ECONOMY
Now Cash transaction limit to be slashed to Rs2 lakh
- TEAM PT
Now Cash transaction limit to be slashed to Rs2 lakh



The Narendra Modi government today moved a fresh proposal to cap cash transactions at Rs 2 lakh instead of the earlier sanctioned Rs 3 lakh.
 
In the government's annual budget presented in February, Finance Minister Arun Jaitley had said cash transactions would be capped at three lakhs. In an amendment to the Income Tax Act, the government has called for reducing the limit to two lakhs starting next month.
 
In the government's annual budget presented in February, Finance Minister Arun Jaitley had said cash transactions would be capped at three lakhs. In an amendment to the Income Tax Act, the government has called for reducing the limit to two lakhs starting next month.
 
Government had recently rolled out the Budget and today it announced as many as 40 amendments to the Finance Bill to which the Opposition parties objected when it was taken up for approval in the Lok Sabha, including Trinamool Congress (TMC), Congress, Biju Janata Dal (BJD) and others. These parties were against the proposal of amendments to 40 Acts as they believed it to be done in the form of back-door entry.
 
The proposal is aimed at curbing black money and pushing the country towards digital transactions.   

The penalty will be 100 per cent -anyone who accepts more than 3 lakhs in cash will have to pay a fine equal to the entire amount received.
 
The decision to ban cash transactions beyond a threshold is based on the recommendation of the Special Investigation Team on black money that was set up by the Supreme Court, Jaitley said while presenting Union Budget 2017-18 in Parliament.
 
The SIT, headed by Justice M B Shah, in July last year had submitted its fifth report to the Supreme Court on steps needed to curb black money.

Noting that a large amount of unaccounted wealth is stored in cash, SIT had said: "Having considered the provisions which exist in this regard in various countries and also having considered various reports and observations of courts regarding cash transactions, the SIT felt that there is a need to put an upper limit to cash transactions."
It recommended a total ban on cash transactions of Rs 3 lakh and above and that "an Act be framed to declare such transactions as illegal and punishable under law".

However, the cash restrictions will not apply to the government, any banking company, post office savings bank or co-operative bank.






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