Parallel economy emerges due to

(A) Tax : Avoidance
(B) Tax : Evasion
(C) Tax : Compliance
(D) Tax : Estimation

Correct Answer : Tax : Evasion
Question Asked : SSC Combined Matric Level (Pre) Exam 2002
Explanation : Parallel economy (black economy) indicates the functioning of an un sanctioned sector in the economy whose objectives run parallel with the social objectives. Major contributory factor to such an economy is black money which is any money that a person or an organization acquires as by a means that involves tax evasion. It is that income from illegal activities that is not reported to the government for tax purposes.
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