5 Jugaad Ways To Overcome Black Money Curbs

black money

November 8th was a sleepless night for many. Our Prime Minister’s so called “South Paw” moment to wipe out black money by de-monetizing Rs.500 and Rs.1000 denomination notes made Tuesday night a little more interesting than usual.

But not surprisingly people have already started finding ways to convert their black money.

So what are people doing to escape the tax+200% penalty on undisclosed cash? Here is a roundup of the methods we’ve heard of so far.

1. Invest in gold – Gold has always been a safe haven to park black money. After the surgical strike many middle men are offering gold at higher price than the prevailing market price. This gold can be sold back in a few month’s time.

2. Distribute smaller amounts to large groups – This is done in 2 ways:

a. Pay small sums of money to those who have clean income tax records in return for a margin. For eg: if your annual income is 10-20 lakhs, depositing Rs. 40-50,000 as cash will not generate much scrutiny. People with black money are exchanging the black money for 30-50% of its value with people who have clean records. These people with clean income tax records, can deposit the full money in their banks without any undue difficulty.

b. Employers are paying 6 months salary in advance in the name of gratitude towards employees dedication and service. Distribution is also being done in the name of small loans given to multiple people.

3. Book airline tickets – Government has allowed acceptance of HDN ( High denomination Notes) in airports and railways. For reasons of converting huge chunks of black money people are resorting to booking airline tickets in bulk and then cancelling it – a portion of the amount goes as cancellation fees but tax evaders are happy that the rest is converted to new currency.

4. Religious institutions – We all run to our place of worship when things go wrong but now people are going there for other reasons. Places of worship receive lakhs of donations every month, contributed by the pious in 10s or 100s . Unscrupulous characters who have access to the treasury can help convert old Rs. 500-1000 into smaller denominations.

5. Commission agents – Some have found a business model to convert this crisis into a booming revenue generator. Many have emerged who are willing to convert black into white for a commission. They typically find people whose cash in hand is lesser than what is shown in their books of accounts and match it with folks who have black money with them.

Well the race still continues to find newer and most innovative way to save the stacked up black-money. But, finding loopholes won’t last long as the surgical strike was executed so well giving less breathing room to the tax-evaders. Clearly our government is winning the difficult battle against- black money.


– By Antony Francis, Financial Analyst

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