.
Maharashtra State Board: Class 11

Cycle of Black Money

Step Example
Income generated Shopkeeper sells goods for cash
Income hidden Does not report the cash to tax office
Tax not paid No record, so no tax paid
Money reused Used for further undeclared activities
Maharashtra State Board: Class 11

Real-Life Application

If a builder takes some payment for a flat in cash (not shown in official accounts) and does not pay tax on it, that money is black money. Similarly, a person bribing an official is using black money.

Maharashtra State Board: Class 11

Key Point Summary

  • 'Black money' means untaxed, unreported income.
  • It harms the country’s development and increases illegal activities.
  • Demonetisation and digital payments are tools to control black money.

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