No cash transaction limit on withdrawals from banks, post office savings account

After limiting the cash transaction limit to Rs 2 lakh a day, the Central Board of Direct Taxes has said that the limit will not be applicable on withdrawals from banks, post office saving accounts and cooperative banks.

According to the Finance Act 2017, the penalty on any cash transaction over Rs 2 lakh a day would attract a penalty of an equal amount.

In March, the government moved amendments to the Finance Bill 2017, proposing to cap cash transactions at Rs 2 lakh instead of Rs 3 lakh as provided in the Budget.

While presenting the Budget on February 1, Finance Minister Arun Jaitley had proposed the cap to be Rs 3 lakh in line with the recommendations of the Supreme Court-constituted Special Investigation Team (SIT) on black money.

In an unprecedented move, the government introduced as many as 40 amendments to the Finance Bill.

Here is all you need to know about the 40 ammendments:

  • While presenting the Budget on February 1, Finance Minister Arun Jaitley had proposed the cap for cash transactions to be Rs 3 lakh with effect from April 1.
  • Among the amendments made to the Finance Bill was a provision to cap cash transaction at Rs 2 lakh instead.
  • Revenue Secretary Hasmukh Adhia tweeted that “The penalty for a violation will be a fine equivalent to the value of the transaction.”
  • The government also made it mandatory to provide Aadhaar card number while filing the income tax returns.
  • The decision to link the Aadhaar card to a bank account and to make it necessary for filing I-T returns was taken in May last year.
  • The Aadhaar number will also be required while applying for a PAN card
  • The Unique Identification Authority of India (UIDAI) has said that all devices using Aadhaar authentication will have to adhere to its new encryption standards starting from June 1.
  • The move has been aimed at adding another security layer as the biometric-based digital payments take centre stage.
  • Last week, the Aadhaar system got a thumbs up from World Bank chief economist Paul Romer who described it as ‘the most sophisticated ID programme in the world.
  • The amendments made to the laws like Companies Act, Employees Provident Fund, Smuggling and Foreign Exchange Act, TRAI Act and Information Technology Act, have been carried out to increase efficiency by merging smaller functioning bodies and thereby reducing their numbers from 40 to 12
  • Opposition parties like TMC, BJD and RSP protested against these changes, saying it was being done in the form of “back-door entry”.