New Delhi: New and creative money laundering networks are spreading across India to help people convert black money or the demonetised 500 and 1,000 rupee notes into legal tender.
Bloomberg News reported that some of these new channels include connecting people to high-turnover businesses that can show old cash as revenue and return the rest; flying demonetised tender to the North Eastern states where people are exempt from paying Income Tax; and the sale of apartments using banned money in an upscale Mumbai suburb popular with Bollywood movie stars, which at least one property brokerage is resorting to.
In all these cases commissions range from 10 percent to 50 percent, depending on the difficulty, the agency quoted people involved in the transactions. New avenues for money-laundering, tax-avoidance, and existing organized crime, the evolution of hawala networks are opening up in the short term.
Bloomberg News cited an individual named Ashok from Mumbai who plans to give a Rajasthan-based garment manufacturing and jewellery company Rs 20 Crore in demonetized notes from one of his property transactions, getting back half that amount in brand-new notes.
Other laundering networks are routing black money through the accounts of farmers, because Agricultural income is exempt from Income Tax.
Individuals are transporting money in trains and vehicles, while the big laundering networks have been using chartering flights to transport cash to India’s northeast, a lawyer told Bloomberg. Certain tribal communities in India’s northeastern states are exempted from paying taxes on income from any sources.
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