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In its efforts to curb black money transactions, the government is considering the special investigation team’s (SIT) recommendation to ban cash transactions above Rs 3 lakh. Central Board of Direct Taxes (CBDT) chairperson Rani Singh Nair said that the suggestion is part of the committee’s recommendations to reduce usage of cash transactions in the economy.
“These recommendations have come. It (banning cash transactions over Rs 3 lakh) is under examination. SIT recommendations are under consideration,” Nair told reporters on the sidelines of an Assocham event here.
The Income-Tax Department has already put a Tax Collected at Source (TCS) on cash transactions and has made quoting PAN mandatory, she added.
The Supreme Court-appointed SIT on black money had submitted its fifth report last month, recommending a complete ban on cash transactions above Rs 3 lakh and imposition of an upper limit of Rs 15 lakh on cash holding by an individual or a corporate.
“The SIT has felt that large amount of unaccounted wealth is stored and used in form of cash … Thus, the SIT has recommended that there should be a total ban on cash transactions above Rs 3,00,000 and an Act be framed to declare such transactions as illegal and punishable under law,” as per the statement released by finance ministry last month. The SIT, headed by retired Justice M B Shah, had also suggested amendment to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, by incorporating the provision that undisclosed foreign income and assets would vest in the Union of India.
On the discussion of advancing of presentation date for Union Budget next year, Nair said, such a step will improve efficiency.
“If you have the Budget … in January, you get President’s assent by March 31. The financial year starts on April 1. So from first day of financial year outlays will be in place, expenditures will be allocated and therefore we will not lose two/three months of financial year in Budget process. It will bring in more efficiency in Budget making,” she said.
The CBDT is looking at starting pre-Budget meetings with various ministries and department from next month itself as against the usual practice of holding such consultation in November.
“The Budget is presented on February 28/29 and by the time it … gets assent of President it is around May 15. So for April and May, we have to take a Vote on Account. So expenditures at that time in all ministries are only allocated what was in earlier year. It also makes a duplication of process…,” she said, adding that “it is just a discussion and the option is being explored”.
The Constitution does not mandate any date for Budget presentation, but it is usually presented on the last working day of February and the two-stage process of Parliamentary approval gets completed by mid-May. The finance ministry is of the view that if the presentation is advanced, then there will be no need for a Vote-on-Account and a full Budget can be approved by March 31, so that ministries are able to streamline their expenditure in a better manner for the financial year beginning April 1.
Nair added that the government is trying to build a fearless regime for people to approach tax officials to seek the best possible advice. “I think that in this new environment, there is a necessity for ensuring the advice we give to the taxpayers is a correct one, in line with tax laws and practice. Because if we have to clean up the tax administration, We also have to see that we guide the taxpayer well,” Nair said. She said the department is making efforts to bring in greater transparency and more clarity in tax laws so that India becomes the favourite place to do business.