10 Method to Convert Black Money to White

10 ways to Convert Black Money to White

Converting black money to white is very common today. People use all illegal method to convert black money to white. This article is written to expose ways which people use to convert black money to white.  I no way encourage any taxpayers or anyone to use any of the below methods.

Bogus Loan Entry

Popular method people use to convert black money to white is by showing bogus loan entry. Modus operandi under this case will be people give black money to friend or relative and take a cheque from them. This is kind of bogus loan entry to convert black money to white.

Another popular way used by people to convert black money to white is by formulating trust for social cause. They make executive bodies of own people in trust sometimes illiterate people like driver cook etc. They donate black money to this trust as charity to convert black money.

On paper it is charity but off the shelf it is conversion of black money to white.

In some cases people give repayment of this loan by giving back cheque. People doing this must understand that Income tax department is watching every transaction and tax payer have to prove genuineness of every transaction.

 

Another popular way of converting black money in to white is by showing income as agriculture income. In order to show income as agriculture income you must possess land and it must be used for agriculture purpose like plantation, garden nursery etc.

However there are various conditions you need to satisfy in order to claim agriculture income.

Showing Cash Income from Profession

Another popular way to convert black money to white is by showing income in cash. Income from tuition, professional fees or commission is shown as cash by many tax payers it is nothing but converting black money in white. 

 

Sale of personal belonging like Jewelry

Go to known jeweler and give him all black money you want to convert. He will give you cheque for the same amount. He will also give you purchase bill showing you sold your personal Jewelry to him. By this way your Black money is converted to white and you need not to pay capital gain tax even.

Converting Black money by Investment

Another method people use to convert black money to white is by making investment in cash.

People purchase insurance policy and pay premium in cash. For example if insurance premium is 50000 Rs/- payable quarterly, than people pay first premium via cheque and rest all premium in cash. This is most simple and popular way to convert black money in white.

Getting Black money as gift

Another popular way to convert black money to white is by getting gift from relative. Modus operandi is simple you have black money and your relative has the same amount of white money. Your relative issues cheque to you as gift and you will give your black money to him/her.

Depositing Black Money on name of Family members

Another popular method for converting black money to white is to open bank account on each and every individual family member. Deposit black money on the name of every family member to convert it in white.

By Real Estate

Real estate is sector where majority of black money is parked. People use real estate deals to convert black money to white. It is observed that people do fake real estate deal exchange money and cancel these deals due to non-payment of money.

By Declaring Black Money

Best method for converting black money to white as per me is by declaring this money to IT authorities and paying tax on this money to convert it in white.

 

Source : http://moneyexcel.com/7904/ways-convert-black-money-white

13 Ways : Indians can convert Black Money into White Even After Demonetisation

13 Ways In Which Indians Will Convert Their Black Money Into White Even After Demonetisation

1. Temple donations. There are reports of people giving their black money to temple ‘hundis’ or donation boxes. Temple managements will show this money as anonymous donations, exchange it for new currency notes, keep a commission for this service, and return most of it to the owner. The government has already clarified that temple hundis will not be asked questions. ABP news showed a sting operation in which the priest of Govardhan temple in Mathura was willing to convert Rs 50 lakh of black money into white for a 20% commission. There have been such reports from different parts of the country.

2. Back-dated FDs in co-operative banks and credit societies. Since such institutions still do a lot of their work manually, they are reports they have issued fixed deposit receipts in back date. Owners of black money have reportedly been able to get various FDs in such institutions in names of various villagers in back dates, and will receive new currency notes in due course, after paying a cut to those in whose name they deposited the money. Non-banking financial institutions who accept such deposits are also reportedly acting similarly in helping convert black money into white. Such institutions have long been alleged to be indulging in money laundering. The level of regulation of such institutions differs from state to state.

3. Using poor people as money mules. As the poor stand in queues at banks to exchange their currency notes, there are reports of them being used to convert black money into white. This doesn’t even need a co-operative bank. Black money are reportedly finding poor people to deposit Rs 2.5 lakh in cash, since the government has said deposits up to that amount won’t be questioned. Such people will then ask to withdraw the entire amount soon, keep some to themselves and return most of it. Since this requires trust, black money hoarders are first and foremost using their staff and their relatives.

4. Giving loans to poor people. Funnelling money through poor people whose bank transactions will not arouse suspicion, is giving way to many creative enterprises. There are also people willing to give interest free loans to the poor – which may seem like a good impact of demonetisation but is actually an effort to convert black money into white and defeat the purpose.

5. Finding Jan Dhan account holders. Jan Dhan accounts have started showing high cash deposits since demonetisation and a part of it is suspected to be black money being laundered. The problem with using poor people as money mules is that they may not have bank accounts. With the banking system overloaded, opening new accounts may take a few days. The government keeps boasting about having opened crores of Jan Dhan accounts but most have seen barely any transactions. Jan Dhan accounts can have deposits up to Rs 1 lakh a year but there are also Jan Dhan accounts which have a lower limit of Rs 50,000 if they don’t adhere to Know Your Customer norms. While the government says it will monitor unusual activity in Jan Dhan accounts, it will be easy for a poor person to say the small amount was his life saving at home. There have been concerns about the use of Jan Dhan accounts for hawala operations since the scheme was launched in 2014.
6. Approaching the banknote mafia. Overnight, a banknote mafia has emerged. These are people accepting old Rs 500 and 1,000 notes and giving back anywhere from 15% to 80% of the value in Rs 100 notes. The people collecting old notes will be able to earn a profit by converting them into white, new currency through poor people, or through other means.

7. Paying advance salaries. Businesses having black money have reportedly used old notes of Rs 500 and 1,000 to pay advance salaries for anywhere between the next 3 to 8 months. The idea is to pay each employee less than Rs 2.5 lakh – the limit above which deposits will be examined. In Gujarat, some businesses are reported to have opened salary accounts and deposit advance salaries, keeping their debit cards with company itself. This way they will be able to deposit old currency notes before 30 December and withdraw new ones easily, without attracting the attention of the income tax department.

8. Booking and cancelling train tickets. Since old notes are being accepted till 14 November to book train tickets, there has been a surge in booking expensive train tickets that people intend to later cancel and get refunds in new notes, with a small cancellation fee. The number of expensive first AC tickets booked per day have increased by many times. As a result, the railways have said refunds won’t be in cash. But since these bookings are being made through travel agents, even refunds through electronic transfers mean the travel agent will be able to return large sums in new currency notes.

9. Using professional money laundering firms. Run by chartered accountants, there are money laundering companies, most famously in Kolkata but elsewhere too, which specialise in converting black money into white while evading the taxman. Known as ‘jama-kharchi’ firms in Kolkata and pad-pedi in Mumbai or, they launder money by using businesses such as highway transport which run completely on cash. These ‘cash-in-hand’ firms match the needs of companies which need short-term funds with those who have excess black money to park. Showing back-dated transactions in the current fiscal is not difficult for such firms. They are said to be burning the midnight oil till 30 December.

10. Buying gold. Gold prices shot up because many black money hoarders rushed to jewellery shops as soon as prime minister Narendra Modi made the demonetisation announcement on 8 November. Many black money owners made the most of four hours they had and bought gold till midnight. There have also been reports, again, of gold selling in back-dated transactions. Jewellers happily sold gold at a high premium. In some shops the demand was so high there was pandemonium with buyers fighting amongst each other to be able to buy first. The government has asked top jewellers to give details of gold transactions after the demonetisation.

11. Using farmers. Since agricultural income is not taxed, a farmer can easily say he got this much cash from the mandi by selling his produce before demonetisation, and here’s the old currency, now please exchange it for new one. In this way, any farmer could help launder money, from old currency notes to new ones, for a cut. An investment advisor told Rediff, “The agricultural income in this country is going to be fabulously high this year, immaterial if the crop is good or poor.”

12. Using political parties. Since political parties can collect donations of Rs 20,000 or less without having to reveal who donated the money, let alone their income tax PAN number, they will have the easiest time with demonetisation. A political party can say it collected this amount of cash in old currency donations before demonetisation and demand that it be changed into new currency by 30 December. That also raises the fear that political parties could actually use this method to launder black money of individuals within and without their party.

13. Brazenly putting it in the bank. The finance ministry said those who deposit large sums of cash that don’t match their income, may have to pay up to 200% tax. In other words, their money could be confiscated and they may have to pay the same amount as penalty. However, income tax authorities say this may not be legally possible. One can put in a large amount of cash in bank, show it as income from ‘other sources’ in the current assessment year, and pay 33% income tax on it. To be able to levy income tax penalty on your deposit, the government will have to be able to prove you didn’t earn this cash in the current assessment year.

Source : http://www.huffingtonpost.in/2016/11/13/13-ways-in-which-indians-will-convert-their-black-money-into-whi/

Intraday trading

There is nothing wrong in trying out Intraday trading. Only thing you need to keep in mind is never risk more than 2% of your trading capital on every trade. No one will go bust in trading if they trade with proper risk management in place.

Here’s one of the best and simple intraday strategy you can try.

Opening Range Breakout (ORB) is a commonly used trading system by professional and amateur traders alike and has the potential to deliver high accuracy if done with optimal usage of indicators, strict rules and good assessment of overall market mood. This system is applicable only for intraday trading.

ORB trading has several variations practiced by traders all over the globe. Some traders trade on a significant breakout from opening range, while others trade immediately on opening range breakout. Time window for the trades also varies from 30 minutes to 3 hours.

Over a period of time observing and trading Indian markets, I have devised with the below system suiting our markets. Below method is both a scalping and a trending system combined into one, hence it is possible to take the advantage of quick moves and trending markets with multiple lots of trades.

Trading Strategy

Quite Simple and straightforward. Rules in the next section needs to be adhered to increase the success rates dramatically.
Any stock creates a range in the first 30 minutes of trading in a day. This is calling Opening Range. The highs and lows of this timeframe is taken as support and resistance.

1. Buy when the stock moves above the Opening Range high.
2. Sell when the stock moves below the Opening Range low.

PLEASE NOTE THAT THE ABOVE SYSTEM IS GENERIC, THE RULES BELOW WILL MAKE IT A SPECIFIC SYSTEM. IF YOU ARE FOLLOWING THIS SYSTEM, PLEASE FOLLOW ALL THE RULES FOR BUY / SELL STRICTLY.

General Rules – Applicable for both Buy and Sell:

Opening range is defined by the high and low made in the first 30 minutes.

5 min chart with 5 EMA and 20 EMA used for making trading decisions.

Entry should be made only on close of the 5 min candle outside the opening range.

20 EMA is one of the key technical indicators used in this system for trend trading. Stop loss is always kept at 20 EMA for riding the profits.

Volume confirmation – Breakout candle should show increase in volume.

Optional confirmation- One of the two indicators – MACD or Stochastics should be favorable for the trade. (We have four indicators in Simplified Technical Analysis – Moving Averages, RSI, MACD, Stochastics. The idea here is at least two indicators should confirm the trade.).

This is purely optional condition to enter trade.

• Respect support and resistance levels. Do not buy just below a resistance or sell just above a support.
• Always trade with 2 lots and book 50% as soon as you see few points profit. Second lot will be used for taking advantage of days trend.

Rules for Buy

• Stock should be trading above the 20 EMA line before the breakout.
• Buy when the 5 minutes candle closes above the opening range.
• 5 EMA line should be above the opening range at the time of breakout.

Where to keep Stoploss

Initial Stoploss – Low of the Opening Range.
Trailing Stoploss – As the stock moves in your direction and you are in profits, book 50% , trail the stoploss at 20 EMA. A close of 5 min candle below 20 EMA confirms exit.

When to book full profits

When the 5 min candle closes below the 20 EMA in the case of longs.

Rules for Sell

• Stock should be trading below the 20 EMA line before the breakdown.
• Sell when the 5 minute candle closes below the opening range.
• 5 EMA line should be below the opening range at the time of breakout

Where to keep Stoploss
Initial Stoploss – High of the Opening Range.
Trailing Stoploss – As the stock moves in your direction and you are in profits, book 50% , trail the stoploss at 20 EMA. A close of 5 min candle above 20 EMA confirms exit.

When to book full profits

When the 5 min candle closes above the 20 EMA.
High Probability Trade Setups

Below additional conditions will give high probability of success:

• The Opening Range breakout is above previous day’s high for buy.
• The Opening Range breakout is below previous day’s low for sell.
• Trade is in the direction of higher time frame charts (15 min /30 min).
• Overall Market is moving in the direction of the trade.
• Opening range breakout happens after brief period of consolidation.

Important Additional Points

• If the opening range is too wide, better do not trade ORB, since the SLs will be very far in our system. You can use other trading systems in such a case.
• Avoid Opening Range Breakout trades in case of a heavy news flow day. ( Like Inflation, Manufacturing, Policy decisions etc.). Use other trading systems once the market settles down after the news.

Source : Kirubakaran Rajendran, 8 years of exp in Indian stock market – http://www.squareoff.in

https://www.quora.com/How-do-I-generate-a-decent-profit-doing-intra-day-trading-online-in-NSE-and-BSE