Few days back when i met one of my friend who is pursuing CA I realised that there is a dire need for the students to understand the concepts of Money Laundering.
We had a very simple discussion that could be obvious amongst the CA students. I was curious to know what exposure my friend is getting in a CA firm. During the conversation I realised that on a day-to-day basis he was busy in filing the tax returns, which most of the CA students do in their articleship period of three years when they are required to undergo practical training.
“So what have you learned in last 2 years in your CA firm?” I asked him curiously.
“We help the clients to minimise their tax liabilities”, answer which was most obvious and very much expected. Every budding Chartered Accountant is trained to reduce the taxes. Some times the provisions of Income Tax Act are used to save taxes but some people go beyond the Tax laws to reduce the tax liabilities of the clients.
While reducing the taxes, by going beyond the Income tax provisions, very few of them actually realise the difference between the Tax evasion and Tax planning.
This tax evaded money is commonly known as the black money in India. This black money is sometimes referred to as the parallel economy. Cash is difficult to invest, keeping it idle yields no returns. Cash never grows unless invested and here the money laundering starts.
In layman’s term Money Laundering is changing the colour of money from black to white. Cash generated by evading the taxes needs to come back into the economy and needs to be introduced into the banks.
There are many CA students like my friend who are not even aware that their tax evasion schemes are leading to the operations like Money Laundering or even terrorist financing. I felt that there is a need to create awareness about the money laundering and that is the reason I decided that i would come up with a simple jargon-free book which will help the students like my friend to understand the basics of Money Laundering.