Firms can go beyond ceiling with I-T approval
The Supreme Court-appointed special investigation team (SIT) on black money has sought a ban on cash transactions above Rs 3 lakh, limiting cash holdings and allowing the government to take over undisclosed cash beyond the threshold and overseas income.
Pointing to the rules in countries such as France and Italy, the panel has proposed cash transactions beyond Rs 3 lakh should be declared illegal. Although the government had put in place steps to restrict cash deposits and loans and payments beyond Rs 20,000, the SIT said more measures were needed as it was tough to track all transactions above the threshold. “Question of levying a penalty would arise only when the transaction comes to the knowledge of the I-T department because it is difficult to locate the same by the I-T,“ its report said.
“As such, these provisions have failed to control or have any effect on transactions or circulation of unaccounted money ,“ the latest SIT report said. In its latest report to the apex court, the panel formed after the BJP government took office two years ago has also suggested a cap of Rs 10-15 lakh on cash holdings and said that any amount above the limit would be transferred to the government.
In special circumstan In special circumstan ces, companies or individuals would be allowed to go beyond the ceiling but would need to get a green light from the income tax commissioner.
This is a recommendation that was made in earlier reports too and the SIT has asked the government to expedite the decision, which is pending with the finance ministry .
It has also proposed that from the next financial year, banks should be asked to report all cash withdrawals of over Rs 3 lakh to the tax department.
It said that a limit on cash holdings would prompt people to disclose unaccounted wealth under the disclosure scheme.
Pointing to the disclosures made under the Panama Papers, the SIT said that there was a need to amend the law to empower the government to take over undisclosed overseas assets.
Further, it said that many of the entities and individuals named in the Panama Papers have argued that they had the requisite approvals from RBI but, the SIT said, the information was not shared with the tax authorities.
Bartaman Patrika epaper 15-07-2016 : http://epaper.prabhatkhabar.com