Explanation:

Some of the chief sources of black money are described below. Sellers or traders who do not give bills or receipt creates black money. Many people invest in bullion or jewellery to hide their actual income from the authorities. In the real estate sector, many people undervalue their real assets to refrain from paying the rightful tax. They cheat the government of the correct amount of property tax. Some Self-Help Groups (SHGs) and trusts do not provide proper sources for their funds and donations received. Tax havens: Tax havens are generally small countries where foreigners don’t have to pay taxes. These countries generally have very liberal regulatory frameworks, which big corporations take advantage of. They set up shell companies there and redirect all their profits to this entity, by which they can reduce their tax liabilities by a huge margin. Hawala: Hawala is an informal method by which money can change hands without the use of banks. This works through codes, contacts and trust with no paperwork at all. Investments through innovative derivative instruments like participatory notes also is a means to hide black money.