Zee Media Bureau

New Delhi: The government is likely to ban cash transactions of above Rs 3 lakh to curb black money in the economy.

The Special Investigation Team (SIT) on black money had recommended ban on cash transactions of above Rs 3 lakh and restricting cash holding with individuals to not more than Rs 15 lakh to curb illegal wealth in the economy.

The SIT headed by Justice (Retd) M B Shah, had earlier submitted its fifth report to the Supreme Court on July 14 on methods to curb black money in the economy.

The panel had felt that large amount of unaccounted wealth is stored and used in form of cash.

“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,” an official statement had said.

SIT had recommended a total ban on cash transactions above Rs 3 lakh and “an Act be framed to declare such transactions as illegal and punishable under law.”

It also felt that, given the fact of unaccounted wealth being held in cash which are further confirmed by huge cash recoveries in numerous enforcement actions by law enforcement agencies from time to time, the cash transaction limit can only succeed if there is a limitation on cash holding.

“SIT has suggested an upper limit of Rs 15 lakh on cash holding,” the statement had said.

Also, cash withdrawal of more than Rs 3 lakh from any bank account in a day should consider as a suspicious activity and the concerned bank should report it to Financial Intelligence Unit (FIU) & the concerned Income-tax Department, it had said.

In case any person or industry required holding more cash, it may obtain necessary permission from the Commissioner of Income Tax of the area, the panel had opined.

SIT suggested amending the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, by incorporating the provision that “undisclosed foreign income and assets would vest in the Union of India“.

“Once it is held that under the law, property vests in Union of India, the person who is holding the said property outside the country shall have to prove that it was acquired legally and/or held after obtaining necessary permission from the RBI,” it had said.