Justice Shah headed SIT on black money recommends ban on cash transactions above 3 lakh rupees

The Supreme Court-constituted Special Investigation Team (SIT) on black money on 14 July 2016 submitted its fifth report to the apex court. The SIT was headed by retired Justice M B Shah.

The SIT in its fifth report recommended the following:

Cash transactions: It has recommended ban on cash transactions above 3 lakh rupees in a day. It recommended enacting a law to declare such transactions as illegal and punishable.

Cash holding: It also suggested capping the cash holding of an industry or individual at 15 lakh rupees. 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 SIT felt that the cash transaction limit can only succeed if there is a limitation on cash holding.

Background

The Justice MB Shah led SIT was constituted in 2014 to look into the ways to curb generation of black money, unaccounted, untaxed wealth, and bring back funds stashed away overseas.

Apart from this, to catch the undisclosed foreign assets and curb the domestic black money, the Union Government has enacted two different laws and they are

• Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015

• Benami Transactions (Prohibition) Amendment Bill, 2015, which the government hopes will get passed in the upcoming monsoon session of parliament.

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