What Is ‘Black Money’ And How It Affects the Real Estate Market?

Overview

Unaccounted earnings for which taxes have not been paid to the authorities are popularly known as black money. Money earned through illegal channels is also termed as black money.

Such funds are hoarded as cash and paid in the same way so that there is no official record of the proceedings. Most of the deals in the Real Estate are such sources of the channels where Black Money is used in large chunks.

Black money is also a source of production for real estate, according to the ‘White Paper on Black Money’ of the Union Government.

Below are the three key reasons for the production of the black money in the market.

1. Outdated government guideline values; 
2. The actual data on the market price of the property is unavailable; and 
3. The market mechanism that paves the way for parties. 

A parallel economy and corruption have also resulted from black money, which is harmful for individuals, the economy, culture, and infrastructure in India.

Also read: What is Circle Rate in Real Estate?

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