The government proposed to lower the cash transaction limit to Rs 2 lakh, from Rs 3 lakh announced in the Budget, as it introduced 40 amendments to the Finance Bill in an unprecedented move.
As the Finance Bill was taken up for consideration in the Lok Sabha, the opposition parties including TMC, BJD, and RSP protested against the introduction of these many amendments, saying it was being done as a "back-door entry". Budget 2017: Development Schemes Focused On
Lok Sabha Speaker Sumitra Mahajan, however, overruled the objections raised by the opposition parties, saying the 'incidental provisions' involved in the amendments constitute a 'Money Bill' and therefore can be considered as part of the Finance Bill. Cash Dealings Above Rs 3 Lakh Banned From April 1
The proposed amendments to the Finance Bill include a provision to cap legal cash transactions at Rs 2 lakh. While presenting the Budget on February 1, Finance Minister Arun Jaitley had proposed to make any cash transaction beyond Rs 3 lakh as illegal with effect from April this year.
A penalty of equal amount would be levied in case of any violation of the provision.
Another senior revenue department official said the move was intended to make the law more stringent to clamp down on cash dealings, which was giving rise to black money.
The move to cap legal cash transactions followed recommendations made by the Special Investigation Team on black money, which was set by the government on directions of the Supreme Court.
The amendments to the laws like Companies Act, Employees Provident Fund, Smuggling and Foreign Exchange Act, TRAI Act and Information Technology Act, have also been moved to make the functioning of tribunals more efficient by merging the smaller ones and reducing their numbers from 40 to 12. A Look At Personal Income Tax Changes In Union Budget 2017-18
The Finance Minister also said the amendments proposed in the Post Office Act, the Oil Industry Development Act and the Research and Development cess can be made part of the Finance Bill as these squarely come within the purview of Article 110.