In a bid to take tough action on black money, Finance Minister Arun Jaitley proposed to ban all cash transactions above Rs 3 lakh effective April 1, 2017. The decision taken is based on the recommendation of the Special Investigation Team (SIT) on black money that was set up by the Supreme Court.
“No transactions above Rs 3 lakh should be permitted in cash. The government has decided to accept this suggestion,” Finance Minister Arun Jaitley said in his budget speech. The government will be required to make this change through the finance bill.
But Jaitley did not say whether the Government intends to accept the SIT’s other suggestion—a cap on cash holding of Rs 15 lakh.
Experts say this will help the government’s war on black money and open up another flank and combined with GST, such a proposal could go a long way.
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