The government has proposed to cap cash transactions at Rs 2 lakh instead of Rs 3 lakh as provided in the Budget-2017. The proposal is a part of the 40 amendments to the Finance Bill moved by finance minister Arun Jaitley in Lok Sabha, which also includes, making biometric identifier Aadhaar mandatory for filing tax returns and allow cheque only contributions to electoral trusts as part of the tirade against blackmoney.
This cap is now at par with the current requirement of quoting permanent account number (PAN) for cash spending and to ensure a deterrent, the penalty for violation of this provision is a fine equivalent to the amount of transaction and the fine will be payable by person or establishment receiving cash.
The amendment provides that a person holding PAN as on 1 July, 2017, has to intimate his Aadhaar number to authority in a manner which will be notified by the government. The other amendments to the laws like Companies Act, Employees Provident Fund, Smuggling and Foreign Exchange Act, TRAI Act and Information Technology Act, have been moved with an aim of making the functioning of tribunals more efficient by merging the smaller ones and reducing their numbers from 40 to 12.