The government today proposed to lower the cash transaction limit to Rs 2 lakh, from Rs 3 lakh announced in the Budget. Finance Minister Arun Jaitley introduced 40 amendments to the Finance Bill amidst protests from the opposition benches.
As the Finance Bill was taken up for consideration in the Lok Sabha, the opposition parties including TMC, BJD and RSP protested against the introduction of these many amendments, saying it was being done as a “back-door entry”.
The proposed amendments to the Finance Bill include a provision to cap legal cash transactions at Rs 2 lakh. While presenting the Budget on February 1, Jaitley had proposed to make any cash transaction beyond Rs 3 lakh as illegal with effect from April this year.
A penalty of equal amount would be levied in case of any violation of the provision, Revenue Secretary Hasmukh Adhia tweeted after the amendment was moved.
Another senior revenue department official said the move was intended to make the law more stringent to clamp down on cash dealings, which was giving rise to black money.
The move to cap legal cash transactions followed recommendations made by the Special Investigation Team on Black Money, which was set by the government on directions of the Supreme Court.
The amendments to the laws like Companies Act, Employees Provident Fund, Smuggling and Foreign Exchange Act, TRAI Act and Information Technology Act, have also been moved to make the functioning of tribunals more efficient by merging the smaller ones and reducing their numbers from 40 to 12.
Jaitley said the electoral bond has been proposed for cleansing the political money since a lot of electoral funding, across the spectrum, comes from unknown sources.
Jaitley said at present the Representation of the People Act provides for revealing of identity of people making donations above Rs 20,000 and the amendment would provide that if money comes by way of electoral bonds, the identity will not be disclosed.
The Finance Minister also said the amendments proposed in the Post Office Act, the Oil Industry Development Act and the Research and Development cess can be made part of the Finance Bill as these squarely come within the purview of Article 110.
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