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How to change Black Money into White Money?

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Tax evasion income is referred to as black money. It can be obtained both legally and illegally. The majority of black money is cash revenue that has not been recorded in books and has not been reported to the government for tax purposes. The real estate market has the most black currency. The increase of unaccounted money, often known as black money, has resulted in the emergence of a parallel economy, which has given rise to a slew of economic and social ills, as well as regulatory and societal issues in the overall system. Some people are trying various techniques to convert black money into white money as the Income Tax Department tightens its mechanism.

Governments have consistently underestimated the economy’s genuine size. The rise in unexplained money has increased expenditure on opulent products, leading to a change in production patterns away from needed things, widening the gap between the rich and the poor.


Overall, one good illustration of where the black money market situation is epidemic is in third and second world countries such as Africa, Asia, South America, and a few European countries. India presently ranks first in the world in terms of unlawful black money, with an estimated USD 1,456 billion in undeclared funds held in Swiss banks. India has more black money than the rest of the world combined, according to figures provided by the Swiss Banking Association. Indian Swiss bank account assets are worth 13 times (1300%) the country’s national debt, and if this black money is confiscated and returned to India, it has the potential to become one of the world’s wealthiest countries.

Ways to Convert Black Money to White Money

Gifts from Relatives

One of the most common ways to turn your black money into white is to present the unaccounted money as gifts from relatives on key occasions such as your wedding anniversary, birthday, or other family celebration. Furthermore, such gifts from family are tax-deductible, thus you can convert your money to white without paying any tax if you account for it as a gift. You accept a gift in the form of a check from a relative or acquaintance and give him or her the same amount in cash.

Giving Money to Family Members

You can give money to all of your family members and deposit it in their bank accounts. To do so, you will need to open bank accounts for each member of your family and put your funds into them. Normally, people submit tax returns for a variety of reasons, including to reflect the income of family members who are taxed at a lower rate. 

Agricultural Income

If you have agricultural land that you use for farming, gardening, and other activities, you can declare some of your revenues as income from agriculture. You can also lease land and record your profits as income from farming in that area. Your unexplained money can be claimed as agricultural income. You won’t have to worry about paying taxes on these reports because agricultural revenue is tax-free.

Ornament Selling Receipts

You can report some income from the sale of gold, silver, and other decorations. For that, you will need to contact a reputable jewelry retailer who will charge you a portion for providing you with receipts. Another option is to buy gold from a local shop, and receive an invoice. Then keep the invoice, and sell the gold back after a set length of time. That way, you will get an invoice and your money refunded at the same moment.


There are a variety of methods to invest money and save money on taxes. It is including paying your insurance premium in cash. You can choose instruments that are eligible for the tax savings plan. PPF accounts, tax-advantaged mutual funds, and term deposits are all safe ways to save money without paying taxes. It is one of the most common ways to turn black money into white.

Income from a Profession

You can claim some money as income from a profession, such as tuition classes, training, or other services for which you have received a monetary payment.

Purchasing Real Estate

You can purchase a home in your spouse’s name and pay rent into their accounts. You can also purchase artwork, antiques, and paintings. It is in this industry that a significant amount of black money is stashed. Real estate transactions are used by people to transform their illicit capital into white money. Many people are known to make a fictitious transaction, exchange money, and then terminate the deal due to the other party’s failure to pay. You can buy property in your spouse’s or adult children’s names. Once they have purchased a home, you can additionally display rent income in their names. Purchase prices might be increased depending on the circumstances.

Make use of investment as a mode of transportation

People can put their ill-gotten gains into currency. They can get an insurance policy and pay a cash premium and frequently pay the initial premium by check and the remainder in cash. They can put capital into a PPF account, a tax-saving mutual fund, a fixed deposit, and other safe investments.

Creating a foundation of trust and giving back to the community

People develop a sense of faith in social upliftment. The executive body is made up of self-employed people. But many of them are illiterate, such as housemaids, drivers, cooks, and security guards. They receive a financial payment to a charity trust. It appears to be charity, but it is a black-to-white conversion. The currency earned by the trust is given to the head member in the form of a loan that is never returned.


There are many efficient methods of changing black capital to white as discussed. But the simplest and most straightforward method is to report this capital to the IRS, pay taxes and penalties, and convert the funds to white. Those who own firms can pay their employees a few months’ advance wages and deposit funds in their accounts. Apart from this, do not withdraw hard notes from the bank for everyday usage; instead, spend your black money on Kirana, veggies, fruits, petrol, and other necessities.

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