New Delhi: Cash transactions above Rs2 lakh will be illegal once the Finance Bill gets the President’s assent.
The government on Tuesday moved amendments to the Finance Bill 2017 proposing to further reduce the legal cash transaction limit from Rs3 lakh to Rs2 lakh.
As part of Union Budget 2017, Union finance minister Arun Jaitley had on 1 February proposed that the legal limit for cash transactions would be Rs3 lakh, in line with the recommendations of the Supreme Court-constituted Special Investigation Team (SIT) on black money.
Revenue Secretary Hasmukh Adhia tweeted on Tuesday that the government has moved amendments to the finance bill to further reduce this limit to Rs2 lakh. The penalty for a violation will be a fine equivalent to the value of the transaction, he added.
The Finance Bill is expected to receive Lok Sabha’s nod on Wednesday.
A clampdown on black money was one of the major electoral promises of the National Democratic Alliance (NDA) and the government has taken a number of steps, including enacting a stringent Black Money Act to curb unaccounted overseas funds, bringing in amendments to the so-called benami act to make it more effective in clamping down on assets held under other people’s names or indirectly, and the demonetisation move invalidating older high-denomination currency notes.
The SIT had also recommended capping cash holdings of individuals and companies at Rs15 lakh but the government chose not to implement this recommendation because of practical difficulties in its implementation. These measures are likely to impact the real estate , jewellery and the high-end luxury market.