In a bid to curb illegal wealth in the economy, the Special Investigation Team (SIT) on black money has recommended a ban on cash transactions of above Rs 3 lakh. The SIT has also suggested a restriction of Rs 15 lakh for individual cash holding.
The SIT - headed by Justice MB Shah (retd) - submitted its fifth report to the Supreme Court on methods to curb black money in the economy. The panel felt that a 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 said.
The SIT recommended a total ban on cash transactions above Rs 3 lakh and said that "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 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 opined.