Criminal activities are generating threat to Indian economy and it is visible in many forms. It will ruin economic fabric of the state. If it is not controlled a parallel economy challenging the national economy be emerged. tax evasion denotes defrauding the revenue by such illegal acts such as concealment of income, or furnishing inaccurate particulars of income, or making a false return, or making false claims to allowances, adopting subterfuges in order to defeat the provisions of the law Unfair trade practices and price rigging are actively undertaken by investors were identified by SEBI and Income Tax Department. These practices were widely carried out in penny stock transactions to claim tax exemptions u/s 10(38) via Long term capital gain.