New Delhi: Finance minister Arun Jaitley on Wednesday proposed a cash transaction limit at Rs3 lakh, in line with the recommendations of the special investigative team (SIT) on black money.
The government will make the necessary amendments to the income tax act to facilitate this, the finance minister said.
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Curbing black money has been one of the major electoral promises of the National Democratic Alliance government. It has announced a number of steps over the last couple of years to check black money, including the recent demonetisation move.
The Supreme-constituted SIT in its report last year had proposed banning cash transactions above ₹ lakh and capped the cash holdings of individuals and companies at ₹ 15 lakh.
These measures can check cash transactions, ensure a paper trail for every high-value transaction and prevent tax evasion. High-value transactions in cash are a common feature, especially in the real estate sector where buyers try to get away with paying lower stamp duty.