The government is examining SIT's suggestion of banning cash transactions of over Rs 3 lakh in an effort to clamp down on black money in the economy, CBDT Chairperson Rani Singh Nair has said.
The move came after Supreme Court-appointed Special Investigation Team (SIT) on black money suggesting banning cash transactions of Rs 3 lakh and above and limiting cash holding with individuals and industry to Rs 15 lakh to curb illegal wealth in the country.
"These recommendations have come. It (banning cash transactions over Rs 3 lakh) is under examination. SIT recommendations are under consideration," she told reporters on the sidelines of an Assocham event in the national capital.
She added that the Income Tax Department has already put a 1 percent TCS on cash transactions and made quoting of PAN mandatory.
"All these aspects are part of SIT recommendations to stop use of cash in the economy. Suggestion on Rs 3 lakh and above is under consideration," she said.
The SIT, headed by Justice M B Shah (retired), last month submitted its fifth report to the Supreme Court on steps needed to curb black money.
Pointing out that a large amount of unaccounted wealth is stored in cash, the SIT said: "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."