The government continued its ongoing fight black money and corruption with Union Finance Minister Arun Jaitley, during the budget presentation on Wednesday, proposing to ban all cash transactions above Rs 3 lakh beginning April 1, 2017.
The decision to ban cash transactions beyond a certain threshold was based on the recommendation of the Special Investigation Team on black money that was set up by the Supreme Court, Jaitley said.
It also appointed Justice MB Shah (retired) to head the team, which submitted its fifth report to the Supreme Court on steps needed to curb black money in July.
The SIT, noting that a large amount of unaccounted wealth is stored in cash, suggested adding an upper limit on such transactions.
“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 said.
It also recommended a total ban on cash transactions of Rs 3 lakh and above and proposed that “an Act be framed to declare such transactions as illegal and punishable under law”.
In November last year, the the government had announced the decision to demonetise high currency notes of Rs 500 and Rs 1000 to fight black money.
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