If Government of India (GOI) wants to end black money then they first need to learn about legal and illegal black money. Then they need to make different plans for different types of black money. GOI needs to treat the people who generate legal black money differently than the people who generate illegal black money.
'Legal Black Money' is the money generated doing legal activities like business income, rent, commission etc etc. People do hard work honestly to earn the money but they hide it from income tax department to save tax. This way the 'Legal Black Money' gets generated. These people are mostly patriotic and law-abiding citizen. They are NOT criminals. They just see income tax department as 'Dacoit'; and there is nothing wrong to save your hard earned money from 'Dacoit' :) So GOI should NOT treat the 'Legal Black Money' owners like criminals!
Reducing income tax rates as low as possible, is the first and best way to end this type of black money. There are more things GOI can do to make paying income tax attractive! I will write about it later.
Yes, your guess is correct. 'Illegal Black Money' is the money generated doing illegal activities like bribe, ransom, scam etc etc. These people are criminals and should be treated like criminals. Irony is, part of this 'Illegal Black Money' gets converted to 'White Money'. These people even pay income tax on that money to make it 'White'!
Need in-depth study to make some special reforms and strict laws to deal with this. These needed reforms and laws are not related with tax, so talking more about it, is beyond the scope of this site.
Read 'Boosting White Economy By Reducing Income Tax Rates' to know black money examples and how reducing income tax rates with making 'Income Tax Payment' attractive, can help to boost white economy.
[ Blog: i Talk about Income Tax ]
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