The government on Tuesday proposed lowering the limit on cash transactions to Rs 2 lakh from Rs 3 lakh announced in the Budget, as it introduced 40 amendments to the Finance Bill in an unprecedented move.
As the Finance Bill was taken up for consideration in the Lok Sabha, opposition parties, including TMC and BJD, protested against the introduction of the large number of amendments, accusing the government of introducing changes through a “back-door entry”.
Lok Sabha Speaker Sumitra Mahajan, however, overruled the objections, saying the "incidental provisions" involved in the amendments constitute a Money Bill and therefore can be considered as part of the Finance Bill.
The proposed amendments to the Finance Bill include a provision to cap legal cash transactions at Rs 2 lakh. While presenting the Budget on 1 February, Finance Minister Arun Jaitley had proposed making any cash transaction beyond Rs 3 lakh illegal with effect from April this year.
A penalty of an equal amount will 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 were giving rise to black money.
The move to cap legal cash transactions follows recommendations made by the Special Investigation Team on Black Money, which was set up by the government on the directions of the Supreme Court.
(This story has been edited for length.)
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