Black Money

Black money refers to income, wealth, or financial transactions that are concealed from tax authorities and regulatory oversight — generated through illegal activities (such as corruption, drug trafficking, or fraud) or through legal economic activity whose proceeds are deliberately not disclosed for taxation purposes. In India, black money is a significant economic and social concern — it distorts resource allocation, undermines public finance, and creates an unequal competitive environment between compliant and non-compliant participants. The government has implemented multiple initiatives to curb black money including: demonetisation of ₹500 and ₹1,000 currency notes in November 2016, the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015, mandatory PAN and Aadhaar linking for financial transactions above specified thresholds, the Pradhan Mantri Garib Kalyan Yojana (PMGKY) amnesty scheme, and enhanced data sharing between tax authorities through the SFT (Statement of Financial Transactions) framework. For equity markets, black money creates risks of sudden large cash infusions into real estate, gold, and certain equity segments — distorting asset prices and creating bubble conditions in specific sectors when black money is converted into ostensibly legitimate financial assets.