Economy and Finance

Economy and Finance

What is Round tripping?

15 Jul 2023 Zinkpot — We Inform, You Perform. 548
What is Round tripping?
  1. Round tripping refers to a process in which money leaves the country through various channels and makes its way back into the country, often as foreign investments or FDI.
  2. The outgoing money is mostly black money and is allegedly often used for stock price manipulations or for money laundering purposes.
  3. So in round tripping, same money enters a country having travelled the world.
  4. Several factors promote round tripping, mainly tax concessions allowed in the foreign country or tax havens encourage individuals to park money there and then reroute it.
  5. RBI considers such transactions from suspicion of being not bona fide, and are perceived to be designed for tax evasion or tax avoidance.
     

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