NEW DELHI: The Special Investigation Team (SIT) on black money has recommended banning cash transactions of Rs 3 lakh and above and restricting cash holding with individuals and industry to Rs 15 lakh to curb illegal wealth in the country.
The SIT, headed by Justice MB Shah (retired), submitted its fifth report to the Supreme Court on methods to curb black money in the economy, an official statement said on Thursday.
The panel said that large amount of unaccounted wealth is stored and used in the 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," the statement said.
SIT recommended a total ban on cash transactions of Rs 3 lakh and above and that "an Act be framed to declare such transactions as illegal and punishable under law".
The team said that given the fact of unaccounted wealth being held in cash, which is 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 said.
The SIT had in its previous reports recommended clear identification of beneficiaries of participatory notes or P-Notes, use of shell companies to provide accommodation entries to launder black money and widespread cricket betting in the country. It had asked the government to ensure greater vigilance on multiple companies having the same address and directors.
The Supreme Court, acting on a petition, had ordered the appointment of an SIT for black money. In 2014 the Narendra Modi-led NDA government set up an SIT as part of its crackdown on black money.