7 ways people Convert Black money to white.

This article is not to promote black money and tax payer to use such steps. This is article for the reference that people are using such ways and government need to take strict action to stop this.

If you are salaried person means whatever you earn is after tax deduction. In accounting language it is called a white money.

What is Black money?

If you don’t pay tax on money which you earn than it is called black money. Mostly it is taken by cash. Black money is tax evaded money which damages country’s economy.

Most of the people will think how to convert Block money into white after PM Modi’s announcement of Demonetization of RS 500 and Rs1000 notes.

Someone who have big chunk of black money i.e 500 and 1000 Rs notes in cash are in big trouble. They are the panicked most and must have searched all possible ways to convert their black money into white after 8th Nov announcement from Prime Minister Mr. Narendra Modi.

If you want to know details about Mr. Modi’s announcement read my earlier post.

Now we know what is black money, its time to see how it is generated or purposefully it is being made for personal benefit.

Kindly note: Generating Black Money is a Crime.


Corruption is one of the most used way to make black money.

There are several types corruption. e.g. Mr. Apple applied for passport , after submission and document verification at passport office one must pass through police verification  When Mr. Apple’s file comes to local police department constable ask for some Chai Paani to clear police verification fast without any delay. In this example small amount of black money made. Same is in Traffic police case.

There are other government office where huge amount of black money being made.

Black money is made for personal benefits

Sale of Property:

By this way Black money  is being made by Purchaser, Seller and Broker.

When Mr. Pawar purchases a property from Mr. Popat whose market value is Rs 50 lakh. But with little tweak in the purchase i.e. instead of paying Rs 50 Lakh in cheque they agree to pay Rs 30 lakh in cheque and remaining Rs 20 lakh in cash. (This is black money)

In this deal instead of 50lakh agreement is prepared for 30lakh . Stamp duty, registration charges will be paid on Rs 30 lakh. Rs 20 lakh is nowhere in the accounting and black money generate.

Providing Service/Goods without Invoice:

When someone providing Service and or selling anything without invoice than income from these sources is black money.

Altering Sales figure:

Business owner, proprietor who runs the business are liable to pay tax. When someone don’t want to pay income tax to increase their income by not paying tax then it’s a black money. It can be done easily with the help of accountant or Chartered accountant by altering sales figure and showing less sales or loss.

There are many other ways by which black money is being generated which are explained at cacmacsguru.com

After PM’s announcement of Rs500 and 1000 notes are not having value after that most searched term in google is “How to convert black money to white”. Most funny thing was Gujarat state was on top in this list followed by Mumbai.

Let’s see how to convert Black money into white method used by people?

1.Donation /Education fees:

Donation to get Engineering or Medical seats required lakhs of RS paid in cash. When you donate to charitable trust.


People who has black money they form a NGO and convert their black money by investing in NGOs.

3.Property Investment:

Purchasing Property by paying 80-20, 60-40 or 70-30 ration. TO understand when you buy property worth of 1 crore then you pay eighty lakh in cheque and 20 Lakh in cash.

4.Buying Gold :

People buys gold instead of keeping cash. Most of the people buy is from different shop in different amount by different names.

5.Converting black money by cheque:

Most popular method of converting black money to white. Mr.B will give cash to Mr. A , Mr.A will give cheque to Mr.B by this way he converts his black money into white by paying some nominal amount to Mr.A.

6.By giving cash and taking cheque with invoice:

Give cash to jeweler or other person who accepts cash and provide you fake invoice with Cheque with some % of fee.


One of the most used method to convert black money into white. Funding candidate who will be standing in election and after he wins gets most benefits.

There must be a way to look into these ways and stop to converting black into white money.


I don’t recommend or promote such activities. This is for awareness. If you are using this methods unknowingly then stop doing it. Government must take strict action against these people.



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s