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The Curious Case of Black Money and White Money: Exposing the Dirty Game of Money Laundering!
A ONE-OF-ITS-KIND BOOK
ON
ONE OF THE MOST TALKED ABOUT TOPICS OF TODAY
You cannot understand MONEY LAUNDERING unless you understand ‘How’ this GAME is actually played. Flip in and you will!!
Get inside to know ‘How’ the following may be related with conversion of black money into white.
• HAWALA
• Shares and Share Market
• PENNY STOCKS AND CIRCULAR TRADING
• P-NOTES
• Unsecured Loans and Fixed Deposits
• NUMBERED ACCOUNTS
• Bearer Shares
• DONATIONS AND TRUST
• HIDDEN LEVERAGE
• Futures and Options (F&O)
• CONVERTIBLE FINANCIAL INSTRUMENTS
• Bitcoins
• SHELL COMPANIES AND PANAMA ISLANDS
• GOLD AND DIAMONDS
• Mergers and Acquisitions (M&A)
• REAL ESTATE
• LETTERS OF CREDIT (L/C)
• Imports & Exports
• SPECIAL ECONOMIC ZONES
• Gambling
• START-UPS ETC
ON
ONE OF THE MOST TALKED ABOUT TOPICS OF TODAY
You cannot understand MONEY LAUNDERING unless you understand ‘How’ this GAME is actually played. Flip in and you will!!
Get inside to know ‘How’ the following may be related with conversion of black money into white.
• HAWALA
• Shares and Share Market
• PENNY STOCKS AND CIRCULAR TRADING
• P-NOTES
• Unsecured Loans and Fixed Deposits
• NUMBERED ACCOUNTS
• Bearer Shares
• DONATIONS AND TRUST
• HIDDEN LEVERAGE
• Futures and Options (F&O)
• CONVERTIBLE FINANCIAL INSTRUMENTS
• Bitcoins
• SHELL COMPANIES AND PANAMA ISLANDS
• GOLD AND DIAMONDS
• Mergers and Acquisitions (M&A)
• REAL ESTATE
• LETTERS OF CREDIT (L/C)
• Imports & Exports
• SPECIAL ECONOMIC ZONES
• Gambling
• START-UPS ETC
- GenresNonfiction
224 pages, Paperback
First published April 3, 2017
72 people are currently reading
126 people want to read
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Displaying 1 - 9 of 9 reviews
May 9, 2020
An remarkable book on how Black Money gets "made" in India. The language used is simple and is intelligible even to those that may have little knowledge about the subject even though they may suffered on account of this malaise that afflicts the country. It is a must read for all the civil servants that deal with revenue and taxation in the country.
August 7, 2017
Eye opener
Book was simple yet was able to communicate various technical aspects of money conversion from black to white & vice versa.
Good book for someone knows nothing of finance but wants to know about black economy.
Book was simple yet was able to communicate various technical aspects of money conversion from black to white & vice versa.
Good book for someone knows nothing of finance but wants to know about black economy.
July 29, 2020
Until now, I never really understood the meaning and menace of black money ( except that it is an ill-gotten wealth or acquired through legal means but hidden with the intention to avoid taxes). This book made me understand how black money is a big scourge on every honest taxpayer. The book has been lucidly written, each concept explained in layman language. Besides the explanation, it is the genius of the writer who takes the same characters in every example and makes it easy for the reader to understand. The user doesn't have to remember all characters.
The writer has explained the creation of black money and then converting into white money in 20 different ways. The writer has explained the concept of bitcoins, swiss banks, Panama paper leaks which otherwise takes some real study to understand. I must say the writer has understood the concept himself really well because only a person who has understood it well can translate into a common man's language. As they say, any fool can make things complex, it takes a genius to simplify it. I will explain one method here which is close to my heart: Real Estate?
"Did you ever wonder that even after demonetization, a slump in the economy, Covid-19 pandemic, the prices of the houses, especially in Mumbai, never decreased? The reason is the huge involvement of black money. How? Let us understand with an example.
Let's say Mr. Darkhorse is a rich businessman. He has around 2 crores of white money and 3 crores of black money to invest. Now he cannot buy a readymade flat or a house(worth 5 crores) with just 2 crores of white money and 3 crores of black money. The government has decided the ready reckoner rates (RR) of each area per square foot wise and anyone selling beyond RR is penalized in form of taxation. So how does Mr. Darkhorse dispose of 3 crores of black money? He goes to a builder who is developing a big residential project. The builders are on the lookout for money. He does a deal with Mr. Darkhorse, takes 5 crores, and in return gives him ownership of 10 unreconstructed flats in a tower. Each flat cost him just 50 Lacs (20 Lacs in white and 30 Lacs in black) which if the builder sells directly would be at least around a crore or more. Mr. Darkhorse can sell them at a higher price whenever he wants to. Extrapolate this scenario that out of 150 flats, 100 flats are given this way, and balance 50 are sold by the builder to end-users directly. Mr. Darkhorse is never in a hurry to sell it because he is not desperate for appreciation like an investor. He is more interested in avoiding 30% of the tax that he would have to pay on the 3 crores of black money. Hence, he will wait for years for the price to appreciate. Once it appreciates considerably, he will sell it. Let's say he sells the house at 4 crores 10 years later. So as per law, he has made a gain of 3.8 Crores ( 4 - 0.2). But wait, he doesn't have to pay the tax if he invests this 3.8 crores in buying another property. Imagine selling 10 flats like this and not having to pay a single penny as tax. Entire black money converted to white.
It is because of this menace the prices of the properties are not decreasing and shall never decrease because the people holding it are not desperate for a return in short term. They are ready to wait. They are more interested in settling their black money."
I will be honest - I was lost in two chapters - F&O, Convertible Financial Instruments. I skipped those. Sometimes, when you are reading such books, it is ok to skip monochromatic chapters rather than giving up on books. In this case, the blame squarely lies in the concept than on the writer.
A recommended read for people who are having their own business, planning to set up one, etc. The study and the observation sometimes come out more like advice. :p
About the Author: This is my first book by Varun Chandna. He knows his concepts really well and must be having a habit of crossing the Ts and dotting the Is. I couldn't find a typo, grammatical mistake, or a gap in concepts.
The writer has explained the creation of black money and then converting into white money in 20 different ways. The writer has explained the concept of bitcoins, swiss banks, Panama paper leaks which otherwise takes some real study to understand. I must say the writer has understood the concept himself really well because only a person who has understood it well can translate into a common man's language. As they say, any fool can make things complex, it takes a genius to simplify it. I will explain one method here which is close to my heart: Real Estate?
"Did you ever wonder that even after demonetization, a slump in the economy, Covid-19 pandemic, the prices of the houses, especially in Mumbai, never decreased? The reason is the huge involvement of black money. How? Let us understand with an example.
Let's say Mr. Darkhorse is a rich businessman. He has around 2 crores of white money and 3 crores of black money to invest. Now he cannot buy a readymade flat or a house(worth 5 crores) with just 2 crores of white money and 3 crores of black money. The government has decided the ready reckoner rates (RR) of each area per square foot wise and anyone selling beyond RR is penalized in form of taxation. So how does Mr. Darkhorse dispose of 3 crores of black money? He goes to a builder who is developing a big residential project. The builders are on the lookout for money. He does a deal with Mr. Darkhorse, takes 5 crores, and in return gives him ownership of 10 unreconstructed flats in a tower. Each flat cost him just 50 Lacs (20 Lacs in white and 30 Lacs in black) which if the builder sells directly would be at least around a crore or more. Mr. Darkhorse can sell them at a higher price whenever he wants to. Extrapolate this scenario that out of 150 flats, 100 flats are given this way, and balance 50 are sold by the builder to end-users directly. Mr. Darkhorse is never in a hurry to sell it because he is not desperate for appreciation like an investor. He is more interested in avoiding 30% of the tax that he would have to pay on the 3 crores of black money. Hence, he will wait for years for the price to appreciate. Once it appreciates considerably, he will sell it. Let's say he sells the house at 4 crores 10 years later. So as per law, he has made a gain of 3.8 Crores ( 4 - 0.2). But wait, he doesn't have to pay the tax if he invests this 3.8 crores in buying another property. Imagine selling 10 flats like this and not having to pay a single penny as tax. Entire black money converted to white.
It is because of this menace the prices of the properties are not decreasing and shall never decrease because the people holding it are not desperate for a return in short term. They are ready to wait. They are more interested in settling their black money."
I will be honest - I was lost in two chapters - F&O, Convertible Financial Instruments. I skipped those. Sometimes, when you are reading such books, it is ok to skip monochromatic chapters rather than giving up on books. In this case, the blame squarely lies in the concept than on the writer.
A recommended read for people who are having their own business, planning to set up one, etc. The study and the observation sometimes come out more like advice. :p
About the Author: This is my first book by Varun Chandna. He knows his concepts really well and must be having a habit of crossing the Ts and dotting the Is. I couldn't find a typo, grammatical mistake, or a gap in concepts.
February 21, 2021
Black Money becomes black due to two reasons. One, it is obtained through illegal means of business. Two, it the money saved from paying due taxes on even legal businesses.
For the first reason, nothing can be done since the business not only illegal but morally reprehensible as well. So there is no option other than prevention and cessation of such business. For the second reason, the government can try to strike balance between taxation and saving.
It seems as if the amount involved in the illegal trade business is more, but the number of people who are involved in the tax-saving black money is more.
What are the commonalities in all the methods suitable for hiding black money or turning it into white money mentioned in the book?
1. A person with white money
2. A Middle Man
3. PRofit/Commission to the people
4. Any transaction that seems legitimate on the surface but is complex enough to be not caught by the authorities
From the above, we can see the second level of transactions taking place when dealing with black money. A new set of trades and jobs get created which deal with converting black money into white. And it would be no stretch to say that without white money being exchanged, there is no value to black money. One aspect not touched in the book seemed to be how these Middlemen (termed as Jockey in the book) deal with their own black money.
To Categorise the methods of Money Laundering (the term actually came from cloth laundering businesses used to turn black money into small spare white money transactions), the major ones would be:
1. Real Estate
2. Stock Market
3. Jewellery
4. Crypto currency
5. Companies and Business transactions
6. People linked gifts/inheritance/loans
Depending on the scale of money to be laundered, you can choose any one of the methods. This explains why there is such inflation in the first four sectors, making them unaffordable for the common public. Furthermore, this illegally begotten wealth is shown off as genuine hard work, luring unsuspecting victims to invest in the above sectors to part with their hard-earned money.
Trying to save tax is not a bad thing. Because in the end, the money will probably be used for self-consumption. It is when the quantum of money exceeds even the consumption level of one person and devolves into the greed of saving everything just for the sake of saving and not giving to others.
For the first reason, nothing can be done since the business not only illegal but morally reprehensible as well. So there is no option other than prevention and cessation of such business. For the second reason, the government can try to strike balance between taxation and saving.
It seems as if the amount involved in the illegal trade business is more, but the number of people who are involved in the tax-saving black money is more.
What are the commonalities in all the methods suitable for hiding black money or turning it into white money mentioned in the book?
1. A person with white money
2. A Middle Man
3. PRofit/Commission to the people
4. Any transaction that seems legitimate on the surface but is complex enough to be not caught by the authorities
From the above, we can see the second level of transactions taking place when dealing with black money. A new set of trades and jobs get created which deal with converting black money into white. And it would be no stretch to say that without white money being exchanged, there is no value to black money. One aspect not touched in the book seemed to be how these Middlemen (termed as Jockey in the book) deal with their own black money.
To Categorise the methods of Money Laundering (the term actually came from cloth laundering businesses used to turn black money into small spare white money transactions), the major ones would be:
1. Real Estate
2. Stock Market
3. Jewellery
4. Crypto currency
5. Companies and Business transactions
6. People linked gifts/inheritance/loans
Depending on the scale of money to be laundered, you can choose any one of the methods. This explains why there is such inflation in the first four sectors, making them unaffordable for the common public. Furthermore, this illegally begotten wealth is shown off as genuine hard work, luring unsuspecting victims to invest in the above sectors to part with their hard-earned money.
Trying to save tax is not a bad thing. Because in the end, the money will probably be used for self-consumption. It is when the quantum of money exceeds even the consumption level of one person and devolves into the greed of saving everything just for the sake of saving and not giving to others.
March 29, 2020
The book is well researched and dwells into the details of most forms of money laundering. The book is structured in the form of a textbook where the author uses fictitious entities to elucidate the transactions or the modus operandi behind each type of tax evasion or money laundering.
June 30, 2019
Xcellent
It's excellent book worth buying for taxation bank anf general students. Worth the money and time.spent. I will highly reco
It's excellent book worth buying for taxation bank anf general students. Worth the money and time.spent. I will highly reco
June 12, 2021
Some basics are covered, but the author shies away from quoting real market stories and MOs in the favor of templatized practices.
August 14, 2020
Informative and Eye-Opener
A very informative eye-opening revelation of how black money in India is converted into white money. The author has elucidated through a simple fictitious set of characters, each of the 30 odd techniques that are used to launder money within the country and abroad, the loopholes in the existing system, and how they are being exploited by the elite few to convert their illegal income into white money. While it may not be possible to completely eradicate this menace, the author has also taken endeavors to explain the incremental steps taken by the government and tax officials to curb this thriving and powerful parallel economy. The book is written in a very simple and transparent way such that any layman can understand the modus operandi of money laundering. A very good book for every youth in the country who wish to pursue their career in taxation and assist the governing system to curb this ever-growing nefarious process.
A very informative eye-opening revelation of how black money in India is converted into white money. The author has elucidated through a simple fictitious set of characters, each of the 30 odd techniques that are used to launder money within the country and abroad, the loopholes in the existing system, and how they are being exploited by the elite few to convert their illegal income into white money. While it may not be possible to completely eradicate this menace, the author has also taken endeavors to explain the incremental steps taken by the government and tax officials to curb this thriving and powerful parallel economy. The book is written in a very simple and transparent way such that any layman can understand the modus operandi of money laundering. A very good book for every youth in the country who wish to pursue their career in taxation and assist the governing system to curb this ever-growing nefarious process.
March 16, 2023
Good. Informative and easily explained.
Displaying 1 - 9 of 9 reviews